Time to Put a Lie About Felix Sater to Rest

Of all the characters in the Trump/Russia saga, few are more fascinating than Felix Sater.

Felix Sater

Sater is many things: a Russian emigre, the son of a gangster, an ex-con, and the guy who scouted real estate deals in Moscow for Donald Trump.

He was also a very valuable informant to the U.S. government for many years, as you can see from some photos I recently came across regarding Evgeny Shmykov, an ex-spy who was Sater’s long-time contact in Russia:

The guy that Shmykov stands shoulder-to-shoulder with? That’s Ahmad Shah Massoud, the anti-Taliban leader assassinated right before the 9/11 attacks.

These photos got some attention on Twitter, but as always, whenever Sater’s name comes up, people inevitably connect him to a powerful Russian Mafia boss named Semion Mogilevich, known as “the most dangerous mobster in the world.

It’s time to put this bullshit to rest.

There is no, I repeat, no credible evidence linking Sater to a Russian Mob boss who was on the FBI’s 10 Most Wanted List.

In writing my book, Trump/Russia, I spent quite a bit of time looking for evidence of the Sater-Mogilevich connection. In the end, I concluded that it just wasn’t there. To paraphrase Robert Mueller, if I had found evidence that Sater was connected to Mogilevich, I would so state.

There’s no doubt Sater did have ties to Russian organized crime. Sater’s father, Michael Sheferfofsky, was a Russian gangster who pleaded guilty in 2000 to two counts of extortion for shaking down businesses in Brooklyn.

But there’s no mention of Mogilevich in Sherorfksy’s criminal file.

So where does this claim come from?

The Sater-Mogilevich link is found in a Supreme Court petition for a writ of certiorari in Palmer v John Doe. 14-676.

This sounds like credible evidence. It’s convinced many people, including me, as my 2017 blog post shows.

The thing is it’s bullshit. Yes, I know. Mea culpa, mea culpa, mea maxima culpa.

While reporting my book, Trump/Russia, I tried to get to the bottom of this. I asked Richard Lerner, the attorney who wrote the Supreme Court petition, how he learned about the Sater-Mogilevich connection.

He somewhat sheepishly admitted that it comes from a website called Deep Capture.

This is where things get weird.

Deep Capture was written by Mark Mitchell, a former editor at Columbia Journalism Review, to “expose the ‘deep capture’ of American institutions by powerful and corrupt financial interests.”

Patrick Byrne

Bankrolling Deep Capture was Patrick Byrne, the CEO of Overstock.com, a publicly-traded online retailer.

Byrne is famous for, among other things, a 2005 conference call with investors that touched on subjects ranging from:

“Miscreants, an unnamed Sith Lord he hopes the feds will bury under a prison, gay bath houses, whether he is gay, does cocaine, both or neither, and an obligatory, not that there is anything wrong with that, phone taps, phone lines misdirected to Mexico, arrested reporters, payoffs, conspiracies, crooks, egomaniacs, fools, paranoia, which newspapers are shills and for who, payoffs, money laundering, his Irish temper, false identities, threats, intimidation, and private investigators,” wrote Mark Cuban, the basketball team owner, investor, and host of Shark Tank.

That’s just a sampling. You can read the full thing here.

Byrne has also accused reporter Bethany McLean of giving Goldman Sachs traders blowjobs and said on live TV that he knew for a fact of a fax machine in the offices of CNBC where every morning hedge funds send in “instructions” for journalists. Authorities at Salt Lake City’s airport arrested him in 2013 when they found a loaded handgun in his carry-on luggage.

Sater is one of Byrne’s “miscreants” who appears as a recurring character in Deep Capture, where he is described to this day as a “Mafia boss” and “a Russian mobster and a member of the Mogilevich organization (controlled by Semion Mogilevich).”

To give you a taste of Deep Capture, check out this now-deleted post that describes … well, just read it for yourself:

A month or so after that, an offshore businessman who had provided some information to our investigation received in the mail a beautiful, lacquered, Russian matryoshka doll. And inside this doll, there was a slip of paper.

On the paper was the letter “F” — with a cross on it. The businessman knew right away that the letter “F” stood for “Felix” – Felix Sater.

The businessman said he had called Felix Sater to see what the deal was with the doll. And after talking to Felix, the businessman invited Patrick Byrne to a greasy spoon diner in Long Island. It was urgent, aid the businessman — so Patrick made haste.

And when Patrick arrived at the diner (along with two other people, who can testify to this) the offshore businessman, discarding with formalities, said, “This meeting can be very short. I have a message for you from Russia.”

The message, said the businessman, was this: “‘We are about to kill you. We are about to kill you.’ Patrick, they are going to kill you – if you do not stop this crusade [the investigation into destructive market manipulation], they will kill you. Normally they’d have already hurt you as a warning, but you’re so weird, they don’t know how you’d react. So their first step is, they’re just going to kill you.”

According to the businessman, this threat had come straight from the mouth of Felix Sater.

Maybe this did happen. Then again, maybe the moon landing was faked. Maybe the Illuminati controls the world. Maybe 9/11 was an inside job.

I’m pretty sure it didn’t happen.

Update: Patrick Byrne emailed me August 4.

“For the record, your email reminded me that Felix wrote me once (while I was very ill) and denied being the source of the Russian death threat against me. He was quite gentlemanly, and I think I said I would post it. However, I think I was in a cardiac unit at the time, come to think of it, and it never got done.”

Byrne didn’t answer my questions about what evidence he has for the Sater-Mogilevich connection, which can still be found on his website.

Whatever credibility Deep Capture had was destroyed in 2016 when a Canadian judge ordered Byrne and Mitchell to pay $1.2 million (Canadian) over published claims that Altaf Nazerali, a Vancouver businessman, was a gangster, an arms dealer, a drug trafficker, a financier of al-Qaida and member of the Russian and Italian Mafias.

Nazerali is mentioned in the deleted post quoted above about Sater and the matryoshka doll. Nazerali is described as a friend of Sater’s, although I’d wager that they never met.

The judge wrote that Mitchell and Byrne “engaged in a calculated and ruthless campaign to inflict as much damage on Mr. Nazerali’s reputation as they could achieve. It is clear on the evidence that their intention was to conduct a vendetta in which the truth about Mr. Nazerali himself was of no consequence.” Read the decision here.

A month before the ruling was issued, Byrne announced he was taking an indefinite personal leave of absence from Overstock.com to battle stage 4 Hepatitis C. He returned to his duties a few months later.

The Supreme Court of Canada dismissed Mitchell and Byrne’s appeal in August 2018 and affirmed a seven-figure award.

Maybe you think Sater a bad guy. Maybe you think he made amends for his criminal past. Either way, a man whose life is far more fascinating than most of ours will ever be doesn’t need to be embellished with fiction.

We’re Responding to Russia. Don’t Tell the President

During the just-concluded G20 summit in Osaka, Japan, President Trump sardonically warned Russian President Vladimir Putin to stay away from the 2020 US presidential election. Responding to a reporter’s question, Trump playfully pointed his finger at Putin and said, “Don’t meddle in the election.” Putin just laughed.

The president might think that the ongoing Russian efforts to interfere in American democracy is all just a big joke. But his administration doesn’t.

It was only a few days earlier that Trump accused The New York Times of a “virtual act of treason” for a June 15 story that revealed that U.S. Cyber Command had placed “implants” — software code that can be used for surveillance or attack — deep inside the Russian electrical grid. Still mad about the story two days later, he tweeted that it was “fake news” and called on the newspaper to release its “phony” sources.  

Even Putin was puzzled by the president’s reaction.  “I am not sure how we should interpret that — if it means that they disclosed real information or it was a planted story,” he said during his annual “Direct Line” with Russian citizens. “But in any case, we have to respond one way or another; we must understand what this is about.”

Putin was asking the right question. What about the report had prompted the president’s unhinged response? Why was the president so upset about a report that the U.S. government was, after years of inaction, finally fighting back against Russian cyberattacks?

The little-noticed answer lies buried in defense legislation and executive orders signed by Trump himself. Although written in dense bureaucratese, what it says is pretty remarkable: Rather than work with the president when it comes to Russia, Trump’s administration has simply decided to work around him.

Like a parent with a obstinate child, the Trump administration, with an assist from Congress, cut the president out of the decision-making loop on national security decisions involving Russia. The Times, then, was a convenient scapegoat for the president’s impotent fury at his own people.

It’s no secret that Trump has long refused to acknowledge even basic truths about the Russian threat, but the consequences to U.S. national security aren’t so well known.

This definitive report in The Washington Post — based on interviews with more than 50 (!) current and former U.S. officials — described how the intelligence community was structuring the president’s daily brief (PDB) to avoid upsetting Trump.

“If you talk about Russia, meddling, interference — that takes the PDB off the rails,” said a second former senior U.S. intelligence official….

Trump has never convened a Cabinet-level meeting on Russian interference or what to do about it, administration officials said. Although the issue has been discussed at lower levels at the National Security Council, one former high-ranking Trump administration official said there is an unspoken understanding within the NSC that to raise the matter is to acknowledge its validity, which the president would see as an affront.

“Doubting the intelligence, Trump pursues Putin and leaves a Russian threat unchecked,” Greg Miller, Greg Jaffe, Philip Rucker, Dec. 14, 2017.

For far too long, the response to ongoing Russian cyberattacks was a big fat ZERO. That only encouraged Russia and other countries to wreak havoc in cyberspace.

“The warning lights are blinking red again,” Dan Coats, Trump’s own director of national intelligence warned in July 2018. “Today, the digital infrastructure that serves this country is literally under attack.”

Then things started to change.

On August 13, 2018, Trump signed a defense bill that basically gave the U.S. military’s Cyber Command a green light to respond to Russia.

The aptly named John S. McCain National Defense Authorization Act authorized Cyber Command to take “appropriate and proportional” action aimed at disrupting, defeating, and deterring Russian cyberattacks, including those aimed at our democracy. The bill also allowed the defense secretary to authorize clandestine military activity in cyberspace without prior presidential approval.

The conference report on the bill, written by Republican and Democrat members of both the House and the Senate, was revealing:

The conferees have been disappointed with the past responses of the executive branch to adversary cyberattacks and urge the President to respond to the continuous aggression that we see, for example, in Russia’s information operations against the United States and European allies in an attempt to undermine democracy. The administration’s passivity in combatting this campaign, as documented repeatedly in hearings before the congressional defense committees in the past 2 years, in the judgment of numerous executive branch officials, will encourage rather than dissuade additional aggression. The Congress has worked diligently to ensure that the Department possesses the necessary capabilities and authorities to combat, in particular, these Russian information operations, and this authorization represents further progress toward that objective. The conferees strongly encourage the President to defend the American people and institutions of government from foreign intervention.

Read that again and take a moment to reflect on that remarkable passage.

Two days after signing the McCain defense bill, the president signed National Security Presidential Memorandum No. 13. This still-secret memorandum freed the military to conduct offensive cyber operations “without a lengthy approval process,” so long as they don’t cause “death, destruction or significant economic impact,” The Washington Post reported last year.

Apparently without realizing what he was doing, Trump had just given the go-ahead for the types of operations described in the Times article that left him so unhinged.

General Paul Nakasone

Spearheading America’s aggressive response in cyberspace to Russia is General Paul Nakasone, the dual-hatted leader of the National Security Agency and U.S. Cyber Command.

Nakasone has pushed a strategy of “persistent engagement” with our Russian foes in cyberspace. In other words, we don’t sit back and wait for our enemies to attack; we take the fight to them.

Under Nakasone, U.S. Cyber Command has shifted from a response force to a proactive one that meets our adversaries in the foreign networks where they lurk. “If we find ourselves defending inside our own networks, we have lost the initiative and the advantage,” Nakasone told a professional military journal.

Securing the 2018 midterm elections was Cyber Command’s No. 1 priority, Nakasone told Congress, and it prompted him to create the “Russia Small Group.”

On Election Day last year, the Russia Small Group shut down the computer networks at the Internet Research Agency, the so-called St. Petersburg “troll factory” behind much of the social media manipulation during the 2016 election. The Russia Small Group also helped state election officials identify vulnerabilities and improve threat warning and it dispatched forces to beef up cyber defenses in Montenegro, North Macedonia and Ukraine.

Much of its work remains secret, but U.S. senators hinted earlier this year that it was no coincidence that the 2018 midterms were not impacted by Russia. Further proof of the group’s success is the fact that it’s now a permanent fixture at the NSA/Cyber Command, housed in a new, $500 million cyberwarfare bunker at Fort Meade, Maryland.

Few Americans realize that the United States is flexing its muscles in the cyber realm, but Russia is keenly aware of what’s going on. “Vitally important spheres of our economy have been targeted with cyberattacks from abroad,” Dmitry Peskov, the Kremlin spokesman, said in the wake of the Times report. An anonymous law enforcement source told RIA Novosti, a Kremlin-owned news outlet, that the Times story about U.S. incursions in the electrical grid is true, although the Russians say they’ve managed to stop the attacks so far. Last fall, Russian trolls and hackers received direct messages identifying them by their real names and warning them not to interfere in the affairs of other nations.

The only one who seems unsure of what’s happening is the president, who may have realized too late what he signed away when he gave his administration the authority to go on the offensive against Russia.

The implications of the decision to take decision-making authority out of the president’s hands are sobering. It was not a decision that was taken lightly.

It reflects a judgement on the part of Congress and the administration that when it comes to Russia, the 45th president poses a threat to the national security of the United States.

Walter Soriano: The Security Consultant for Russian Oligarchs, the CIA … and Diego Maradona?

Walter Soriano

Updated with additional details on USG, specifics of Soriano’s work for Deripaska and Abramovich, and links to the CIA.

Natasha Bertrand at Politico was out with a big story earlier this week about Walter Soriano, a mysterious Orthodox Jew who runs a security firm in London.

Bertrand reported that the Senate Intelligence Committee issued a subpoena to Soriano seeking his communications with Paul Manafort and Michael Flynn.

The subpoena, sent April 5, also seeks records of Soriano’s contacts with three Israeli private intelligence firms as well as any communications he may have had with Orbis Business Intelligence, a firm co-founded by the former British spy Christopher Steele.

The 51-year-old Soriano is unknown in the United States, but he’s a figure of intense speculation in Israel where his name surfaced more than a year ago in connection with a bribery investigation of Israeli Prime Minister Benjamin Netanyahu.

Israeli Kan TV news reported that Soriano was hired to dig up dirt on the investigators investigating Netanyahu. This work was given to subcontractors, some of whom worked for Israeli military intelligence:

This prompted Netanyahu to write a Facebook post insisting that he had not spoken to Soriano in eight years.

What intrigued me about Soriano was that Bertrand’s story linked him to Oleg Deripaska, whose connections to Paul Manafort were at the heart of Robert Mueller’s investigation into Russian interference in the 2016 election.

What hasn’t been reported in the United States is that Deripaska was a client of Soriano’s consultancy, USG Security Limited, according to a court filing by Israeli investigative journalist Raviv Drucker. (Soriano is suing Drucker in Israel for libel.) Drucker wrote that Soriano worked for Deripaska during his long-running legal feud in London with Michael Cherney, who has long faced allegations—which he has denied—that he and his brother, Lev, are connected to Russian organized crime.

Another oligarch, Roman Abramovich, also was a USG client, according to Drucker. USG helped Abramovich in his legal dispute in London with Boris Berezovsky, Drucker’s court filing states.

Drucker claims that USG’s subcontractors carried out “sophisticated surveillance, information gathering and data acquisition by various technological means, such as eavesdropping, hacking, and so on.”

On its website, USG says that its consultants are “all former members of the world’s elite intelligence units, military forces and security organizations, with vast knowledge and practical experience.”

This sounds very much like the work of the three private Israeli security firms who are mentioned in the subpoena: Psy Group, Wikistrat, and Black Cube. Founded by former Israeli military intelligence officers, Black Cube has used operatives with false identities to investigate journalists, victims of Harvey Weinstein, and former Obama staffer Ben Rhodes. Published reports claim Trump aides hired Black Cube for a “dirty ops” campaign to discredit Rhodes and other supporters of the Iran nuclear deal. (Black Cube denied working for Trump.)

Another Soriano client is Dmitry Rybolovlev, another Russian billionaire who purchased a Florida mansion from Trump in 2008 for $95 million. Trump had purchased the mansion for $41 million four years earlier.

Rybolovlev hired Soriano to spy on art dealer Yves Bouvier, according to Drucker and an investigation by Le Point, a French newsweekly. Le Point also obtained correspondence from Soriano to Rybolovlev suggesting he was also hired to deal with problems at the football club the oligarch owns, AS Monaco. (See “L’étrange M. Soriano,” Le Point, February 7 2019.)

The football connection is an interesting thread in this strange world because someone named Walter Soriano emerged in 2010 — the same year that USG Security Limited went into business — as the UK representative of former Argentinian superstar Diego Maradona.

Diego Maradona

“I think Diego would be very open to the idea of coming to England and managing Aston Villa,” a reporter for the Sunday Mercury quoted “Walter Soriano” as saying.

The real Walter Soriano was at one time a partner in a now defunct UK firm called Football Universe Limited. And like Maradona, Soriano is a native Argentinian, the tireless blogger Richard Silverstein reported. (An Israeli judge threw out Soriano’s lawsuit against Silverstein.)

An earlier version of USG’s website names Soriano as director of operations and Simon Bird simply as “UK operations.” The equally mysterious Mr. Bird, who is 76 and not to be confused with an English actor of the same name, gave an address of Ware House in Lyme Regis, a manor immortalized in the film The French Lieutenant’s Woman. Bird is described as a historian and a longtime partner of Winston Churchill’s granddaugher-in-law.

Both Bird and Soriano were directors of a now-defunct UK firm, Universe Security Group, whose board included Nahum Admoni, a former head of Mossad; Uri Sagi, former head of IDF intelligence; and Albert Raes, formerly Belgium’s top spy. (Issac Molho, a trusted advisor to Netanyahu caught up in the prime minister’s scandals, received about $200,000 in “finder’s fees” from the company.)

Update: A reader who asked not to be named pointed out that Molho did not just receive finder’s fees. He owned 10 percent of the company, according to a letter of intent he signed in 2003. Soriano was the majority shareholder.

In 2003, the Panama Maritime Authority, which manages the world’s largest ship register, selected Universe Security Group as one of three “recognized security organizations” to approve ship security plans. Soriano told Lloyd’s List that company operatives come mainly from the UK, Belgium, Israel, Central and South America, North Africa and the US.

A sharp-eyed Twitter user, @brazencapital, pointed out something I had read many years ago and since forgotten. One of Universe Security Group’s contacts was Kyle “Dusty” Foggo, formerly the No. 3 at the CIA who went to prison in the scandal surrounding Congressman Randy “Duke” Cunningham. (Foggo was one of the subjects in my first book, Feasting on the Spoils.)

Buried in Foggo’s sentencing memorandum from 2008 is a statement from a CIA contractor named Joel Combs:

Sentencing memo, US v Foggo

Universe Security’s reputation suffered a fatal blow in 2009 when one of its customers was robbed, according to an administrator’s report. (The client was not identified in the report but Israeli media reports named Graff diamonds in London.) Admoni, Sagi and Raes all resigned from the company en masse. The company went into liquidation; its assets were acquired by Soriano and Bird’s newly-formed USG Security.

There’s more. Soriano’s USG Security also surfaced in a dispute between wealthy London property developers the Candy brothers and British businessman Mark Holyoake.

“I have reliable information that USG Security has been hired by [Ed Candy] for (sic) investigate and monitor my family, my colleagues and myself,” Holyoake told a London court. He described USG as a “military-based ‘security consultancy and security services provider.'” (See Holyoake v Candy, Queen’s Bench Division)

Holyoake declined to reveal who passed him this information saying it related to security arrangements for his family and “could have consequences for the safety of my source if revealed.” Candy’s representative denied hiring USG.

During trial, Holyoake’s wife testified that among the men in the Candys’ “extended circle who have died mysteriously” is Boris Berezovsky, the exiled Russian oligarch in London who became a fierce critic of Vladimir Putin.

Berezovsky lost his high stakes London court battle with Roman Abramovich in 2012 over control over a major Russian oil company. Seven months later, Berezovsky was found dead in his shower with a scarf around his neck. A coroner could not reach a verdict on the death.

The mysterious Mr. Soriano is much than he seems. Connected to the prime minister, deeply tied to the Israeli security establishment, he adds to the intrigue surrounding Trump and Russia.

A Russian Oligarch is Investing in U.S. Companies. Should We Be Worried?

Vladimir Potanin

Compared to his fellow Russian oligarchs, Vladimir Potanin is radically transparent when it comes to his investments in the United States.

But then again, how many people realized that a Russian oligarch was a major investor in a firm that hosted Maryland’s voting data? Even fewer know that Potanin has been linked in court documents to one of the world’s largest private equity funds.

Potanin, at 58, is one of the world’s richest men. The bulk of his $18.7 billion fortune derives from his large stake in Nornickel, the world’s largest refined nickel and palladium producer, which he has held since the 1990s. Potanin and his fellow metals tycoon, Oleg Deripaska, waged a bitter, multiyear battle for control of Nornickel.

Unlike Deripaska, Potanin has not been sanctioned the U.S. government although he appeared on the Kremlin list of billionaires and officials with ties to Russian President Vladimir Putin.

Potanin is well known in Russia. Less well known, is his role as the major investor in Altpoint Capital Partners LLC, a venture capital fund based in Greenwich, Connecticut with offices in New York and Los Angeles. AltPoint has more than $287 million in assets under management, according to its lastest SEC disclosure.

Potanin does disclose his interests in Altpoint, but there’s a bigger problem: private equity provides a convenient means of obscuring how he and other foreign billionaires invest in U.S. businesses.

“Washington knows shockingly little about foreign money flowing through the financial system, especially via private fund structures like hedge funds, venture capital and private equity, allowing foreign actors to make opaque investments that pose national security risks,” Joshua Kirschenbaum and David Murray observed in Bloomberg.

Altpoint, it turns out, was an early investor in Lyft, the ride-hailing app that recently had its initial public offering. It owns Ford Models, which repped Brooke Shields and Elle Macpherson. And Altpoint has backed a host of startup firms like Factual, a location data company. Altpoint also has founded a hedge fund dealing in cybercurrencies like Bitcoin.

“We are excited about the consumer internet, a new eCommerce approach, media, virtual and augmented reality, mobile solutions or the internet of things,” reads Altpoint’s profile on Cruchbase.

One company in Altpoint’s portfolio is ByteGrid, which set off alarms when in Maryland in July.

During “fact finding activities using open source methods,” the FBI found out that Bytegrid, which hosted the computer servers used to register Maryland voters and and provide unofficial election night results, was being financed by Potanin.

State officials swiftly called a press conference. “We felt it imperative that our constituents know that a Russian oligarch has purchased our election machinery,” said Maryland State Senate President Thomas V. Mike Miller.

Three years had passed before anybody noticed that the Russian oligarch had “purchased” Maryland’s “election machinery.” And nobody seems too bothered by the fact that the same company managed computer facilities for the U.S. Department of Defense.

This matters because Potanin is an oligarch. In fact, he’s one of Russia’s original oligarchs.

Born into the nomenklatura, the Soviet elite, Potanin used to connections to create a successful bank after the collapse of the Soviet Union in the 1990s. It was Potanin who masterminded the “loans-for-shares” program and he positioned himself to acquire the government’s position in Nornickel for a fraction of its value.

“Yes, it made me incredibly rich,” he told The Financial Times “Everybody knows I won control of 38 per cent of [Nornickel] in loans for shares, cheap.”

Out of the seven original oligarchs, Potanin is one of the only ones still welcome in Moscow. “Why did we survive, [Mikhail] Fridman and myself? Maybe because we never tried to dictate to the government, to the Kremlin,” he told the FT.

Potanin began quietly investing in the U.S. businesses in 2006 via Stone Tower Equity Partners LLC, a New York private equity fund.

Stone Tower acquired Ford Models in 2007, but it took three years before anyone noticed Potanin’s role. “A Russian oligarch has seized control of a coveted American asset: beautiful models,” The New York Post wrote.

It’s interesting to note that Stone Tower’s chairman and CEO, Michael Levitt, was nominated by Interros, Potanin’s holding company in 2008 to serve as an “independent” director at Nornickel. Levitt was elected, even after his connections to Potanin were revealed.

Guerman Aliev aka Gerald Banks

After the 2008 financial crisis, Guerman Aliev, a Russian who worked for Interros was dispatched in the United States to take over his boss’ investments in Stone Tower.

Aliev brought on a new team and renamed Stone Tower as Altpoint Capital. (He then renamed himself as Gerald T. Banks.)

“We buy and sell controlling and non-controlling positions in companies,” Aliev explained in a 2015 deposition. “Being a U.S. manager in the United States, we have investments in Texas, we have investments in just about every single state in the United States. We buy and sell these companies as we see fit.”

Peering deeply into Altpoint is a difficult task. Just ask Potanin’s ex-wife, Natalia, who tried to identify her husband’s far-flung assets after he filed for divorce in 2013. Mrs. Potanina hired the law firm of Alston & Bird (ring a bell?), and used U.S. courts in several states to force her husband’s U.S. companies to answer questions:

Altpoint is Potanin’s captive private equity fund, and he uses it to keep a significant portion of his wealth in the United States. Petitioner requested discovery from Altpoint and several of its employees to show Potanin’s ties to Altpoint in order to assist her in identifying it as one of Potanin’s assets. Debevoise & Plimpton (which represents Potanin’s interests in Russia) appeared on behalf of Altpoint and several other Potanin-affiliated respondents in multiple other U.S. judicial districts, and moved to quash this discovery. …

Letter to Judge November 18, 2015.

In one filing, attorneys for Natalia Potanina identified the following as Potanin’s U.S. companies:

  • Altpoint Capital Partners LLC
  • Amquip Crane Rental
  • ANARAQ
  • Bytegrid Holdings LLC
  • Everquest Financial Ltd.
  • Ford Models
  • Globe Energy Services LLC
  • IVESCO Holdings
  • Pyote Water Solutions
  • Resources Acquisition
  • Sanchez Resources LLC
  • SCA Sanchez Resources Holdings LLC
  • TowerCo
  • VAZATA
  • Stone Tower Capital LLC
  • Apollo Global Management LLC
  • Norilsk Nickel USA
  • Stillwater Mining Company

The most interesting company on this list is Apollo Global Management LLC, one of the world’s biggest private equity firms with connections to both Russia and the Trump administration.

Apollo loaned $187 million to Jared Kushner’s family real estate firm and one of its founders, Joshua Harris, advised the incoming Trump administration on infrastructure. Earlier, Apollo signed on to finance Trump’s aborted effort to build a tower in Moscow in 1996.

A spokesman for Apollo did not answer my questions about the company’s relationship with Russia.

In 2011, Apollo acquired Stone Tower Capital LLC and with it, Potanin’s old fund, Stone Tower Equity Ventures, for an undisclosed sum. Stone Tower Equity Ventures is now known as Apollo ST Capital LLC.

Another Apollo co-founder, Leon Black, also has links to Trump and Russia. He was named to the advisory board of the $10 billion Russian Direct Investment Fund in 2011. The RDIF was added to the sanctions list in 2015 by the U.S. Treasury Department. Presumably Black has resigned from the RDIF, although his spokesman didn’t respond to my questions.

Kirill Dmitriev, CEO of the RDIF, makes numerous appearances in the Mueller Report. After Trump’s election, it was Dmitriev who wrote, “Putin has won.”

As for links to Trump, here is Black (wearing sunglasses) seated next to Jared Kushner at the 2016 US Open in New York:

Leon Black, wearing sunglasses, watches the 2016 U.S. Open tennis tournament with Jared Kushner

Altpoint began investing in ByteGrid, which is based in McLean, Virginia, in 2011. According to court documents, Altpoint purchased 3,925 of the total 4,000 Class A Units of ByteGrid and was granted the right to appoint four of the six members of the Board of ByteGrid.

Between 2011 and 2016, Altpoint financed Bytegrid’s acquisition of a half dozen data centers in Silver Spring, Maryland; Alpharetta, Georgia; Chicago, Illinois; Cleveland, Ohio; Lynnwood, Washington; and Annapolis, Maryland. Bytegrid’s investment decisions were controlled by Aliev and two others at Altpoint. (See Decision in Lynwood Tech Holdings LLC v NR Int. LLC, Circuit Court of Fairfax County, Virginia.)

Bytegrid acquired the Sidus Group, an Annapolis-based firm, in 2015. Sidus had an existing contract with the state Board of Elections for the MDVOTERS system.

In May 2016, the MDVOTERS system came under a “denial of service” computer attack and Sidus took the site down to stop the attack. According to the Maryland State Board of Elections, no users were impacted and the system was not compromised. It’s not clear where the attack originated, but in 2017, Maryland learned that it was one of 21 states targeted by Russian government operatives before the 2016 presidential election

After Potanin’s name was linked to the state’s election system, DHS conducted another investigation and found no evidence that Maryland’s systems had been compromised (The report’s detailed findings, however, were redacted). At the end of 2018, ByteGrid transferred ownership of its Annapolis data center to Intelishift, a privately owned, Virginia-based data center.

There’s nothing wrong with a Russian oligarch investing in U.S. business, but the problem, as Maryland learned the hard way, is one of transparency.

If we’ve learned anything about modern Russia, it’s that no oligarch survives in power as long as Potanin has in Russia without answering the Kremlin’s request for help when the call comes. This, I suspect, is what alarmed the FBI about ByteGrid.

Had Putin asked Potanin to throw a wrench into Maryland’s elections, he would not have been able to refuse.

The pee tape

Someday, we may find ourselves staring in amazement at our computer screens as a man who resembles the 45th president performs unspeakable acts with prostitutes in a Moscow hotel room.

But Michael Cohen, the president’s former lawyer and fixer, thinks that day will never come. And he’s in a good position to know one way or another.

The public first learned of the possible existence of what came to be known as the pee tape from the Steele dossier. Former British MI6 officer Christopher Steele reported that prostitutes had performed a “golden shower” urination show for Trump in the Moscow Ritz where he was staying during the 2013 Miss Universe pageant. This had been recorded by Russian intelligence for purposes of blackmailing Trump.

But this claim about a pee tape wasn’t news to Cohen. Thanks to a newly released transcript from the House intelligence committee, we now know that Cohen first heard about the pee tape shortly after Trump returned from Russia.

Trump denied it, but he asked Cohen to find out where the rumors were coming from.

Testifying under oath, Cohen says he spoke to many people about the tape, including one unnamed caller who demanded $20 million.

Another person who called Cohen about the tape was Harvey Levin of the gossip site TMZ, who also had heard about the existence of the tape. (TMZ did not immediately respond to a request for comment.)

In the end, Cohen concluded that the pee tape didn’t exist for a very practical reason. If prostitutes had urinated on the bed in the Moscow Ritz, where did Trump sleep that night?

The tape had acquired a life of its own, Cohen said, much like the claim that he had attended secret meetings with Russians in Prague, which also appeared in the dossier. Cohen said under oath that all the allegations concerning him in the dossier are false.

But, Cohen also relates an interesting anecdote about the dossier. After it was published January 10, 2017 by Buzzfeed, Trump called Cohen at home.

In other words, Trump seemed very concerned. He appeared unsure whether the allegations in the dossier regarding Cohen were true or not.

So let me make sure I got this right. This is the same dossier with the golden showers allegations that Trump scoffs at. If those claims, which appear in the very front of the dossier, were false, would he really need to see Cohen’s passport in the middle of the night?

In other words, if there’s a huge lie on page one of the dossier, you don’t need to scrutinize pages two, three, four, and five, especially not in the middle of the night. It can wait until morning.

Perhaps Trump was just panicking, but it seems quite possible that something in the dossier hit the mark to cause such panic for Cohen to go rushing back to Trump Tower waving his passport. Whether that’s the pee tape or not, we don’t know.

Steele, unlike Cohen and Levin, Steele, was passing along more than a rumor about the pee tape. He claimed to have confirmed the incident with three separate sources:

  • “Source D,” described as having “been present.”
  • “Source E,” a “senior/western member of the staff at the hotel,” who was aware of the golden showers incident at the time it occurred in 2013.
  • “Source F,” a female staffer at the hotel who confirmed the story.

I remain unconvinced. It could be Steele was the victim of a Russian disinformation effort. As I wrote in Trump/Russia, this kind of tawdry material in reports compiled by former spooks was not out of the ordinary:

What people failed to realize was that sordid allegations like the one in Steele’s report were a dirty secret of the world of private investigations. Several people familiar with this world told me that reports by companies like Kroll, K2, Mintz Group, IGI, and others were often littered with tawdry allegations. “Yes, sex stuff comes up a lot and it’s often nonsense,” a DC attorney who often hires private investigators told me. One veteran opposition researcher told me he has seen the same thing so often that he has detected a pattern: when the subject of the investigation was connected to Latin America, drugs were involved; when the connection was Russia or Eastern Europe, then it was usually sex. “Every single one of their reports has something like that,” the opposition researcher said. “That’s what they pitch the client to keep them on the hook. They then spend months trying to confirm it.”

Then again, maybe Steele got it right and one day we may find ourselves staring in amazement at our computer screens as a man who resembles the 45th president performs unspeakable acts with prostitutes in a Moscow hotel room.