Tefvik Arif was the chairman of Bayrock Group, the murky company that partnered with Donald Trump to build Trump SoHo in lower Manhattan.
Figuring out who he is was not an easy task.
Tevfik Arif (Тевфик Ариф) was born Toifik Arifov (Тофик Арифов) on May 15, 1953 in the Soviet Socialist Republic of Kazakhstan. He was one of four brothers born to a Turkish family in the Jambyl Region in northern Kazakhstan.
That’s about the only thing we know about his early life with any certainty.
What he did for the next 38 years is unclear. The oft-repeated facts of his background come from a short profile on Arif published in Real Estate Weekly in 2007, just as Trump was preparing to kick off sales of Trump SoHo.
Real Estate Weekly reported that Arif had received a degree from Moscow Institute of Trade and Economics and then worked in the Soviet Ministry of Commerce and Trade in the former Soviet Union for 17 years, where he served as the chief economist and deputy director of the Ministry’s Department of Hotel Management.
Many journalists have repeated this story. It may be true, but no one seems to have bothered to check. It’s worth noting that this is the only reference to a Soviet Ministry of Commerce and Trade that I found on the Internet. There is a Russian ministry that has this name, but I could find nothing from the Soviet era. (Arif did not speak English very well, so it’s possible this is a mistranslation.)
There was, however, something called the USSR Chamber of Commerce and Industry, which was run by the KGB and spied on the West. A third of the chamber’s staff were KGB, according to a US State Department report that cited CIA information. And the USS Chamber of Commerce and Industry did have a hotel division, V/0 Sovintsentr, which ran a trade center and various Moscow hotels.
In the Russian press, Arif is affiliated with the Soviet Ministry of Foreign Trade (which did exist). Or maybe he was just a Soviet hotel bureaucrat, as he claims. Whatever Arif did for the first 40 odd years of his life, he hasn’t been very open about it.
Trans World Group
After the collapse of the Soviet Union in 1991, Arif left the government and made a career leap. A huge leap.
In a court proceeding in Turkey, the former Soviet hotel bureaucrat testified that he “worked in energy sector, chemical sector and metallurgy sector. I was producing coal in Russia and copper in Kazakhstan. Due to lack of coal, it was not possible to make production. I started to organize them.” He started a private company called the Speciality Chemicals Trading Co., trading in “chrome, rare metals and raw materials.”
And then he went to work for Trans World Group. TWG was a British company headed by two brothers, David and Simon Reuben. After the Soviet Union collapsed, the Reubens moved aggressively into metals production, buying up smelters and refineries.
As foreigners, however, the Reubens needed locals to build their business. Enter Arif. He became an “agent on the ground” — a fixer, in other words — for TWG in Kazakhstan, according to internal company documents reviewed by theblacksea.eu, an online investigative Website.
Arif apparently did his job well. Very well. In a few years, TWG’s holdings of steel, iron, chrome and alumina refineries in Kazakhstan generated one fifth of the entire country’s gross revenues.
Maybe Arif was just a Soviet hotel bureaucrat who seized a once-in-a-lifetime opportunity to get into the post-Soviet metals sector. But his hotel background would have been of little use to TWG. What TWG needed was someone with deep connections in the country’s political and business circles. The kind of people who had those connections in the Russia of the 1990s were either ex-KGB, or mobsters.
Consider another pair of fixers the Reubens brought into TWG in 1992. They were the Cherney brothers, Lev and Michael, and they formed a 50-50 partnership with TWG. It was a successful partnership. With the Cherneys help, TWG grew by leaps and bounds. The problem for the Reubens was that Michael Cherney’s name soon became publicly linked to Russian organized crime groups. The Reubens quickly bought out Cherney’s share of TWG for $410 million.
Swiss authorities in 1996 accused Michael Cherney of “drug trafficking, money laundering, fraud and sponsoring murder” on behalf of a Russian organized crime group run by “V Ivankov.” This was the infamous Russian mob boss nicknamed “Yaponchik” who had settled in New York, where the FBI found him hiding out in Trump Tower and Trump’s New Jersey casino.
Michael Cherney has repeatedly denied these allegations, which he blames on his archenemy and former partner Oleg Deripaska, one of the wealthiest men in Russia. In 2008, the federal Swiss court exonerated him of the charges, but two years later, Spain issued an international arrest warrant for Michael Cherney’s arrest on money laundering charges.
Did Arif have links to the Russian Mafia? Felix Sater, who worked under Arif at Bayrock, seems to think so.
The Wall Street Journal reported that Sater and his attorney threatened to expose Arif’s past unless he paid Sater’s attorney fees. Sater warned of a possible lawsuit that would include details of Arif’s wrongdoing “in the post-Soviet metals business in Kazakhstan.”
In a personal memo, Sater was even more blunt: “The headlines will be, ‘The Kazakh Gangster and President Trump.'”
A High-Net Worth Individual
“The head of the family is my uncle Roustam Arif [sic],” Tevfik’s son Arif writes in 2013 in correspondence obtained by theblacksea.eu. “In our culture, the patriarch is usually the oldest member of the family. Roustam is my father’s oldest brother. Even though my father is a successful entrepreneur in his own right (hotels, construction and real estate), his younger brother Refik Arif is the principal figure in the main family business (commodities).”
In the mid-90s, Refik reportedly acquired control of the Aktyubinsk Chromium Chemicals Plant (ACCP) in Aktobe, in north-western Kazakhstan, near the border with Russia. Refik also established a highly profitable chemicals trading business. And this is an important piece of the story, because the money for Bayrock, at least part of it, came through Kazakhstan.
Consider that for a moment. The Arifs managed to pool enough capital and influence to buy what turned out to be a highly lucrative chemical plant. How was this possible? What really happened in Kazakhstan in 1990s?
Around 1999, Refik Arif’s chemical trading business was generating so much cash that the family retained Hamels, a UK tax consultancy, to help structure their investments. On its website, Hamels describes its typical clients as “high net worth individuals seeking to minimize their respective tax burdens on current income or investment streams…”
In a 2011 memo, Hamels partner Zig Wilamowski wrote, “Mr. Refik Arif is one of four brothers who have over many years built up a substantial and profitable international business from the sale of chrome-based chemicals.” Williamowski said he was in a position to verify the “good origin” of the Arif family’s wealth. You can read the document here.
With the help of Hamels, the Arifs set up a network of shell companies, many of which were established in the Caribbean tax haven of the British Virgin Islands. These companies included Bennington Trade Assets Ltd., which owns property in the center of London and Merlin Trading Assets Ltd., which owns an executive jet. There are too many companies to name them all. Many are found in the Panama Papers leak of offshore companies founded by the Panamanian law firm Mossack Fonseca.
The real moneymaker for the family was Castello Global Ltd., which handled the profits from the chrome trading business. Here is a breakdown of Castello Global’s profits:
So much money was pouring out of Kazakhstan that Tevfik Arif decided it was time to try something big. Really big.
He moved to New York and set out to do a real estate deal with the biggest and the best. So he set up offices of his new company Bayrock Group in Trump Tower, one floor below Trump’s own offices.
To be continued…
Call me skeptical.
I don’t believe that Facebook won the election for Donald Trump. That’s the claim put forth in this hagiographic profile of Jared Kushner in Forbes and in many other media outlets.
The traditional campaign is dead, another victim of the unfiltered democracy of the Web–and Kushner, more than anyone not named Donald Trump, killed it.
We see these stories every time a new president is elected. A while back it was Obama’s “data crunchers.” This time, the key to Trump’s victory, Kushner would like us to believe, were computer algorithms that targeted potential Trump supporters with social media to stunning effect.
The secret weapon was Cambridge Analytica’s computer algorithms that figure out who you are based and what motivates you based on all the times you click Like on Facebook, as Cambridge Analytica’s Jack Hansom explains in this video:
These algorithms turned up some surprising findings. Liking the New Orleans Saints mean you’re less likely to be “conscientious,” i.e. do the right thing. And liking the Energizer Bunny means you’re more likely to be neurotic.
So what? Well, one or two of these things don’t tell you much, but the average person has hundreds of Facebook Likes which allows Hansom and his colleagues to build a surprisingly accurate picture of your personality. You can test this on yourself here.
Facebook allows you to drill down to the kind of person in the kind of place you want. (You can even reach “Jew haters” in Idaho if you wish.) Here’s Cambridge Analytica’s CEO Alexander Nix showing how his company’s model could be used to drill down to find every “persuadable” gun rights advocate in Iowa:
It’s very impressive (and very creepy), and it makes for a good story, one that Silicon Valley loves in an everybody-is-stupid-except-for-me way.
But the problem with the claim that Kushner and his machine learning wizardry won the election for Trump is that everybody was doing it. Hillary Clinton had a team of mathematicians and analysts crunching data. Ted Cruz had hired Cambridge Analytica as well, but then he ran into the Trump train.
I may be wrong, but I’d wager the $1.8 billion worth of free airtime that TV networks gave Trump every time he opened his trap probably had a lot more to do with him winning the election than Cambridge Analytica.
Trump knows how to get on TV: He is a promotional genius. What will he say next? He’s a modern day PT Barnum and Jeff Zucker‘s CNN couldn’t get enough.
Setting that aside, the Facebook/Jared Kushner story is still pretty important. And what’s important about it is that Special Counsel Robert Mueller thinks it’s pretty important. Facebook may not have won Trump the election, but it may seriously damage his presidency.
CNN reported Sunday that Mueller, who’s investigating Trump’s links to Russia, had served Facebook with a search warrant. Mueller was interested in the $100,000 worth of ads purchased by bogus accounts that Facebook on Sept. 6 acknowledged had “likely operated out of Russia.”
Mueller’s search warrant for Facebook is a big deal, a former federal prosecutor explains:
Mueller would have had to show the judge that there was reason to believe that one or more foreign individuals committed a crime and the evidence of the crime could be found on Facebook’s servers.
The crime is that foreign nationals are prohibited from contributing money “or other thing of value” (like $100,000 worth of Facebook ads) in connection with an election. It’s also against the law to solicit, accept, or receive such a contribution. (Here is the statute.) And if someone on the Trump campaign knew about the Russian Facebook ads and did nothing to stop it, that is also a crime — aiding and abetting.
Did someone on the Trump campaign know about the Russian Facebook ads. We don’t know yet, but the answer lies in targeting. To put it in Watergate terms: Who targeted whom and when?
Were the Russian Facebook ads and the Trump campaign targeting the same people? And if so, how did a bunch of Russian trolls in St. Petersburg or Vladivostok or where ever know to target, say, black women in Milwaukee or rural voters in Michigan’s Upper Peninsula, for example?
I tried to ask Alex Stamos, Facebook’s chief security officer, but didn’t get a reply.
This question intrigues Sen. Mark Warner, the leading Democrat on the Senate intelligence committee, as he said on the Pod Save America podcast:
Warner: When you see some of the explanation and some of the fact that it appears that, for example, women and African Americans were targeted in places like Wisconsin and Michigan, where the Democrats were too brain dead to realize those states were even in play … It was interesting that those states seem to be targeted where the bots — where they could could create a lot of these fake Twitter and Facebook accounts, could in fact overwhelm the targeted search engines that would end up saying on your news feed, you suddenly got stuff that “Hillary Clinton’s sick” or “Hillary Clinton’s stealing money from the State Department.”
I get the fact that the Russian intel services could figure out how to manipulate and use the bots. Whether they could know how to target states and levels of voters that the Democrats weren’t even aware really raises some questions. I think that’s a worthwhile area of inquiry.
How did they know to go to that level of detail in those kinds of jurisdictions?
Vietor : I wonder if they just asked Jared [Kushner] like Trump does with all of his questions. We’ll find out.
Warner : We’ll find out. More to come on that.
Sen. Warner thinks it’s a worthwhile line of inquiry, and it’s a good bet Mueller does too. The information Facebook handed over to Mueller included the targeting criteria the bogus Russian accounts used, The Wall Street Journal reported.
An unnamed Trump campaign staffer told CNN that the key to the whole inquiry may be found on Facebook’s servers.
Only Facebook can answer three critical questions: were the same databases used by the Trump campaign and Russian operatives to coordinate targeting of voters; was money used to promote pro-Trump posts, and, if so, how much was spent and by whom; and will Facebook reveal if bots were successfully used to push fake news posts?
Hopefully, Robert Mueller knows the answers.
I just finished reading The Scorpion and the Frog, the book by Felix Sater’s Wall Street pal, Salvatore Lauria.
It’s an interesting read about Sater’s time on Wall Street and his dealings with Mobsters.
Even more interesting are the details about his cooperation with the CIA in Russia against al Qaida that helped keep him out of prison for racketeering.
A lot of these details were new to me, so I thought I would post a little summary of what’s in the book.
Sater’s lawyer, Robert S. Wolf, has called some of the CIA-related portions of the book “fabricated.” However, The Scorpion and the Frog was the subject of a 2002 legal proceeding in federal court in Los Angeles. Lauria sought to stop publication of his own book. Not because it was fiction, but because it told the truth.
According to Lauria, he had agreed to write the book on the condition that his real name not be used. His publisher, however, went ahead and used his real name, and Lauria was worried that he could be physically harmed by the people named in the book. A bench trial was held and in the end a federal judge cleared the way for the book’s publication.
With that said, here’s my abridged version of what the book says:
Felix Sater walked away from his Mob-linked Wall Street business in 1996 and headed for Russia. He would spend the next two years there before returning to the United States to surrender to the FBI in 1998 and plead guilty to racketeering.
Sater had two jobs in Russia. The first was a deal to bring AT&T bulk long distance service and pre-paid phone charge cards to the country. The second was to find a deal that could get him out of jail.
Sater began to develop contacts at secret Russian military installations known as closed cities, which held “some of the great secrets of the Soviet Union,” Lauria wrote.
The closed cities were opening up. Their representatives were contacting “various countries and rogue organizations interested in buying everything from missiles to assault rifles to millions of rounds of ammunition,” Lauria wrote. They also would make munitions and missiles “to order.”
“We ran into guys selling shiploads of arms to Arabs and other Muslims — Libya, Iraq — countries that were hostile to the United States,” Lauria wrote.
At some point, according to the book, Sater made an initial contact with “someone connected to the CIA.”
Sater gave this version of events to New York magazine.
One night, Sater told me, he went to dinner with a contact that he assumes was affiliated with the GRU, the Russian military-intelligence agency, where he was introduced to another American doing business in Moscow, Milton Blane. “There’s like eight people there,” Sater said, “and he’s sizing me up all dinner long. As I went to take a piss, he followed me into the bathroom and said, ‘Can I have your phone number? I’d like to get together and talk to you.’ ” Blane, who died last year, was an arms dealer. According to a government disclosure made 13 years ago in response to a Freedom of Information Act query, Blane had a contract with the Defense Department to procure “foreign military material for U.S. intelligence purposes.” Sater says the U.S. wanted “a peek” at a high-tech Soviet radar system. “Blane sat down with me and said, ‘The country needs you,’ ” Sater said.
Back to the book. Sater’s unofficial contact in the CIA came to see him and told him the agency wanted a radar tracking system that the Russians had developed before the fall of the Soviet Union. The radar tracking system had never been deployed, and the CIA worried that the system could fall into the hands of our enemies.
“We looked around through Lex’s contacts and found we could definitely get the radar system. For once, this was a deal we were doing with no interest in the money. We were doing it to enhance our own position regarding the legal charges, and also as something that might benefit the country. Money or profit was not an issue. We just wanted the credit for doing it. With a direct line to the radar system, we contacted our lawyer in New York, who went to Washington DC to talk to the CIA”
The CIA was interested. The agency sent a man to Russia, and Sater located the radar tracking system. (In other parts of the book, Lauria calls it a “missile guidance system.”)
With that success, Sater was approached about acquiring a dozen Stinger missiles. The Stinger was the portable, shoulder-fired missile that used a heat-seeking sensor to home in on an aircraft’s engine. They could be fired from as far away as 5 miles away and could easily bring down a passenger airliner.
The CIA was desperate to get hold of them. Lauria states that at least 12 Stinger missiles were obtained by Osama bin Laden.
As he had with the radar tracking/missile guidance system, Sater found that he could get the Stingers, albeit in a round-about way.
Sater could not buy the Stingers directly from al Qaida. “Instead, he used his contact with a KGB general who claimed he had strong ties with Ahmad Shah Massed, leader of the Northern Alliance,” Lauria wrote. Sater alaso used “connections he thought he had with both sides in the Afghan War.” This is interesting. Was Sater dealing with the Taliban?
According to Lauria, Sater obtained photographs of the Stinger missiles as well as the the serial numbers of three of them to verify their authenticity. Sater also obtained what he thought was an active cell phone number for bin Laden. His attorney supplied it all to the CIA.
The CIA offered to pay Sater $300,000 per missile. Lauria insists there was no profit built into the deal. However, one of their partners, Gennady “Gene” Klotsman went behind their backs and demanded $3 million per Stinger. The CIA was furious and called off the deal.
A few days after the attacks of Sept. 11, 2001, Lauria got a phone call from Sater. The information they had provided about Osama bin Laden was now being actively pursued.
“Our situation had improved,” Lauria wrote.
Somehow I missed this. Buried deep in this excellent New York magazine piece on Felix Sater is this tidbit:
Cohen, one of Trump’s personal attorneys, had known Sater since they were teenagers.
I’m curious how these two met. Sater was born in Russia and grew up in the Russian enclave of Brighton Beach as a Mobster’s son. Cohen grew up on Long Island as a doctor’s son. About the only thing the two seem to have in common is that they are both Jewish and roughly the same age.
Update: Sater told Talking Points Memo he knew Cohen through Cohen’s wife, Laura Shusterman:
Sater said he most clearly remembers the beginning of his relationship with Cohen from the time the former Trump Organization attorney began dating his now-wife, whom Sater describes as a girl from his neighborhood of Jewish Soviet expatriates. Cohen told TPM the pair had known each other before then, in their teenage years, and that he hadn’t yet begun dating his wife, reportedly a Ukrainian émigré, when he was in his teens.
Their friendship puts a different light of the chummy emails between the two men in 2015, after Trump announced he was running for president. In the emails, obtained by The New York Times, Sater promised to use his contacts in Russia to help Trump win.
“Our boy can become president of the USA and we can engineer it,” Sater wrote in an email. “I will get all of Putins team to buy in on this, I will manage this process.”
Cohen had been in negotiations with Sater and foreign investors to build a Trump Tower in Moscow from September 2015 through the end of January 2016. Trump announced he was running for president in June 2015.
In January 2016, when negotiations stalled, Cohen wrote to Putin’s spokesman, Dmitri S. asking for help. But Mr. Cohen did not appear to have Peskov’s direct email.
That’s really strange. Why would he do this? As an attorney, he knows how important records are. It’s almost as if Cohen didn’t really expect a reply, but wanted to leave a trail.
And the White House has been referring questions about this whole matter to Cohen’s attorney, suggesting that this was Cohen’s deal, not the Trump Organization’s.
The port of Yalta on the Black Sea has long been a source of controversy.
Churchill, Roosevelt and Stalin met there in 1945 to discuss what to do with Germany when World War II ended. The Big Three agreed to demand Germany’s unconventional surrender. They also left with a promise form Stalin to allow free elections in Poland and to grant Eastern Europe the right of political self-determination. Stalin, however, wasn’t a man of the word and the result was a divided Europe and decades of Cold War.
On the 50th anniversary of the Yalta Conference, Donald Trump was considering whether to put his mark on the the Black Sea port.
In September of 2005, a Ukrainian cabinet minister announced that Trump was considering a major investment in his country.
Evhen Chervonenko, Ukraine’s minister of transport, announced on Sept. 12th that Trump planned to put $500 million into construction of an exclusive yacht and hotel complex in the Black Sea resort of Yalta. In order to boost tourism, the Yalta yacht club would replace the unsightly Yalta freight port.
The plan called for what Chervonenko called for a “huge condominium” with restaurants and a hotel.
The Yalta deal never happened, but it’s a chapter of the Trump-Russia story that has not gotten the attention it deserves for it weaves together two critical parts of the saga: Felix Sater and Deutsche Bank.
For Chervonenko had not met with Trump, but rather with one of his representatives, Felix Sater.
Sater was a violent twice-convicted felon who had gone to prison for stabbing a commodities trader in an ugly bar fight. Born in Russia and raised in the Russian enclave of Brighton Beach, Sater was the son of a Russian mobster convicted of extorting businesses in Brooklyn.
Despite his past, or perhaps because of it, Sater had gotten a job at Bayrock Group LLC, a New York development firm run by Tevfik Arif, a Kazah-born businessman. Bayrock joined forces with Trump to develop Trump SoHo, in lower Manhattan.
Construction on Trump SoHo had not yet begun when Trump granted Sater and Bayrock exclusive rights for one year to develop a Trump International Hotel and Tower in Kiev and Yalta and the rest of the Commonwealth of Independent States, which included Russia, and the former satellite republics in the Soviet Union. So this career criminal journeyed to Ukraine to negotiate a deal for Trump.
Yalta, although rich in history, is not the first place one thinks of for international tourism. Its location in the Russian-speaking Crimean Peninsula made it part of the ongoing tension between Russia and Ukraine that would culminate in Russia’s invasion of Crimea in 2014.
But Sater was obviously deeply connected in Crimea and the Ukraine. He arrived in the Ukraine in September 2005 bearing a letter from Trump that declared that Ukraine was developing rapidly, and was an ideal location for the signature development of Donald J. Trump. Somehow, Sater got Bayrock Group in a 2005 meeting of the executive council of investors of Crimea chaired by the Prime Minister of Crimea, Anatoliy Matviyenko, according to a Sept. 1 press government release.
Much later, Sater would use his Ukrainian connections to help a Ukrainian lawmaker Andrii V. Artemenko deliver a peace proposal for Russian and Ukraine to the White House in February 2017. Michael Cohen, Trump’s consigliere, had met with the two men in New York and delivered the proposal to the office of Michael Flynn, the National Security Adviser. (Interestingly, Cohen had his own business dealings in Ukraine around the time that Sater was pitching developments in Yalta.)
Several other multinational firms were considering massive investments in Ukraine along with the Trump Organization in 2005. These included the National Container Company of Russia, the Ofer Group of Israel, and the Toepfer Group of Germany. The Toepfer Group would later be caught paying millions of dollars in bribes to Ukrainian officials. Russia’s Sberbank and Vneshtorgbank (now VTB) were considering an additional $2 billion in Ukraine for “re-equipment of railways and ports.” Both of these banks were sanctioned by the United States in 2014 following Russia’s invasion of Crimea.
Trump, who called himself a billionaire and regularly inflated his estimates of his net worth (see TrumpNation by Timothy O’Brien), did not have $500 million to invest in Ukraine or anywhere else for that matter.
On Sept. 9th, three days before the announcement of Trump’s “investment” in Yalta, Ukrainian Transport Minister Chervonenko announced that Trump’s favorite lender, Deutsche Bank, had agreed to loan $2 billion to finance improvements to the country’s railways, postal service, and seaports.
Deutsche Bank’s London office is an attractive target for investigators looking into Trump ties to Russia because of the bank’s own sordid ties to Russia.
From 2011 to 2015, Deutsche Bank laundered rubles into dollars (without any reporting requirements) through a practice known as “mirror trades.” The bank allowed its Russian customers to buy Russian blue-chip stocks in Moscow and then quickly execute a sale of the same stocks in London. Deutsche Bank helped Russians transfer an estimated $10 billion out of the country via these mirror trades. US and UK regulators fined the bank a combined $629 million.
Trump’s business in the Ukraine was not yet finished. In February 2006, Donald Trump Jr. and Ivanka Trump paid a visit to the Ukraine. The Trump children met with Viktor Tkachuk, an adviser to the newly elected, West-leaning president of Ukraine, Viktor Yushchenko. They also met with Andrey Zaika head of a newly-formed Ukrainian construction consortium. The meeting with the Trump children, held in Kiev, was not reported in the Ukrainian press until after the Trumps had left the country.
The Yalta deal fizzled, but it’s a remarkable moment in the Trump-Russia story.