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.
I’ve pointed out the useful idiots of the American right before like David Keene of The Washington Times and others. But Putin uses people who are useful to him, regardless of political ideology, and there are useful idiots on the American left as well.
Two that come to mind are Katrina vanden Heuvel, editor of The Nation magazine, and her husband, Stephen F. Cohen, a professor emeritus of Russian studies at Princeton and NYU and a contributing editor to the magazine his wife edits.
On Aug. 9, The Nation published a lengthy “expose” that concluded that the Democratic National Committee wasn’t hacked by Russia or anyone else, as our intelligence communities tell us. The article, titled “A New Report Raises Big Questions About Last Year’s DNC Hack,” is dense, impenetrable, and ill-informed. It takes author Patrick Lawrence 4,000 words to say that the DNC emails were downloaded at speeds faster than the internet could handle. Before that we are doused with Lawrence’s rhetorical sewage:
Lost in a year that often appeared to veer into our peculiarly American kind of hysteria is the absence of any credible evidence of what happened last year and who was responsible for it. It is tiresome to note, but none has been made available.
“Absence of any credible evidence” — File that one away for later.
This article was quickly debunked. And it was ridiculed by Sam Biddle of the Intercept who found something interesting in Lawrence’s Twitter timeline:
Editor Katrina vanden Heuvel ordered a review of this article, which is the latest in a string of Russia-related embarrassments for The Nation, a still highly-regarded left-leaning publication that is in danger of disappearing into the loony fringe. Things have gotten so bad that journalists at the magazine complained about the magazine’s Russia coverage in a letter to vanden Heuvel in June. Here’s an excerpt from a longer version quoted in this column in The Washington Post:
As longtime associates of The Nation, we are deeply concerned that by making these editorial emphases and by likening calls for investigations into the Russia connection to “red baiting,” the magazine is not only playing into the hands of the Trump administration, but doing a dishonor to its best traditions. We have noted, too, with dismay, that Tucker Carlson, Ann Coulter and other far-right adversaries have taken comfort in the writings of other Nation writers on the current crisis.
Ouch. The Nation being cited by Ann Coulter. Other Nation articles suggest that leaks pose a greater danger to U.S. national security than Trump himself. Odd choice for a magazine that exhorts its readers to the barricades with slogans like “Resist. Organize. Defend Freedom.”
[Update: Here is the Nation’s DNC article being used as Russian propaganda]
I don’t know how it happened but somewhere along the way Vandel Heuvel and her husband Stephen F. Cohen became Putin’s useful idiots. And I mean that in the same sense as Lenin did when he used it to describe liberals and Social Democrats who helped advance the Communist cause outside the Soviet Union.
Recall that “absence of any credible evidence” phrase in the article I noted above? It’s is a frequent refrain of Stephen F. Cohen, who uses it to shoot down all criticism of Putin.
The U.S. community’s findings that Russian President Vladimir Putin ordered an influence campaign into the 2016 election aimed at undermining Hillary Clinton and helping Trump’s chances of winning? No evidence.
Cohen called the declassified summary released by the U.S intelligence community on Jan. 6 “embarrassing” and “worse than amateurish” on a podcast five days after the report’s release. The report contains “zero” evidence and Cohen says not incorrectly that U.S. intelligence has been dead wrong before. A summary of his podcast describes the report as “utterly bogus.”
You probably won’t be surprised to learn that this mirrors the Kremlin’s response to the intelligence summary as well. Russian Foreign Ministry spokesman Maria Zakharova, said Jan. 12, “Accusations are usually based on facts, dates and figures. This report is based on claims. There is nothing new in it for anyone, nothing but yet another compilation of absurd stereotypes.”
Echoing Donald Trump, Cohen also says there’s no evidence that Putin is “a killer.” This ignores the chairman of a UK panel who concluded that Putin “probably” gave the order to kill Alexander Litvinenko, the former FSB agent poisoned with radioactive Polonium-210 in 2006 in a London hotel.
Similarly, Cohen argues there is no evidence that Putin kills journalists such as Anna Politkovskaya of Novaya Gazeta — gunned down on Putin’s birthday — or the 33 others killed since he took office in 2000. Once again, Donald Trump makes the same claim.
“Trump [like Cohen] is technically right but wrong in spirit,” says Mark Galeotti, a New York University professor who studies the Russian security state. “There is indeed no proof Putin has journalists killed. But he presides over a regime in which journalists are beaten, harassed and murdered, often with impunity.”
Cohen is arguing a legal technicality. Sure, there’s no evidence Putin ordered anyone’s death. But someone did order the murders Litvinenko, Politkovskaya, or Boris Nemtsov. Those killers aren’t punished in Putin’s Russia, even though Putin probably knows who they are.
Follow his line of thinking and one could make the logically-sound but completely absurd argument that there is no evidence that smoking causes lung cancer.
It goes like this: Not all smokers develop lung cancer, and not all lung cancer patients are smokers. And the link between cancer and smoking is purely statistical. No double-blind study has ever been conducted to prove that smoking and lung cancer. So, how do we know that smoking — and not, say, air pollution — causes lung cancer?
Silly, yes, but it’s the same argument employed used by tobacco makers in court. It’s also the logic of climate-change skeptics (“scientific consensus is not evidence”), and people who think the Earth is 5,000 years old (“Evolution is a theory, not proof.”)
No evidence. No proof.
It is the desperate logic of those unable to reevaluate a long held, but increasingly ridiculous position so as to avoid looking like a fool.
Semion Mogilevich remains a subject of fascination in the Trump-Russia story.
I’ve written before about Mogilevich’s ties to Trump Tower and how the man called the most powerful Mobster in the world may be a subject of interest to Special Counsel Robert Mueller.
I thought it would be worthwhile to take a deeper dive into the world of Semion Mogilevich to understand who he is and what it means for Trump to be connected to him.
If you want cut to the chase, here you go: Having a relationship with Mogilevich was in some ways like having a relationship with Putin himself.
Semion Mogilevich and Donald Trump both were born in June of 1946, only two weeks apart, in vastly different circumstances. Trump, as we know, was the son of a wealthy New York developer. Mogilevich was born to a Jewish family in Kiev and before he began his life of crime he earned an economics degree.
Calling Mogilevich a Mobster is a bit misleading. He is a Mobster, but he’s much more than a Russian version of Tony Soprano.
Mogilevich is better described as a secret billionaire who made his fortune in the murky gas trade between Russia and Ukraine. US Attorney Michael Mukasey said in 2008 that Mogilevich “exerts influence over large portions of the natural gas industry in parts of what used to be the Soviet Union.”
The man called “the Brainy Don” also ran a publicly-traded company that defrauded investors in the United States and Canada out of $150 million. He sells weapons and drugs, arranges contract killings, runs prostitutes — all on an international scale. He has connections and influence at the very top of the Russian oligarchy. But the biggest sign of his power and influence is that he today lives free in Russia.
How is this possible? How can an international criminal live openly in Moscow?
To understand this, consider this secretly recorded conversation between then Ukrainian President Leonid Kuchma and Ihor Smeshko, who was then head of Ukraine’s military intelligence:
Smeshko: “So, this is why [the American FBI] thinks that Mogilevich’s organization, it is working completely under the cover of SBU [Ukraine’s secret service.] This is why there is this kind of cooperation there!”
Kuchma: “He [Mogilevich] has bought a dacha in Moscow, he keeps coming.
Smeshko: “He has received a passport already. By the way, the passport in Moscow is in a different name. And what is level in Moscow is … Korzhakov [the head of Boris Yeltsin’s personal security] sent two colonels to Mogilevich in Budapest in order to receive damaging information on a person … He himself did not meet them. His organization’s lieutenant, [Igor] Korol, met these colonels and gave them the documents relating to ‘Nordex’. Mogilevich has the most powerful analytical intelligence service. But Mogilevich himself is an extremely valuable agent of KGB, PGU … When they wanted to … Mogilevich … When the Soviet Union collapsed UKGB ‘K’ command did not exist yet. When one colonel wanted to he is retired, he lives there when he tried to arrest him, he got his pennyworth, they told him ‘Stop meddling! This is PGU [SVR, Russian foreign intelligence service] elite’. He has connections with [Russian businessman and former Deputy Prime Minister Anatoly] Chubais.”
This conversation, which was secretly recorded by a Kuchma bodyguard, is difficult to follow, but it gives you a sense of Mogilevich’s power and reach. First, he ran his own powerful intelligence service that was useful to a Russian president. He was an agent of the KGB in the days of the Soviet Union and remains a source to modern Russian intelligence. And he is protected by powerful interests in Russia.
These tapes were of great interest to Alexander Litvinenko, a former Russian FSB officer who was poisoned in a London hotel in 2006 with radioactive Polonium-210. Litvinenko, who hated Putin, had a role in transcribing them and publicizing them.
The British inquiry into his death went into considerable detail of the conversations on these tapes and his writings, which contain a few other fascinating bits of information on Mogilevich. In an email, Litvinenko revealed that Mogilevich had sold arms to al Qaida:
“I know beyond the doubt that Mogilevich is FSB’s long-standing agent and all his actions including the contact with al Qaida are controlled by FSB — the Russian special services. For this very reason, the FSB is hiding Mogilevich from the FBI.”
In Russia, criminals and intelligence services aren’t adversaries. They are birds of a feather. They share information. The Mob helps the state, and in return, Russian criminals like Mogilevich get to share in the riches and remain free.
As Mark Galeotti, an expert on Russian history and security issues, writes,
“The Russian state is highly criminalized, and the interpenetration of the criminal ‘underworld’ and the political ‘upperworld’ has led the regime to use criminals from time to time as instruments of its rule.”
Mogilevich’s ties to the Russian political “upperworld” go deep. Very deep.
In another secretly recorded conversation in 2000, Ukrainian PM Kuchma discusses Mogilevich with Leonid Derkach, the former head of the Ukrainian security services.
Kuchma: “Have you found Mogilevich?”
Derkach: “I found him.”
Kuchma: “So, are you two working now?”
Derkach: “We’re working. We have another meeting tomorrow. He arrives incognito.
Later in the discussion Derkach revealed a few details about Mogilevich.
Derkach: “He’s on good terms with Putin. He and Putin have been in contact since Putin was still in Leningrad.”
Kuchma: “I hope we won’t have any problems because of this.”
Derkach: “They have their own affairs”
According to Litvinenko, the poisoned ex-FSB agent, Putin was Mogilevich’s “krisha” or protector in Russian underworld slang.
And this was a relationship that dated back to the early 1990s when the future Russian president was a deputy mayor in St. Petersburg.
“Mogilevich have good relationship with Putin since 1994 or 1993,” Litvinenko says in broken English on a tape made before his death.
Back in 1993 and 1994, Putin was deputy mayor of St. Petersburg. He was known in St. Petersburg as the man who could get things done. His approach to the criminal world was a practical one, Karen Dawisha writes in Putin’s Kleptocracy.
The mafia and the KGB had always had points of intersection and conflict — the 1990s were no different, and the mafia had its uses. It was global, it could move money, it could hide money, and in any case, some of the money would come back to St. Petersburg for investment. So how did Putin operate? First and foremost, he made illegal activity legal.
Most countries, even corrupt ones, go after their biggest criminals. But in Russia, criminals have their uses.
One of these points where the interests of Mogilevich and Putin merge is in the natural gas trade. RosUkrEngero (RUE), a murky Swiss company that acts as an intermediary in gas sales between Russia and Ukraine is seen as a joint venture of sorts between the two men.
RUE is half owned by Gazprom, the Russian gas giant that is run by Putin’s cronies. The other half is nominally owned by two Ukrainian businessmen: Dmitry Firtash and a minority partner. But the U.S. government suspects that Mogilevich (see here) is the man behind the curtain at RUE.
The world was closely watching in 2008 when Russian police arrested Mogilevich on a tax evasion scheme. He posted bail and was released a year later. Charges were dropped in 2011.
Mogilevich is part of the story, the tragedy really, of modern Russia.
Russia is a country rich in natural resources. It has great wealth below the ground. Above ground the wealth is shared by a small number of individuals who were close to Russian President Vladimir Putin.
Putin allowed this select few to enrich themselves by siphoning billions out of the country’s natural gas and oil fields, its steel and nickel mills, its fertilizer plants, the state railroads, and many more industries. In return for unimaginable wealth, these oligarchs pledged absolute fealty to Putin.
This is an operation that Mogilevich knew very well. Enriching yourself and your friends in exchange for loyalty — that’s the job of a Mafia Don. Which is exactly what Putin is.
As Sen. John McCain told late night host Seth Meyers, Russia is a “a gas station run by a mafia that is masquerading as a country.”
Bloomberg reports that Special Counsel Robert Mueller has decided that Trump’s sale of his Palm Beach mansion to a Russian billionaire is worth a deeper look.
As readers of this site know, Dmitry Rybolovlev, the Russian fertilizer king, bought the future president’s Palm Beach mansion in 2008 for $50 million more than Trump paid for it just a few years earlier. The mansion, called Maison de l’Aimitie (House of Friendship), was in such bad shape that Rybolovlev got permission to tear it down and sell off the land beneath it.
I’ve written how this transaction has the marks of a bribery case I followed here in San Diego.
Not long after the mansion sold, Trump was approaching default on loan from Deutsche Bank. And the $50 million Trump pocketed on the mansion sale was enough to cover the $40 million he had personally guaranteed to the German lender.
Here’s a bit more detail: The Palm Beach mansion sold in July 2008. That fall, Trump was desperately trying to get Deutsche Bank to extend a senior construction loan for the 92-story Trump International Hotel and Tower in Chicago. The Chicago project was already facing weak sales before the 2008 financial meltdown hit.
Unlike many other Trump Organization projects, the Donald was personally on the hook in Chicago. He hadn’t licensed his name. He had no partners. He arranged all the financing himself: He put $77 million of his own equity into the tower and had given Deutsche Bank a $40 million personal guarantee. (See “In Chicago, Trump Hits Headwinds,” The Wall Street Journal, 29 Oct. 2008.)
Trump’s Deutsche Bank loan came due Nov. 7, 2008 with an outstanding principal balance of $334 million, plus $251 million in interest. Not only did Trump not pay, but with his usual bombast, he sued Deutsche Bank to force them to extend the loan. Deutsche Bank countersued, and demanded Trump cough up his $40 million guarantee. Deutsche Bank ultimately extended the loan for five years and eventually Trump paid it.
There are a lot of dogs sniffing around this tree. The personal guarantees Trump made for his Deutsche Bank loans are also of interest to New York State regulators looking at the president’s relationship with the German lender’s wealth management division: according to The New York Times:
Additionally, the New York regulators recently requested information related to the hundreds of millions in loans Deutsche Bank’s private wealth management division provided Mr. Trump, one of the people said, paying particular attention to personal guarantees he made to obtain the loans. Those guarantees have declined as the loans were paid down and the property values increased, but it remains a source of interest to the regulators.
For those who want even more detail, I’ve embedded Trump’s Deutsche Bank personal guarantee at the end of this post. If anyone with some expertise in these matters finds anything interesting in there, please let me know.
Mueller’s team are also said to be interested in dealings involving the Bank of Cyprus. Rybolovlev, the Russian oligarch who bought Trump’s Palm Beach mansion, became the bank’s largest shareholder in 2010 when he purchased a 9.7 percent stake through his British Virgin Islands holding firm, Odella Resources. (Wilbur Ross, Trump’s commerce secretary, invested in the bank in 2014.)
The shady mansion sale is just one of the things FBI investigators and others are examining:
- Russian purchases of apartments in Trump buildings
- Trump’s involvement in a controversial SoHo development in New York with Russian associates
- The 2013 Miss Universe pageant in Moscow
- Jared Kushner’s efforts to secure financing for some of his family’s real-estate properties.
It seems that Mueller’s team is looking for evidence of a payment disguised as a real estate transaction, fee or gift that would give Russians what the intelligence community likes to call “levers of pressure” that could be used against the US president.
Trump’s Personal Guarantee
It’s a bit suspect, to say the least, that Dmitry Rybolovlev, the Russian fertilizer king, bought the future president’s Palm Beach mansion for $50 million more than Trump paid for it just a few years earlier.
The mansion, called Maison de l’Aimitie was in such bad shape that Rybolovlev got permission to tear it down and sell off the land beneath it. I’ve written how this transaction has the marks of a bribery case I followed here in San Diego.
I decided to take a deeper look at Rybolovlev. Turns out, he’s got an interesting past: He spent nearly a year in jail on murder charges. Depending on whom you ask, Rybolovlev is a man who rubbed out a competitor or an innocent man framed for murder by corrupt Russian officials.
The evidence points to the latter. Rybolovlev, born in 1966, came from a family of doctors in Perm, an industrial city in the Ural Moutains. After graduating from the Perm Medical Institute in Russia in 1990 he joined the cardiology department of a local emergency room.
It was the dramatic upheaval after the fall of the Soviet Union that changed his life and the lives of his patients, who could not afford to pay him. Rybolovlev moved to Moscow and became one of the first licensed brokers in the country.
It was the right place at the right time. The Russian government, desperate to raise cash and stave off collapse, and being totally unacquainted with capitalism, began selling off its companies for mere fractions of their value. It was perhaps the single greatest investment opportunity in history.
In 1995, Rybolovlev started buying up shares of Uralkali, a fertilizer maker that was located back in his home region of Perm, the center of the country’s potash industry. He quickly amassed a controlling interest in the company and was named chairman of the board.
In 1996, Rybolovlev was arrested on a murder conpiracy charge. He would spend his 30th birthday and the next 11 months in jail.
[The definitive account of Rybolovlev’s time in jail comes from an interview he gave to the Russian edition of Forbes magazine about a decade ago.]
Rybolovlev was accused of ordering the 1995 murder of Evgeny Panteleymonov, the general director of Netfchimik, which produced industrial alcohol. Rybolovlev was chairman of Netfchimik and owned 40 percent of the company, according to Forbes.
Netfchimik generated high cash flows — and attracted attention from criminals. In the summer of 1995, Panteleymonov met with Rybolovlev and told him the criminals had to go. Rybolovlev had offered him bodyguards for his protection. Panteleymonov had refused.
Rybolovlev was not so cavalier. He had grown so worried for his family’s safety that he moved them to Florida and then to Switzerland. He hired bodyguards to protect his family, his parents and his business partners. “From time to time, I had to wear a bulletproof vest,” he told the Russian edition of Forbes.
Unprotected, Panteleymonov was gunned down by a mob-linked businessman named Oleg Lomakin (aka Prokop). Lomakin was arrested for Panteleymonov’s shooting, and, oin exchange for leniency, he accused Rybolovlev of ordering the murder.
It was enough to get Rybolovlev thrown in jail, where he languished. Authorities moved from from cell to cell in an effort, he suspects, to break him. Weeks dragged into months. Offered freedom if he sold his shares in Ukrakali, he refused. He told Forbes he was prepared to serve 10 years, if necessary.
Finally, the case against him began to fall apart. No other evidence linked Rybolovlev to the shooting, and eventually Prokop admitted that he had perjured himself. After nearly a year of incarceration, Rybolovlev was allowed to post bail of one billion rubles (about $200,000). In late 1997, he was acquitted of murder charges.
It turned out that Rybolovlev’s arrest was tied to the politics of the fertilizer industry. There was a familiar Soviet problem of overproduction, and to smooth things out the Rybolovlev’s company Uralkali and other fertilizer producers decided to collude. In 1993, they formed the International Potash Company to channel their exports.
Things were uneventful until 1996. On May 20th, Uralkali shareholders voted to end its relationship with the International Potash Company and export the company’s products through an American company, Transammonia. The next day, Rybolovlev was arrested.
“I definitely came out a different person,” Rybolovlev told Forbes. “I got an understanding of how the world actually works. ” In prison, the businessman realized that the state can ruin his business at any time. Political risks were too significant and could never be neglected.
Freed from jail, Rybolovlev resumed command of his business. In 2007, he listed Uralkali on the London stock exchange and overnight became one of Russia’s richest men. He sold most of his stake in the company in 2010 to three Russian tycoons. Forbes estimates his fortune today at $7.4 billion.