Dirty Rubles

by Greg Olear

  No one doubts that Putin has been “nice” to Trump, or that the wannabe and the actual autocrat have a “good relationship.” But the Donald/Vladimir bromance is extremely troubling.

  Vladimir Putin—murderer, tyrant, crook—is antithetical to American values. He is a mobster thug. We don’t want to make nice with this guy.

  More importantly, it is illegal for American presidential campaigns to coordinate with foreign governments. It is illegal for American political candidates to accept any money from foreign sources. It is illegal for American citizens to negotiate US foreign policy with foreign governments. This cuts right to the bone of what it means to be an American—by coordinating with an enemy power, Trump and his associates were doing what the Founding Fathers most despised and feared. Even the appearance of financial impropriety by the US president, especially as related to foreign governments, was anathema to the Framers, which is what prompted the inclusion of the Emoluments Clause in the Constitution. As law professor Zephyr Teachout wrote in the Washington Post, “The framers knew what a headache [the Emoluments Clause] could become, but they included it anyway because of the lessons of history. They knew that foreign governments would necessarily attempt to influence US policy, and they wanted the Constitution to protect against that.”

  Why did Trump and his surrogates feel compelled to have so many meetings with Putin’s agents? Why, if there was nothing untoward in their intentions, did they lie about it so vehemently? What happened, and what were they trying to conceal?

  VLADIMIR PUTIN SUCCEEDED BORIS YELTSIN as acting president of Russia in 1999. He has been in power ever since. Under his reign, Russia has regressed from a burgeoning democracy to a veritable dictatorship. Putin consolidated power, destroying the independent judiciary, clamping down on press freedoms, using false-flag operations to win popular support, and exploiting his power for personal gain. He is more like a tsar than a president—although the Romanovs did not possess nuclear weapons, and their wealth, obscene as it was, paled in comparison to Putin’s own.

  Bill Browder, the American-born British national who was an early investor in Russia after the collapse of the Soviet Union, and who left the country after the government became too corrupt to continue doing business there, tells a story about Putin: After the rise of the oligarchs in the early 2000s, Putin had the richest, most powerful oligarch—Mikhail Khodorkovsky, head of the energy concern Yukos—arrested. At a humiliating show trial during which the accused oligarch was kept in a cage, Khodorkovsky was found guilty of fraud. He was sent to prison, and his sizable assets seized. After this sobering display, the other oligarchs approached Putin and asked what they needed to give him to avoid the same fate as Khodorkovsky, whose fate none of them wanted to share. Putin replied: “Half.” Since then, ill-gotten gains have poured into his coffers. The oligarchs boast fabulous wealth, but by virtue of claiming half of their money, Putin bests them all. Browder has suggested that Putin may well be the world’s richest individual.

  Here is another story that reveals Vladimir Putin’s character. When President Obama imposed the sanctions after the annexation of the Crimea, Putin had no proportionate way to respond. Russia has no exports we want. Our wealthy citizens do not go there on vacation. What Putin decided to do was ban American citizens from adopting babies from Russian orphanages.1 In this way, he punished the neediest and most vulnerable of his own population in retaliation for a punishment imposed on him for his own thuggish misdeeds. Little children are literally dying because of this decision. Putin, piece of shit that he is, doesn’t care.

  But then, he is not really a politician, as we define the term. He is a Mafioso.

  Russia is a mafia state. The line between the government and organized crime is so blurry as to be meaningless. The head of the government is Vladimir Putin. Semion “The Brainy Don” Mogilevich, now in his seventies, is the capo di tutt’i capi of the Vory v Zakone, or “thieves-in-law”—the Russian mob.2 Putin and Mogilevich work hand in glove, with the latter’s minions performing functions too unseemly for the former’s to participate in. They are two foci of the small circle of oligarchs who own almost everything of value in Russia.3

  The Russian mob is not La Cosa Nostra, the quaint Italian mafia of Don Corleone or Tony Soprano, which it more or less usurped in the early 90s after the fall of the Soviet Union. It does not confine itself to racketeering and assassination. It is orders of magnitude more ambitious. Its tentacles are everywhere. Activities in which Vory v Zakone are known to have engaged: narcotics and opioids, human trafficking, sex slavery, illegal arms dealing, systematic computer hacking to rig elections, massive bribery, and money laundering on an unprecedented scale. The Russian mob more resembles SPECTRE than GoodFellas—the best of the best of criminals.

  ON 22 NOVEMBER 1963 IN DALLAS, TEXAS, Lee Harvey Oswald shot and killed John F. Kennedy. It seemed impossible to believe, but it was true. A lone gunman, perched with a sniper’s rifle in a third-floor window, had assassinated the President of the United States. The police arrested him hiding out in a movie theatre.

  The authorities determined that Oswald acted alone. The Warren Commission arrived at the same conclusion. But doubts persisted. How could a schmuck with so little training be such a good shot? Was there not perhaps a second gunman, hiding behind a grassy knoll? Was Oswald’s subsequent murder by nightclub owner Jack Ruby not part of a conspiracy? Why had the Secret Service allowed the president to parade through a hostile state like a sitting duck?

  Surely the simplest explanation—that Oswald shot JFK—was inadequate to the occasion. There must be more! The mob had Kennedy killed, because he had slept with a gangster’s girlfriend. LBJ had Kennedy killed, so he could seize power for himself. The CIA had Kennedy killed, because he screwed up the Bay of Pigs. Fidel Castro had Kennedy killed, in retaliation for assassination attempts on his life. The real killer was a Corsican hit man, a trio of vagrants, Ted Cruz’s father. And so on. These were all grand narratives, and they all made a helluva lot more sense than some disgruntled commie pipsqueak morphing into the American Sniper and taking down the Leader of the Free World.

  Which is what made this particular KGB operation so successful.

  Yes, it’s true: JFK conspiracy theories were promulgated by the Soviets. The KGB exploited this American tragedy to spread disinformation, or deza, leading to the widespread belief that there was something fishy about the JFK assassination. Anyone who wrote about this was unwittingly helping the Russian effort: Jim Garrison, L. Fletcher Prouty, Oliver Stone, Jerome Corsi, and yes, Yours Truly. The objective of deza is to sow doubt, and through doubt, to bring dissention and foster a mistrust of our institutions. The Russians have been at this a long time, and they are very, very, very good at it.

  Another example: Edward Snowden. Here’s a guy who presented as a smart, savvy patriot, out to blow the whistle on the nefarious Deep State. He seduced countless well-minded people, among them the left-wing journalist Glenn Greenwald and the documentary filmmaker Laura Poitras (and, for some time, me). In fact, Snowden is a Russian spy and a traitor.

  In 2011, Edward Snowden, who’d resigned from the Central Intelligence Agency two years earlier, began working on Dell Computer’s CIA account, where he liaised closely with chiefs of the Agency’s technical branches. Exactly when Snowden was recruited by one of the Russian moles at the National Security Agency is unclear, but by April of 2012, he was already illegally downloading classified files. In 2013, he took a job with the government contractor Booz Allen, with the explicit goal of obtaining top-secret documents from the NSA’s facility in Hawaii. On 20 May 20 2013, he took a leave of absence from Booz Allen, ostensibly to return to the mainland for medical reasons. Instead, he flew to Hong Kong, where a bizarre sequence of events led him to Moscow.

  The Guardian and the Washington Post began publishing the stolen classified documents on 4 June 2013. On 21 June, the United States formally charged Snowden with espionage; the next day, his passport was revoked. Julian Ass
ange was able to provide him with Ecuadorean travel papers.4 Snowden flew to Moscow, where he was to take an Aeroflot flight to Cuba; from there, he was to proceed to Ecuador, which would grant him asylum. Under pressure from the American government, however, both Cuba and Ecuador decided against granting Snowden’s asylum request, and he has been in Russia ever since. Snowden continues to insist that his desire was always to live in Latin America; the US government, he says, has “trapped” him in Russia. Given that his extradition would be much easier in Ecuador or Bolivia, where CIA influence is strong, it’s more likely that the government that wants to keep him in Russia is not America’s, but Putin’s. After all, Putin can point to Snowden’s presence in his country as proof of his desire for freedom and transparency. The American asylum-seeker, like Donald Trump, is a useful Russian prop. In the first few months of Trump’s presidency, Putin floated the idea of extraditing Snowden, as a favor; but this will never happen, because a trial will prove conclusively that Edward Snowden is not a whistleblower, but a KGB asset.

  A more recent Russian op concerns a large-scale military training exercise that took place in the summer of 2015 in Texas. The KGB spread the rumor that Operation Jade Helm 15 was the first step in a plot by President Obama to round up dissidents, who would be interned in Walmart parking lots, and impose martial law. The deza was so successful that it fooled Texas governor Greg Abbott, who ordered the National Guard to monitor the Jade Helm operation. Michael Hayden, former director of both the CIA and the NSA, fingered the KGB in this op. “Russian bots and the American alt-right media convinced many Texans [ that Jade Helm] was an Obama plan to round up political dissidents,” he said on the Morning Joe podcast. Abbott’s hysterical response, Hayden said, demonstrated to the Russians that their active measures were working. “At that point, I’m figuring the Russians are saying, ‘We can go big time. At that point, I think they made the decision, ‘We’re going to play in the electoral process.’”

  Finally, CALEXIT—the proposed secession of California—was also a Russian active measure, designed to sow division and make the US weaker. In 2016, a group called Yes California sought to secure enough signatures to put secession on the state ballot, and propositions on ballots in California have a way of being unpredictable. As appealing as a nation of California might be—or a “Blue-topia” nation of California, Oregon, Washington, New York, New Jersey, Connecticut, Massachusetts, Vermont, New Hampshire, Maine, Rhode Island, Delaware, and Maryland—a fractured United States is nothing short of Vladimir Putin’s wildest dream. An independent California would be akin to the collapse of the Soviet Union: a huge win for Moscow. Indeed, a closer look at the Yes California movement reveals plenty of Russian fingerprints. Both of its founders, Marcus Ruiz Evans and Louis Martinelli, are conservatives and have registered as Republicans. Evans lives in Fresno, the district of Devin Nunes; Martinelli, in Yekaterinburg, Russia, of all places—site of the Bolshevik massacre of the Romanov royal family. And while the latter’s choice of residence may be perfectly benign, I’m not the first to raise an eyebrow at the coincidence. As Katie Zezima reported in the Washington Post:

  But Yes California has had to fend off a torrent of questions about Russian influence. In September, Marinelli represented the group at a Moscow conference hosted by the Anti-Globalization Movement of Russia; 30 percent of conference funding came from the Russian government, but none went to Yes California, according to its organizer. Yes California opened a “cultural center” at the movement’s Moscow headquarters in December. Marinelli has compared California independence to the annexation of Crimea, and Yes California has received a flurry of news coverage from the government-funded RT.

  Zezima then printed Martinelli’s denial of official Russian involvement: “We don’t have any communication with or contact with or receive any support of any kind from the Russian government or any Russian government officials.” This may have been perfectly true, but it sounds uncannily like the Trump team’s denials of Russian influence chronicled previously.

  Unable to hit us militarily or economically, Russia uses asymmetric warfare to fuck with us. The KGB has been doing this quite successfully for decades. Putin is a creature of the KGB. Deceit is in his DNA.

  Why do we want to be BFFs with him?

  THE MOST RATIONAL EXPLANATION for Donald Trump’s craven refusal to release his taxes or speak a discouraging word about Putin, his ability to bounce back in real estate after numerous bankruptcies, his out-of-nowhere victory in the election, and, for that matter, his fascination with cheap Eastern European labor, whether it be Polish demolition workers, Romanian Mar-a-Lago waiters, or Slovenian wives, is that he’s in debt to the Russians. And not just Vladimir Putin and the Russian government. He owes the Vory v Zakone, too.

  You see, Trump is no stranger to organized crime. His father, Fred Trump, had to deal with La Cosa Nostra to build his real estate empire; the younger Trump inherited these unseemly arrangements. Introduced to still more mobsters by his mentor Roy Cohn, Trump has benefited mightily from the Mafia in his various real estate ventures. The most egregious incidents involve his use of ready-pour concrete in the construction of Trump Tower and the exploitation of illegal and underpaid Polish immigrants to demolish the Bonwit Teller building, but there is much, much more. The media generally ignored this rather obvious link during the campaign, preferring to focus on the horse-race. This lack of wide reportage does not make the mob ties any less real.

  Michael Cohen was long portrayed in the press as Trump’s personal attorney. He is an attorney, insofar as he holds a law degree from literally the worst law school in the United States, but he’s more of a fixer—for Donald Trump, and also for the Russian mob. As Jonathan Chait wrote in New York magazine:

  Cohen’s uncle…worked closely with La Cosa Nostra and gained the organization’s trust. Cohen’s first employer was a criminal, his father-in-law was a criminal with ties to the Russian Mafia, and Cohen maintained extensive criminal associations throughout his public life. Sometimes people involved in mostly legitimate business have gangster friends, but if you’re surrounded at all stages by gangsters — including operating your business out of a criminal headquarters, as Cohen did — then your real profession is “crook.”

  It is telling that one of the few non-family-member fixtures in Trump’s inner circle is a glorified mobster. It hints at the larger truth.

  As discussed, the Russian mob is the most successful criminal organization the world has ever known. They make bank on an unimaginable scale. The enormous amounts of cash generated by the far-reaching enterprises of the Vory v Zakone necessitate a vast and byzantine system of money laundering, unprecedented in scope and volume. Trump Org is one of the countless vehicles through which Mogilevich and his ilk make legit their dirty rubles.

  Back in 1992, as the Vory v Zakone were supplanting La Cosa Nostra in the United States, Mogilevich dispatched Vyacheslav “Little Japanese” Ivankov, who had just completed a prison sentence in Russia, to New York, to oversee his American operation. For the next three years, Little Japanese ran amok, consolidating power, organizing criminals, taking over turf from other mobs; the FBI finally arrested Ivankov on 8 June 1995, charging him with the extortion of $2.7 million from an investment advisory firm.

  For those three years, when he was arguably the most powerful mobster in the country, Little Japanese resided in either Trump Tower or the Taj Mahal Casino.

  Both were Trump properties.

  Ivankov was hardly the only Russian crime figure with a Trump address. As the former NSA spook John Schindler reports, “There are literally dozens of Russian OC scams, some gargantuan, that we know were based at Trump properties.” This begs the question: Why did so many Vory v Zakone maintain addresses at various Trump properties?

  A series of reports in the Financial Times delve into the Trump Org/Russian OC relationship dating from his sixth(!) bankruptcy, when Trump’s credit at US banks prevented him from accessing more capital. And yet somehow, Tr
ump managed to fund several major real estate deals—and paid for a number of them in cash. How?

  The 2016 election was not the first time Donald Trump negotiated a quid pro quo with Russians. After his sixth bankruptcy threatened to shut down his business, he made a deal: in exchange for an influx of capital, he would help launder Mogilevich’s dirty rubles. Real estate is well suited for this purpose, as there is a lot of capital, a lot of money changing hands, and, as what we’ve seen of Trump’s taxes indicate, a lot of wiggle room with the IRS. Trump could buy an apartment for $5 million and sell it for $10 million in dirty rubles; the new owner could then sell it, even at a 50% loss, and the money from the sale would be “cleansed” by the transaction, and thus available for deposit in Western banks. Too, the sales could be masked by shell corporations formed in places like the Cayman Islands or Panama. It would be very hard to trace. Risk to Trump would be minimal. This is what happened in 2008, when the oligarch Dmitry Rybolovlev bought Trump’s $40 million mansion in Palm Beach, Florida, for $95 million, as Rachel Maddow famously explained.

  This clears up the oft-quoted remark by Donald Trump Jr., made at a real estate conference in New York in 2008: “Russians make up a pretty disproportionate cross-section of a lot of our assets.” And: “We see a lot of money pouring in from Russia.” All Junior meant was that Russian mobsters were snapping up apartments in Trump Tower and other Trump properties—and not for a song, either.

  It’s not just flipping real estate that provides an opportunity to launder money. Construction costs, too, can be massaged to suit that purpose. And while regulators in New York may be tough to fool, projects in other countries would be far less so. Take the massive Trump Tower building in Baku, Azerbaijan. The New Yorker’s Adam Davidson wrote a wonderful exposé on this white elephant of a deal, which looks like a vehicle to launder money for the Iranian National Guard, presumably one of our most dangerous enemies. Baku has been strategically important since the discovery of oil in Azerbaijan a century ago. The Trump Tower Baku, however, is not in a thriving part of the city, but in the middle of nowhere. It would be like deciding to build the Empire State Building in Flushing. Much of the work was paid out in cash, with one local contractor receiving $180,000 in banknotes, which he stuffed in his laptop bag. Furthermore, there was a lot of front-end money, some $100 million, spent on renovation. Stuff was torn out to make way for new stuff. Constant renovation can be expensive even when done on the up-and-up, but if used as a boondoggle to hide cash payments? It’s a perfect money-laundering vehicle. If you claim you paid $10 million for white marble tile, and then you remove it, how can anyone prove the money was ever really spent, in this corrupt country halfway around the world from Trump Organization headquarters?5