The question emerging from the notorious June 2016 meeting between the Russian lawyer Natalia Veselnitskaya, other Russians, Paul Manafort, Donald Trump Jr. and Jared Kushner isn’t what the campaign wanted from the Russians, but what the Russians want from Donald Trump.
They want him to nullify a law that has frozen billions of dollars of stolen money, a substantial amount believed to belong to Russian President Vladimir Putin.
Reince Priebus, the president’s chief of staff, characterized the meeting as about “orphans” barred from entering the United States. But behind that word is a much bigger story involving the so-called Magnitsky Act, passed in 2012 that barred “human rights offenders” from access to the U.S. financial system, the de facto controller of the movement of global capital. Virtually all the world’s money moves through the U.S. SWIFT (Society Worldwide for Interbank Financial Telecommunication) system.
According to one source in Cyprus who asked not to be named because ‘Putin’s thugs might come to my door and kill me,’ as much as $500 million found its way from Russia into FBME, an assertion sharply denied by the bank.
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The “human rights offenders” were 18 individuals likely connected to the Russian mafia and/or the government. The Magnitsky Act was passed by Congress in 2011 to punish the killers of Sergei Magnitsky, a lawyer beaten to death in a Russian jail in 2009. The law sequestering the funds has enraged Russians including Putin, whose money is believed to be scattered across the planet, including Spanish real estate and London luxury flats.
Magnitsky sought to investigate the theft of $243 million from Hermitage Capital, the brainchild of William Browder, an American who was once the biggest investor in Russian stocks. Browder told me the Panama Papers showed some of his money had landed in the accounts of cellist Sergei Roldugin, godfather to Putin’s children. Asked if Putin was ultimately behind the theft, Browder said the connections make it likely.
Browder wasn’t the only victim. Thousands of cases of fraud have taken place in Russia, in which operatives with strong government connections raid the offices of prosperous companies, charging tax fraud. They steal the companies’ ownership documents and transfer them to themselves. The companies – as Browder’s was – are presented with huge tax bills. When they pay, a “refund” ends up in the hands of the thieves.
Much of the $243 million, and probably far more, landed in the Cyprus branch of Tanzanian bank FBME, illustrating the scam. FBME is owned by Lebanese bankers Ayoub-Farid M and Fadi M Saab. In April, U.S. District Judge Christopher Cooper granted a motion by the U.S. Financial Crimes Enforcement Network, or FinCEN, to bar FBME Bank from U.S. operations, in effect shutting it down.
FBME is to international banking what Jackson Hole was to America’s Wild West outlaws. Its clients are alleged to include the Russian Mafia, Indonesian, Japanese and Thai money launderers, the Yakuza, phishing scams, international drug syndicates, and manufacturers of sarin nerve gas for Syrian President Bashar Assad. Shell entities with suspected links to Hezbollah’s financial operations are among the bank’s 6,500 accounts.
According to a Cyprus source who asked not to be named because “Putin’s thugs might come to my door and kill me,” up to $500 million found its way from Russia into FBME; the bank in the FinCEN case denies the assertion. That money has now been sequestered.
Veselnitskaya and her Russian colleagues were there to ask – as she has in other venues – to void the Magnitsky Act. Putin wants his money back. Trump himself pledged to support the act, in an April letter to Congress. But Paul Manafort, Michael Flynn and others need to be asked about this under oath.
John Berthelsen is the editor emeritus of the Hong Kong-based Asia Sentinel, which recently published a seven-month investigation of FBME. Reach him at firstname.lastname@example.org.