The shallow criminal state
...I realize we’re supposed to become inured to the incoherent ramblings of a president who drifts through life unburdened by things like reality or consequences or object permanence, but for some of us, the mental callouses haven’t quite built up, making garbled presidential tweet farts like the ones Trump ripped Tuesday night still seem shocking in their pungent perversity.
They were followed Wednesday morning by more conspiratorial Twitter rambling: “Look how things have turned around on the Criminal Deep State. They go after Phony Collusion with Russia, a made up Scam, and end up getting caught in a major SPY scandal the likes of which this country may never have seen before! What goes around, comes around!” -- Rex Huppke, Chicago Tribune, May 23, 2018
The Politico Magazine
Just what were Donald Trump's ties to the mob?
David Cay Johnston
In his signature book, The Art of the Deal, Donald Trump boasted that when he wanted to build a casino in Atlantic City, he persuaded the state attorney general to limit the investigation of his background to six months. Most potential owners were scrutinized for more than a year. Trump argued that he was “clean as a whistle”—young enough that he hadn’t had time to get into any sort of trouble. He got the sped-up background check, and eventually got the casino license.
But Trump was not clean as a whistle. Beginning three years earlier, he’d hired mobbed-up firms to erect Trump Tower and his Trump Plaza apartment building in Manhattan, including buying ostensibly overpriced concrete from a company controlled by mafia chieftains Anthony “Fat Tony” Salerno and Paul Castellano. That story eventually came out in a federal investigation, which also concluded that in a construction industry saturated with mob influence, the Trump Plaza apartment building most likely benefited from connections to racketeering. Trump also failed to disclose that he was under investigation by a grand jury directed by the U.S. attorney in Brooklyn, who wanted to learn how Trump obtained an option to buy the Penn Central railroad yards on the West Side of Manhattan.
Why did Trump get his casino license anyway? Why didn’t investigators look any harder? And how deep did his connections to criminals really go?
These questions ate at me as I wrote about Atlantic City for The Philadelphia Inquirer, and then went more deeply into the issues in a book, Temples of Chance: How America Inc. Bought Out Murder Inc. to Win Control of the Casino Business. In all, I’ve covered Donald Trump off and on for 27 years, and in that time I’ve encountered multiple threads linking Trump to organized crime. Some of Trump’s unsavory connections have been followed by investigators and substantiated in court; some haven’t. And some of those links have continued until recent years, though when confronted with evidence of such associations, Trump has often claimed a faulty memory. In an April 27 phone call to respond to my questions for this story, Trump told me he did not recall many of the events recounted in this article and they “were a long time ago.” He also said that I had “sometimes been fair, sometimes not” in writing about him, adding “if I don’t like what you write, I’ll sue you.”
I’m not the only one who has picked up signals over the years. Wayne Barrett, author of a 1992 investigative biography of Trump’s real-estate dealings, has tied Trump to mob and mob-connected men.
No other candidate for the White House this year has anything close to Trump’s record of repeated social and business dealings with mobsters, swindlers, and other crooks. Professor Douglas Brinkley, a presidential historian, said the closest historical example would be President Warren G. Harding and Teapot Dome, a bribery and bid-rigging scandal in which the interior secretary went to prison. But even that has a key difference: Harding’s associates were corrupt but otherwise legitimate businessmen, not mobsters and drug dealers.
This is part of the Donald Trump story that few know. As Barrett wrote in his book, Trump didn’t just do business with mobbed-up concrete companies: he also probably met personally with Salerno at the townhouse of notorious New York fixer Roy Cohn, in a meeting recounted by a Cohn staffer who told Barrett she was present. This came at a time when other developers in New York were pleading with the FBI to free them of mob control of the concrete business.
From the public record and published accounts like that one, it’s possible to assemble a clear picture of what we do know. The picture shows that Trump’s career has benefited from a decades-long and largely successful effort to limit and deflect law enforcement investigations into his dealings with top mobsters, organized crime associates, labor fixers, corrupt union leaders, con artists and even a one-time drug trafficker whom Trump retained as the head of his personal helicopter service.
Now that he’s running for president, I pulled together what’s known – piecing together the long history of federal filings, court records, biographical anecdotes, and research from my and Barrett’s files. What emerges is a pattern of business dealings with mob figures—not only local figures, but even the son of a reputed Russian mob boss whom Trump had at his side at a gala Trump hotel opening, but has since claimed under oath he barely knows.
Neither Trump’s campaign spokesperson, Hope Hicks, nor Jason Greenblatt, the executive vice president and chief legal officer at the Trump Organization, responded to several emailed requests for comment on the issues raised in this article.
Here, as close as we can get to the truth, is what really happened.
After graduating in 1968 from the University of Pennsylvania, a rich young man from the outer boroughs of New York City sought his fortune on the island of Manhattan. Within a few years Donald J. Trump had made friends with the city’s most notorious fixer, lawyer Roy Cohn, who had become famous as lead counsel to Senator Joseph McCarthy. Among other things Cohn was now a mob consigliere, with clients including “Fat Tony” Salerno, boss of the Genovese crime family, the most powerful Mafia group in New York, and Paul Castellano, head of what was said to be the second largest family, the Gambinos.
This business connection proved useful when Trump began work on what would become Trump Tower, the 58-story high-rise where he still lives when he’s not at his Florida estate.
There was something a little peculiar about the construction of Trump Tower, and subsequent Trump projects in New York. Most skyscrapers are steel girder construction, and that was especially true in the 1980s, says John Cross of the American Iron & Steel Institute. Some use pre-cast concrete. Trump chose a costlier and in many ways riskier method: ready-mix concrete. Ready-mix has some advantages: it can speed up construction, and doesn’t require costly fireproofing. But it must be poured quickly or it will harden in the delivery truck drums, ruining them as well as creating costly problems with the building itself. That leaves developers vulnerable to the unions: the worksite gate is union controlled, so even a brief labor slowdown can turn into an expensive disaster.
Salerno, Castellano and other organized crime figures controlled the ready-mix business in New York, and everyone in construction at the time knew it. So did government investigators trying to break up the mob, urged on by major developers such as the LeFrak and Resnick families. Trump ended up not only using ready-mix concrete, but also paying what a federal indictment of Salerno later concluded were inflated prices for it – repeatedly – to S & A Concrete, a firm Salerno and Castellano owned through fronts, and possibly to other mob-controlled firms. As Barrett noted, by choosing to build with ready-mix concrete rather than other materials, Trump put himself “at the mercy of a legion of concrete racketeers.”
Salerno and Castellano and other mob families controlled both the concrete business and the unions involved in delivering and pouring it. The risks this created became clear from testimony later by Irving Fischer, the general contractor who built Trump Tower. Fischer said concrete union “goons” once stormed his offices, holding a knife to throat of his switchboard operator to drive home the seriousness of their demands, which included no-show jobs during construction of Trump Tower.
But with Cohn as his lawyer, Trump apparently had no reason to personally fear Salerno or Castellano—at least, not once he agreed to pay inflated concrete prices. What Trump appeared to receive in return was union peace. That meant the project would never face costly construction or delivery delays.
The indictment on which Salerno was convicted in 1988 and sent to prison, where he died, listed the nearly $8 million contract for concrete at Trump Plaza, an East Side high-rise apartment building, as one of the acts establishing that S &A was part of a racketeering enterprise. (While the concrete business was central to the case, the trial also proved extortion, narcotics, rigged union elections and murders by the Genovese and Gambino crime families in what Michael Chertoff, the chief prosecutor, called “the largest and most vicious criminal business in the history of the United States.'')
FBI agents subpoenaed Trump in 1980 to ask about his dealing with John Cody, a Teamsters official described by law enforcement as a very close associate of the Gambino crime family. The FBI believed that Cody previously had obtained free apartments from other developers. FBI agents suspected that Cody, who controlled the flow of concrete trucks, might get a free Trump Tower apartment. Trump denied it. But a female friend of Cody’s, a woman with no job who attributed her lavish lifestyle to the kindness of friends, bought three Trump Tower apartments right beneath the triplex where Donald lived with his wife Ivana. Cody stayed there on occasion and invested $500,000 in the units. Trump, Barrett reported, helped the woman get a $3 million mortgage without filling out a loan application or showing financials.
In the summer of 1982 Cody, then under indictment, ordered a citywide strike—but the concrete work continued at Trump Tower. After Cody was convicted of racketeering, imprisoned and lost control of the union, Trump sued the woman for $250,000 for alteration work. She countersued for $20 million and in court papers accused Trump of taking kickbacks from contractors, asserting this could “be the basis of a criminal proceeding requiring an attorney general’s investigation” into Trump. Trump then quickly settled, paying the woman a half-million dollars. Trump said at the time and since then that he hardly knew those involved and there was nothing improper his dealings with Cody or the woman.
There were other irregularities in Trump’s first big construction project. In 1979, when Trump hired a demolition contractor to take down the Bonwit Teller department store to make way for Trump Tower, he hired as many as 200 non-union men to work alongside about 15 members of the House Wreckers Union Local 95. The non-union workers were mostly illegal Polish immigrants paid $4 to $6 per hour with no benefits, far below the union contract. At least some of them did not use power tools but sledgehammers, working 12 hours a day or more and often seven days a week. Known as the “Polish brigade,” many didn’t wear hard hats. Many slept on the construction site.
Normally the use of nonunion workers at a union job site would have guaranteed a picket line. Not at this site, however. Work proceeded because the Genovese family principally controlled the union; this was demonstrated by extensive testimony, documents and convictions in federal trials, as well as a later report by the New York State Organized Crime Task Force.
When the Polish workers and a union dissident sued for their pay and benefits, Trump denied any knowledge that illegal workers without hard hats were taking down Bonwit with sledgehammers. The trial, however, demonstrated otherwise: Testimony showed that Trump panicked when the nonunion Polish men threatened a work stoppage because they had not been paid. Trump turned to Daniel Sullivan, a labor fixer and FBI informant, who told him to fire the Polish workers.
Trump knew the Polish brigade was composed of underpaid illegal immigrants and that S&A was a mob-owned firm, according to Sullivan and others. "Donald told me that he was having his difficulties and he admitted to me that — seeking my advice — that he had some illegal Polish employees on the job. I reacted by saying to Donald that 'I think you are nuts,'" Sullivan testified at the time. "I told him to fire them promptly if he had any brains." In an interview later, Sullivan told me the same thing.
In 1991, a federal judge, Charles E. Stewart Jr., ruled that Trump had engaged in a conspiracy to violate a fiduciary duty, or duty of loyalty, to the workers and their union and that the “breach involved fraud and the Trump defendants knowingly participated in his breach.” The judge did not find Trump’s testimony to be sufficiently credible and set damages at $325,000. The case was later settled by negotiation, and the agreement was sealed.
While Trump’s buildings were going up in Manhattan, he was entering a highly regulated industry in New Jersey – one that had the responsibility, and the means, to investigate him and bring the facts to light.
From the beginning, Trump tried to have it both ways. While he leveraged Roy Cohn’s mob contacts in New York, he was telling the FBI he wanted nothing to do with organized crime in Atlantic City, and even proposed putting an undercover FBI agent in his casinos. In April of 1981, when he was considering building a New Jersey casino, he expressed concern about his reputation in a meeting with the FBI, according to an FBI document in my possession and which the site Smoking Gun also posted. “Trump advised Agents that he had read in the press media and had heard from various acquaintances that Organized Crime elements were known to operate in Atlantic City,” the FBI recorded. “Trump also expressed at this meeting the reservation that his life and those around him would be subject to microscopic examination. Trump advised that he wanted to build a casino in Atlantic City but he did not wish to tarnish his family’s name.”
Part of the licensing process was supposed to be a deep investigation into his background, taking more than a year for would-be casino owners, but Trump managed to cut that short. As he told the story in The Art of the Deal, in 1981 he threatened to not build in Atlantic City unless New Jersey’s attorney general, John Degnan, limited the investigation to six months. Degnan was worried that Trump might someday get approval for a casino at the Grand Hyatt Hotel in Manhattan, which could have crushed Atlantic City’s lucrative gaming industry, so Degnan agreed to Trump’s terms. Trump seemingly paid Degnan back by becoming an ardent foe of gambling anywhere in the East except Atlantic City—a position that obviously protected his newfound business investment as well, of course.
Trump was required to disclose any investigations in which he might have been involved in the past, even if they never resulted in charges. Trump didn’t disclose a federal grand jury inquiry into how he obtained an option to buy the Penn Central railroad yards on the West Side of Manhattan. The failure to disclose either that inquiry or the Cody inquiry probably should have disqualified Trump from receiving a license under the standards set by the gaming authorities.
Once Trump was licensed in 1982, critical facts that should have resulted in license denial began emerging in Trump’s own books and in reports by Barrett—an embarrassment for the licensing commission and state investigators, who were supposed to have turned these stones over. Forced after the fact to look into Trump’s connections, the two federal investigations he failed to reveal and other matters, the New Jersey Division of Gaming Enforcement investigators circled the wagons to defend their work. First they dismissed as unreliable what mobsters, corrupt union bosses and Trump’s biggest customer, among others, had said to Barrett, to me and other journalists and filmmakers about their dealings with Trump. The investigators’ reports showed that they then put Trump under oath. Trump denied any misconduct or testified that he could not remember. They took him at his word. That meant his casino license was secure even though others in the gambling industry, including low-level licensees like card dealers, had been thrown out for far less.
This lapse illustrated a fundamental truth about casino regulation at the time: Once the state licensed an owner, the Division of Gaming Enforcement had a powerful incentive not to overturn its initial judgment. State officials recited like a mantra their promise that New Jersey casinos were the most highly regulated business in American history, more tightly regulated than nuclear power plants. In Temples of Chance I showed that this reputation often owed less to careful enforcement than to their willingness to look the other way when problems arose.
Ha’aretz reports on Israeli ties to Trump Probe
Alexander Shustorovich, Andrew Intrater,Glasnost, Len Blavaknik, Leonard Blavatnik, Mark Levin, Oliver Bullough, Simon Kukes, Ussr, Yuri Milner
There are billionaires aplenty with Kremlin ties who funneled political contributions to Donald Trump and top Republican leaders. So many are Israel lobbyists, Netanyahu cronies, and well-connected oligarchs — could it all be just one big coincidence? Read two articles below:
#1 – Analysis: The Countless Israeli Connections To Mueller’s Probe Of Trump And Russia
Chemi Shalev, Ha’aretz
The Israeli media usually takes scant interest in Robert Mueller’s investigations. It prefers to dwell on Donald Trump’s supposedly pro-Israeli policies. Last week’s report in the New York Times about the participation of Joel Zamel, the Australian-born “Israeli specialist in social media manipulation,” in an August 3, 2016 meeting at Trump Tower in New York was an exception to the rule. The FBI, the Times reported, had even come to Israel to search the offices of Zamel’s company. Here was a direct Israeli link to the scandal that has bewitched much of America since Trump was first elected.
The moment of fleeting interest was followed up by a report, published by Walla! News, that another Israeli-based company called Inspiration, run by former IDF intelligence officers, had been employed by a super PAC that supported Trump’s election. The report alleged that after retiring from the race, Housing Secretary and then-candidate Ben Carson personally presented Trump with Inspiration’s plan for voter manipulation in swing states. A source in the company told Walla! that Inspiration had received “enormous amounts” of information from the Super PAC, which it then used to compose strategies and slogans that would elevate Trump and “float all kinds of things” about Hillary Clinton.
The two separate cases of Israeli involvement fed into sometimes anti-Semitic conspiracy theories that seek to place Israel on the same level as Russia in its intervention in the 2016 presidential elections. In Israel’s case, however, there is no indication or allegation of direct government involvement or of Mueller’s interest. Nonetheless, beyond Zamel and Inspiration, a disturbing number of the main players implicated so far in Mueller’s investigation, many of them of Russian origin, have a direct link to Israel in their past or present.
There could be myriad reasons for the preponderance of actors with ties to Israel. In recent years, Israeli political strategists have developed an international reputation for election campaigns; many are employed by foreign political parties. Israeli intelligence services have certainly developed an expertise in psychological warfare; both Zamel and Inspiration are said to have employed former intelligence officers. And an estimated 10-15 percent of the million or so Russian immigrants who came to Israel from the 1970s onwards are known to have used the country as a way station to immigrate to the United States and other Western countries – but not before picking up Israeli citizenship, which remains with them for life. These included so-called Russian oligarchs, some of whom made their fortunes on the wrong side of the law.
National Security Advisor Michael Flynn
Nonetheless, there is no denying that Benjamin Netanyahu’s government was overjoyed at Trump’s election – if not before the fact, then certainly after. According to reports published in November and December of last year, Mueller is investigating lobbying efforts made in December 2016, before Trump’s inauguration, by former National Security Advisor Michael Flynn and presidential adviser Jared Kushner against the Obama administration’s intention to refrain from vetoing UN Security Council Resolution 2334, which condemned Jewish settlements in the occupied territories. Flynn’s indictment included an admission that he had lied to the FBI about his approach to Russia’s U.S. Ambassador Sergei Kislyak to delay the Security Council vote.
And while no direct link has been established, there was certainly a confluence of views and interests in the recently uncovered efforts by the United Arab Emirates (UAE) and Saudi Arabia to assist Trump’s campaign. According to the New York Times, in the August 2016 meeting at Trump Tower, the UAE representative, George Nader, told Donald Trump Jr. and other participants that Obama had left a “power vacuum” in the Middle East. The report also states that Nader had concocted a secret plan to destabilize the Iranian regime, an objective now being pursued, despite their denials, by both Israel and the United States.
The question of whether the Israeli involvement was merely coincidental or an indication of something more sinister could become clearer if and when Mueller presents his findings. In the meantime, here is a necessarily incomplete catalog of the numerous Israeli connections to some of the people named so far in Mueller’s probe:
George Nader, the convicted pedophile who worked on behalf of UAE, is a Lebanese businessman who has worked for decades in the shadows of Middle East diplomacy. He has often been accused in the Arab press of being an agent for the Mossad. In the 1980s, Nader reportedly mediated between Israel and Lebanon. At the same time, he established the journal Middle East Insight, which often arranged meetings in Washington between Israelis and Arabs. In July, 1996, Nader hosted Netanyahu shortly after his first election as prime minister. This video shows both on the same stage.
Two years later, Nader forged even closer ties with Netanyahu and his bureau: he served as Ronald Lauder’s assistant in the cosmetic tycoon’s failed efforts to secure a peace deal between Netanyahu and Syria’s president at the time, Hafez Assad. Netanyahu’s advisers have acknowledged their contacts with Nader, who is said to have been especially close to Dore Gold, the prime minister’s aide and former UN ambassador.
Nader’s partner in representing the UAE – and in pressing Trump to take a hard line on Qatar – was Elliott Broidy, the Los Angeles venture capitalist and GOP fundraiser. Broidy made headlines in recent weeks for his lucrative lobbying efforts on behalf of the UAE, which included two personal meetings with Trump, as well as for his alleged role in Trump lawyer Michael Cohen’s payment of $1.6 million to former Playboy Playmate Shera Bechard. Many commentators assume that it was Trump who actually had an affair with Bechard and got her pregnant, with Broidy volunteering to serve as his cover.
Broidy also has a long history with Israel in general and Netanyahu in particular. Together with Sheldon Adelson, he is a prominent member of the board of directors of the Republican Jewish Coalition, which has taken hawkish positions on the Iran nuclear deal and the Israeli-Palestinian conflict. Fifteen years ago, Broidy set up Markstone Capital Group which operated in Israel, investing in Israeli companies and attracting Israeli investors. In 2003, then-Finance Minister Netanyahu took credit for convincing the New York State pension fund to invest $250 million in Markstone. It later emerged that Broidy’s bribes to former New York State Comptroller and now-convicted felon Alan Hevesi also played a role in the pension fund’s largesse. By the time Broidy pled guilty to a misdemeanor after cooperating with Hevesi’s investigators in 2012, Markstone’s Israeli branch had essentially collapsed, taking with it the many Israelis’ investments.
In January 2017, Nader took part in a meeting in Seychelles, which is also being probed by Mueller. In attendance were Erik Prince, Trump confidante, brother of Education Secretary Betsy Devos and founder of the security company Blackwater, as well as Kirill Dmitriev, CEO of the Russian government’s sovereign wealth fund Russia Direct Investment Fund. Dmitriev’s fund has in recent months been negotiating with Israeli government ministers on a $100 million project to open Israeli-run dairies in Russia.
Natalya Veselnitskaya, who features in the June 2016 meeting at Trump Tower, in which she is alleged to have offered damaging information on Hillary Clinton, represented Prevezon Holdings Ltd. in the money laundering case brought forth by former New York Southern District Attorney Preet Bharara. After Bharara was dismissed by Trump, Prevezon was allowed to pay a $6 million fine in May 2017 to avoid criminal prosecution. The owner of Prevezon is Denis Katsyv, another Israeli citizen, whose father Pyotr was a high municipal official in Moscow. In 2005, the same Katsyv reached a similar settlement with Israeli authorities, paying a fine of 35 million shekels after being indicted for money laundering at a Tel Aviv branch of Bank Hapoalim. The Cyprus-registered Prevezon was managed for a while by a Tel Aviv lawyer, who also represented the Russian Embassy in Tel Aviv.
Katsyv partnered with the Dutch branch of Africa-Israel Ltd., which belongs to Russian-Israeli diamond and real estate mogul Lev Leviev. Leviev’s apartments in New York were alleged to have served as a conduit for Prevezon’s money laundering. In 2015, Leviev sold four stories of the old New York Times building in Manhattan to Jared Kushner for $295 million, secured through a loan from Deutsche Bank, which is also being probed by Mueller.
Leviev and Roman Abramovich, the billionaire owner of Chelsea Football Club who has recently run into visa problems with British authorities, teamed up in 1999 to set up the Federation of Jewish Communities in Russia (FOR). They were responding to a request by Vladimir Putin to set up a group that would rival the Russian Jewish Congress, headed by Israeli-Russian oligarch Vladimir Gusinsky, who was close to former Russian President Boris Yeltsin. The head of the FOR is Italian-Russian Chabad Rabbi Berel Lazar. In April 2017, Politico alleged that Chabad and FOR were used by the Kremlin as conduits for their efforts to influence the U.S. elections. The report was denied and even dismissed as anti-Semitic. Interestingly, a BBC story published this week about payments made to Michael Cohen by Ukraine in order to secure a long White House meeting with Trump for Ukrainian leader Petro Poroshenko notes that the approach to Trump’s lawyer was made via the Chabad branch in Port Washington, New York.
Mueller is also said to be investigating connections between Russian oligarchs and Trump’s businesses in the years before he became president. One such partner in Trump’s failed Soho tower was the late Israeli-Georgian tycoon Tamir Sapir. In 2007, Trump hosted the wedding of Sapir’s daughter, Zina, with Rotem Rosen, then the director of the North American branch of Leviev’s Africa-Israel. The same year, Netanyahu listed Sapir as one of the potential donors to his Likud primary campaign in a handwritten note uncovered by the Yedioth Aharonoth daily.
Another partner in the Soho project, and possibly the architect of Trump’s ties to Russia, was Felix Sater, who worked closely with Cohen. Sater is also an Israeli citizen, having passed through the country on his way to the United States with his father Mikhail, whom the FBI has named as a lieutenant for Russia mafia kingpin Sergei Mogilevich. Mogilevich came to Israel in 1990 and lived there for a few years. According to press reports, Mogilevich participated in a 1995 meeting of Ukrainian master criminals convened in Tel Aviv by another Russian oligarch with a shady reputation, Boris Birshtein. After several years in Israel, Birshtein left the country for Canada, after learning that he had turned into a target of the Israeli police. Subsequently, he partnered with Trump in a building project in Toronto.
Mueller is also said to be investigating a $150,000 contribution to Trump’s inaugural committee, in which Broidy played an active role, made by another Ukrainian billionaire, Victor Pinchuk. Cohen, it is alleged, was the middleman. Pinchuk is a significant contributor to religious institutions, but is also well connected to its politicians. In 2008 he served as co-chairman of the Israeli Presidential Conference convened in Jerusalem by the late Shimon Peres.
* Another purported target of Mueller’s investigation is Russian oligarch Viktor Vekselberg, an Israeli citizen with investments in Israel, for payments allegedly made to Michael Cohen. Vekselberg partnered with Israeli-Russian billionaires Len Blavatnik, who is invested in Israeli media, connected to Netanyahu and is also under Mueller’s spotlight, as well as Russian-Israeli billionaire Mikhail Fridman. One of their joint holdings was Alfa Bank, which, according to the Steele Dossier, owned a mysterious internet server found in Trump Tower. Fridman is also the main contributor to the Genesis Prize, in which Netanyahu regularly plays a prominent role, and which featured recently in the brouhaha surrounding Natalie Portman’s decision to decline the prize after she had earlier accepted it.
#2 – Ha’aretz Report: “Know Your Oligarch: A Guide To The Jewish Billionaires In The Trump-Russia Probe”
by JTA and Ron Kampeas, Ha’aretz
The special prosecutor’s probe into Russian meddling in the 2016 election offers an unsettling journey for anyone steeped in Russian Jewry, and the transition from the repression of the former Soviet Union to the relative freedoms of the Russian Federation.
Of 10 billionaires with Kremlin ties who funneled political contributions to U.S. President Donald Trump and a number of top Republican leaders, at least five are Jewish. (The Dallas Morning News has a handy set of interactive charts.)
There’s Len Blavatnik, the dual British-American citizen who dumped huge amounts of cash on Republican candidates in the last election cycle, much of it funneled through his myriad investment firms. (The same Len Blavatnik who funds scholarships for IDF veterans and who is friends with Israeli Prime Minister Benjamin Netanyahu.) Alexander Shustorovich is the president of IMG Artists, a titan among impresarios, who gave Trumps’ inauguration committee a cool $1 million. He arrived in 1977 with his penniless family in New York at age 11, fleeing Soviet persecution of Jews.
The list goes on — we explore some of the names below. But first: What was going on in the Soviet Union as it headed towards collapse in the late 1980s that led to the proliferation of Jewish names among its oligarch class?
“Not all oligarchs are Jewish, of course, not the majority, but there is a significant number,” said Mark Levin, the CEO of the National Coalition Supporting Eurasian Jewry, who joined its predecessor, the National Council on Soviet Jewry, in 1980 as a staffer. “They were in the right place at the right time.”
Here are some of the factors that put them in the “right place at the right time.”
You can go home again
Many Soviet Jews left the country because bigotry and punitive Soviet policies kept them, among other indignities, from getting jobs in their preferred professions. But with the collapse of the USSR, and with opportunities opening up at home, a number of these younger emigrants drew on the entrepreneurial strain, training and connections they found in their new countries, be it the United States, Britain and Israel.
In the late 1980s, when they heard that the policy of glasnost was loosening up markets, a number of them traveled back to their homeland seeking opportunity, armed with savvy and with moneyed connections in their new countries. They were in place after 1991 when Russia and its former republics rapidly privatized everything from mines to media.
“I know people who left the Soviet Union, it imploded, they went back, they had friends and acquaintances who were telling them there were great opportunities,” Levin said. “There were business people who were partnering with people in Russia and other countries because they had the connections to complete business deals.”
The Jews who stayed behind kept in touch with friends and family who were succeeding overseas and were able to tap them for investment opportunities.
“Jews in the ex-USSR had a ready-made network of trusted contacts in the U.S. and Israel who they could go into business with,” said Oliver Bullough, a British author and journalist whose expertise is Russian history and politics. “It was harder for Russians who had no contacts abroad to achieve this. This also, in my opinion, explains why ex-KGB people did well since they had a network of former spies in other countries.”
Glasnost opened doors
Glasnost, or openness, instituted by Mikhail Gorbachev, the last Soviet leader, included opening up plum government jobs to minorities that had previously been marginalized. That accelerated Jewish entry into higher ranks of the bureaucracy just when it was opportune to be in a position to know what sector was about to be privatized, and which government-owned business was about to be broken up.
It helped that unlike communist regimes in eastern Europe, Levin said, in Russia and the former Soviet republics, the elites remained in place — only the ideology of communism was jettisoned.
“Russia and most successor states of the Soviet Union went through a much different transformation than the former communist Europe nations,” he said. “Most of the governing elite didn’t change.”
Moreover, the very professions to which Jews were restricted under the old Soviet system were the ones that proved useful in the new economy. Jews, Levin said, were likelier to be entrepreneurs.
“There were Jews who were helping to make the transition from a command economy to a market economy,” he said.
Author Michael Wolff, profiling tech entrepreneur Yuri Milner in 20111, wrote, “The Jews in Soviet Russia, often kept from taking official career paths, came to thrive in the gray and black markets. Hence, they were among the only capitalists in Russia when capitalism emerged.”
Bullough said the scientific disciplines that accepted Jews under the old system were suddenly in demand under the new.
“Jews were often excluded from the kind of universities that produced diplomats, and therefore pushed more towards pure sciences, which meant there was a disproportionate number of Jewish mathematicians who were able to engage with the new banking industry,” he said.
But who really knows.
Most of all, said Levin, it was chaos. Massive sectors of the economy were up for grabs. At times, there seemed to be no controlling authority. When the dust settled, Russia had entered the age of the oligarchs. “In the beginning, it was like Chicago in the 1920s,” he said. Connie Bruck, profiling Blavatnik in The New Yorker in 2014, quoted a new Russian phrase: “Never ask about the first million.”
Here are some of the businessmen with Soviet Jewish roots who have been named in stories about the Trump-Russia investigation.
Leonard Blavatnik, 60
Oligarch factor: U.S.-British citizen. Forbes lists him as the 48th richest man in the world. Access Industries, which he founded in 1986 while he was at Harvard Business school, exploded in its earlier years through investments in uranium and oil in the collapsing Soviet Union. It has since expanded into massive media holdings.
Trump factor: Gave more than $6 million in the 2016 election cycle, virtually all to Republicans, after a pattern of relatively modest donations to both political parties. Longstanding business ties to Viktor Vekselberg, the oligarch allegedly linked to secret payments to Trump lawyer Michael Cohen. Blavatnik donated $12,700 last year to a Republican party legal fund that has helped to pay Trump’s lawyers in the Russia inquiry.
Jewish ties: He has served on the board of Tel Aviv University, the Center for Jewish History and the 92nd Street Y. His family foundation funds a Colel Chabad-run food bank and warehouse in Kiryat Malachi in Israel, which sends monthly shipments of food to 5,000 poor families in 25 Israeli cities. He is friends with Netanyahu, and has been questioned by police in connection with the investigation into gifts the prime minister allegedly has received from wealthy benefactors. He funds scholarships for Israeli army soldiers.
In 2017, Israeli police investigated whether Prime Minister Netanyahu was involved behind the scenes in the sale of Channel 10 to Leonard Blavatnik (a partner in RGE Communications, which owns 51 percent of Channel 10).
Oligarch factor: A cousin to Vekselberg, who has a Jewish father but does not identify as Jewish. Intrater, a U.S. citizen, is the CEO of Columbus Nova, the investment company with close ties to Vekselberg’s Renova. An SEC filing from 2007 lists Intrater as the chairman of the board of CableCom, a Moscow-area cable TV provider.
Trump factor: Columbus Nova funneled payments from Renova to Michael Cohen, Trump’s lawyer. Intrater also donated $250,000 to Trump’s inaugural committee.
Jewish ties: Intrater, the child of a Holocaust survivor, has given more than $500,000 to the University of Southern California’s Shoah Foundation and has donated to the Auschwitz-Birkenau Foundation Committee. Intrater’s brother, Frederick, the design manager for Columbus Nova, bought up a batch of domain names with associations with the “alt-right” in the summer of 2016, when support for then-candidate Trump on the far right was rising and Get Out the Vote drives were intensifying. Frederick Intrater said he made the purchases without Andrew’s knowledge, and later regretted it, allowing the URL names to wither. “To conclude that I support white supremacy or anti-Semitism is unreasonable given what I’ve described above and also taking into consideration that I am a Jew and son of a Holocaust survivor,” Frederick Intrater said.
Oligarch factor: Shustorovich, a U.S. citizen, traveled to Moscow in 1989, a year after graduating from Harvard, and immediately became a player in media there, starting scientific publications. He unsuccessfully sought to get his company, Pleiades Group, into the $12 billion deal that sold Soviet nuclear fuel to the United States. He is now CEO of IMG Artists, a company that manages talent in classical music and dance.
Trump factor: Shustorovich gave $1 million to Trump’s inaugural committee. Notably, his attempt to give the George W. Bush campaign $250,000 in 2000 was rejected in part because of his ties at the time to Russia’s government.
Jewish ties: Shustorovich arrived in New York at 11 in 1977 with his family, who did not have enough money to buy food. His father, Evgeny, pushed out of work in Russia as a chemist because of his hopes of emigrating, joined Kodak in Rochester, N.Y. and soon rose to prominence in his field. For a period in 1986-1987, Evgeny Shustorovich was one of the faces of the Soviet Jewry movement as he became an ardent advocate for the right of his brother — also named Alexander — to emigrate from the former Soviet Union.
Oligarch factor: Kukes, a U.S. citizen, left the Soviet Union in 1977, settling in the Houston area. A chemist, he was for a period an academic, and then worked in the Texas oil industry. He returned to Russia and became an executive in the post-Soviet oil industry there. In 2003, he became head of the Yukos oil company after another Jewish oligarch, Mikhail Khodorkovsky, was jailed by Russian leader Vladimir Putin for tax evasion and theft — but mostly, most observers think, for funding opposition parties.
The Guardian in 2003 uncovered CIA documents linking Kukes to bribery, charges which he has denied. Prior to his year-long gig helming Yukos, Kukes was from 1998-2003 the president of TNK, another oil company, whose principal stakeholders were Blavatnik and Vekselberg. In 2012 when he headed the Russian arm of Hess, Forbes reported that Kukes’ former chauffeur, who had risen through the company ranks, was a Russian mafia boss. The man denied the charges, but Kukes pushed him out of the company. Last year, Kukes was a U.S.-based CEO of Nafta, a consulting firm for investors in Russia’s energy sector. Nafta’s website has since been scrubbed.
Trump factor: With no major history of GOP giving, Kukes suddenly funneled $285,000 into the Trump reelection effort — much of it after June 2016, when Russian interest in the possibility of a Trump presidency intensified.
Jewish ties: Kukes does not have apparent formal ties with the organized Jewish community, although he tells interviewers he left the former Soviet Union because he was Jewish. In 2015, he bought a 12.5 percent share in Leverate, an Israeli-founded company that develops brokerage software.
Oligarch factor: Milner never fled the Soviet Union — his parents still live in Moscow. He was the first non-emigre from the Soviet Union to attend Wharton business school, and was for years involved in Russian banking before entering tech. He is well known as a Silicon Valley investor, owning one of the most luxurious houses in ritzy Los Altos Hills, valued in 2011 at $100 million. Last year, it was revealed through leaked documents that Russia’s government funded substantive stakes in Twitter and Facebook that were for a time held by his company, DST Global. In 2013, Milner joined Facebook’s Mark Zuckerberg, Google’s Sergey Brin and 23andme’s Anne Wojcicki in establishing the multi-million dollar Breakthrough prize for scientists.
Trump factor: After last year’s revelations, Milner scoffed at the notion that Russia was plowing money into social media efforts to influence elections, noting that he never sought a seat on the board of the companies he invested in. Milner in 2015 invested $850,000 in Cadre, a real estate startup launched by Jared Kushner, Trump’s son-in-law, and Kushner’s brother Josh. Milner has said that he met Jared Kushner only once. Kushner’s stake in Cadre was one of many that he initially failed to disclose when he became an adviser to his father-in-law.
Jewish ties: Milner attends a synagogue when he is in Moscow. Somewhere along the line, he appears to have acquired Israeli citizenship. Speaking with Forbes in 2017 after the magazine named him one of the 100 “greatest living business minds,” Milner said he was “humbled and honored” to be “the only Russian or Israeli citizen on the list.”