The Russian press wondered whether Trutnev had an interest in Uralkali: Was he Rybolovlev’s shadow partner? All sides strongly denied this. The speculation came about after a disaster in 2006 threatened to wipe out Rybolovlev’s entire business.
His potash mine was located in the Urals, in the city of Berezniki, on the banks of the Kama River. Gulag laborers had originally dug the mine and propped up its tunnels with salt pillars. The city sat on top. A flood caused the walls and supports to dissolve—and opened a giant municipal sinkhole. The hole swallowed up the railway line and menaced the inhabitants.
It was entirely possible that the state would impose punitive fines on Uralkali or seize its Mine-1. Sechin threatened as much. Mysteriously, the state did nothing. Four months after Rybolovlev bought Trump’s mansion, Trutnev issued the government’s verdict.
“I think the investigation into Uralkali’s fault is inappropriate,” Trutnev declared mildly.
He blamed the problems on Stalin-era planners, who were conveniently dead. Uralkali’s share price soared.
For Rybolovlev, 2008 was a hell of a year. His company won a dramatic reprieve, his wife sought $6 to $12 billion, and he acquired an interesting piece of South Florida real estate from a celebrity American TV mogul.
According to the Steele dossier, it was around this time that the Kremlin and the Trump campaign began what the dossier called a “regular exchange” of information.
—
It was November 3, 2016, just five days before the U.S. election, and Anna-Catherine Sendgikoski was waiting for a client. Sendgikoski was a limousine driver. And an ardent Democrat who hated all things Trump. Her station was Charlotte International Airport in North Carolina—specifically the terminal used by private jets.
At around 2:00 p.m. Sendgikoski noticed a newly arrived plane. It had come in at lunchtime. Even by the standards of personal aviation the jet was a head-turner—a sleek Airbus A319, painted in flowing lines of teal, cream, and ink black. There was nothing to identify it apart from a handful of letters on the tail fin. Painted in white capitals they read: M-KATE. The M meant the plane was registered in the Isle of Man.
Sendgikoski snapped a photo. A perimeter fence with barbed wire and a yellow fire truck half obscured the plane, but the call sign was clearly visible. Some twenty minutes later another private jet came in to land. This one wasn’t bashful about its proprietor. Giant letters behind the cockpit screamed out a familiar name: TRUMP. She took another picture. She posted the two photos on Twitter.
The man himself walked from the jet and got into a waiting motorcade. Sendgikoski said she didn’t see anyone emerge from the mystery plane. She did look up its owner—Rybolovlev. The Russian had named his jet after his daughter Katia. It was parked about three hundred feet away from Trump’s. The coincidence struck her as “suspect” and “strange,” she told The Charlotte Observer. Rybolovlev had turned the inside of his plane into a cozy home. It had a bed, shower, table, and state-of-the-art TV.
North Carolina was a battleground state and both Trump and Clinton had been making frequent trips there. At a rally in Charlotte that afternoon Trump accused Hillary of “far-reaching criminal conduct” and said a Clinton victory would create “an unprecedented constitutional crisis.” But why was a Russian billionaire in town?
Over the next months, investigative reporters would spend hours combing through flight records. The White House dismissed their efforts as a conspiracy theory and said that Trump and Rybolovlev had never met.
This appeared to be true.
Still, M-KATE’s hyperactive flight schedule raised more questions than answers. In 2016 and early 2017 Rybolovlev’s jet made seven trips to New York, for several days each, usually at a time when the candidate was there. It flew twice to Miami when Trump was at Mar-a-Lago. And it made seven trips to Moscow, mostly preceding or following flights to Florida or New York.
The simplest way to explain these movements was to inquire. I emailed the billionaire’s adviser, Sergey Chernitsyn, asking if I could interview Rybolovlev. We might speak in Russian, if he preferred, and I was ready to head off to the South of France or any location that suited him. My email said: “The big question, I guess, is why Dmitry’s jet is often in the same place as Donald’s?”
Chernitsyn’s answer was friendly. Regrettably, there would be no interview. He confirmed that Rybolovlev hadn’t met Trump. And “D [Dmitry] often goes to the States—so it’s not so strange that the planes were at the same time at the same place.” The purchase of the Trump mansion was a “good enough investment done,” with the land on sale in three parcels, he wrote.
Okay, but what was Rybolovlev doing in the United States? Chernitsyn: “He travels for business and pleasure. He always travels a lot as you can see from the plane records.”
The answer made a kind of sense but was couched in language so vague as to be meaningless. It left open the question of whether Rybolovlev might have been delivering something. Or had he perhaps met someone else from Trump’s entourage during his travels? Like for example, Trump’s personal lawyer, Michael Cohen.
The Steele dossier alleged that Cohen played the role of secret intermediary. It said that Cohen made a clandestine trip to Europe in August 2016. The goal was to “clean up the mess” left by media revelations concerning Paul Manafort and Carter Page. The meetings were originally scheduled to take place in Moscow but were shifted to an “operationally soft” EU country “when it was judged too compromising for him [Cohen] to travel to the Russian capital.”
Steele’s sources told him the meeting took place in Prague, the Czech capital. The location may have been the premises of the Russian state cultural organization Rossotrudnichestvo—a “plausibly deniable” place to meet with Kremlin officials. Cohen allegedly held talks with Oleg Solodukhin, a Russian official operating under Rossotrudnichestvo cover.
The dossier further alleged that Cohen turned up at the meeting with three “colleagues.” Who they were was unclear. The agenda: how to make “deniable cash payments” to hackers who “worked in Europe under Kremlin direction against the Clinton campaign.” And “various contingencies for covering up these operations and Moscow’s secret liaison with the Trump team more generally.”
Cohen vehemently denied Steele’s claims. The lawyer said he’d never visited Prague. No proof surfaced that he was there. If Prague was wrong, could the meeting have taken place somewhere else? Cohen—who has a Ukrainian wife—tweeted the cover of his U.S. passport and showed off the visa stamps inside.
According to intelligence sources in Washington and London, the FBI was skeptical of Cohen’s denials. It examined Cohen’s movements and considered whether he might have gone to Europe on a private jet. I asked Chernitsyn if Rybolovlev and Cohen had met.
Chernitsyn’s reply: “As to Michael Cohen—maybe, he [Rybolovlev] meets a lot of people. I myself have never been present on a meeting with this person—so I can’t say you definitely.”
Rybolovlev did know some politicians and public figures, including former French president Nicolas Sarkozy. They watched soccer in Paris. And Prince Albert of Monaco. But not Trump, Chernitsyn said.
With little hard information, reporters were left chasing phantoms. In mid-August 2016 Ivanka and Jared Kushner visited Dubrovnik, Croatia. Rybolovlev’s yacht, My Anna, was spotted in Dubrovnik on the same dates. Was this perhaps planned? Or, as Cohen insisted, was it the musings of a deranged liberal media determined to besmirch the candidate?
Finding out more was made difficult by the fact that Rybolovlev managed his business affairs offshore. Many of his companies were registered in the British Virgin Islands, an impenetrable tax haven. Rybolovlev used a Panama-based law firm, Mossack Fonseca. It was known for asking few questions of its rich customers. One of them was the wife of Dmitry Peskov, Putin’s press spokesman. The firm’s leaked database became known as the Panama Papers.
Rybolovlev also used another major offshore center, Cyprus. In 2010 he sold most of his
stake in Uralkali, held via a Cyprus company, to a consortium of Russian oligarchs, reportedly for more than $5 billion. Soon after he bought nearly 10 percent of the Bank of Cyprus, the island’s biggest lender. Many of its depositors were Russian. Meanwhile, back in Moscow Rybolovlev’s old friend Trutnev was promoted and became an assistant to Putin.
Cyprus was a haven for billions of dollars in Russian capital, much of it of suspect origin. The cash typically went into shell companies. Some of this “investment” was then returned to Russia as foreign revenue. The island was also a significant hub for Russian espionage and intelligence operations.
Rybolovlev’s fellow investors in the Bank of Cyprus were an interesting bunch. After a bailout in 2013 the bank got a new vice chair: Vladimir Strzhalkovsky. Strzhalkovsky was a former KGB agent and longtime Putin associate who served on the boards of Russian state enterprises. Another board member was Viktor Vekselberg, a Russian oligarch on good terms with the Kremlin.
There was one other major investor, an American. His name was Wilbur Ross.
In 2014 Ross became the bank’s chief shareholder. He gained the position of vice chairman, attended board meetings with the ex-KGB agent, and restructured the bank’s debts. Ross is said to have curbed rather than increased Kremlin influence and to have improved corporate governance. Ross brought in Josef Ackermann, the former chief executive of Deutsche Bank, as chairman. According to Chernitsyn, Rybolovlev never contacted Ross or the other Russians and his stake in the bank got smaller.
Even so, it was a curious picture. Like his oligarch contacts, Manafort used Cypriot vehicles for his business affairs, and at one point had at least fifteen bank accounts on the island. Trump set up two companies in Cyprus. One of them, Trump Construction Co. Ltd., was registered in September 2008, two months after he sold Maison de l’Amitié. What the company did, the scale of its activities, its annual filings—all were secret.
So in the months leading up to Trump’s election campaign Ross, an American venture capitalist, was working closely with a group of Putin-connected Russians. All of this in a jurisdiction that the U.S. State Department said was prone to “money laundering.” And where “international criminal networks” were active.
Ross resigned from the Bank of Cyprus in 2017 when he got a new job.
It was a good one.
Trump made him U.S. secretary of commerce.
—
Dmitry Rybolovlev wasn’t the only Russian to acquire a Trump property. In fact, Russian and Eurasian buyers had been purchasing real estate from him for a long time, ever since the building of Trump Tower began in 1980.
Some were legitimate. Others, though, were intimately involved with Russian organized crime. At key moments in Trump’s career, when Western banks were reluctant to lend and credit evaporated, income originating from the former Soviet Union appears to have rescued Trump from financial ruin.
The Russians came in waves. Some arrived with the tide of Soviet refugees who emigrated to the United States in the 1970s, many of them Jewish. Most of the money that left Russia during this late communist period came from the mafia. This meant moving cash, lots of it, sometimes using Israeli contacts as conduits, but more often via banks in Luxembourg and Switzerland. They deposited gold bullion and precious stones.
Trump Tower opened in 1983. Among the new tenants were Eastern European newcomers with considerable cash resources.
In 1984 Trump sold five apartments on the fifty-third floor to David Bogatin, an alleged Mogilevich associate. The price was $6 million. Bogatin then used his Trump properties to carry out a gasoline bootlegging scam and, as prosecutors put it, to “launder money and shelter assets.” In 1987 a court sentenced him to two years in jail for tax evasion. Bogatin pleaded guilty but skipped bail and fled to Poland. He was eventually extradited back to the United States and prison.
There was a second Russian influx in the early 1990s, prompted by the end of the USSR. Inside Russia, there was widespread looting of property and assets that had previously belonged to the Party or state. These new immigrants fueled mafia activity in New York, in particular in Brighton Beach and other parts of Brooklyn.
One of them was Vyacheslav Ivankov, a well-known Moscow felon. Ivankov—known as Yaponchik, or the Little Japanese—was a crime boss, or vor. His criminal career was extensive—forgery, firearms, drug trafficking, extortion—punctuated by long spells inside Soviet penal institutions. In spring 1992 Ivankov moved from Russia to New York.
There, he and a group of gang members took over mafia operations in Brighton Beach, moving into gambling, prostitution, and arms smuggling. Ivankov was a superior kind of villain. He nurtured connections—with Mogilevich’s powerful organization in Hungary and central Europe; with the Solntsevskaya bratva in Moscow, the world’s number one mafia group; and with Russian former intelligence.
Federal agents were keen to arrest Ivankov. There was only one problem—where was he? The bureau found it easy to wiretap and prosecute Italian American mobsters, who were fond of walking and talking. But Ivankov was elusive.
The FBI agent James Moody was tasked with hunting him down. Moody told Robert Friedman, the author of Red Mafiya, a book about the U.S.-based Russian mob, that Ivankov’s hideout was a surprise. It took three years to find it.
“At first all we had was a name. We were looking around and had to go out and really beat the bushes,” Moody said. “And then we found out that he was in a luxury condo in Trump Tower.”
Before he could be arrested Ivankov vanished from Manhattan. A special investigator with New York State’s Organized Crime Task Force, Gregory Stasiuk, followed the clues. According to Friedman, Ivankov went to the Taj Mahal in Atlantic City, New Jersey, the casino owned by Trump that was later fined nearly half a million dollars for money laundering. The casino was popular with Russians, who spent large sums at Trump’s gaming tables.
The FBI eventually caught up with Ivankov at his mistress’s apartment in Brighton Beach. They found $75,000 in cash and a gun wrapped in a sock. It had been tossed into the bushes outside. Agents recovered a copy of Ivankov’s personal telephone directory. In it, they found a number for Trump Tower and the fax of the Trump Organization’s office.
How much of this could be related to Trump? Like any other successful real estate developer, Trump had sold a lot of properties during his career. He could scarcely be blamed for the nefarious activities of some of his Russian customers. Or the fact that a few of them turned out to be swindlers and professional crooks.
The reality, though, was that Russian clients were a core part of Trump’s business. This was true from his early years as a developer to his later arm’s-length ventures in which he licensed his brand to foreign investors, from Panama to Baku in Azerbaijan, and Toronto in Canada.
Trump’s links to the underworld were multifarious. As were those of his nearest business partners.
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At the same time that the FBI was looking for Ivankov, another Moscow-born immigrant was sitting in jail. This was Felix Sater. Sater’s family was Jewish. In 1974, when Sater was eight, his parents emigrated from the Soviet Union to Israel. From there they moved to Baltimore and then to Brighton Beach.
According to court documents, Sater’s father—originally called Mikhail Sheferofsky—was a Mogilevich crime syndicate boss who headed the Russian mafia in Brooklyn. He served prison time in Britain for counterfeiting and fraud. In the United States Sater Sr. ran an extortion scheme in Brighton Beach. The charge sheet accused him of terrorizing restaurants, food stores, and a local medical clinic. This took place during the 1990s and involved the “wrongful use of actual or threatened force, violence and fear.”
Felix Sater had a criminal record, too. He began his career selling stocks on Wall Street. In 1991, at age twenty-five, he stabbed another man after work during a barroom brawl, attacking his victim with the stem of a margarita glass. Sater spent fifteen months in jail. His conviction meant that he lost his securities license and could no lo
nger work in finance.
At least not legally. Broke, married, and with a four-month-old baby daughter, Sater got involved in a pump-and-dump stock market fraud. His fellow conspirators came from leading New York Italian mafia families. They defrauded investors of $40 million. During this period Sater traveled frequently to Moscow. His involvement in crime—as Sater tells it—ended in 1996.
Normally Sater might have expected another jail term. It was at this point that he cut a deal with the FBI. The bureau said it was struggling to penetrate stock market frauds, including one carried out by Mogilevich using a Philadelphia-based shell company.
The FBI recruited Sater as an informant. He was now a cooperating witness. He pleaded guilty to racketeering and fraud. In return for his services Sater got federal immunity.
There are two ways of interpreting what happened next. One, that Sater’s life entered a new redemptive phase, in which he effaced his past sins by returning from Moscow and working diligently for the FBI. Two, that Sater exploited the fact that his fraud record was under seal, and therefore not public, to make a lot of money.
Not just for him but for his new partner—Donald Trump.
At the turn of the new millennium Sater began working for a real estate development company, Bayrock LLC. The firm had begun in Moscow during the tail end of communism. Its founder was Tevfik Arif. Born to a Turkish family in Soviet Kazakhstan, he was a former bureaucrat who had worked in the USSR’s commerce and trade department.
Arif landed in New York from Russia and Turkey, his operations base for much of the 1990s. He hired Sater to manage the company. In 2003 Bayrock moved into offices in Trump Tower on the twenty-fourth floor, two floors below Trump’s own premises. Sater, Arif, and Trump became partners.
Over the next five years Sater worked on various licensing deals for Trump properties, including a trip with Donald Jr. to Phoenix. He had a Trump Organization business card, which said his role was “senior adviser to Donald Trump.” At Trump’s request Sater met with Donald Jr. and Ivanka in Russia in 2006 and showed them around the capital. And arranged for Ivanka to “sit in Putin’s private chair at his desk and office in the Kremlin.” (Ivanka said she couldn’t recall this.) Overall, Sater said that he had a “friendly” relationship with Trump. He dropped into his office “numerous times” to pitch ideas.
Collusion: Secret Meetings, Dirty Money, and How Russia Helped Donald Trump Win Page 25
