Where’s All The Money?

With Russia, the Mueller indictments, Fusion GPS, the Dirty Dossier, the Paradise Papers and, gasp, Vault 8 (finally!!) grabbing the headlines these days it’s hard to focus on other things, especially when those “other things” happened almost twenty years ago.  Nevertheless, if you have any interest in Bill Browder or the Clintons you may want to tear yourself away from Twitter for a moment and follow along because 1998 and 1999 were spectacularly interesting years.  When Russia defaulted on its loans in August, 1998, Browder’s shenanigans came to a screeching halt and his firm not only lost its partner, diamond magnate Beny Steinmetz, it lost a shiz ton of money for its investors. Additionally, $4.8 billion in missing IMF funds and a money laundering investigation into the Bank of New York exposed the unfathomable depth of the Russian oligarchs’ greed, the Russian mafia’s vast web of corrupt activity, and the ungodly amount of capital flight pouring out of Russia and washing through U.S. banks. All of this of course happened on Bill Clinton’s watch whose administration turned a blind eye to overt corruption and money laundering.  I doubt one has to wonder long if the Clintons got their cut for looking the other way. The other interesting part of this story is that Bill Browder has been completely silent about his partner’s involvement in the IMF scandal but, then again, he does like to hide the truth, doesn’t he?

As I have mentioned previously the Clinton administration, Harvard, Soros, and USAID were behind Russia’s privatization program during the 1990s and one of the main characters behind the Harvard Institute for International Development (H.I.I.D.), was Larry Summers whose background is fairly extensive;  former Vice President of Development Economics and Chief Economist of the World Bank between 1991-1993, Senior U.S. Treasury Department official until later promoted to Treasury Secretary during the Clinton administration, and the director of the National Economic Council for Obama between 2009-2010.  Finally, he became president of Harvard University between 2001-2006 after tearing up Russia with the rest of his Harvard cronies.

Summers worked closely with Jeffrey Sachs, Russians Anatoly Chubais and Boris Nemtsov, and former World Bank consultant, Jonathan Hay, who was appointed H.I.I.D’s general director in Moscow.  According to Janine R. Wedel via thenation.com, Hay “assumed vast powers over contractors, policies and program specifics; he not only controlled access to the Chubais circle but served as its mouthpiece.”  This cozy little group of co-conspirators helped direct everything from the Russian voucher program and the State auctions to IMF funds earmarked for Russia.  And speaking of vouchers, don’t forget that the majority of Russian citizens had no idea that they had to take their vouchers to auctions in order to invest in newly privatized State companies.  Most citizens simply sold them (to buy food) to guys like Bill Browder who was given $25 million from Salomon Brothers to purchase and then invest them. Not that it would have mattered anyways had they known because the Harvard-Chubais clique made sure that the auctions were rigged and only select Russians and foreign entities such as Harvard Management Company (H.M.C.) and George Soros were allowed to participate in them. As Wedel put it, the program “favored Russian bankers, Soros and insider expatriates working in Russia’s nascent markets.”

Bottom line?  A handful of individuals like George Soros and Russian oligarchs Mikhail Khodorkovsky, Boris Berezovsky, and Roman Abramovich were able to purchase Russian energy and communication companies for peanuts.  “Thanks America,” said almost no Russian citizen during the 1990s…or ever since.

As insanely corrupt as things became in Russia the Clinton administration continued to place the program at the forefront of its Russian foreign policy and they spun it as a success over and over again.  Meanwhile, there was the IMF money.  As Summers, Hay, and Chubais were rigging auctions, they continued to direct billions in taxpayer dol—er, I mean US-IMF-World Bank funds to Russia even though their government was saddled with foreign debt which they couldn’t possibly climb out from under.  I mean, once you took into consideration the corruption, capital flight, and the fact that some of the IMF funds were spent on things like Yeltsin’s reelection campaign and the Chechen War, how could they? That’s right, the U.S. inadvertently paid for Yeltsin’s reelection and funded Russia’s war while, get this, the CIA, unbeknownst to American taxpayers, was also funding the Chechen separatists and radical Islamists. Who’s says you can’t play both sides of a slaughterfest, am I right?  And just when you think this story can’t get any worse, the Clinton administration continued to push for more loans despite the corruption, misused funds, and the fact that some of the money simply up and disappeared.  Poof.  Just like that.  Enter the IMF’s missing $4.8 billion.

In early to mid-1998, there were serious congressional misgivings about giving Russia more money but the IMF caved under pressure from the Clinton administration and authorized a $22.6 billion package. The first installment of $4.8 billion was sent out on August 14, 1998, and it immediately disappeared through a maze of shell companies and foreign bank accounts.  You may be asking yourself right now who was arrested and prosecuted for this unbelievable crime but don’t bother.  No one was prosecuted.  Ever.  Like, never ever.  The case was investigated and during a September, 1999, House Committee on Banking and Financial Services hearing, Chairman Jim Leach stated,

“According to press reports, it was the filing of a SAR [Suspicious Activity Report] by one of the banks that will be represented at this hearing, Republic National Bank of New York, that helped alert law enforcement authorities to the massive funds flow from Russia into other New York money center banks.”

That’s right.  Apparently Bill Browder’s partner, Edmond Safra, and his bank, Republic National, were the ones to blow the whistle on Bank of New York.  Yet, after being questioned by Leach specifically about the IMF funds the Managing Director and Deputy Counsel of Republic National Bank, Anne Vitale, replied,

“We have not seen IMF transfers of any significant amount at all going through. One of the things with our wire transfer report is to search for names appearing in the press. Now I have a staff member who puts in the names appearing in the press to see whether the wire has gone through Republic with that name on it. We have not seen substantial IMF transfers. What we have seen is very, very minimal.”

Good ol’ Larry Summers also testified at the hearing and stated,

“With respect to Bank of New York there is no evidence that there were any IMF funds diverted.”

Of course there wasn’t.  Folks, do you see what’s happening here?  No one’s at fault so there’s no one to prosecute.  And despite Summers’ testimony that Bank of New York was innocent and Vitale’s alleged belief that Republic National’s SAR did not include any activity involving the IMF funds, three months after the Committee hearing media outlets like the UK’s Independent pushed the story that Edmond Safra’s Republic National Bank blew the whistle on BONY, “Mr. Safra’s American bank unmasked the embezzlement of international aid to Moscow last year.”  Additionally, two years after the hearing RFE/RL reported that a Swiss magistrate was looking into suspcious activity regarding the IMF money and Runicom, a Swiss affiliate of Sibneft. At the time, Sibneft was owned by Boris Berezovsky and Roman Abramovich.  Oleg Lurie also reported on the Swiss investigation in the March 2003 edition of Johnson’s Russia List and noted that the $4.8 billion loan originated at the U.S. Federal Reserve bank on August 14, 1998, but for whatever reason it was never sent to the Central Bank of Russia but rather to Edmond Safra’s Republic National.  From there the money was transferred to multiple accounts (See Lurie’s article.  For RFE/RL’s earlier account on the money trail go here):

  • “$2.35 billion were transferred to the Bank of Sydney…part of the money transferred to the Bank of Sydney was placed in an account of a company which was 25% owned by a daughter of President Boris Yelsin, corporate account that was partially owned by Yeltsin’s daughter.”

 

  • “$2,115 million was converted into pounds sterling and transferred to the National Westminister Bank – here the trace of money disappears.”

 

  • “$780 million and $270 million was transferred on August 14 and August 18 respectively to the Credit Suisse bank.”

 

  • “$1.4 billion were transferred to the notorious Bank of New York and further to its Geneva branch, Bank of New York-Intermaritime. The money entered the account of a Russian ‘United Bank’ owned by Roman Abramovich and Boris Berezovsky…the IMF money was immediately transferred to the account of the Swiss RUNICOM company, owned by Roman Abramovich.”

It seems that until Swiss magistrate Laurent Kasper-Ansermet started investigating the missing IMF funds in January, 2000, the Clinton administration tried to keep a lid on where the funds were originally deposited and where the funds went. According to Kaspwer-Ansermet the funds were “deposited in an account of the Republic National Bank of New York. From there I am trying to trace where they went.”

So yeah, it appears Summers and Vitale both lied although I’m not surprised based on their backgrounds. As I discussed earlier, Summers was knee-deep in the disgustingly corrupt privatization program while Vitale on the other hand was a former assistant attorney in the Southern District of New York where she had “prosecuted money laundering, narcotics and organized crimes cases,” now working for Republic National. Of course one has to wonder what a former federal prosecutor was doing at Republic National Bank after the New York Magazine’s 1996 spread on Safra’s ties to the Russian mafia but who am I to judge her obvious corruption, right?  And as if that’s not shady enough, spoiler alert after Safra died in 1999, HSBC took over Safra’s Republic National Bank (and Safra’s shares in Bill Browder’s firm, Hermitage Capital) and Vitale went to work for HSBC as special litigation counsel.  So there’s that.

It seems that every character involved in these scandals is shadier than the next and that definitely includes Bill Clinton and his administration who stonewalled the Swiss investigation.  A September, 2000 Congressional Report entitled “Russia’s Road to Corruption,” reported that the Swiss magistrate,

“…formally requested assistance from the U.S. government [Clinton administration] in his investigation into the Bank of New York case in September 1999 and began a series of detailed requests for information and assistance in January 2000 but to date has received little cooperation.”

Wait, what? The Clinton administration held up an investigation?  Imagine that.  And it wasn’t just the IMF scandal they tried to bury, it was the billions of dollars that had been money laundered through the Bank of New York for years. If you’re not familiar with this story, here goes: The case was tied to Russian mafia kingpin Semion Mogilevich, his bank, Inkombank, and oligarchs Mikhail Khodorkovsky and Boris Berezovsky—the same guy who owned the account that received some of the stolen IMF money (for more detailed information you might want to read this or this).  All three men had ties to BONY through its top executives and a shell company called Benex. Benex of course also had ties to Marc Rich, Grigory Luchansky, Nordex, Bruce Rappaport, and Inter-Martime Bank but who’s got that kind of time?

As to when the U.S. government and Intelligence agencies knew about the corruption in Russia, there’s Karon von Gerhke-Thompson. Ever hear of her? Of course you haven’t because the last agency that wants you to know about her is the CIA.  According to Gerhke-Thompson’s testimony during the September, 1999 hearing,

“As early as July 1993, the CIA believed that financial aid from the U. S. and international lending institutions to support Russia’s transition was being laundered through front firms into offshore banks. A substantial amount of the laundered money was believed to be in safe havens in offshore banks or was used to establish offshore businesses and joint venture partnerships with Westem firms. According to Mr. V, Konanykhine and Khodorkovsky were key players to unraveling the ties between the KGB, senior government officials and Russian organized crime families.”

As early as 1993.

Folks, they knew.  They all knew.  The administration knew.  The Intelligence agencies knew.  Even the IMF knew.  And yet the U.S. government kept sending billions of dollars to Russia.  It’s like anything the Clintons get involved in ends up like a kegger party gone horribly criminal and their shenanigans could probably take up a few seasons of COPS.  It’s that ridiculous.  And if Mueller wants to go after Paul Manafort for things that happened a decade or two ago then Americans should demand that a serious investigation take place into the missing IMF funds.  Naw, I’m kidding.  Americans should demand it, period.  Additionally, it would be nice if the ICIJ would release something along the lines of the “Clinton Papers” because we all know that Bill and Hillary made some serious cash out of all of this and most likely hid it offshore.  But don’t count on that happening anytime soon.

So what was Bill Browder’s take on all of these events?  For one, he never mentions in his book that his partner’s bank, Republic National of New York, was involved in the IMF debacle which is beyond weird in and of itself.  If Edmond Safra was such a hero by reporting the money laundering, stolen IMF money, and Russian corruption wouldn’t it only make sense that Browder would mention that? Well yeah, but no, he didn’t.  In fact, I’ve never seen him mention it.  Going back to his book, rather than talk about it he pointed his greedy little fingers at the oligarchs and cried about how much money he lost,

“The bailout package [IMF money] may have been big, but it was viewed by the Russian oligarchs not as a backstop but as a massive piggy bank that they could use to convert their rubles into dollars in order to get that money as far away from Russia as possible…when the dust finally settled the fund [Hermitage Capital] was nursing a $900 million losses and a 90 percent drop…It’s hard to describe what it’s like to lose $900 million…It was also a public humiliation.”

Ugh, cry me a river, Browder.  In his book he went on to say that he only had one choice at that point and that was to stay in Russia in order to gain back all of the money his clients had lost.  In other words, very wealthy and powerful people lost a lot of money at the hands of Bill Browder and he was willing to break the law to get back that money.

 

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