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Corrupt yes, Russian spy unlikely

A review of House of Trump, House of Putin. The Untold Story of Donald Trump and the Russian Mafia. By: Craig Unger. Publisher: Transworld Publishers, London, 2018.

August 26, 2019 - Taras Kuzio - Books and ReviewsIssue 5 2019Magazine

Craig Unger’s book portrays Donald Trump as corrupt and a long-time Russian agent, but he really only succeeds in providing evidence for the former claim. Unger is convincing in showing that Trump was unscrupulous in his business dealings, never caring who he sold his properties to – whether they were Italian-American mobsters, Soviet Russian-Jewish émigrés with ties to organised crime groups in the USSR, or post-Soviet Russian Mafiosi and oligarchs. Unger’s portrayal of Trump as someone that communist and post-communist intelligence services sought to recruit is not convincing, however, writing that Trump “has been a person of interest to Soviet and Russian intelligence for more than 40 years”. It is a rather thin thread of evidence tying Trump to the Czech intelligence services through his first Czech wife, Ivana Trump.

Although Trump surrounded himself with pro-Russian realists in the 2016 election campaign, this does not make him a Russian agent – just as it would be wrong to define prominent realists like Henry Kissinger and John Mearsheimer as Russian agents. Meanwhile, political consultants, like Paul Manafort, with whom Trump had a connection since 1980, are extreme cynics without any ideology and are willing to work for anybody who pays well. Trump and Manafort are alike because they believe the end justify the means.

No questions asked

The first purchasers of Trump’s condominiums were Italian-American mobsters who used them as a means to launder their ill-gotten gains. In the 1980s, 600,000 Soviet Jews, with a good dose of members of organised crime back in the homeland they had left, emigrated from the USSR to the United States and many settled in Brooklyn’s Brighton Beach – which came to be known as “Little Odesa”. The third group of oligarchs and mobsters arrived after the collapse of the Soviet Union and continued to invest their corrupt gains in Trump’s properties. Most of Trump’s purchases were made through offshore shell companies which were a means whereby corrupt individuals could hide their identities and the sources of their ill-gotten gains. The US, United Kingdom and many other western countries still permit the use of anonymous shell company purchases and Unger estimates that 300 billion US dollars of Russian dirty cash is laundered through the US every year. Since the 1980s, a fifth of Trump’s condos were purchased through opaque cash purchases with no due diligence by his companies. Unger writes: “In Trump, the Soviets had discovered a man who was so intoxicated by a huge new clientele with boatloads of cash that he engaged in dubious transactions without asking questions”.

Trump’s partner in the Russia mafia was Felix Sater who helped cement the lucrative criminal ties between the Italian-American Mafiosi and Soviet Russian-Jewish immigrants from the 1980s onwards. Unger credits Sater, who emigrated from the USSR to the US in the early 1970s and settled in Brighton Beach, with expanding the use of Caribbean shell companies and Israeli banks. Sater was eventually recruited by a number of US intelligence agencies because of his insider ties to the murky world of Russian politics and crime.

Sater was involved with the well-known Soviet and Russian mobster Semyon Mogilevich and his criminal organisation, as well as Russian oligarchs and President Vladimir Putin. Bayrock, one of Mogilevich’s companies used for money laundering, had an office on the 24th floor of Trump Tower in New York, providing a “cozy family of billion oligarchs from the former Soviet Union”; Vyacheslav Ivankov ran Mogilevych’s crooked operations from the Trump Tower; a total of 65 condos in various Trump properties were sold through offshore shell companies to Italian-American Mafiosi and Russian oligarchs.

Putin’s ties to this criminal world in general, and the Tambov organised crime group in particular, were cemented in the 1990s when he worked in the mayor’s office in St Petersburg. Unger writes that Putin and Mogilevich had a “common cause” which was a “criminal cause”. After he came to power in 2000, Putin cemented this nexus between organised crime, Chekists (former KGB and GRU [Soviet and Russian military intelligence] officers) and high-level bureaucrats in an “era of unimaginable corruption and greed”.

The Mogilevich connection included the lucrative gas trade from Russia and Central Asia through to Ukraine and Europe. Ukrainian gas mogul Dmytro Firtash, whom the US department of justice has sought to extradite since 2014, admitted to US Ambassador William Taylor that Mogilevich had blessed his entry into this “business”. Another early associate was Vadym Rabinovych who attended Mogilevich meetings in Russia and Israel.

Firtash was the Ukrainian connection in this nexus, while Austrian Raiffesen Bank was the favourite European bank for gas intermediaries that Russian and Ukrainian officials and oligarchs used to steal billions from their governments. Firtash, born in the Galician region of western Ukraine, was Putin’s agent in Ukraine, making huge profits from discounted gas which was used to buy up strategic branches of the Ukrainian economy for the Russian state. In recent years, Rabinovich became politically active in the pro-Putin Opposition Platform – For Life headed by another gas oligarch, Yuriy Boyko. This latest pro-Putin and pro-Russian political project in Ukraine is supported by Viktor Medvedchuk whose daughter, Darina, has none other than Putin for her godfather. The Opposition Platform-For Life came second in the July 2019 snap parliamentary elections.

Geopolitical weapon

Unger describes the laundering of Russian dirty money as “a geopolitical weapon against the West” which “serves [Putin’s] political agenda that they act as intelligence operatives, that they recruit assets, that they collect intelligence on persons of interest”. This is probably the case, but the fault surely lies at the feet of many European and US governments who are willing to accept dirty money from Russia and the former Soviet Union. For example, 2,000 shell companies and hundreds of bank accounts in the US state of Delaware were created by Irakly Kaveladze through which 1.46 billion dollars was laundered between 1991 and 2000. Western willingness to accept dirty money from Russia, Ukraine and the former communist world is a self-inflicted wound. Unger describes the intimate connections between Russian intelligence training and dirty money which overlaps with crime, assassinations, surveillance and money laundering.

The author also provides a good deal of information about corruption on Washington’s K Street – the infamous road that houses many lobbyists and political consultants. This form of business that he describes as “sanitised corruption” became institutionalised and “part of the white-collar professional world”. It was legal, professional, corrupt and cynical catering to any government irrespective of their authoritarianism or human rights record. While Manafort has become a household name, there was also Jack Abramoff (nicknamed “Casino Jack”) who was jailed. Manafort, Abramoff and other lobbyists and consultants represented and cleaned up the world’s tyrants in Washington helping them to penetrate the highest levels of the US government. Most, like Manafort, never bothered to register with the FARA (Foreign Agent Registration Act), managed by the department of justice, until rules became tighter during the recent Robert Mueller investigation.

These lobbyists and consultants hired high-ranking names which included former FBI Director William Sessions, former UK Prime Minister Tony Blair, and former European heads of state from Poland, Austria, and Germany. Sessions worked for Mogilevich, who the FBI put on its most wanted list. His successor at the FBI, Louis French, also worked as a consultant for Russian oligarchs and government bodies.

Besides stretching the claim of Trump being a Russian agent, a second problem in Unger’s book is the one-sided nature of the argument that only the Republican Party is corrupt through its work as lobbyists and consultants. He writes that leaders of the Republican Party (i.e. Mitch McConnell, Lindsey Graham, John Kasich, John McCain, Marco Rubio, and others) were “on the payroll of the Kremlin” and “serving the interests of Vladimir Putin”. Unger writes that Putin’s lobby poured money into K Street and influential law firms to “help legitimise and promote the agendas of Russian oligarchs whose billions effectively represented the theft of Russia’s patrimony”. Ukrainian oligarchs were no different; a major Washington law firm working for Rinat Akhmetov sought to suppress western writing (including my 2015 book, Ukraine. Democratization, Corruption and Russian Imperialism) about his early criminal background.

Unger raises the issue of the millions of dollars the Russians paid for Republican-connected lobbyists and consultants. Yet the lobbyists and consultants with links to the Democratic Party have been just as willing to take dirty money from Russia, Ukraine and elsewhere. It is also wrong for Unger to write that Hillary Clinton did not view Putin in the same favourable way as Republicans. Her views only became more critical in 2011-2012, but prior to that she pursued President Barack Obama’s reset policy with Russia which came immediately after Russia’s 2008 invasion of Georgia. As Bill Browder shows in his excellent book Red Notice, President Obama and Senator John Kerry were opposed to the passage of the Magnitsky Act which sought to punish Russian officials involved in infringements of human rights. Political consultants linked to both the Democrats and Republicans in Washington took dirty money from kleptocrat Ukrainian President Viktor Yanukovych. The Podesta Group headed by Tony Podesta was one of these recipients and his brother, John, had run Hillary Clinton’s 2016 election campaign.

Stretched evidence

Unger’s belief in Trump as a Russian agent or useful idiot is undermined by the fact that Trump has no business dealings in Russia – a Trump Tower in Moscow has never materialised. Although it is true that Manafort worked with Russian intelligence officer Konstantin Kilimnik (as they say, former spooks do not exist). Unger explains, not very convincingly, the reason for the absence of a Trump Tower in Moscow is that the Russians want to launder their money out of Russia and “not put more in it”.

Unger claims Trump was hooked by Russia in two ways. The first was through old-fashioned kompromat on his sexual and other activities, such as during the 2013 Moscow beauty contest. Unger cites the Steele Dossier commissioned by the Democratic Party during the 2016 elections which alleged that Trump was compromised and had “unknowingly regularly supplied intelligence to Vladimir Putin”. The second was when Russian and Russian-backed money through the German Deutsche Bank rescued Trump from one of his many bankruptcies at a time when all other banks refused to deal with him.

During the 2016 elections, Unger writes that Trump’s campaign repeatedly reached out to Russia and knew about Russian operations against his opponent Hillary Clinton and “Russian support came pouring in”. Unger believes that Russian hacking provided Trump with his narrow election victories in Wisconsin, Pennsylvania and Michigan (traditionally Democratic strongholds) which ensured his victory in the US Electoral College. As Unger writes, “it is more than likely that the Russian interference made the difference” and he therefore concludes that Russia helped to ensure Trump’s election victory. There is no doubt that Russia wanted Trump to win, as Putin had become personally hostile to Hillary Clinton after she had supported protestors in Moscow in 2011-2012, but it was the US Electoral College system that permitted Trump to win even though he received nearly three million fewer votes.

Unger’s book provides a fascinating and convincing account of Trump’s corruption and the Washington “swamp” of lobbyists and political consultants – although it is portrayed in not a balanced way. He superbly links many threads together from Soviet Russian-Jewish émigrés with ties to organised crime in the USSR, post-Soviet Russian oligarchs, Russian Mafiosi, Putin, money laundering, and corruption in the energy and many other sectors. Unger is a true believer, like many US Democrats, that Trump is a Russian agent or useful idiot. Yet his book stretches the evidence and ultimately fails to convince that this is the case.

Taras Kuzio is a professor in the Department of Political Science at the National University of Kyiv Mohyla Academy, and a Non-Resident Fellow at the Foreign Policy Institute, School of Advanced International Studies at Johns Hopkins University.

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