"Russian oligarch Oleg Deripaska is at the center of a major political scandal in Britain, accused of courting and cavorting with major figures from both the Labor and Tory parties.
The aluminum magnate Deripaska, who is very close to Russian Prime Minister Vladimir Putin and uses London as a major business outpost, has become a toxic figure on the other side of the pond.
The Times of London reported on October 12 that British Business Secretary Peter Mandelson--a top official in the Labor Party--had visited Deripaska aboard his megayacht off the Greek island of Corfu. Deripaska's right-hand man in London, Nathaniel Rothschild, then wrote a letter to the Times this week detailing how the Tory's chief economic advisor, George Osborne, and top fundraiser, Andrew Feldman, were also aboard Deripaska's yacht and tried to "solicit a donation" from the Russian oligarch.
Wrote Rothschild:
Since Mr. Deripaska is not a British citizen, it was subsequently suggested by Mr. Feldman during a conversation at which Mr. Deripaska was not present, that the donation was "channeled" through one of Mr. Deripaska's British companies. In a subsequent phone call in mid-September about one month later, Mr. Feldman again raised the issue of the donation with me. Mr. Deripaska decided that he did not wish to make any donation.
These revelations have prompted a major investigation into pay-to-play corruption on both sides of the aisle in Britain, with both the British and American press extensively covering the story.
The Deripaska scandal is especially newsworthy in light of the oligarch's connections to another powerful politician--John McCain. Mark Ames and I reported at length about this topic in a Nation article earlier this month, "McCain's Kremlin Ties."
We wrote:
Because of numerous accusations of involvement in death threats, extortion, racketeering and money laundering, Deripaska had been barred from entering America since 1998. The visa ban was costing Deripaska billions: for years he and fellow RusAl shareholders had sought to cash in their wealth by launching an IPO in London, which could have netted up to $10 billion for RusAl's owners. However, finding institutional buyers would be difficult if not impossible as long as RusAl's primary owner was barred from entering the United States.
Despite rampant Russophobia among Republicans, Deripaska turned to powerful GOP figures to solve his problem--especially to Republicans connected with McCain. In 2003 Deripaska hired former presidential candidate Bob Dole, who had nearly picked McCain as his running mate, and Dole's lobbying partner Bruce Jackson (also a McCain aide) to lobby the State Department to overturn the visa ban. Over the next few years Dole's firm, Alston & Bird, was paid more than $500,000 to push for Deripaska's visa.
Deripaska also reached out to a Washington-based intelligence firm, Diligence, chaired by GOP foreign policy hand Richard Burt, McCain's top foreign policy adviser in 2000 and an adviser in '08 (Burt left Diligence in 2007 to join Henry Kissinger's consulting firm). Deripaska's business partner in London, Nathaniel Rothschild, an heir to the English Rothschild fortune, bought a stake in Diligence, according to the New York Times and confirmed by a Rothschild spokesman. The firm offered Deripaska many useful services: corporate intelligence gathering, visa lobbying through considerable GOP connections and, crucially, help in obtaining a $150 million World Bank/European Bank for Reconstruction and Development loan for a Deripaska subsidiary, the Komi Aluminum Project. Getting the loan was useful in providing a layer of comfort to Western investors skittish about RusAl. So Diligence, now partly owned by Rothschild, provided a "due diligence" report to the World Bank, which the Bank then used to approve its loan to Deripaska.
Not surprisingly, the lobbying worked: in December 2005 Deripaska was issued a multientry US visa, according to the State Department.
However, Deripaska's trip did not end well. Under the visa's terms, he was forced to endure lengthy FBI questioning. The interview went badly--according to people who know him, Deripaska had little patience for prying bureaucrats. When he left the country, the visa ban was reinstated. Once again Deripaska turned to powerful Republicans--this time, to McCain and campaign manager Davis, who arranged the January 2006 Davos introduction. T
he McCain campaign later claimed that "any contact between Mr. Deripaska and the senator was social and incidental," but afterward Deripaska thanked Davis for arranging "such an intimate setting." The Washington Post reported that Davis was "seeking to do business with the billionaire." Indeed, Deripaska's subsequent thank-you letter mentioned his possible investment in a metals company Davis represented through a hedge-fund client.
Deripaska subsequently met McCain in Montenegro in August 2006, where Deripaska had earlier obtained control of the country's aluminum plant--its major economic asset--at Putin's request. McCain campaign manager Rick Davis was already in the country, helping to secure Montenegro's independence from Serbia in a referendum campaign, which became a key geostrategic victory for the Kremlin and Deripaska.
Two former senior US diplomats who served in the Balkans told us that Davis' lobbying firm received several million dollars to help run Montenegro's independence referendum campaign. The terms of the agreement were never disclosed to the public, but top Montenegrin officials told the US diplomats that Davis's work was underwritten by powerful Russian business interests connected to the Kremlin and operating in Montenegro.
Moreover, Davis worked closely with Deripaska's allies to secure Montenegro's "independence"/do Russia's bidding. As we reported:
At key points in the campaign, Davis reached out to Deripaska's allies for help. With the referendum too close to call, the Serbs tried to sway public opinion by threatening to revoke scholarships and other education privileges of Montenegrin students if the country should secede. This caused a panic--so to counter the Serbs, Davis turned to Deripaska emissary Nathaniel Rothschild (Rothschild has reportedly become the richest of all the Rothschilds, thanks to his privileged role as a Deripaska adviser).
Three weeks before the independence referendum, Davis asked Rothschild to come to Montenegro. After arriving in his private Gulfstream jet, Rothschild was trotted out before the cameras with the Montenegrin prime minister, where he pledged $1 million to support students who might be hurt by Serbia's scholarship threat. Another Deripaska ally brought in to secure the student vote was Canadian billionaire Peter Munk, CEO of Barrick Gold, the world's largest gold-mining corporation (it was Munk who had hosted the Davos meeting between McCain and Deripaska a few months earlier). Munk, who serves on the advisory board of RusAl, delivered pledges of support from Canadian universities.
Soon after the referendum, the powerful figures behind Montenegro's independence were carving up the country. That summer Rothschild started discussions with top Montenegrin officials about gaining control of the valuable shoreline, including the half-billion-dollar Porto Montenegro project, which aims to become the world's top mega-yacht marina, complete with luxury hotels, shopping and the country's first eighteen-hole golf course.
The property was handed to the Munk-Rothschild-fronted offshore consortium for a pittance, according to MANS, the local NGO partner of Transparency International, in yet another backroom deal. Eventually, Deripaska's role in Porto Montenegro, which was initially secret, was formally acknowledged, although the full list of owners is still a mystery. Deripaska is also developing an 8 billion-euro resort in southern Montenegro and seeking control of a coal mine and a thermal power plant.
Roughly two years later, in March of this year, Rothschild hosted a high-dollar fundraiser for McCain at London's posh eighteenth-century Spencer House, which Rothschild donated for the occasion. Given the close relationship between Rothschild and Deripaska, some speculated that Deripaska was the hidden hand behind the event.
The conservative watchdog group Judicial Watch filed a complaint with the Federal Election Commission, alleging that the fundraiser amounted to an illegal contribution by foreign nationals to McCain's campaign.
Deripaska's links to Davis & co may very well be more extensive than we reported. The British press has begun to expose the full-breath of Deripaska's influence-peddling. If only these articles had the same impact on our side of the pond."
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