The Bank of Cyprus & American Politics Report
April 4, 2017
Russia, after the fall of the Berlin Wall, started a journey down a road few knew what it meant, and for a long time, the economy was in a great state of flux, identified as buying up state enterprise and building them up into companies under the Capitalist system. Politics wise, the country was weak, with various mafia and oligarch beginning to form. Under this environment, easy & dirty money was to be made. And indeed vast fortunes were made. But without much rule of law in Russia, money flow out of the country for safety. Much of that was through Cyprus.
(New news continues to flow out on this subject, and thus this report is up-dated at times)
1/ The Cover-Up
Dmitry Rybolovlev, Russian billionaire who bought real estate from Trump that made Trump a quick, about US$50 million profit, was a major owner of Bank of Cyprus. Viktor Vekselberg, Russian billionaire that had close ties to the Russian oil & gas industry, is currently a major shareholder of Bank of Cyprus. Wilbue Ross,, the American billionaire & Trump’s Commerce Secretary is a major shareholder of Bank of Cyprus and helped ran the bank. Vladimir Strzhalkovsky, referred to in Russian media as a former KGB official and Putin ally, was helping to run the Bank of Cuprus. Josef Ackermann, who now runs Bank of Cyprus, is a former Deutsche Bank AG head, where, the bank is under investigation by American investigators and lent Trump US$ billons.
In sum, all these people have “Information” about Bank of Cyprus. At the same time, in America, there is an investigation on Trump’s ties to Putin’s Russia, relating to a few issues, such as conflict of interest and Putin hacking the 2016 election, if there is any colluding between Trump and his proxies and Putin and his proxies.
So one point that can help solve the investigation is Bank of Cyprus. But this is difficult. Cyprus itself is referenced 530,937 times in the Panama Papers and the Bank of Cyprus is referenced 4,657 times. The Panama Papers confirmed what had long been suspected: that Russian money flows between offshore companies and Cyprus and Switzerland, long known for its secretive banks.
Yet while a great deal of information is secretive, where there is smoke there is fire. So what is the latest with the people mentioned connected to the Bank of Cyprus?
Two yachts, the Anna, owned by Dmitry Rybolovlev (close ties to Putin via Dmitry large involvement with helping Russian Orthodox Church), and the Sea Owl, owned by President Donald Trump’s financier Robert Mercer, are seen in a cove near the British Virgin Islands on Friday, March 10, 2017. Viktor Vekselberg is under investigation by Putin. Wilbur Ross, after refusing to give written information and little verbal information, on Bank of Cyprus and the Trump proxies, at the confirmation hearing, is set to perhaps benefit from Bank of Cyprus listing on UK’s stock market. Vladimir Strzhalkovsky is traveling the world with Putin, with the latest being Vietnam, in his capacity as a Russia tourism head. Josef Ackermann, who Wilber Ross said has a big Rolodex, meaning phone address book and knew everyone in Europe in America, is embroiled in a court case in Germany.
What does all of that movement point to?
The current movements of people and other events, points to a “Damage Control” from possible fall-out from the Bank of Cyprus situation.
2/ Dmitry Rybolovlev
The 1990s were a difficult time in Russian history, as the country transitioned its economy through privatization. Lawlessness and corruption were widely documented and according to converging reports, Dmitry Rybolovlev, who in 2017 is a figure at the center of America’s investigation into Trump and Putin ties, after Putin hacked the 2016 American election to help Trump win, partnered with a number of local criminal bosses in order to secure his interests in different businesses.
At the same time, Rybolovlev became concerned about the safety of his family so he moved them to Switzerland, while he stayed in Russia to do business. In September 1996, Evgeny Panteleymonov, Director of Neftekhimik, a company partly owned by Rybolovlev, was shot by a killer at the staircase of his own house. In May 1996, Rybolovlev was officially indicted and arrested for the contract killing of Panteleymonov. According to the prosecution, Rybolovlev himself, ” without a corresponding license”, purchased in August 1995 2 pistols TT that he kept and carried, and later gave to the killers “for the premeditated murder of Panteleymonov”.
Rybolovlev, has a reputation of being an outsider of the Putin circles, was however set free 11 months later, after the only living witness recanted his testimony and the intervention in Rybolovlev’s favor of Andrey Pokhmelkin, brother of Vladimir Pokhmelkin, a prominent congressman representing Perm District in the Duma, as well as of local Governor Gennady Igumnov. In 1997 Rybolovlev was acquitted by courts of law at three levels, including the Presidium of the Supreme Court.
Rybolovlev also seem to enjoy some clout, in Putin controlled Russia. Georgi Bedjamov, President of the Federation of Bobsleigh and Skeleton of Russia and former co-owner of “Vneshprombank”, was arrested in March 2016 in Monaco after an international arrest warrant was issued against him by the Russian authorities on charges of fraudulent bankruptcy and embezzlement. Bedjamov was liberated in July 2016 by the Prince, a decision that was later confirmed by the Monaco Appeal Court. Some Russian sources alleged that Dmitry Rybolovlev helped Georgi Bedjamov escape Russian authorities in exchange for sensitive financial data on the Russian elite obtained by Bedjamov while he was linked to the now bankrupt bank “Vneshprombank”. Rybolovlev denied these claims in an interview to the French newspaper Le Parisien in late October 2016.
Dmitry Rybolovlev last week disavowed any contact with President Donald Trump, even with the oligarch did purchase a Palm Beach mansion from the developer in 2008 from Trump, where it made Trump some US$ 50 million profit in a few years (Trump in Palm Beach: Why did Russian pay so much for his mansion?). So Rybolovlev’s known tie to Trump is the purchase of a 62,000-square-foot mansion in 2008 on North County Road in Palm Beach for $95 million, the highest price paid at the time for a residence in the U.S.
3/ Dmitry Rybolovlev Contact with Trump
But speculation again was stoked when his state-of-the-art yacht Anna sat anchored in the British Virgin Islands on Friday night and another equally resplendent luxury liner, the Sea Owl, sidled up, according to a website that tracks the movement of yachts (source)
How important was Mercer to Trump being elected president? He supported U.S. Sen. Ted Cruz, R-Texas, before throwing his support to Trump. Along with Mercer’s support came Stephen Bannon, the man who ran the right-wing website Breitbart News. Bannon took over Trump’s campaign. Now Bannon serves as chief strategist to President Trump.
The owner of the dark-hulled yacht? President Donald Trump’s biggest financial supporter and Breitbart News moneyman, Robert Mercer. Rybolovlev has repeatedly said he has never met Trump or had any dealings with anyone in his campaign, though within days of the election, Trump’s and Rybolovlev’s jets were parked on the airport apron in Charlotte, N.C., on Nov. 3. Trump had a campaign rally that day in Concord, N.C. Rybolovlev said he was there for business.
The oligarch’s jet showed up in places where Trump just happened to be campaigning. This past week, for the first time, Rybolovlev through a spokesman said he and his plane did share the airport apron at the same time as Trump in Charlotte, N.C., but it was purely coincidental.
“Particular attention has been focused on a trip made by Mr. Rybolovlev to North Carolina,” said Sergey Chernitsyn, an adviser to Dmitry Rybolovlev. “He was in North Carolina for a business meeting and we can state categorically that he did not have any contact with Mr. Trump or any of his advisers at the time he was there.” He did not address why his plane was in Miami on the weekend of Feb. 11 when Trump was at Mar-a-Lago entertaining the Japanese prime minister. The oligarch’s jet have a habit to showed up in places where Trump just happened to be campaigning. Recently, for the first time, Rybolovlev through a spokesman said he and his plane did share the airport apron at the same time as Trump in Charlotte, N.C., but it was purely coincidental.
Now enter Robert Mercer, who along with his daughter Rebekah, have supported right-wing causes, whether it be Breitbart or Super PACS, including Make America Number 1, which supported Cruz before getting behind Trump. Mercer along with his daughter Rebekah, have supported right-wing causes, whether it be Breitbart or Super PACS, including Make America Number 1. The Mercers have poured at least $1.4 million into organizations that cast doubt on climate change science and $34.6 million to 30 conservative non-profits from 2011-2014, according to Politico.
The latest from the Mercers, is Making America Great, a nonprofit run by Rebekah Mercer, one of Trump’s most influential donors, will begin airing $1 million in television ads on Wednesday, coupled with a $300,000 digital advertising campaign. The TV ads will run in the District of Columbia, along with ten states Trump carried in the presidential election where a Democratic senator is up for re-election in 2018: West Virginia, Wisconsin, Missouri, Michigan, North Dakota, Florida, Ohio, Indiana, Montana and Pennsylvania. The digital campaign also will focus on voters in those states.
4/ Mercer: In Bed with Trump & Bannon
In 2015, the Washington Post called Mercer one of the ten most influential billionaires in politics. Mercer was a major financial supporter of the 2016 presidential campaign of Ted Cruz, contributing $11 million to a super PAC associated with the candidate. Reporter Zachary Mider, writing for Bloomberg in January 2016, called Mercer “the biggest single donor” in the 2016 U.S. presidential race.
According to the Center for Responsive Politics Mercer is currently ranked the #1 donor to federal candidates in the 2016 election cycle, ahead of Renaissance founder James Harris Simons who is ranked #5 and generally donates to Democrats. By June, Mercer had donated $13.5 million to Ted Cruz’s super PAC, $2 million to John R. Bolton‘s super PAC, and $668,000 directly to the Republican National Committee. Since 2006, Mercer has donated about $34.9 million to federal campaigns. Since 1990, Renaissance Technologies has contributed $59,081,152 to federal campaigns and since 2001, has spent $3,730,000 on lobbying.
Mercer has given $750,000 to the Club for Growth, $2 million to American Crossroads, and $2.5 million to Freedom Partners Action Fund. In 2010, Mercer financially supported Art Robinson‘s efforts to unseat Peter DeFazio in Oregon’s 4th congressional district. In the 2013-2014 election cycle, Mercer donated the fourth largest amount of money among individual donors, and the second most among Republican donors. Mercer joined the Koch brothers conservative political donor network after the 2010 Citizens United v. FEC, but Mercer and his daughter, Rebekah Mercer, decided to establish their own political foundation. The Mercer Family Foundation, run by Rebekah, has donated to a variety of conservative causes. Rebekah was one of the members of Donald Trump’s Presidential Transition Team Executive Committee.
Mercer was a major supporter of Donald Trump‘s 2016 campaign for president. Mercer and his daughter played a role in the elevation of Stephen Bannon and Kellyanne Conway into senior roles in the Trump campaign. The Mercers had worked with Bannon previously on Breitbart.com, Reclaim New York and the Government Accountability Institute (GAI) funding and investments, and Rebekah had worked with Conway on the Cruz Super-PAC Keep the Promise in the 2016 Republican primaries. Mercer also financed a Super PAC, Make America Number One, which supported Trump’s campaign. Nick Patterson, a former colleague of Mercer’s, has said, “In my view, Trump wouldn’t be President if not for Bob.
In addition to the money Mercer has spent on political campaigns, estimated at $32 million as of 2016, he has invested millions of dollars in the Heritage Foundation, the media outlet Breitbart.com ($10 million for initial 50% stake in 2011), Cambridge Analytica, the Cato Institute, the Media Research Center, Reclaim New York and GAI. In 2013, Mercer was shown data by former Jimmy Carter pollster Patrick Caddell, who has been critical of top Democrats, and commissioned more research from Caddell that showed “voters were becoming alienated from both political parties and mainstream candidates”. Mercer was the main financial backer of the Jackson Hole Summit, a conference that took place in Wyoming in August 2015 to advocate for the gold standard. He has also supported Doctors for Disaster Preparedness and Fred Kelly Grant, an Idaho activist who encourages legal challenges to environmental laws. Mercer has supported a campaign for the death penalty in Nebraska and funded ads in New York critical of the so-called “ground-zero mosque“. According to associates interviewed by Bloomberg, Mercer is concerned with the monetary and banking systems of the United States, which he believes are in danger from government meddling.
Mercer played a key role in the campaign to pull the United Kingdom out of the European Union, also known as Brexit. According to Andy Wigmore, communications director of Leave.eu, Mercer donated the services of his data-analytics firm Cambridge Analytica to the head of the United Kingdom Independence Party (UKIP), Nigel Farage. The firm was able to advise Leave.eu through its ability to harvest data from people’s Facebook profiles in order to target them with individualized persuasive messages to vote for Brexit. However, Leave.eu did not inform the UK electoral commission of the donation, contrary to the law which demands that all donations valued over £7,500 must be reported.
According to a March 2017 New Yorker article by investigative journalist Jane Mayer, quoting a former Renaissance employee, Mercer has criticized the Civil Rights Act of 1964, the landmark federal statute arising from the civil rights movement of the 1960s. Mercer was reported to have considered the law a “major mistake” and surmised that African Americans were economically better off before the civil rights movement. Mercer also posited that white racists no longer existed in the United States and that the only racists remaining were African American. She also added on MSNBC Chris Hayes show, “Mercer would rather talk to cats then people”
This past month, the Guardian profiled Robert Mercer, noting he had a $10 million stake in Cambridge Analytica, that specializes in “psyops” — “election management strategies” and “messaging and information operation.” Also reportedly on the board of Cambridge Analytica: Steve Bannon. The company can psychologically analyze Facebook users — reportedly without their knowledge — based on their activity. “We are thrilled that our revolutionary approach to data-driven communication has played such an integral part in President-elect Trump’s extraordinary win,” Alexander James Ashburner Nix, the CEO of Cambridge Analytica, said after the election
In December, Trump, Bannon and senior aide Kellyanne Conway attended a lavish Christmas costume party Heroes and Villains at the Mercers’ Long Island family estate. Mercer worked for IBM for two decades before getting wealthy when he joined the hedge fund Renaissance Technologies. The political clout, though, tends to be wielded through his daughter, Rebekah. Politco in November reported that she was playing a major role in shaping Trump’s administration. Cattell, Rybolovlev’s spokesman, said the oligarch did not know Mercer’s daughter.
Now one of the president’s chief financial backers during the campaign has been spotted within one-tenth of a nautical mile of Rybolovlev in the aquamarine waters of the Caribbean. The yachts stayed near each other on Saturday then later motored away from each other, but were in the same vicinity during the weekend. A source provided The Palm Beach Post photos of Mercer’s Sea Owl and Rybolovlev’s Anna anchored off the North Sound near Virgin Gorda in the British Virgin Islands. One photo shows the two yachts separated only by a few sailing vessels between them. The two vessels were a couple hundred feet away from each other on Friday and about 1,000 feet apart as late as Monday, according to data from www.marinetraffic.com obtained by the Palm Beach Post.
“Mr. Rybolovlev has never met Robert Mercer and has no relationship with him whatsoever,” said Brian Cattell, the oligarch’s spokesman, said Tuesday. Cattell, Rybolovlev’s spokesman, used to write for Breitbart. He said he never met Mercer.
5/ NYT Report on Bank of Cyprus & Wilbur Ross
Since the CIA and FBI said Russia launched a campaign to interfere with the U.S. election in an attempt to benefit Trump, ties between one of America’s longtime nemeses and the president have surfaced on several fronts, including Rybolovlev. Russia hacked the emails of the Democratic National Committee and Hillary Clinton’s campaign, which were released through WikiLeaks.
The president’s former campaign manager Paul Manafort, his former National Security Adviser Michael Flynn, Attorney General Jeff Sessions and former campaign adviser Carter Page all have had interactions with Russian officials.
Trump has business ties with Russians who developed properties with him in Fort Lauderdale and New York. There is also a possible connection through Commerce Secretary Wilbur Ross, who has part ownership in the Bank of Cyprus, which has ties to Russian President Vladimir Putin. Rybolovlev also owned shares in the bank. Ross also has a home on Palm Beach where Trump owns Mar-a-lago, now dubbed the Winter White House. Then there is the Deutsche Bank connection. The former CEO now runs the Bank of Cyprus. Deutsche Bank is Trump’s top creditor to the tune of about $300 million. Deutsche just paid $425 million in fines to the state of New York for laundering $10 billion in Russian money.
Earlier, during the confirmation hearing of Ross, NYT had a soft-ball report on Ross, indicating that Ross intentions in Bank of Cyprus, was professional, meaning to clean up the bank and return the bank to profit, in doing so NYT also mentioned another Russian Oligarch, Viktor Vekselberg, who bought into Bank of Cypress, at about the same time as Ross, citing him as a real business person, unlike much management at Bank of Cypress, which were Putin’s Mafia & KGB cronies, using the bank to launder dirty Russian money.
NYT reported: “When Wilbur L. Ross, a billionaire American investor, bought shares in the Bank of Cyprus three years ago, he found himself part owner of a big but failing bank with a vice chairman who used to work with Vladimir V. Putin in the Leningrad K.G.B. and five other Russians on its board,” adding that was enough to raise concerns when President Trump nominated Mr. Ross to be his commerce secretary and Ross at the Bank of Cypress, got rid of many of Putin cronies.
NYT reported that after leading a group of around 30 investors from the United States and elsewhere in a 2014 investment in the Bank of Cyprus worth 400 million euros, Mr. Ross served for a period as co-vice chairman of the bank along with Mr. Strzhalkovsky, Mr. Putin’s old K.G.B. associate. But Mr. Strzhalkovsky, who had no experience in banking, was then forced out.
The only Russian with a prominent role in the bank today is Viktor Vekselberg.
NYT was also hard hitting in the soft-ball article, nevertheless, reporting: “Helping to keep such theories alive, however, has been a refusal by the White House — over Mr. Ross’s objections — to release his written responses to questions posed by United States senators. In a speech in the Senate on Monday, Senator Bill Nelson, a Florida Democrat, complained that the White House was “sitting on” the replies. Mr. Nelson said he had spoken with Mr. Ross about the Bank of Cyprus and had been told that Mr. Ross had one meeting of about an hour with a Russian investor in the lender in 2014. “He knows of no loans or interaction between the bank or anyone affiliated with the Trump campaign or organization,” the senator said. He added that he believed Mr. Ross and that he could not understand the White House’s “secretive behavior.” “Not only is this lack of transparency unsettling, it’s behavior that everyone in this Senate should agree is unacceptable and shouldn’t be tolerated,” Mr. Nelson said.”
On question of Ross real intent, there is also the Deutsche Bank connection, perhaps not as dirty as Putin’s cronies, however, the former CEO now runs the Bank of Cyprus. Deutsche Bank is Trump’s top creditor to the tune of about $300 million. Deutsche just paid $425 million in fines to the state of New York for laundering $10 billion in Russian money. Trump, as part of his policy, has weakened Dodd Frank, the regulations that regulate Wall Street, particularly banks.
Ross, who’s worth about $2.9 billion according to the Bloomberg Billionaire’s Index, made big bets on troubled European banks after the financial crisis and has reaped handsome profits in the U.K. and Ireland. At Bank of Cyprus, which he’s trying to turn around with the help of former Deutsche Bank AG Chief Executive Officer Josef Ackermann, the results haven’t been so good. His firm won’t make money until the bank’s shares jump by almost 50 percent from their current price.
6/ Putin Goes After Viktor Vekselberg
Recently, Russian Prime Minister Dmitry Medvedev had a private meeting with Viktor Vekselberg, the billionaire whose lieutenants were earlier this month put in jail on charges of paying bribes to local government officials. The prosecutions of the two executives in Vekselberg’s Renova group prompted speculation that the businessman himself could be targeted, suffering the same fate as other prominent people who have fallen from grace under President Vladimir Putin.
“They spoke, said it was an unofficial meeting at Medvedev’s residence,” a government source told Reuters. The government press office confirmed the meeting took place, but declined to give details. A source in Vekselberg’s entourage said the businessman had planned to raise the investigation with Medvedev, but it was not yet clear if he had been able to do that. A spokesman for Vekselberg declined comment.
State investigators on Sept. 5 laid bribery charges against Evgeny Olkhovik, Renova chief managing director, and Boris Vainzikher, chief executive of Renova subsidiary T Plus. Lawyers for both men have declined to comment. t the time they were detained, a Renova spokesman said the company would cooperate with the authorities, and that the investigation was not connected with Vekselberg personally. A third suspect in the case, Mikhail Slobodin, used to be the head of a utility which is now owned by Renova. He is currently abroad. His lawyer, Sergey Koptyakov, told Reuters on Tuesday his client denies the charges and is appealing against an order for his arrest.
7/ Musical Chair of Ownership at Bank of Cyprus
Mr. Rybolovlevwas the biggest shareholder in the Bank of Cyprus. But his stake in the bank, which at one point reached close to 10 percent, was mostly wiped out in 2013, when the island’s banking system nearly collapsed. In the process, he lost $600 million, his lawyer said. That 2013 banking crisis, however, opened the way for other Russians, some of whom had close ties to the Kremlin, in contrast with Mr. Rybolovlev, to gain control of the Bank of Cyprus, at least on paper. This happened when the Cypriot authorities, desperate for cash to prop up failing banks, confiscated billions of dollars in deposits held in the Bank of Cyprus and Laiki Bank, also known as Cyprus Popular Bank, which had failed. Many of these seized deposits belonged to Russians who, as partial compensation, received Bank of Cyprus shares.
As a result of this highly controversial maneuver, Mr. Strzhalkovsky and other Russians lost billions.
But in September 2013, they secured seats on the Bank of Cyprus board, meaning that Russia, for the first time, had effective control of a major European bank. None of them knew anything about banking and they could not agree on ways to save the Bank of Cyprus from ruin. With the lender on the edge of bankruptcy, John Hourican, an Irishman who had been brought in as chief executive, insisted that the bank raise capital. Fearful that the bank might go under, the Russians and other shareholders reluctantly agreed to the plan, which would greatly dilute their ownership stakes.
The Bank of Cyprus held meetings in New York and London to drum up investor interest, attracting the attention of Mr. Ross, a veteran of investing in distressed assets who had turned a tidy profit rescuing the Bank of Ireland. He then assembled a group of investors who follow his lead in these matters because they view him as having the Midas touch.
Adonis Papaconstantinou, who leads a group of Laiki Bank creditors seeking to recover lost money, and who was once on the Bank of Cyprus board, said that the 2014 share issue was intended to make it difficult for Russians to invest and was skewed in favor of potential investors from the United States and Europe. “Nobody could tell the Russians that they could not invest, but they are proud people and they could see that this was an attempt to keep them out — or at least minimize their influence,” said Mr. Papaconstantinou, who lost his seat on the bank’s board in the purge that started after Mr. Ross’s arrival. Christodoulous Vassiliades, the managing director of a Cypriot legal firm that represented some of the former Russian board members, recalled that the Russians had already lost so much money in the 2013 banking blowout that most of them had little appetite for a fight with Mr. Ross over control of the Bank of Cyprus.
8/ Cyprus: A Center of Gro-Politics
Cyprus is often used by Russia’s politically connected businessmen. In a March 2013 report, McClatchy detailed how Russians had come to dominate Cyprus as both customers and providers of financial services. Russian depositors and investors took losses that year in Cyprus when the European debt crisis nearly crumbled major banks.
It was clear, he said, that “Ross was there to benefit the interests of the U.S. and Britain,” Cyprus’s former colonial master, but the Russians “just wanted their money back” and came around to the view that the American investor was the best hope for keeping the bank afloat. Mr. Ross became vice chairman of the bank in November 2014 and gave up this position after his confirmation as commerce secretary.
In many ways, however, it is much more than just a business. As the biggest bank in the country — a member of the European Union that is on a delicate fault line between East and West — the Bank of Cyprus plays an outsize role not only in the nation’s economy but also in its political and even geopolitical direction. In a June 2013 letter to the European Central Bank pleading for help, the Cypriot president, Nicos Anastasiades, described the Bank of Cyprus as a “mega-systemic bank” on which the future of the island depended. Mr. Anastasiades, in public statements at the time, expressed alarm that the confiscation of deposits, carried out at the behest of the European Union in return for aid, would hand the bank to the Russians by issuing shares as compensation for seized money.
The bank, fortified by the 2014 recapitalization and money from the sale of assets in Russia, Serbia and elsewhere, has now stabilized and even managed to pay back nearly $12 billion in emergency loans granted at the height of the crisis by the European Central Bank.
NYT sums up:
“But while it is on the way to recovery and is no longer considered a potential beachhead for a Russian presence in Europe’s financial system, the bank has not yet proved to be a good investment for Mr. Ross. Its share price is still lower than what he paid in 2014. Mr. Papaconstantinou, the former board member, said he spoke with Mr. Ross during one of his visits to Cyprus and asked why he had put money into such a troubled bank. “He told me he thought it was a good move because Cyprus had gone down so far it could not get any worse and could only go up,” Mr. Papaconstantinou recalled. In the long run, that is probably a safe bet. But, said Stelios Orphanides, a financial journalist with Cyprus Mail: “It is like owning tickets to a first-class cabin on the Titanic. It is a good investment, so long as the Titanic does not go down. But if the Bank of Cyprus goes down, Cyprus goes down, too.”
Bank of Cyprusis a major Cypriot financial institution. In terms of market capitalisation, of €1.24 Billion on 24 March 2017, it is the country’s biggest bank. As at December 2016, the bank held a 31.1% share of the Cypriot deposit market (€15 Billion) and a 39.4% share of the Cypriot loan market (€18.3 Billion), making it the largest bank in Cyprus. The Bank of Cyprus Group employs 4,284 staff worldwide and 4,000 in Cyprus. The shares of the bank are listed on the Cyprus Stock Exchange (CSE). The Bank is the largest listed company on the CSE in terms of market capitalization. Since October 8, 2007 the Bank of Cyprus has been part of the Cyprus 10 Index, which comprises the 10 largest companies in Cyprus. The Bank of Cyprus was also listed on the Athens Exchange since 2000 and had been part of the FTSE/Athex Large Cap index from 9 October 2006 until March 2013. However, in late 2016 it has announced plans to de-list from Athens on 9th January 2017 and list on the London Stock Exchange in January 2017.
9/ Viktor Vekselberg: One of the Richest Russian
While a great deal of talk & speculation has it that the bank was wrestled away from Putin’s Oligarch interest to the West, the fact remain that The Lamesa Holding S.A. owned by Russian businessman Viktor Vekselberg, with a holding of 9.27% of the bank.
Viktor Veksellberg is a Ukrainian-born Russian businessman. He is the owner and president of Renova Group, a large Russian conglomerate. According to Forbes, his fortune is estimated at $13.6 billion, making him the fourth richest person in Russia, as of August 4, 2015. Vekselberg is close to the Moscow Kremlin, overseeing projects to modernize the Russian economy.
In 1988, after the Gorbachev administration relaxed restrictions on private business as part of his new policy Perestroika and Glasnost, he founded NPO Komvek which did work for the Irkuksk Aluminum Plant and in 1990, he co-founded Renova Group with college classmate, Leonard Blavatnik. KomVek owned 67% of Renova and Blavatnik’s company Access Industries owned the remainder. He benefited financially from the privatization of the aluminum industry in Russia under the Yeltsin administration in 1993. In 1996, he co-founded the Siberian-Urals Aluminium Company (SUAL) via a merger of the Ural and Irkutsk Aluminum Plants. (SUAL would later be incorporated into United Company RUSAL, the largest aluminum company in the world). Using revenues generated from his aluminum business, he purchased a minority interest in Tyumen Oil (TNK), one of Russia‘s largest oil and gas companies. In 1997, he secured a controlling interest in Tyumen and was appointed to the Board of Directors; in 1998, he was appointed Chairman of the Board. Later, he integrated those and other assets under the umbrella of Renova Group, delegating operating responsibilities to managers.
In 2003, the Renova Group, along with Access Industries (owned by Leonard Blavatnik) and the Alfa Group (owned by Mikhail Fridman, German Khan, and Alexei Kuzmichov) announced the creation of a strategic partnership to jointly hold their oil assets in Russia and Ukraine, forming the AAR consortium. In the same year, they merged AAR with British Petroleum‘s Russian oil assets in a 50-50 joint venture named TNK-BP, the largest private transaction in Russian history. Acting as a chairman of the executive board of TNK, Vekselberg was instrumental in negotiating and closing the transaction.
Ukrainian-born oil baron Viktor Vekselberg studied at the Moscow Institute of Railroad Engineering in the 1970s. He made his first million selling scrap copper from worn-out cables. He led Russia’s first successful hostile takeover in 1994, when his Renova firm took control of the Vladimir Tractor Factory and installed a Russian-born Harvard M. B.A. to run it. He later bought several medium-size aluminum smelters and bauxite mines, united them into $1 billion (sales) Sual Holding in 1996. That group eventually became part of one of the world’s largest aluminum producers, UC Rusal, in which he still has a stake. Vekselberg got $7 billion in cash when he and his partners sold their 50% stake in joint oil venture TNK-BP to state-owned Rosneft in 2013. He invested some of the proceeds into companies like Swiss industrial firms Sulzer and Oerlikon, Swiss steel company Schmolz+Bickenbach and Italian firm Octo Telematics, which makes software for insurance companies. Vekselberg owns a large art collection, including nine Faberge eggs he bought from the Forbes family for $100 million.
Vekselberg is now[when?] overseeing a vast restructuring of his assets: the division of property with partner Leonard Blavatnik, the merger of Renova’s aluminium assets with those of Oleg Deripaska, and the integration of various electricity and telecommunications investment.
10/ Unsavory Russians: Dmitry Rybolovlev & Viktor Vekselberg
Similar to Dmitry Rybolovlev, who in 2017 is a figure at the center of America’s investigation into Trump and Putin ties, after Putin hacked the 2016 American election to help Trump win, Vekselberg is also known for unsavory practices.
In April 2009, Swiss Federal Finance Department initiated a criminal investigation against Vekselberg in connection to alleged violations of securities law.As a result of the investigation, Vekselberg was fined $38m by Swiss authorities.
In 2008, Vekselberg proxied a deal between Russian and Hungarian governments, buying the former embassy building from Hungary for $21m and immediately selling it to the Russian government for $116m, while the market price of the building was estimated at $50m. Investigation of the paper trail by Alexey Navalny and the Rospil project has found several invalid and backdated documents,thus suggesting a collusion (e.g. the tender held by the Hungarian side was totally fictive, as the building was already sold by that time). Hungarian officials responsible for the deal (Tátrai Miklós, Marta Horvathne Fekszi and Arpad Szekely) were detained in February 2011. On the Russian side, a criminal investigation was only started in August 2013.
In 1997, Vekselberg, Blavatnik and Mikhail Fridman’s Alfa Group acquired a 40 percent stake in TNK, a former state-owned oil company with interests in several West Siberian oil fields. Two years later, they acquired assets in Sidanco, which was owned in part by BP. Sidanco had been declared bankrupt by a commercial court in Siberia. BP’s CEO at the time, John Browne, later called the legal system “rigged,” and BP paid almost $8 billion to acquire a 50 percent interest in TNK after the ruling. The other half was consolidated by Vekselberg and his partners under the holding company Alfa-Access-Renova (AAR). The investment formed TNK-BP, Russia’s third-largest oil producer, and the partnership paid $38 billion in dividends to both sides between 2004 and 2011.
TNK-BP chief executive officer Bob Dudley — now CEO of BP — was forced to leave Russia after a strategy dispute in 2008 and, in 2011, AAR sued BP over a separate Arctic development deal it tried to strike with state-controlled oil company Rosneft. BP executives announced in May 2012 that it would sell its stake and Fridman stepped down from his role as CEO. In October of that year, Rosneft announced it would acquire the entire company, paying the billionaires $27.7 billion for their half of the venture in March 2013.
11/ Vekselberg Gone Global.
He holds the bulk of his fortune through Nassau, Bahamas-based holding company, Renova Group, and Russia-based Renova, which control a series of publicly traded and closely held entities. Vekselberg controls about 6 percent of publicly traded United Co. Rusal, Russia’s largest aluminum producer, according to data compiled by Bloomberg. He also owns shares in three publicly traded Swiss machinery, industrial equipment and steel manufacturers: a 63 percent stake in Sulzer, 43 percent of Oerlikon and 25.5 percent of Schmolz + Bickenbach.
He owns Russian utility company T Plus, which consolidates the stakes he holds in four heat and electric utility companies, TGK-9, TGK-5, TGK-6 and Volga Territorial Generating company (TGK-7), and a 90 percent stake in construction company Kortros and 47 percent of Energoprom Group, one of the world’s five biggest carbon and graphite producers. The billionaire also has four regional Russian airports, precious metals producer Safina and a controlling stake in telecommunications company Akado. Vekselberg controls such assets in Russia as Renova Orgsintez, which produces chemicals, Urals Turbine Works, an industrial machinery manufacture, and Hevel, which develops production of thin-film solar modules. He owns Milan, Italy-based Avelar Energy Group that’s focused on renewable energy, and Octo Telematics, a telematics services provider, as well as Zoloto Kamchatki, a gold miner.
Dmitry Medvedev, when he was president in 2010, asked Vekselberg to head technology hub Skolkovo outside Moscow, hoping to replicate Silicon Valley’s success in Russia.
12/ McClatchy: Dirty Bank of Cyprus to London Stock Exchange
Cyprus is often used by Russia’s politically connected businessmen. In a March 2013 report, McClatchy detailed how Russians had come to dominate Cyprus as both customers and providers of financial services. Russian depositors and investors took losses that year in Cyprus when the European debt crisis nearly crumbled major banks.
Billionaire investor Wilbur Ross, tapped by President-elect Donald Trump to serve as his commerce secretary, has been the top shareholder in a Cypriot bank with deep Russian ties and investors who made their fortunes under Russian President Vladimir Putin, underscore the financial orbit around Putin that intersects with figures in Trump’s campaign and administration. Beyond the Russian ties, again, Bank of Cyprus’ chairman once headed Deutsche Bank, which has repeatedly run afoul of U.S. regulators and is a major lender to the Trump business empire.
Ross led a September 2014 rescue of Bank of Cyprus, the largest and most important bank in that island nation off the coast of Turkey. Ross’ investment group took an 18 percent stake in bank.
The bank’s shareholders earlier approved taking it public, offering shares to investors on the London Stock Exchange at a price that could mean strong returns for existing shareholders, Wilbur Ross included, who currently, according to latest Bank of Cyprus share price, is suffering a major loss from his investments.
Last spring, European Union leaders announced that Cyprus had exited the rescue program for ailing banks, using only three-quarters of the billions offered.
The second largest shareholder in Bank of Cyprus is a Russian conglomerate called Renova Corp., which is headed by Viktor Vekselberg, a Russian billionaire and associate of Putin who served on the management board of Russian oil giant Rosneft, which was under U.S. financial sanctions in 2014 after Russia’s annexation of Crimea.
Vekselberg, with a fortune estimated at more than $14 billion, was featured by Esquire magazine as the richest Russian who doesn’t live abroad. He made his money first in energy and aluminum, later in telecommunications and other businesses, but his Putin ties were emphasized with his selection by the Russian president to build a pair of hotels next to Sochi’s Olympic Park for the 2014 Winter Olympic Games. He gave one of them to the state, saddling Russian taxpayers with outstanding loans of more than $400 million, the AP reported in 2015.
None of that suggests that Ross himself is involved in questionable business dealings. But the roles of Vekselberg and him in Bank of Cyprus underscore the overlapping financial interests of associates of Trump and Putin.
Vekselberg also serves as the president of an offshore company in the Bahamas called Sual International, where one of his vice presidents is Len Blavatnik, the richest man in Britain, who bought storied music company Warner Brothers for $3.3 billion in 2011. Blavatnik was a co-founder, with Vekselberg, of Bank of Cyprus investor Renova.
Both men’s involvement in Sual is detailed in the Panama Papers, the 2.7 terabytes of leaked documents from the Panamanian law firm of Mossack Fonseca that revealed, among other things, that Putin’s closest associates collectively moved billions of dollars through offshore companies. McClatchy and international partners analyzed the law firm’s emails, incorporation documents and client interactions under the umbrella of the International Consortium of Investigative Journalists.
Renova has numerous offshore entities that appear in the Panama Papers, most in the Bahamas, including Renova US Holdings. Earlier this year, Vekselberg, through his conglomerate, took a minority stake in U.S. online tabloid Gawker Media.
Offshore companies and the asset protection they provide are legal and often used in international business. They provide privacy in mergers and acquisitions, ease of real estate transfers and estate planning. But they are also used for money laundering, tax evasion and camouflaging illicit earnings. Most offshore jurisdictions collect little information on true ownership, providing anonymity for reasons legitimate and otherwise.
13/ McClatchy: Wilber Ross, Panama Papers & Money Laundering
Cyprus itself is referenced 530,937 times in the Panama Papers and the Bank of Cyprus is referenced 4,657 times. The Panama Papers confirmed what had long been suspected: that Russian money flows between offshore companies and Cyprus and Switzerland, long known for its secretive banks.
Earlier this year, McClatchy revealed how the Panama Papers showed another intersection of the financial interests of the Trump and Putin camps. Sual later merged with the company Rusal, the world’s largest aluminum producer, whose president is Oleg Deripaska, another Russian who appeared in the Panama Papers. He had a Caribbean offshore firm established out of Cyprus to invest in Mongolian mining.
Deripaska was for years barred from entering the United States, and the State Department never openly said why. In a BBC interview in July 2009, he accused American authorities of blackmailing him by revoking his visa to obtain information.
Deripaska, who like Vekselberg has served as a Putin appointee on an economic board and invested in Sochi, famously fell out with Paul Manafort, who served for several months earlier this year as Trump’s top campaign adviser. Deripaska sued Manafort in the offshore tax haven of the Cayman Islands, alleging that Manafort had taken $19 million intended for investments in a deal they’d participated in together.
Because of its dependence on Russian clients, the banking system in Cyprus remains a money-laundering concern for the U.S. State Department. “While significant progress has been made in recent years with the passage of ‘laws’ better regulating the onshore and offshore banking sectors and casinos, these ‘statutes’ are not sufficiently enforced to prevent money laundering,” the State Department said in a report on countries that pose special risks, covering 2015.
As the lead investor in Bank of Cyprus, Ross helped put together the board of directors and tapped as its chairman Josef Ackermann, the retired CEO of Germany’s Deutsche Bank. It was under Ackermann that Deutsche Bank repeatedly ran afoul of U.S. and European regulators.
Deutsche Bank agreed to a $37 million settlement last week with the New York Attorney General’s Office and the Securities and Exchange Commission over allegations of poor record-keeping on complex trades. Those problems began while Ackermann was still CEO in 2012. In addition, Deutsche Bank is reportedly the subject of an ongoing probe by regulators in the United States, Europe and the United Kingdom for so-called mirror trades from 2011 to 2015. That complex scheme allowed wealthy Russian clients to buy securities in their native rubles in Moscow and simultaneously sell identical ones for foreign currency in London.
Regulators say they suspect allies of Putin used these trades to get hard currency and evade financial sanctions. Reuters, citing anonymous sources, has said these trades in Russia surpassed $6 billion.
Another settlement, this one with the U.S. Department of Justice, is reportedly imminent. The agency originally sought $14 billion from the bank, according to multiple news reports, accusing it of misleading investors during the U.S. housing crisis about complex housing bonds called mortgage-backed securities. The settlement covers a period of alleged wrongdoing during Ackerman’s tenure. Trump’s financial disclosures show he has borrowed as much as $364 million from Deutsche Bank for hotels in Chicago and the nation’s capital and for his Doral golf club in Miami. These loans come due by 2024. The bank may have lent Trump more than $3 billion since the 1990s.
14/ Who is Wilber Ross:
There are two theories about Wilbur Ross, that he got soft coverage from NYT and Democrat Party at the confirmation hearing because he stitch together a viable steel company from bankruptcies, and saved a great many American steel makers jobs, and also another, who is a cut-throat businessman, at reviving bankruptcy firms, such as with coal industry, with horrific treatment of workers and taking advantage of every business opportunity to turn around companies, such as ditching America to go off-shore.
Huffington Post reports: Wilbur Ross, the billionaire Trump nominated to become commerce secretary, is the 79-year-old private equity mogul earned the nicknames “bottom feeder” and “king of bankruptcy” in the mid-2000s, when he became known for buying up decaying businesses, including steels mills, coal mines and textile factories. At the time the U.S. economy was shedding more than 100,000 manufacturing jobs each year as companies moved factories to countries like China, where labor was cheap and safety and environmental rules were few. Ross reaped profits by stripping workers of health benefits, ignoring safety concerns and sending jobs abroad, where workers expect lower wages. In total, Ross offshored roughly 2,700 jobs at companies he invested in since 2004, according to Labor Department data Reuters published on Tuesday.
In 2004, Ross bought Cone Mills, a struggling North Carolina textile company, and combined it with another factory to form International Textile Group. He later renamed the company Cone Denim, and as Bloomberg reported in 2012, expanded production “in less-expensive emerging markets” and moved to “eliminate duplicative facilities.” The firm operated two mills in Mexico and one in China. In 2004, Cone Mills employed 1,100 people. By 2012, the company had just 300 workers in North Carolina, a 72 percent drop. In a scathing retelling of the incident, The Daily Beast dubbed Ross “Trump’s future secretary of outsourcing.”
The Trump transition team did not immediately respond to a Huffington Post request for comment. Reuters reported that Ross did not respond to several requests for comment.
The same year Ross bought Cone Mills, he formed International Coal Group. ICG became the corporate umbrella for mines Ross bought in 2005 from an ailing coal producer called Horizon after a bankruptcy judge stripped thousands of miners, some with black lung disease, of their medical coverage and shredded their union contract.
ICG was also the vehicle where Ross placed the assets of Anker Coal Group. Ross had been buying up Anker shares since 1999, and by 2001 he owned 47 percent of the company and was its largest shareholder at 47 percent. ICG fully acquired Anker’s coal assets in 2005.
Among the former Anker properties Ross controlled was Sago Mine, which the federal Mine Safety and Health Administration cited in 2005 for 208 violations. (In 2005, two employees joined ICG from Massey, a coal company that became infamous for its disregard for safety regulations under CEO Don Blankenship. In 2010, an explosion at Massey’s Upper Big Branch mine killed 29 workers, and Blankenship was found guilty of conspiring to violate mine safety and health standards and sentenced to a year in prison. Blankenship endorsed Trump for president from prison in 2016.) More than half of the citations at Sago were labeled “serious and substantial,” including 20 dangerous roof falls, 14 power wire insulation problems and three cases of inadequate ventilation plans.
15/ Going Concern: Wilbur Ross and the Russians
Ross willingness to do business with some of Russia’s wealthiest and least savory businessmen is an on-going concern.
But Ross’s 2014 investment in the Bank of Cyprus has received little public attention amid the broader concerns in Washington over the Trump administration’s potential ties to Russia.
Guardian reports: Ross, a private equity investor who has said he would step down from the bank after his final confirmation, had been asked to provide more details about his own relationship with previous and current Russian investors in the bank, including Viktor Vekselberg, a longtime ally of the Russian president, and Vladimir Strzhalkovsky, the former vice-chairman of Bank of Cyprus who is also a former KGB agent with a close relationship to Putin.
Senator Bill Nelson of Florida said the White House “has chosen to sit on” a written response by Ross to some of those questions even though Ross told the senator he was eager to release his response.
Nelson, the top Democrat on the Senate commerce committee, said in a speech on the Senate floor that other senators were “troubled and frustrated” by the White House move. Nelson said it had been “verbally reiterated” to him by Ross that the commerce department nominee was not aware of any “loans or interactions” between the Bank of Cyprus and the Trump campaign or Trump Organization.
Ross also told Nelson that he had one meeting that lasted about an hour with a Russian investor in the bank in 2014, but no other details were provided. An attorney for Ross said he was not handling the matter and referred questions about the issue to the commerce department, which declined to respond. The senators’ scrutiny of Ross’s ties to Bank of Cyprus comes as the Trump administration faces several investigations, including by the FBI, into possible links between Trump campaign officials and Russia.
The first letter, sent on 16 February, was led by Senator Bill Nelson of Florida, the top Democrat on the Senate commerce committee, and was co-signed by Cory Booker of New Jersey, Ed Markey of Massachusetts, Tom Udall of New Mexico and Tammy Baldwin of Wisconsin.
Among other questions, the letter asked Ross if he was “aware of any contacts between any individuals currently or formerly associated with the Bank of Cyprus and anyone affiliated with the Trump presidential campaign or the Trump Organization”. It also asked whether Ross was “aware of any loans made by the Bank of Cyprus to the Trump Organization, its directors or officers, or any affiliated individuals or entities”.
A second letter sent by New Jersey senator Cory Booker said the list of Russian businessmen with ties to both Putin and the Bank of Cyprus was “startling”.
“The American public deserve to know the full extent of your connections with Russia and your knowledge of any ties between the Trump administration, Trump campaign or Trump Organization and the Bank of Cyprus,” Booker wrote. “Americans must have confidence that high-level officials in the United States government are not influenced by, or beholden to, any foreign power.”
Among Booker’s list of 11 questions was a demand to know more about if – and when – Ross first learned about Strzhalkovsky’s ties to the KGB, and whether the former KGB official ever met Trump. Booker also asked Ross whether he had any knowledge about the 2008 purchase of Trump’s Palm Beach home by Dmitry Rybolovlev, a Russian billionaire and investor in Bank of Cyprus. The beach house was reportedly sold for $95m.
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