Chapter 5 – The Presidency and Russian Organized Crime61 min read

Excerpt from Guilt By Association—How Deception and Self-Deceit Took America to War (2008) State Street Publications, pp. 77-101.

Privatization is now starkly revealed as a massive plunder of public property.—Michael Meacher[1]

Rather than engage the Russians, John McCain seeks to enrage them.[2] In May 2006, he and Joe Lieberman sought to embarrass President Vladimir Putin by calling for a U.S. boycott of the July 2006 G-8 summit of industrial nations. That meeting was convened in Putin’s hometown of St. Petersburg, an historic showcase newly refurbished by the Putin government and a city where he served as deputy mayor during the reform era of Mikhail Gorbachev.

In an effort, coordinated with the late Congressman Tom Lantos, to discredit Putin, McCain portrayed as a “political prisoner” Mikhail Khodorkovsky, the most infamous of Russia’s corrupt oil oligarchs. When, without further explanation, he also charged that the indictment of Russian media oligarchs Boris Berezovsky and Vladimir Gusinsky was “politically motivated,” it became clear that the candidate was either ignorant about—or complicit in—Russian organized crime. As Russian media moguls in the 1990s, Berezovsky and Gusinsky played critical roles in rigging the 1996 re-election of President Boris Yeltsin. During Yeltsin’s first term as president, a handful of Ashkenazi oligarchs financially pillaged Russia’s post-Soviet economy under the guise of Glasnost (openness) and Perestroika (restructuring).

Russia’s “Big Seven” oligarchs invested an estimated $500 million in Yeltsin’s re-election,[3] enabling them to hold onto privatized assets long enough that public assets stolen from the Russian people could plausibly be portrayed as private and hence subject to the protection of post-Soviet law. Six of the “Big Seven” qualify for Israeli citizenship. This chapter identifies the syndicate operatives that a McCain presidency would protect at the risk of U.S.-Russia relations—and to the great detriment of the Russian people.

Though Boris Berezovksy frequently travels to Tel Aviv with an Israeli passport, he resides in London where he enjoys political asylum—a status Moscow aims to see revoked. Gusinsky relocated to Tel Aviv from Moscow where he was a vice-president of the Bronfman-led World Jewish Congress and chairman of the Russian Jewish Congress.

By the time oil oligarch Khodorkovsky was jailed for fraud and tax evasion, his lieutenant Leonid Nevzlin had already fled to Israel to escape an arrest warrant on charges that he organized a series of contract killings from inside Yukos, a Russian oil company over which he and Khordorkovsky gained control in 1995 in a Yeltsin-era fraud known as “loans for shares.”[4] When he fled Russia, Nevzlin was also the sole beneficiary of a trust that controlled voting rights in Yukos. When Moscow sought his extradition, Tel Aviv refused.[5]

Until his October 2003 arrest, Khodorkovsky was actively discussing his planned presidential campaign in which he would have invested a portion of his massive oil wealth. Had he succeeded (quite likely given the Ashkenazi-oligarch control of Russian media at the time), he would have gained political control of a nation that he had already financially plundered in partnership with a network of predominantly Ashkenazi operatives.

Though campaigning for president on his national security credentials, McCain has misdiagnosed issues of profound consequence not only to ordinary Russians but also to Americans systematically defrauded by the same transnational syndicate. With regularity, the candidate has favored those complicit in the criminal network chronicled in this account. Thus the skepticism with which Moscow must have viewed John McCain’s May 2008 campaign proposal for a new arms pact with Russia.[6]

This chapter also describes the modus operandi by which Russia was looted by organized crime operatives sharing the same ideological bias as those operating in the U.S. In addition to chronicling a U.S. presidential candidate’s relationship with this syndicate, this chapter also describes the suspect political dynamics behind the “Orange Revolution” in Ukraine. The consistency with which John McCain has associated with this transnational network raises the sensitive issue whether his candidacy enjoys syndicate support.

Mega-thief Mikhail Khodorkovsky

To claim that Khodorkovsky is a “political prisoner” requires a closer look at how, at 32 years of age, a single Russian-Ashkenazi citizen amassed state-owned assets worth more than $30 billion. A description of this politically facilitated fraud demonstrates just how few well-placed operatives are required to sustain this criminality across borders and across generations.

Bank Menatep, founded by Khodorkovsky in 1990 when he was 27, pre-staged the fraud used to gain a controlling interest in Yukos, which was privatized in 1995.[7] In 1993, Khodorkovsky became deputy to Vagit Alekperov (aka “the Don”) who was then minister of fuel and energy charged with reorganizing the Russian oil industry for privatization. After brokering corrupt transactions between bureaucracies and industries, Menatep emerged as a conglomerate of Khodorkovsky-controlled enterprises.[8]

Under the 1995 “loans for shares” scheme, the cash-strapped Yeltsin administration pledged shares in state-owned oil companies to oligarch-controlled banks as collateral for loans to the government. When the government defaulted on the loans, the oil company shares were “auctioned” to the oligarchs by the same oligarch-controlled banks.[9] Participation in the auctions required not only an invitation, typically by seeking approval from Yeltsin’s daughter, Tatyana, but also a registration approved by oligarch-owned banks.

Bank Menatep managed the Yukos auction, enabling Khodorkovsky, Nevzlin and their partners initially to take control of Yukos by acquiring 45% of its shares for $159 million with 11.5 billion barrels of proven reserves—less than three cents per barrel.[10] Two years later, Yukos was listed on the Moscow stock exchange at a value of $7 billion. By 2004 its value topped $34 billion.

Even the funds used to bid in the government auctions came largely from the government. Favored banks (owned by the oligarchs) were given loans by the central bank at negative interest rates, and government funds were kept on deposit at below-market interest rates. Not only were the banks also allowed to seize profits of certain Russian traders and avoid paying tax on their windfalls, but they could also participate in the government bond market where annualized yields ranged from 60 to 200 percent in dollar terms, 1995-98.[11]

Self-Made Fortunes

To grasp the role played in this criminality by personal relationships, it helps to understand the role of intermarriage, including that of Ashkenazi oligarch Oleg Deripaska, Russia’s richest oligarch. According to The New York Times:[12]

His marriage to Polina V. Yumasheva, the daughter of a presidential speechwriter to President Yeltsin, Valenin Yumasheva, was the closest to a dynastic wedding in the new Russia…. Eighteen months after they were married, Mr. Yumasheva married Mr. Yeltsin’s daughter Tatyana, making Polina the stepdaughter of Mr. Yeltsin – and Mr. Deripaska a member of the Yeltsin family through marriage.[13]

Sibneft, another major oil company, owned reserves equivalent to Texaco before its merger with Chevron. The shares of Sibneft sold at auction for $100.3 million to Yeltsin insiders Roman Abramovich and Boris Berezovsky.[14] Known as the “Grey Cardinal” and “The Godfather of the Kremlin,”[15] Berezovsky introduced Abramovich to Yeltsin’s inner circle and later sold out to him when Berezovsky fled to London in 2000 to escape fraud and embezzlement charges brought by the Putin government.

Like other oligarchs, Abramovich also began his criminal career with corrupt export schemes that acquired state-owned commodities at low state prices and sold them abroad at far higher prices. These early oligarchs (operating as the people in between) exploited that difference to amass fortunes across an array of commodities. Abramovich and his mentor, Boris Berezovsky, specialized in the theft of oil and aluminum.

In 2004, Abramovich sold his stake in Russian Aluminum to Deripaska.[16] In its 2008 listing, Forbes ranked Abramovich, age 41, the world’s 15th richest billionaire with personal wealth of $23.5 billion.[17] In February 2008, The Moscow Times estimated Deripaska’s wealth at $40 billion placing him, at age 40, among the world’s top 10 billionaires as rising prices for oil and metals boosted his net worth (Forbes ranked him ninth in 2008 with wealth of $28 billion).[18]

Without explanation, Forbes describes as “self-made” the vast fortunes amassed by Russia’s oligarchs in a process that senior Forbes editor Paul Klebnikov characterized in 2000 as “the biggest disaster (economically, socially and demographically) since the Nazi invasion of 1941.”[19] In early 2008, 74 billionaires lived in Moscow. With an average wealth of $5.9 billion, the Russian capital eclipsed New York City as home to the world’s greatest number of billionaires. In both cities, the billionaire population is predominantly Ashkenazi.

In July 2004, Klebnikov, then editor-in-chief of Forbes Russia, was murdered as he left his Moscow office. He had just published a profile of Russia’s Top 100 richest featuring many of the newly rich who would be hard pressed to explain how they legitimately acquired their self-made fortunes. The subtitle of Klebnikov’s 2000 book, Godfather of the Kremlin, captured the scope of the criminality that John McCain defends: Boris Berezovsky and the Looting of Russia.

McCain charged that Putin’s opposition to the oligarchization of Russia is “a creeping coup against forces of democracy and market capitalism.” By associating the stature and authority of his position as a U.S. Senator with opposition to the indictment of Berezovsky and Gusinsky, McCain helped dash the dreams of ordinary Russians who aspire to be governed by the rule of law rather than by oligarchs and the rule of in-laws such as Deripaska. To restore a credible legal system after looting on such a scale requires leaders willing to expose those who defrauded the Russian public by inducing belief in the corrupted authority of law.

According to The Washington Post, McCain campaign manager Rick Davis twice arranged for the candidate to meet with Oleg Deripaska whose links to organized crime are sufficiently compelling that a visa to visit the U.S. was revoked in July 2006.[20] Their first encounter was arranged at the annual World Economic Forum in Davos, Switzerland in January 2006. They met again in Montenegro seven months later during an official U.S. Senate trip to that eastern European country.[21]

Fields within Fields. On March 20, 2008, after John McCain secured the Republican nomination for president, Nathan Rothschild and his father, Lord Jacob Rothschild, sponsored a fundraiser for McCain in London.[22] A principal adviser to Oleg Deripaska, Nathaniel is a descendent of Nathan Mayer Rothschild who helped finance Britain’s victory over Napoleon at Waterloo.[23] In addition to providing financial advice to the Russian oligarch on the aluminum giant Rusal, Nathanial Rothschild also advises Indian steel magnates.[24]

The New Russian Royals

Along with the Big Seven oligarchs, Berezovsky and Gusinsky donated the money and media time required to re-elect Yeltsin in 1996. Also known as “Russia’s Rupert Murdoch,” Gusinsky launched Sevodnya, a newspaper that threw its unqualified support behind Yeltsin’s presidential campaign. Yeltsin promptly rewarded Gusinsky with Russia’s first private television network (NTV). That key asset anchored Gusinsky’s creation of a media conglomerate that included print, radio and television.

Roman Abramovich became a business partner of Yeltsin’s son-in-law, Leonid Dyachenko, and also served on the board of Sibneft, Berezovsky’s primary oil holding. Soon after Putin succeeded Yeltsin as president on New Year’s Eve of 1999, Berezovsky sold to his protégé Abramovich his interest in Signeft (oil) and ORT, Russia’s largest television network. Abramovich promptly conveyed ORT’s voting rights to Vladimir Putin.

In 2003, Abramovich purchased Chelsea, Britain’s leading soccer club, for $300 million and has since reportedly spent $500 million on player transfers. In addition to his lavish home in Moscow, his six-story house in London’s Eaton Square, formerly part of the estate of the Duke of Westminster, is reported to be worth more than $46 million. With proceeds from their plundering, Russia’s criminal elite now own an estimated one in five homes in London’s posh Mayfair district.

In September 2005 Abramovich cashed out a 73% stake in Sibneft in a $13 billion sale to Gazprom, Russia’s state-owned energy conglomerate. He owns multiple mansions and at last count three mega-yachts of more than 300 feet in length with two more under construction, including Eclipse, a super luxury yacht that measures more than 525 feet, the world’s largest.[25]

In April 2008, the Kensington and Chelsea council approved plans for Abramovich to build the United Kingdom’s most costly residence at an estimated expense of £150 million ($298 million). The eight-bedroom mansion is expected to be eight floors, three of them underground.[26] In July 2008, he announced the purchase of a villa on the French Riviera for $500 million to honor his upcoming marriage to model Daria Zhukova, 25. The estate requires a full-time staff of 50 gardeners to maintain the grounds.[27]

Though he resides primarily in London, Abramovich saved an estimated $1 billion in Russian taxes by investing several hundred million dollars in Russia’s Far East region of Chukotka.[28] Impoverished residents call the young Ashkenazi oligarch a “messiah” for lavishing a portion of his stolen wealth on their destitute region where he served as governor from 2001 until recently. His grateful constituents may not realize that his political status protected him from prosecution in Russia. In November 2005, he was sworn in for a new five-year term but resigned in July 2008.[29]

Abramovich attends services in Russia of the Orthodox Lubavitch Hassidic movement headquartered in Brooklyn, New York—the Jewish equivalent of fundamentalist evangelical Christians. Abramovich provided funding for Italian-American Rabbi Berel Lazar who relocated to Russia in the early 1990s to promote the Lubavitch movement. In June 2000, one day after meeting with Putin in the Kremlin, Lazar convened a meeting of Hassidic rabbis and their emissaries from 45 Russian regions where they voted Lazar chief rabbi of Russia, replacing Adolph Shayevich, a rabbi recognized by the World Jewish Congress.

Lazar’s position was arranged by Putin (reportedly advised by Abramovich) so that the Russia government could bring corruption charges against media czar Gusinsky without being subjected to the charge of anti-Semitism, damaging Russia’s reputation in world affairs. As head of the Russian Jewish Congress (to which Gusinsky made a $10 million annual contribution), the Gusinsky case had to be handled with care. Once Rabbi Lazar became chief rabbi, there was less concern that pursuing Gusinsky would provoke that charge.[30] Gusinsky relocated to Spain and then to Israel where he remains.

Putin invited Lazar to a special dinner at the Kremlin during the January 2001 visit to Moscow of Israeli President Moshe Katsaw. A special cleansing (koshering) of the Kremlin kitchen was ordered for the first time in Russian history. To escape charges of anti-Semitism, Putin pit two Jewish factions against one another. Yet he also exchanged the (relative) moderates of the World Jewish Congress for extremists of an Orthodox Hassidic sect known to enjoy financial support from at least one of Russia’s richest oligarchs.[31]

When Gusinsky fled to Israel, his NTV television station was taken over by Gazprom, the state gas monopoly led by Dimitri Medvedev until his March 2008 election to succeed Putin as president. During his heyday in Moscow, Gusinsky maintained a close relationship with Yuri Luzhkov, an Ashkenazi khozyain (boss) appointed mayor of Moscow by Yeltsin in 1992 and since elected three times.[32]

The Moscow Mob

Luzhkov helped Gusinsky gain control of Channel 4, a major Moscow television station, as well as other media properties. Gusinsky, in turn, helped re-elect Luzhkov who designated Most Bank, controlled by Gusinsky, the primary bank for financing Moscow real estate projects and infrastructure. When Luzhkov became mayor, Elena Baturina emerged as a key beneficiary of Moscow construction contracts. By 2007, her net worth of $2.3 billion ranked her 335th on the Forbes 2008 list of the world’s billionaires.[33] Baturina is Luzhkov’s wife.

As the world’s fourth-most-expensive city behind Tokyo, Osaka and London, Moscow is notable for its staggering social divide. In a city where the official sustenance wage is less than $170 per month and homelessness is rampant, Luzhkov directed an estimated $250 million to rebuild the 19th century Cathedral of Christ the Savior, the world’s largest Orthodox church, destroyed on the order of Stalin’s chief administrator Lazar Kaganovich in December 1931.[34] Luzhkov’s assessment of Moscow’s steadily widening social divide: “It’s normal, the city is working.”[35]

Gusinsky now divides his time between Tel Aviv and Joe Lieberman’s home state of Connecticut where he maintains a home in the upscale town of Greenwich. Gusinsky and Luzhkov toured the U.S. together, meeting with their American counterparts who wanted to enter the Russian media market.

As the predominantly Ashkenazi operatives in this transnational syndicate staged privatization frauds, the Russian public endured a dramatic five-year decline in life expectancy among men, the most dramatic reversal in human welfare recorded in a developed nation other than in wartime.[36] At least 12.5 million men “disappeared” in the former Soviet Union due to suicide, alcoholism, a failing healthcare system and destructive behavior.

Life expectancy in Russia fell to 66 years, 14 years below the European Union average. As yet, no one has proposed how to factor such costs into the oligarchization of Russia. Nor has anyone explained why a candidate for the U.S. presidency would protect those who financially pillaged Russia unless his candidacy enjoys syndicate support—or unless he considers oligarchies consistent with democracy and market capitalism.

As poverty swept a nation never known for its prosperity, Khodorkovsky and his colleagues undermined the Russian tax base by shipping Yukos oil to a tax haven at a small markup and paying tax only on the difference. The oil was then sold at world prices and no tax paid on the real profit. When, in response, lawmakers sought to raise taxes on the oil sector, he blocked the legislation by using his tax savings to fund opposition political parties.

Khodorkovsky’s deep-pocket philosophy of democracy bears a striking resemblance to the McCain-Feingold campaign finance reform that allows America’s well-to-do to invest unlimited amounts in their pet political projects. Had McCain’s reforms been operative in Russia, Khodorkovsky could have funded his political opposition to tax reform through tax-exempt 527 organizations, all the while citing freedom of speech, freedom of the press and even freedom of religion by portraying as anti-Semitic anyone who opposed his political campaign.

While ordinary Russians were coping with the effects of this criminality, Khodorkovsky was negotiating the sale of a large block of Yukos shares to ExxonMobil or ChevronTexaco and proposing to use the proceeds to fund his own presidential campaign. If successful, Russia’s “piratization” would have financed in Russia an Ashkenazi-oligarch system of governance with wealth defrauded from the Russian public. Yeltsin predecessor Mikhail Gorbachev charged in July 2005 that $1 trillion had been hidden abroad by those “plundering” Russia.[37] The facts suggest the total may be considerably more.

The all-pervasive influence of the Russian Mafia was well known before the Yeltsin government enabled an Ashkenazi elite to take organized crime to national scale. In The Piratization of Russia, Marshall Goldman, emeritus professor of Russian economics at Wellesley College, provided a glimpse of the political realities inside the Kremlin prior to the Gorbachev era:

Brezhnev’s daughter was having an affair with a circus clown who was also a diamond smuggler while her husband, Yuri Churbanov, deputy head of the national police, was on the payroll of the Uzbek Mafia. Even more amazing, the head of the Uzbek criminal organization paying Churbanov was Sharal Rashidev, who in his day job was the Secretary, or leader, of the Uzbek Communist Party. No wonder few of the efforts to attack crime in the waning days of the communist era were successful.[38]

Birds of a Feather

Why does an aspirant for the White House (John McCain) allege that those countering this criminality are mounting “a creeping coup against forces of democracy and market capitalism”? Why attack Putin while defending Berezovsky and Gusinsky? Why, unless his candidacy enjoys syndicate support, describe mega-thief Mikhail Khodorkovsky as a “political prisoner”? If not a Kremlin overseen by an Ashkenazi oligarchy, what sort of government would a McCain administration envision for the Russian people?

Prior to his arrest, Khodorkovsky transferred voting control of Menatep, a Yukos holding company, to deputy chairman Leonid Nevzlin whose 2004 wealth Forbes estimated at $2 billion. Nevzlin fled to Israel shortly after Russian authorities indicted a former Yukos security chief for four murders including the death of the mayor of Nefteyugansk, a Siberian oil town at the center of the Yukos empire.[39]

Two fellow Yukos billionaires, Mikhail Brudno and Vladimir Dubov, fled with Nevzlin where they now live as his neighbors in Herzilya, an exclusive seaside community north of Tel Aviv. The Yukos security chief was sentenced to twenty years in prison for murders that Nevzlin is alleged to have ordered[40] and Khordokovsky reportedly approved.[41] In 2005, Israeli Prime Minister Ariel Sharon declined Putin’s personal appeal to extradite Nevzlin for prosecution on a murder charge in Moscow dating from when Nevzlin led the Russian Jewish Congress.

Russian law enforcement officials claim that the murder of a city official was but one of many that Nevzlin ordered. In March 2008 the Russian government began a murder trial for Nevzlin in absentia. Moscow cites evidence that he oversaw an operation resembling Murder, Inc. that ordered the assassination of Russian business executives and officials from 1998 to 2004.[42]

Despite these charges, Nevzlin traveled freely in the U.S. after his Christmas Eve 2006 arrival in Newark, New Jersey under State Department protection championed by Congressman Tom Lantos. Nevzlin’s pro-Israeli supporters claim that the charges against him are political payback for his alliance with Khodorkovsky. Lantos assured The Jewish Week that Nevzlin is “as honest as they come,” adding, “To accuse him of murder is about as absurd as my being charged with murder.”[43] In August 2008 a Russian court, trying Nevzlin in absentia, found him guilty of ordering four murders and attempted murders.[44] Alexei Pichugin, the former head of Yukos security, was sentenced to 24 years in prison in 2006 for carrying out those murders.[45]

During Nevzlin’s visit to the U.S., he met with (predominantly Jewish) members of Congress and with hedge fund operator Michael Steinhardt, a key financial supporter of the Democratic Leadership Council (DLC). The “centrist” DLC was founded after a “leftist” campaign dominated by organized labor ensured Minnesota Senator Walter Mondale’s loss to Ronald Reagan in the 1984 presidential election. The DLC was led by Senator Joe Lieberman when he commenced his failed 2000 campaign for vice president with presidential candidate Al Gore, Jr. Eight years earlier, Bill Clinton resigned as DLC chairman to begin his successful Clinton-Gore presidential campaign. As Steinhardt boasted in a March 2006 televised interview: “I was president of the DLC when we brought Bill Clinton to office.”[46]

Michael Steinhardts’s father, Sol “Red” Steinhardt, was a prominent jewel fence for New York’s crime syndicate during the 1930s. He was particularly close to Arnold Rothstein,[47] the acknowledged head of organized crime and an inspiration to Meyer Lansky who emerged as chairman of the National Crime Syndicate and its enforcement affiliate, Murder, Inc., following the 1929 crime conclave in Atlantic City. As a hedge fund operator, Michael Steinhardt paid 75% of the $70 million in civil fines required to settle a Securities and Exchange Commission/Department of Justice case in the early 1990s when he sought to corner the market in short-term Treasury notes. Steinhardt was estimated to have made $600 million on his Treasury positions.[48]

In 2000, Steinhardt and Charles R. Bronfman founded Taglit-Birthright Israel to pay for young Diaspora Jews to travel to Israel to discover their Zionism.[49] As of May 2008, 165,000 participants from 53 countries had traveled to Israel under a program that the Israeli government sponsors by covering a third of the costs.[50] In 2007, casino mogul Sheldon Adelson donated $30 million. He gave $36 million more in 2008.[51] In 2007, he also contributed funds for a lavish new office building in Washington, D.C. for AIPAC.[52]

Influence, Submission and Control

Could Vladimir Putin be seeking to protect the Russian people from any further deprivations at the hands of this oligarchy? Does he aim to correct a nationwide control fraud inflicted on Russia by a transnational criminal syndicate?[53]

Of particular concern to a fledgling democracy should be efforts by this predominantly Ashkenazi network to purchase—as it did in 1996—the presidency of Russia (or any nation) with a combination of stolen public assets and control of the public’s airwaves. Russia’s leadership can take little comfort in the fact that a similar challenge faces America, a mature democracy.

In response to Russia’s systemic criminality, John McCain charged that the widely popular Russian president was seeking to “create an empire of influence and submission, if not outright control.” Future research will identify who persuaded the candidate to issue a series of similar statements. Without more facts, it is impossible to know whether he is complicit, incompetent or naïve—or whether someone in his office routinely releases such statements in his name.

At the annual Munich Security Conference in February 2007, President Putin portrayed as “very dangerous” the current U.S. approach to global relations. Based on Putin’s experience with this syndicate’s operations in Russia, it is reasonable to conclude that he was referring to the influence of an unelected (Ashkenazi) government operating with impunity inside the U.S. government—as the people in between.

Fields within fields. McCain campaign manager Rick Davis lobbied for Imagesat, an Israeli firm that sells satellite imagery. He also consulted to Pegasus Capital Advisors, a private investment firm with a financial stake in Imagesat. Pegasus offered Davis and his partner in the Davis Manafort firm a chance to participate in one of its investments. In November 2005, Pegasus acquired a stake in Traxys, a transnational company that trades in industrial metals, a business where Oleg Deripaska made his initial fortune by stripping assets from state-owned enterprises and selling them abroad.[54] Aluminum was an early target.

The criminal network identified in this account typically influences both sides in political contests. Davis Manfort worked in Ukraine for Rinat Akhmetov, the richest man in Ukraine and the principal financial backer of Viktor Yanukovych, the Moscow-backed candidate for the Ukraine presidency. In 1996, Davis served as deputy campaign manager for Republican Bob Dole. Both Dole and Democrat Bill Clinton used Carl Lindner-provided aircraft during their 1996 presidential campaigns.

A consultant to Michael Bloomberg’s New York mayoral campaign, Davis joins others in the McCain campaign who lobbied for telecommunications companies, including Verizon, Comsat and SBC Communications—firms with a direct interest in matters before the Senate Commerce Committee, chaired by McCain in 2001 and again from 2003 to 2005.

Two initial exceptions to the McCain campaign’s conflict-of-interest guidelines benefited Davis’s firm. The first allowed lobbying not in excess of a specified threshold. The second allowed lobbying overseas on behalf of foreign firms and politicians.[55] The campaign’s ethics guidelines, crafted by Davis, were tightened only after McCain secured the nomination.[56]

Davis also draws a salary as president of the Reform Institute, a group McCain helped found to reduce “the influence of special interests” in politics and government. In marketing his lobbying services both domestically and abroad, Davis described himself as someone who has “operated at the highest level of decision and deal making.” As senior campaign manager, he controlled the use of McCain’s campaign bus, the Straight Talk Express. In early July 2008, Davis’ responsibilities as campaign manager were reduced.[57]

Trans-generational Orchestration

Revenues from Russia’s financially pillaged enterprises were recycled into corrupt privatization auctions only after rampant inflation (2,500% in 1992 alone) destroyed the savings of ordinary Russians, leaving only syndicate operatives with the funds to bid. “Shock therapy” fiscal discipline (sharp cutbacks in social spending) further ensured that only those Russians complicit in this nationwide fraud could afford to participate in purchasing the wealth of their nation.[58]

Anatoly Chubais, the Ashkenazi politician with the most influence over privatization, is widely considered the most hated man in Russia. He earned it. He cites as evidence of the success of privatization the fact that “there was no civil war.” He means it. “This is the true value of our reforms,” Chubais boasts, “not the fact that oligarchs are worth billions today. I couldn’t care less about that.”[59]

As a key architect of Yeltsin’s 1996 re-election campaign, Chubais concedes that Yeltsin did not understand his own administration’s privatization methods (“not the economic intricacies but certainly the political and economic big picture”). Chubais justifies his role in the massive frauds that created Russia’s oligarchs by pointing to the robber baron era of American capitalism, arguing “Russia is already in the process of liberating itself from the same thing.”[60]

Chubais’ assessment fails to distinguish between America’s early-stage capitalists—who created great wealth—and Russia’s 20th century oligarchs—who defrauded their fellow citizens of the nation’s great wealth, plunging the most vulnerable into abject poverty. With few exceptions, those enriched by Chubais built nothing new. Oftentimes the oligarchs forced their employees to sell them the few shares they had gained in the privatization process.[61] More than two-thirds of the top 100 richest Russians claim “self-made” fortunes from their ownership of natural resources and raw material firms that belonged to the Russian people.[62]

The mindset voiced by Chubais may be influenced by Vladimir Potanin, his neighbor in the Russian countryside. As a Kremlin insider, Potanin got an early start in this massive fraud when he created a foreign trading company to export state-owned natural resources and raw materials. His outsized profits capitalized a Yeltsin-favored bank where state enterprises and municipalities kept their cash (Potanin served as Yeltsin’s first deputy prime minister for seven months). His bank (Oneximbank) was both an originator and a beneficiary of the 1995 loans-for-shares scheme. As one of the Big Seven, he was also a major force in Yeltsin’s reelection in 1996. Through Oneximbank, Potanin acquired more than 20 firms.[63] With a 2008 net worth of $19.3 billion, he ranks 25th among the world’s billionaires.

In defending the indefensible, Chubais acknowledges University of Chicago economist Milton Friedman as both inspiration and guide for an ostensibly “legal” process that, by 2003, led to a handful of oligarchs controlling 85% of Russia’s leading private companies.[64] Confirming that this crime is poised to continue, Thomas Mirow, the newly appointed president of the European Bank for Reconstruction and Development, announced in July 2008 the “encouraging signs” that Chubais could play an influential role in negotiating a new accord between Russia and the European Union.[65]

To orchestrate a fraud of such magnitude in plain sight required the appearance of good faith and legality along with some semblance of intellectual authority. Each of those components was furthered by U.S. Treasury Under Secretary Lawrence Summers who in the mid-1990s had just completed two years as chief economist at the World Bank. Backed by the perceived authority of those institutions, Summers dispatched to Russia a handpicked advisory team from Harvard University that lent this larceny the appearance of good faith legality and academic legitimacy.

Associating this systemic criminality with Harvard’s historic credibility eased the enactment of legislation required to perpetrate fraud under the authority of law. The Harvard team of predominantly Ashkenazi advisors crafted much of the legislation (at the request of Chubais) that enabled the oligarchization to proceed “lawfully,” in plain view and with impunity. With Yeltsin’s re-election, the Ashkenazi-ation of Russia gained the legal protections allowed private property in post-Soviet Russia even as the perpetrators moved much of their ill-gained wealth out of the country.

Under Cover of Democracy

An acclaimed economist, Summers resigned in 2006 as president of Harvard. When pressed at a February 2006 faculty meeting for his opinion of scandals surrounding Harvard’s advisory team to Russia, Summers claimed he did not know the facts. That lie sealed his fate with a dismayed faculty, ending the shortest term served by a Harvard president in 144 years. [66]

While syndicate operatives were stripping assets from the Russian economy and impoverishing the Russian people, Yukos CEO Mikhail Khodorkovsky was modeling his Open Russia foundation after Open Society activities funded by George Soros in Eastern and Central Europe. Research suggests those activities provide Soros a handy means for gathering in-country intelligence while recycling his hedge fund profits back into his “pro-democracy” operations.[67] Open Society operations also offered this Hungarian-American investor a plausible reason to insist on an early presence in post-communist economies—in plain view, with protection of the authority of law and under cover of democratic principles. As in the U.S., the openness of democratic societies became the means by which duplicity could operate with impunity in plain view.

At the February 2007 Munich Security Conference, President Putin opposed the deployment in Russia of foreign organizations as channels for funding by foreign governments. “This is not about democracy,” he argued. “This is about one country (he did not specify which) influencing another” while the inflow of funds is “hidden from our society.” As Russia screened pro-democracy organizations for ulterior motives, Putin was portrayed as “anti-democratic.”

The Orange Revolution

John McCain describes himself as a strong supporter of Ukrainian Viktor Yuschenko whose “Orange Revolution” presidential campaign of November 2004 gained worldwide media coverage as Kiev became a rallying point for pro-democracy groups. Such groups are now under attack as officials fear they incite crises to catalyze regime change.

Soros-funded Open Society efforts joined forces in Ukraine with the National Democratic Institute (NDI), a government funded U.S. operation chaired by Madeleine Albright, former Clinton administration Secretary of State.[68] Also active in the Ukraine was NDI’s Republican counterpart, the International Republican Institute—chaired since 1993 by John McCain.[69] Both organizations are taxpayer-financed through a neoconservative-favored project known as the National Endowment for Democracy. The Endowment’s activities are coordinated with the State Department’s Agency for International Development.

The role played by those organizations in Ukraine’s presidential election helps explain why nations are reasserting their sovereignty to resist this form of foreign intervention. Often that resistance involves charges of outside interference by the U.S. to incite riots and work stoppages and encourage coups d’etats[70] A guilt-by-association modus operandi utilized in this election suggests a pro-Israeli rather than a pro-democracy agenda, and points to a nontransparent motive.

In a high-profile election in this widely watched venue, dioxin poisoning disfigured the face of Yushchenko, Ukraine’s pro-democracy presidential candidate. Widely published before-and-after photos of the handsome Orange Revolution candidate made Viktor Yanukovych, the Moscow-backed opposition, appear “ugly” by comparison—and guilty by association.


Viktor Yushchenko March 28, 2002, left, and Dec. 6, 2004, right.

(AP Photo/Viktor Pobedinsky/Efrem Lukatsky)


With sustained media coverage, that poison-induced power of association evoked the dark ghosts of Russia’s Stalinist past. News reports routinely referenced a 1978 incident when a ricin-poisoned pellet was fired from a pneumatic umbrella into the leg of Bulgarian dissident Georgi Markov on London’s Waterloo Bridge.[71] Markov died four days later. As news reports repeatedly referenced the Markov incident, the Moscow-backed candidate was discredited.

The poisoning of a popular presidential candidate also fueled the plausibility of a resurgence of a Cold War conflict of opposites – pro-democracy vs. pro-Moscow. In that media-stoked morality play, the disfigured Yushchenko was cast as the freedom-seeking hero victimized by Moscow’s Evil Empire, and featured a steady stream of references to Putin’s suspect past as a colonel in the Soviet-era KGB.

Specialists in exotic poisons know that dioxin is generally not deadly. Its defining property is its capacity to create disfiguring cysts on the upper torso. The evidence suggests that the poisoning worked its intended effect on the candidate, on the election and on politics in the region. After his election victory Yushchenko soon proved that he was both corrupt and incompetent. By September 2005 he had sacked his entire coalition government when its own members accused one another of corruption and cronyism. He acknowledged that ordinary Ukrainians had come to see the Orange Revolution as a means of transferring wealth from an old to a new elite.[72]

Ukraine has since endured a series of unstable power-sharing arrangements. With Yushchenko’s approval, Nathaniel Rothschild, in line to become the fifth Baron Rothschild, is now prospecting for oil in Ukraine.[73]

Mikhail Fridman, a Russian Ashkenazi oligarch born in Ukraine, founded Alfa Group in the 1990s as a commodities trading firm whose shadow economy profits enabled him to capitalize Alfa Bank, one of Russia’s largest, along with a conglomerate with interests in oil, telecommunications, electricity, chemicals, pharmaceuticals, cement, glass, construction and retail sales. His role in the 1995 loans-for-shares fraud enabled him to later merge TNK, an oil company he controlled, with British Petroleum to create TNK-BP, Russia’s third largest oil producer.[74] In 1996, Alfa Bank also reaped large profits on government treasury bills.

As one of the original Big Seven bankrollers of Yeltsin’s 1996 re-election campaign, Fridman joined an elite group who then “controlled half of Russia’s economy” according to former Security Council Deputy Secretary Boris Berezovsky.[75] Though Berezovsky exaggerated, it would be accurate to say that 20 oligarchs controlled half the Russian economy. Both Berezovsky and Fridman owned a stake in ORT television, a major media outlet that backed Yeltsin’s re-election. Forbes ranked Fridman 20th on its 2008 list of the world’s billionaires with a personal net worth of $20.8 billion.[76]

With a personal wealth of between $5 and $10 billion, Victor Pinchuk is Ukraine’s second richest oligarch. Married to the only daughter of Leonid Kuchma, Ukraine’s former president, Pinchuk describes George Soros and Bill Clinton as his friends as he became a donor to the foundations of both. Soros called him an “enlightened capitalist” as Pinchuk acquired a $160 million London estate and financed programs in Washington at the Brookings Institution.[77]

Guilt by Association Redux

John McCain’s conduct suggests he is naive about how unconventional warfare is waged by the people in between. The timing of the high profile poisoning in London of Alexander Litvinenko in November 2006 should have raised McCain’s suspicions as an ex officio member of the Senate Intelligence Committee. Alarms should have sounded when media reports immediately sought to link the murder of a former KGB colonel (Litvinenko) to former KGB colonel Vladimir Putin—with no plausible motive for Putin to order such a murder.

Rather than kill Litvinenko quickly and quietly, did the people in between stage that “theater of assassination” for a strategic purpose? Why then? Could it be because President Putin was then engaged with members of the Quartet (Russia. the U.S., the European Union and the U.N.) to end the 40-year Israeli occupation of Palestine as an essential step toward stability to the Middle East? From a game theory perspective, it would have been perfectly predictable that Litvinenko’s murder would create friction between two key players—Russia and the U.K.—and distract the leaders of both (aka entropy).

During the first week of December 2006, an analysis of this Putin-discrediting, power-of-association entropy strategy (titled “Khodorkovsky’s revenge”) was distributed widely, with a copy to the Russian embassy.

Who, if not the syndicate profiled in this account, had the means, motive and opportunity to murder Litvinenko in London? Two days after Khodorkovsky lieutenant Leonid Nevzlin arrived at Newark airport on Christmas Eve 2006, Russian Prosecutor General Yury Chaika issued a press release identifying Nevzlin as a murder suspect in the Litvinenko poisoning and seeking his extradition. Litvinenko met with Nevzlin in Israel just weeks before his death.[78]


Former KGB Colonel Alexander Litvinenko, photographed at his home in London May 10, 2002. (AP Photo/Alistair Fuller).

Litvinenko photographed in London hospital, November 20, 2006 (Getty Images/Natasja Weitsz).

By early January 2007, Time Warner had bought the rights to a film version of the Litvinenko murder that will be produced by Hollywood star Johnny Depp and in which he may play the lead role.[79] In mid-January 2007, Chaika protested the refusal of U.S. authorities to extradite Nevzlin, citing the principle of reciprocity between law enforcement bodies.

When Nevzlin traveled to the U.S. in July 2005, he criticized Putin in a Yukos-related Helsinki Commission briefing where he urged that Russia be expelled from the G-8.[80] Tom Lantos and John McCain championed Nevzlin’s proposal in the Congress. Why would a candidate for the American presidency advocate a proposal by a Russian fugitive complicit in international organized crime and reportedly active in a Russian version of Murder, Inc.?

Throughout the Litvinenko incident, London-based oligarch Boris Berezovsky continued to plead his innocence in the murder in London of a man who had worked for him. Litvinenko also provided testimony that helped Berezovsky persuade British authorities that the godfather of the Kremlin merited political asylum. Litvinenko assured Whitehall that the Kremlin (i.e., Putin) had ordered Berezovsky’s murder.[81] While Litvinenko was slowly dying, Berezovsky funded a public relations campaign to inject Putin-discrediting storylines into the global media marketplace.

Moscow wants to bring Berezovsky to trial for fraud and embezzlement. Berezovsky’s hatred for Putin remains palpable as evidenced by the funds he invested in a guilt-by-association public relations campaign that sought to link Putin to the Litvinenko murder. Media outlets used the murder as an opportunity for another flurry of stories claiming that Khodorkovsky, like Litvinenko, was the victim of an abusive state.[82] From Tel Aviv, Nevzlin funded an anti-Putin public relations campaign that ran parallel with Berzovsky’s campaign from London.[83]

Was this high-profile murder with an atomic-age poison (polonium-210 is deadly in microgram amounts) meant to reinforce another mental thread: the threat of Iran’s nuclear program? The choice of murder weapon is consistent with the power-of-association modus operandi chronicled throughout this account. Was the associative effect meant to reinforce the threat of nuclear terrorism?

Another indication of this global syndicate’s hand at work in Russia is Khodorkovsky’s enlisting of Henry Kissinger and Jakob Rothschild as Open Russia board members. Yukos also retained U.S. attorney Stuart Eizenstat to market its former CEO as the embodiment of post-Soviet democracy and free enterprise modernity. Using guilt-by-association marketing, the Yukos public relations campaign compared Khodorkovsky’s imprisonment with Russia’s Stalinist past and portrayed the conduct of mega-thief Khodorkovsky, to use McCain’s phrase, as the apex of “democracy and market capitalism.”

That associative “bleed-over” sought to discredit Putin while portraying Eizenstat’s client as the hapless victim of an oppressive state reverting to its Stalinist past. Like a toxic fog, hints of anti-Semitism hung ever present in the background, intimated but never clearly stated. Had that accusation been made, might an inquisitive public have realized that history’s greatest heist remains largely an Ashkenazi operation?

Wielding the power of association as a media-deployed weapon, the Yukos public relations campaign portrayed Putin’s KGB past as evidence of an oppressive police state intent on victimizing an innocent oil company executive. John McCain obligingly cast the Yukos chief as a “political prisoner” as though he were the innocent victim in a good versus evil morality play. While McCain rushed to the defense of Khodorkovsky and Berezovsky, Russian general Aleksandr Lebed offered an appraisal consistent with the known facts:

Berezovsky is the apotheosis of sleaziness on the state level; this representative of a small clique in power is not satisfied with stealing—he wants everybody to see that he is stealing with impunity.[84]

Unless John McCain enjoys the support of this transnational syndicate, why would he join Tom Lantos, Joe Lieberman, Boris Berezovsky and Leonid Nevzlin in an effort to discredit Russia’s leadership?

President McCain and the Godfather of the Kremlin

John McCain’s support for Boris Berezovsky demands an explanation. The range of criminality in which “the Godfather of the Kremlin” engaged is a testament both to his genius and his psychosis:

  • Berezovsky first mastered the ability to strip state-owned assets (oil, timber, aluminum), avoid taxes and hide that wealth offshore—the root cause of the destruction of the ruble.
  • At Avtovaz, the most mobster-ridden of any large Russian company, police identified no fewer than 65 contract murders involving Avtovaz managers and dealers in a firm where Berezovsky wielded substantial influence.[85]
  • His control fraud at Aeroflot offers a case study in how an oligarch could loot a company without owning it by directing 80% of the airlines’ global revenues to foreign accounts that he controlled.[86]
  • His grasp of labor racketeering was on display when he financed a miners’ strike and bragged about it as he profited from the conflict.
  • His corruption of Russian media was legendary, particularly in rigging Yeltsin’s re-election with the help of media oligarch Vladimir Gusinsky.
  • After he and Gusinsky raised Boris Yeltsin from 10% approval to a 1996 election victory, Yeltsin appointed him deputy secretary of the Security Council.
  • He then financed Chechen organized crime by arranging ransom payments for kidnappers while simultaneously discrediting (and endangering) the entire Chechen people.
  • When Chechen President Aslan Maskhadov announced that Berezovsky was financing organized crime, one month later, in December 1997, the severed heads of four kidnapped British telecom workers were found lined up on the side of a highway in Grozny.[87]

A master of the technique of waging war through the people in between, Berezovsky was notorious for appointing agents of the oligarchs to government staffs. Following his appointment to the Security Council, Izvestia revealed that Berezovsky was both Israeli and Russian. After repeated denials, he was forced to admit that he held an Israeli passport, declaring, “Any Jew in Russia has a double citizenship”—a comment that outraged Russian Jews loyal to Russia.

Berezovsky then complained that he was the victim of “a rising tide of anti-Semitism.” If not for that claim (and his stolen fortune), why would the British grant him asylum? Why would a candidate for the U.S. presidency support a gangster whose behavior turned democracy into a profanity for ordinary Russians? Berezovsky’s blatant criminality played a key role in discrediting both markets and democracy. Russians now speak of privatization as “grab-it-ization” (prikhvatizatsiya) and refer to democracy as “shitocracy” (dermokratizatsiya).[88]

Americans should be concerned when a presidential candidate lends his support to key figures in transnational organized crime. The Russian experience confirmed that this global syndicate is masterful at committing nationwide frauds by corrupting a nation’s lawful authority, including the office of the president—as with “asset” Boris Yeltsin, a notorious alcoholic.

With the pro-Israeli bias of mainstream media, the political environment—both in the U.S. and abroad—is ripe for frauds on an unprecedented scale. As in Russia, those frauds include a presidential election in which the public’s airwaves can be deployed to induce Americans to believe that a candidate would put America’s interests first—despite what the confirmed facts suggest.

Media and Nonlinear Criminality. In the course of a July 27, 2008 interview with CNN’s Wolf Blitzer, presidential candidate John McCain agreed to answer several call-in questions. Without identifying the caller, Blitzer asked, “If you were president, would you move the U.S. embassy from Tel Aviv to Jerusalem?” McCain immediately answered “yes.” Blitzer then clarified his answer by asking, “Like, as soon as you were inaugurated, right away, you would order the State Department to do that?” McCain responded, “I’ve been committed to that proposition for years.” The next morning Prime Minister Ehud Olmert announced it was unlikely Israel and the Palestinians would reach a peace accord by the end of 2008, considering the volatile issue of Jerusalem.[89]


  1. Michael Meacher, Independent, October 17, 1988.
  2. “It’s already clear that a new arms race is being unleashed across the world . . . It’s not our fault, we didn’t start it…. In effect, we are being forced to retaliate.” Vladimir Putin, February 8, 2008. Catherine Belton, “Russia forced into ‘new arms race,’” Financial Times, February 8, 2008.
  3. Grigory Yavlinsky, “Russia’s Phony Capitalism,” Foreign Affairs, May/June 1998. The author suggests that the actual amount may have exceeded $1 billion at a time when candidate campaign spending was limited to $2.9 million. The writer is a Russian economist, political figure, reformer and co-founder of Yabloko, a Russian political party. Yabloko representatives sought to impeach Boris Yeltsin.
  4. Catherine Belton, “Nevzlin Faces Murder Charges,” The Moscow Times, July 27, 2004. “Nevzlin is charged with ordering the killing of several business executives and officials from 1998 to 2004, and this trial is closely linked to that of Alexei Pichugin, the oil firm’s former security chief, who was jailed for life last August on charges of involvement in the same murders.” Catrina Steward and Matt Siegel, “Nevzlin Goes on Trial in Absentia for Murder,” The Moscow Times, March 20, 2008, p. 5.
  5. Contemporary reports, denied by Yukos spokesman Yury Kotler, claimed that Khodorkovsky had transferred control over Yukos shares to the UK-based Lord Jacob Rothschild. “Yukos share rights ‘transferred,’” BBC News, November 11, 2003 (online); Catherine Belton, “Kremlin Tempers Attack on Yukos,” The Moscow Times, November 3, 203.
  6. Elisabeth Bumiller, “McCain Urges New Arms Pact With Moscow,” New York Times, May 28, 2008, p. 1.
  7. “Menatep” is the acronym for the local chapter of a youth center in Moscow’s Frunze district called the Inter-Branch Center for Scientific and Technology Program. Menatep Group emerged from the commercial activities of this center, particularly its trade in computers. Registered in 1988, Menatep Group’s 1991 public offering was the first since the Bolshevik Revolution. Its growth surged after 1991 on the currency speculation triggered by hyperinflation (2,500% in 1992). By 1993 Menatep was the authorized bank for several city and regional governments.
  8. Reportedly many of those deals involved exports of state-owned oil, timber and aluminum for Boris Berezovsky. Reports suggest that Marc Rich, the international commodities trader, was an early and active trader in Russian commodities, particularly aluminum. The fact that Berezovsky adopted capital flight strategies pioneered by Rich suggests that Rich was a direct or indirect mentor to Berezovsky and other Russian traders and financiers, including Khodorkovsky. Paul Klebnikov, Godfather of the Kremlin (New York: Harcourt, Inc., 2000), pp. 61-65, 204.
  9. Of all the international financial institutions with access to Russia’s true financial condition, the IMF had the best information. Stanley Fischer served as first deputy managing director of the IMF from September 1994 through August 2001 (the senior IMF official in charge of operations and policy worldwide). In February 2002, he became vice chairman of Citigroup and president of Citigroup International charged with oversight of global risk management (i.e., financial risk), working with CEO Sanford Weill and executive committee chairman Robert Rubin, former treasury secretary in the Clinton Administration. A Menatep company paid just $9 million more than the reserve price of $150 million for 45% of Yukos. That initial stake was increased to 78% for a total purchase payment of $309 million.
  10. Alekperov consolidated three oil producers into Lukoil, an acronym taken from the names of three major oil fields. In 1995, after Prime Minister Victor Chernomyrdin agreed to transfer those state-owned oil fields to Lukoil, Alekperov emerged as president and Lukoil modeled itself after vertically integrated firms. Lukoil’s proven oil reserves exceeded 20 billion barrels in 2004, second only to Exxon-Mobil. Erin E. Arvedlund, “The Russian Contender for King of the Oil Patch,” New York Times, May 21, 2004. State-owned Gazprom has proven reserves of 116 billion barrels, exceeded only by Saudi Arabia with 260 billion barrels and Iran with 128 billion barrels. Lukoil acquired Getty Oil assets in 2000 and began converting its 1,300 gas stations to Lukoil outlets. In 2004, Lukoil acquired 800 stations from ConocoPhilips. Forbes valued Alekperov’s 2008 net worth at $13 billion, ranking him 56th among the world’s billionaires. Lukoil also owns a controlling interest in Imperial Bank, several television stations, and 19.9% of the Russia newspaper Isvestia, enabling Alekperov to mute criticism while also currying favor with the Kremlin. Lukoil leases refineries in the U.S. as it operates worldwide with ~600 affiliated firms and ~160 subsidiaries, including operations in Libya and Iraq according to Forbes. Lukoil was the first Russian firm to acquire a publicly traded U.S. corporation. According to oligarch Mikhail Fridman, the market capitalization of Lukoil grew 467% from 2003 to 2008, to $95 billion. Clifford Levy and Sophia Kishkovsky, Russian Strikes Back a BP’s Chairman, and Oil Dispute Flares Again, New York Times, June 17, 2008, p. C3.
  11. “The banks that collected these huge interest earnings – Onexim, Menatep, Alfa and Stolichny, among others – put almost nothing back into the Russian economy.” Paul Klebnikov, Godfather of the Kremlin (New York: Harcourt, Inc., 2000), pp. 210, 279-80.
  12. In an earlier scenario evidencing intermarriage into a politically powerful Russian family, Svetlana, daughter of Joseph Stalin by his second wife, married Mihail Kaganovich on July 5, 1950. Mihail was the son of Lazar Kaganovich, vice president of the Council of People’s Commissars and the only Ashkenazi member of the Politburo, Russia’s inner cabinet. Lazar’s sister, Rosa Kaganovich, became Stalin’s third wife after they met at the opening ceremony for the Moscow subway the construction of which was overseen by her father. Svetlana defected in March 1967 while traveling in India. Her mother’s death is variously attributed to suicide and poisoned tea. Known as the “Iron Commissar” and Stalin’s trusted trouble-shooter, Lazar Kaganovich became deputy premier of the Soviet Union. Thus, Stalin’s Ashkenazi brother-in-law became the second-ranking official in the Soviet hierarchy. Meanwhile, with Svetlana’s marriage to Lazar Kaganovich’s son, Stalin’s daughter became his own sister-in-law. During the 1920s, Kaganovich served as the senior Soviet official overseeing the starvation of eight to 15 million Ukrainian farmers. See L.W. Phelps-Owen, “Mme. Stalin Virtually Unknown,” The Washington Post, July 10, 1949, p. S9; Reuters, “Stalin’s Daughter Reportedly Wed,” New York Times, July 16, 1951, p. 2; James Reston, “Stalin’s Daughter Apparently Defects And Consults With U.S. Aides in India,” New York Times, March 10, 1967, p. 1; Reuters, “Red Ship Returns,” Washington Post, April 10, 1956, p. 4.
  13. Andrew E. Kramer, “Out of Siberia, A Russian Way to Wealth,” New York Times, August 20, 2006, p. BU1.
  14. Although the Russian government held a right to repurchase the shares, that option was not exercised. Vladimir Dubov, a member of the Duma’s budget committee and a 7% shareholder in Yukos, swayed a December 2002 vote against a tax law that would have allowed foreign oil firms to obtain set tax regimes, thereby reducing their risk of entry into the Russian marketplace. In the spring of 2004, Dubov led a fight to defeat a natural resource tax.
  15. Trained as a mathematician and an expert on decision theory, Berezovsky would be intimately familiar with the game theory mathematics that underlie this systemic criminality, including the ability to coordinate its “probabilistic” operations with minimal direct communication among key operatives.
  16. In October 2003, the 35-year old Ashkenazi oligarch Oleg Deripaska paid Roman Abramovich $2 billion for an additional 25% of Russian Aluminum (RusAl), raising Deripaska’s stake to 75% and giving him control over approximately one-eighth of worldwide aluminum production.
  17. Abramovich manages his assets offshore through Millhouse Capital, an investment fund. Abramovich and Deripaska created Russian Aluminum (RusAl) in 2000, an acquisition vehicle for state-owned properties. By 2002, annual revenues topped $4 billion. Abramovich sold his interests in RusAl and Aeroflot, the privatized national airline from which Berezovsky is accused of embezzling $600 million. With a modus operandi akin to the casino skim, firms acquired by Berezovsky reportedly would see their capitalization eroded as their cash flow was redirected to his next acquisition.
  18. Tai Adelaja, “Deripaska Doubles Wealth to $40Bln,” The Moscow Times, February 19, 2008, p. 7.
  19. Paul Klebnikov, Godfather of the Kremlin (New York: Harcourt Brace, 2000), p. 320.
  20. According to a Reuters report: “The Wall Street Journal has tied the entry ban to what it called concerns that Deripaska may have ties to organized crime in Russia, citing unnamed U.S. law enforcement officials.” Lobbying on his behalf has been coordinated by 1996 presidential candidate Bob Dole and his Alston & Bird law partners who were paid $260,000 in 2005 for work on “Department of state and visa policies and procedures” tied to Deripaska. Jim Wolf, “U.S. revoked Deripaska visa – State Dep’t official,” Reuters, May 11, 2007 (online). In May 2007, Canadian auto-parts manufacturer Magna International Inc. announced that a unit of Russia’s Basic Element (controlled by Deripaska) would invest $1.54 billion in Magna. That investment provided Deripaska with control of six of the 14 seats on the Magna board of directors and a means for the firms in his conglomerate to capitalize on growth opportunities in Russian and Chinese automotive markets. Reuters, “Magna says Russian Machines to invest in firm,” May 10, 2007.
  21. Jeffrey H. Birnbaum and John Solomon, “Aide Helped Controversial Russian Meet McCain,” Washington Post, January 25, 2008, p. A1.
  22. “Senator’s Supporters Are Invited to Lunch With a Lord,” Washington Post, March 15, 2008, p. A6.
  23. Landon Thomas, Jr., “The Man Who May Become the Richest Rothschild,” New York Times, March 9, 2007.
  24. Additional research will be required to determine the relationship, if any, between the interests of Rothschild and Deripaska in the Russian aluminum industry and John McCain’s recommendation that a $35 billion U.S. Air Force contract to replace refueling tankers be awarded not to a U.S. manufacturer but to the European Aeronautic Defense and Space Company (EADS) and its Airbus subsidiary. On appeal, the U.S. Government Acountability Office agreed with the Boeing Company that the Air Force unfairly evaluated the merits and overall costs of the Boeing bid. Leslie Wayne, “Audit Says Tanker Deal Is Flawed,” New York Times, June 19, 2008, p. C1.
  26. “Russian-Jewish billionaire to build U.K.’s priciest mansion,” Haaretz, April 29, 2008.
  27. “Tycoon Abramovich buys world’s most expensive house for $500M,” Haaretz, July 10, 2008.
  28. “Roman Abamovich governor of Chukotka again,” Pravda, November 21, 2005.
  29. Michael Schwirtz, “A Billonaire Govenor Resigns in Russia,” New York Times, July 4, 2008, p. A4.
  30. Marshall Goldman, The Piratization of Russia (New York: Routledge, 2003), pp. 128-134.
  31. Journalists described Rabbi Lazar as a “representative from an obscure sect of ultra-orthodox Jews.” Tom Gross and Guy Chazan, “Gusinsky arrest raises fears for Russia’s Jews,”, June 19, 2001. See full-page advertisement of April 29, 2008 in New York Times (p. A13) touting the teachings of “The Lubavitcher Rebbe Rabbi Menachem Schneerson.” The ad reads: “The Rebbe, scion of the royal House of David, makes it very clear that Judaism charges us—the most ordinary mortals—with the task of bringing Moshiach.” Moshiach is messiah from a Hebrew word meaning “the anointed one” envisioned as a descendant of King David. As 12th in Maimonides’ 13 principles of faith, the Moshiach will rebuild the Temple in Jerusalem, gather Jews from all over the world and bring them back to the Land of Israel. U.S. casino mogul Sheldon Adelson is also a Lubavitch supporter, giving large sums for the Hasidic Chabad-Lubavitchers to build a center in Las Vegas. Connie Bruck, “The Brass Ring,” The New Yorker, June 30, 2008, p. 43.
  32. In 1994, Yeltsin gave Luzhkov control over the federal government’s inventory of state-owned property, enabling Luzhkov to generate a separate source of revenue to fund projects that drew frequent charges of corruption, favoritism and use of his position for personal gain. In 1997 alone, Moscow reportedly took in $1 billion from privatization.
  33. The Moscow Times estimates her 2008 wealth at $7 billion. Tai Adelaja, “Deripaska Doubles Wealth to $40Bln,” The Moscow Times, February 19, 2008, p. 7.
  34. Kaganovich (aka “Iron Lazar”) and Vyacheslav Molotov are widely credited with orchestrating the widespread terror-famine in Ukraine (known in Ukraine as Holodomor) that starved to death an estimated six to seven million people from 1932 to 1933.
  35. Stephen Lee Myers, “A powerhouse remakes Russia’s capital,” International Herald Tribune, June 27, 2005.
  36. Jeanne Whalen, “Russia’s Health Care Is Crumbling,” The Wall Street Journal, February 13, 2004, p. A9.
  37. Quoted in Jaspar Gerard, “Gorbachev calls for Russian millionaires to repay money,” The Sunday Times (UK), June 5, 2005.
  38. Marshall Goldman, The Piratization of Russia (New York: Routledge, 2003), p. 177.
  39. Duncan Gardham, “Oil billionaire named in Litvinenko inquiry,” Telegraph (U.K.), December 28, 2006.
  40. Mark Mackinnon, “Fugitive vows to keep fighting for Russia,” The Globe and Mail (U.K.), April 29, 2005.
  41. “Nevzlin Faces Murder Charges,” The Moscow Times, July 27, 2004.
  42. Catrina Stewart and Matt Siegel, “Nevzlin Goes on Trial in Absentia for Murder,” The Moscow Times, March 20, 2008, p. 5.
  43. The Criminal State series will chronicle the close working relationship among those ideologically aligned around the Zionist cause. The late Tom Lantos’ wife, Annette, and their two daughters are converts to the Church of Jesus Christ of the Latter Day Saints (Mormon). In April 2001, Congressman Lantos was presented a doctorate of humane letters during commencement ceremonies at Brigham Young University, America’s primary learning center for Mormons (“the Lost Tribe of Israel”). In June 2008, Mrs. Lantos was presented the Presidential Medal of Freedom from President G.W. Bush on behalf of her husband. During that same ceremony, the Medal of Freedom was presented to Laurence H. Silberman, an federal appeals court judge who co-chaired a commission that investigated the intelligence community’s flawed prewar claims about Iraq’s weapons programs. William Branigin, “President Presents Medals to Honor the Contributions of Six,” Washington Post, June 20, 2008, p. A9.
  44. Reuters, “Russian court finds Jewish oligarch living in Israel guilty on four counts of murder,” Haaretz, August 1, 2008.
  45. “Yukos figure ‘guilty of murders,’” BBC News, August 1, 2008.
  46. The Charlie Rose Show, March 9, 2006 (available online).
  47. Rothstein was widely reputed to be a key participant in fixing the 1919 World Series, also known as the “Black Sox Scandal” when Rothstein agents paid members of the Chicago White Sox to lose. Known as the “Moses of the Jewish mob,” Rothstein’s other nicknames included Mr. Big, The Fixer, The Man Uptown, The Big Bankroll and The Brain.
  48. “Michael Steinhardt’s Voyage Around His Father,”, November 8, 2001. Since its founding, the DLC has been overseen by President Al From. The Nevzlin-Steinhardt meeting may be explained by the oft-repeated redeployment of stolen funds to leverage larceny into perceived legitimacy and geopolitical influence. In March 2001, New York University’s School of Education was renamed the Steinhardt School of Education after a $10 million donation from Michael and Judith Steinhardt (i.e., 2% of the funds realized from the treasury-note fraud). The Steinhardt School is near NYU’s Edgar Bronfman Center for Jewish Student Life. In February 2007 Steinhardt sold his interest in The New Republic as did Martin Peretz, its editor since 1974 and Al Gore Junior’s tutor and mentor while Gore was a student at Harvard. While working as a New Republic correspondent in Italy, CIA station files described Michael Ledeen as an agent of influence of a foreign government (Israel). Ledeen was then hired in 1981 by Paul Wolfowitz, director of policy planning at the State Department. In 1983, he was hired on the recommendation of Richard Perle as a Defense Department consultant on terrorism before becoming a consultant to the National Security Council and later a consultant to the Pentagon’s Office of Special Plans under Douglas Feith. The former New Republic correspondent now serves on the board of the Jewish Institute of National Security Affairs along with Richard Perle and Stephen Bryen.
  49. Michael Steinhardt, No Bull (New York: John Wiley, 2001), pp. 273-281.
  50. See the introduction for an explanation of the sayanim corps of undercover operatives and the need to maintain and expand a cadre of those who can be recruited to volunteer assistance when asked because they believe their assistance will advance the cause of the Zionist state.
  51. Ruth Schuster, “‘We want the non-committed Jews,’” Haaretz, May 28, 2008.
  52. Connie Bruck, “The Brass Ring,” The New Yorker, June 30, 2008, p. 43.
  53. William Black calls them “financial superpredators.” Control frauds “do not simply defeat controls; they suborn them and turn them into allies.” As Black points out: “[T]he scariest aspect of control frauds is that they can occur in waves, causing systemic damage.” What is described in this account is not stealing from a public agency; this syndicate steals from the public often with the public an unwitting accomplice. Here lies the role of consensus beliefs and the capacity of people to do immoral acts while believing they are behaving morally. Thus the recurring role of self-deceit. As Black explains, control frauds “are adept at finding the weak link in any institutional chain.” Because finance is institutional, the temptation, the opportunity and the payoff are substantial and the expertise is available, particularly among the people in between. “The S&L industry was not a major purchaser of junk bonds, but it provided Milken’s most important group of ‘captives.’ They were critical to the overstating of junk bond values….” The credit crisis triggered by the subprime mortgage market used a similar “trash for cash” approach in plundering value from the public, largely through defrauding financial markets where pension assets are dominant. Black cites the political and social results of the national scale control fraud in Russia: “Life expectancy has fallen dramatically, violence has increased, respect for Western institutions has plummeted, and the poverty and disease rates have surged. These social and political effects have made many Russians hostile to the United States, and the effects feed back into economic policies that can cause further damage.” William K. Black, The Best Way to Rob a Bank is to Own One, (Austin: University of Texas Press, 2005), pp. x-iv, 40, 248-49.
  54. Adam Nagourney, “Worries in G.O.P. about Disarray in McCain Camp,” New York Times, May 25, 2008, p. 1. With offices in New York, Moscow and 23 other locations, Traxys management team, headed by CEO Mark S. Kristoff, acquired a majority stake in Traxys in 2006 in a buyout sponsored by Pegasus and Kelso & Company. See If Sogem and Considar, the predecessor firms to Traxys, were involved with trading metals during the oligarchization of Russia, this buyout helped launder those proceeds.
  55. Michael Cooper, “Savior or Machiavelli, McCain Aide Carries On,” New York Times, October 23, 2007.
  56. Matthew Mosk, “Top McCain Adviser Has Found Success Mixing Money, Politics,” Washington Post, June 26, 2008, p. 1. The Post article describes how relationships become “lucrative commodities” citing instances where Davis, as campaign manager, hired a vendor of campaign services in which he was also an investor.
  57. Adam Nagourney, “McCain Orders Shake-Up of His Campaign,” New York Times, July 3, 2008.
  58. A Harvard University professor and ‘shock therapy’ advocate, Jeffrey Sachs downplays the key role he played in the deprivations forced on the Russian people. He has since transferred to Columbia University where in September 2006 George Soros pledged $50 million to a Sachs-led Millennium Promise to help eradicate extreme poverty in Africa. The recurring behavior patterns associated with Mr. Soros and his Open Society operations suggest this effort may be a means to survey natural resources in Africa for acquisition by Chinese firms reinvesting U.S. purchasing power.
  59. BBC News “Profile of Anatoly Chubais,” March 17, 2005 (available online).
  60. Ibid.
  61. Rather than include professionals skilled in law and finance to advise on the employee ownership component of the Russian privatization program, the Harvard advisory team retained Joseph Blasi, a sociologist at Rutgers University who was previously part of the Harvard Project on Kibbutz Studies.
  62. In July 2008, Thomas Mirow, newly appointed president of the European Bank for Reconstruction and Development (founded at the end of the Cold War to bring markets to former communist countries), said that he saw “encouraging signs” in Russia, in particular that Chubais could play an influential role in negotiating a new accord between Russia and the European Union. Katrin Bennhold and Alison Smale, “New Head of Development Bank Puts Focus on Russia,” New York Times, July 5, 2008, p. B2.
  63. In 1993, in the lead-up to the loans-for-shares fraud, Potanin’s bank (Oneximbank) became the paying agent for Finance Ministry bonds. In 1994, Oneximbank became the depository and paying agent for treasury obligations and in 1995 became the Russian Federation’s authorized bank for dealing with bankrupt enterprises, a key component in the loans for shares fraud.
  64. “How to Make a Billion Dollars,” Frontline, October 2003, Friedman’s 1962 book, Capitalism and Freedom, provided Russian reformers with guidelines for minimizing the influence of government. Friedman’s prescription provided the intellectual authority that privatization architects could cite for their belief (or the pretense of belief) that this massive fraud was a means to maximize personal and social freedom.
  65. In his previous job as secretary of state in the German Finance Ministry, Mr. Mirow traveled widely in Russia. Katrin Bennhold and Alison Smale, “New Head of Development Bank Puts Focus on Russia,” New York Times, July 5, 2008, p. B2.
  66. See David McClintick, “How Harvard Lost Russia,” Institutional Investor, January 2006.
  67. This Hungarian-born Ashkenazi multi-billionaire co-founded in 1973 the Quantum Fund, one of the first hedge funds. The fund reportedly generated a 3,365% return over the next 10 years. His speculation on the British pound earned him a reputation for “bankrupting” the Bank of England. As part of Europe’s exchange rate mechanism, the bank maintained an artificial exchange rate with the Deutschmark as the U.K. economy weakened (along with the pound sterling) while the German economy improved. In September 1992 Soros led other investors in exerting pressure on the pound by short-selling more than $10 billion of pounds sterling, igniting “Black Wednesday” (September 16, 1992) when the bank was forced to borrow £15 billion to defend a rapidly devaluing currency, reportedly earning Soros $1.1 billion.
  68. An assessment of the power-of-association political dynamics in Ukraine was provided to the Russian embassy in Washington during the widely heralded “Orange Revolution” of November 2004.
  69. McCain is the only sitting member of Congress ever to head one of the democracy groups. After taking over in January 1993, he shifted much the institute’s focus from Latin America to the former Soviet bloc. Under his leadership, the institute has grown to 400 employees working in 70 countries with a budget of about $78 million as he solicited funds from some 560 defense contractors, lobbying firms, oil companies and other donors, many with interests before Senate committes he was on. John Dowd, his personal attorney in the Keating Five scandal, served as the institute’s general counsel. Critics have long charged the institute with improper meddling in pursuit of a neconservative agenda. In 2002, the institute was criticized after George Folsom, its president at the time, praised a coup attempt against Venezuelan president Hugo Chavez. A former U.S. ambassador to Haiti has asserted that institute operatives undermined reconciliation efforts among Haitian political rivals, contributing to a coup in 2004. Mike McIntire, “McCain’s Lobbyist Laden Group,” New York Times, July 28, 2008, p. 1.
  70. Billy House, “‘Democracy builders drawing ire,’” Arizona Republic, July 16, 2006.
  71. Seldom did media reports include a reference to the more recent attempt by Mossad agents to poison Hamas leader Khaled Meshal in Jordan in 1998. When the attempted murder was discovered and two Mossad agents were apprehended by Jordanian authorities, Tel Aviv reluctantly agreed to provide an antidote. Since 1991, Meshal has lived in Damascus where he currently resides.
  72. Andrew Osborn, “Orange revolution grinds to a halt as Yushchenko sacks entire government,”, September 9, 2005.
  73. Landon Thomas, Jr., “The Man Who May Become the Richest Rothschild,” New York Times, March 9, 2007, p. C1. Adolph Hitler sought to conquer Russia knowing that its vast resources could sustain his quest for global dominance. Ukraine, the center of agricultural and manufacturing for the Soviet Union, also served as the center of much of its nuclear weaponry, including its nuclear-armed submarine fleet.
  74. In March 2008, Russian security officials reported the arrest of two brothers with links to British interests who were gathering classified data for foreign firms. Ilya Zaslavsky is a TNK-BP manager while his brother Alexander is head of the British Council’s Moscow Alumni Club. BBC News, March 20, 2008.
  75. “Beyond Transition,” an excerpt from the 1998 report of Donald N. Jensen, Associate Director of REF/RL, The World Bank Group. See
  76. Charitable giving by Russia’s Ashkenazi elite appears to remain in the broader Jewish community. For example, Vladimir Potanin donates to New York’s Guggenheim Museum while Mikhail Fridman donates to the Jewish Museum of New York. With Sibneft acquired by Gazprom, only two large independent oil companies remain: TNK-BP controlled by Fridman and Lukoil controlled by Vagit Alekperov.
  77. Landon Thomas Jr., “Can the New Rich Buy Respect? One Ukrainian Oligarch Is Trying,” New York Times, August 8, 2008, p. C1.
  78. Catrina Stewart and Matt Siegel, “Nevzlin Goes on Trial in Absentia for Murder,” The Moscow Times, March 20, 2008, p. 5.
  79. “Variety: Johnny Depp to make movie of spy poisoning,”, January 13, 2007.
  80. Congressman Tom Lantos also participated in the July 13, 2005 Helsinki Commission briefing titled “The Yukos Affair and Its Implications for Politics and Business in Russia.” The commission is also known as the U.S. Commission on Security and Cooperation in Europe. Its mandate is to ensure that the rule of law protects human rights and basic freedoms in countries under its jurisdiction. Nevzlin’s testimony showed how the rule of law has routinely been displaced by belief in the (corrupted) authority of law: “…it is my opinion that the rule of Russia law is the cornerstone of civil society because it serves to protect the rights and freedoms of all citizens…. The lives of many hundreds of thousands of people have been harmed forever as a result of the abuses of the Russian government, which has violated basic human rights and its own laws again and again.” Similar to Greenspan vouching for the financial soundness of Lincoln S&L in the early stages of that control fraud, we now know that systemic corruption of the authority of law was key to the control fraud inflicted on Russia. Similarly, corruption of the lawful authority of Israel’s sovereignty is all that stands between Leonid Nevzlin and his prosecution for murder under Russian law. Nevzlin’s full statement is posted online at a Khodorkovsky-related website: http/www.khodorkovsky.infor/docs/nevzlinbriefing2. See also “The U.S. to play the Yukos card again?,” Pravda, July 7, 2005.
  81. In April 2007 Moscow sought a reversal of his asylum status after Berezovsky called for the use of force to remove Putin from office. Terry Macalister, Ian Cobain and Simon Tisdall, “Diplomatic rift as Russia says: give us Berezovsky,”, April 19, 2007.
  82. For the past four years, Ashkenazi reporter Arkady Ostrovsky has been the Moscow correspondent for the London-based Financial Times where his portrayal of Khodorkovsky proved unfailingly sympathetic. Even as late as March 2007, Ostrovsky described (in an autobiographical sketch about his own childhood in Moscow) how Khodorkovsky “was arrested in 2003 and watched from a prison cell as his company was destroyed by the state.” Arkady Ostrovsky, “A difference in class,” Financial Times, March 3-4, 2007, p. 3.
  83. Catherine Belton, “Kremlin’s public enemy number two fights back,” Financial Times, February 25-25, 2007.
  84. Paul Klebnikov, Godfather of the Kremlin (New York: Harcourt, Inc., 2000).
  85. Ibid., p. 92.
  86. Ibid., p. 181.
  87. Ibid., pp. 257-268.
  88. Ibid., p. 320.