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Key members of Trump team have close ties to Russia

© Savo Prelevic, AFP | A billboard in Danilovgrad, Montenegro, shows the US and Russian leaders.

Text by Khatya CHHOR

Latest update : 2017-07-07

As US President Donald Trump faces fresh calls for investigations into the extent of his administration's dealings with Moscow, Russia ties have already become commonplace at the highest levels of government in his choice of top advisers.

Two days after Trump emerged victorious in the November 8 presidential election, Russia's Deputy Foreign Minister Sergei Ryabkov was quoted by Interfax as saying that Russian officials had been in regular contact with members of the Trump team: “We continue to do this and have been doing this work during the election campaign.”

A Trump spokeswoman later denied the allegations.

But a New York Times article on Wednesday appeared to lend new credence to the claims. The Times cited four current and former US officials who confirmed that communications between Trump associates and senior Russian intelligence, as well as members of the Russian government, had been intercepted in the last year of the presidential campaign. The officials spoke on condition of anonymity because the ongoing investigation is classified.

In what has quickly become typical Trump fashion, the US president derided the new allegations in a tweet attacking the media.

National security adviser resigns

Trump’s national security adviser, Michael T. Flynn, was the first domino to fall over suspicions that the administration had inappropriate contact with the Kremlin on Trump's behalf. But he may not be the last.

Flynn resigned late on Monday over reports that he spoke to Russian Ambassador Sergey Kislyak about the sanctions imposed by former president Barack Obama in late December over Russia’s alleged hacking ahead of the US election.

The communications prompted speculation that Flynn was attempting to undermine the US measures by reassuring the Kremlin that they could be mitigated or even reversed once Trump was in office. “Kislyak was left with the impression that the sanctions would be revisited at a later time,” a former official told the Washington Post.

If Flynn did discuss sanctions with the ambassador, his actions could be deemed in violation of the Logan Act, which bars private individuals from attempting to influence the actions of a foreign government in any dispute with the United States “or to defeat the measures of the United States”.

Kislyak confirmed to the Post that he had communicated with Flynn by text, by phone and in person, but did not specify whether they talked about the sanctions. Flynn originally denied that the measures were discussed but later backtracked, saying through a spokesman that he “couldn’t be certain that the topic never came up”. A telephone call Flynn had with Kislyak on December 29 garnered particular scrutiny, as it came on the same day that Obama announced the sanctions and expelled 35 Russian diplomats from the United States.

In a surprising revelation, the White House acknowledged on Tuesday that Trump was aware Flynn had discussed US sanctions in his calls with Kislyak. Press secretary Sean Spicer told reporters that White House counsel Don McGahn informed Trump on January 26 that the Justice Department believed Flynn had discussed the measures with the Russian ambassador.

Then acting attorney general Sally Yates warned that by having misled senior officials – including Vice President Mike Pence – about the nature of his communications, Flynn had opened himself up to possible Russian blackmail.

Obama’s director of national intelligence James R. Clapper Jr. and then CIA director John Brennan shared these concerns, the Washington Post reported. “Flynn had put himself in a compromising position,” a US official told the paper. Nevertheless, until his resignation on Monday, Flynn continued to sit in on confidential White House security briefings.

Flynn’s ties to Russia go back several years. He has said he first met Kislyak when he traveled to Moscow in 2013 while still director of the Defense Intelligence Agency (he was asked to resign the following year amid charges of mismanagement). Flynn also appeared several times as a guest on state-run Russian news channel RT and in 2015 he was paid to deliver a speech at a gala in Moscow marking the 10th anniversary of RT’s English-language broadcasts, when he was seated next to Russian President Vladimir Putin and at the same table as Green Party candidate Jill Stein.

Rex Tillerson, secretary of state

Trump’s new secretary of state, former Exxon CEO Rex Tillerson, has deep and long-standing financial ties to Russia to the tune of hundreds of millions of dollars. In 1998 he was listed as a director of Exxon’s Russian subsidiary, Exxon Neftegas, which was registered in the Bahamas, The Guardian and Süddeutsche Zeitung reported. He gave up the directorship when he became Exxon’s CEO in 2006. He has said that he first met Putin in 1999.

Exxon signed a $3.2 billion agreement with Russian state-owned oil giant Rosneft to develop Russian oil reserves in 2011; the agreement also gave Rosneft subsidiaries stakes in US and Canadian oil projects. Putin was personally present at the signing of the deal.

But the real prize came a year later, when Exxon signed an agreement with Rosneft that would see more than $500 billion jointly invested in developing Russia’s Arctic and Black Sea reserves. The April 2012 deal was the largest ever concluded by a Russian oil firm with a foreign petrol company.

"Experts say that this project, in terms of its ambitions, exceeds sending man into outer space or flying to the moon," said Rosneft chairman Igor Sechin, who was deputy prime minister when the deal was signed and is a close ally of Putin. Like Putin, Sechin is a former KGB official.

In 2013, Putin awarded Tillerson Russia’s Order of Friendship, one of the highest honours the country can bestow on foreign citizens.

But the good times came to an abrupt end in 2014, when the Arctic deal was suspended indefinitely due to the new US and EU sanctions levied against Russia over its actions in Ukraine.

Exxon said it may have lost up to $1 billion as a result of the sanctions, CNN reported. But despite the US measures, Moscow still looked favourably on Exxon. Russia has "done things to help us hang on to the rights we have", Tillerson said in March last year.

The Treasury Department also sanctioned Sechin personally, by freezing his assets and banning him from entering the United States or conducting business with US citizens.

According to 2016 company filings, Tillerson still owns Exxon stock worth $218 million (plus a pension plan worth almost $70 million), the value of which will skyrocket if Russian sanctions are lifted. He has vowed to sever ties with Exxon and transfer the value of his deferred shares into an independently managed trust to avoid conflicts of interest.

But Tillerson’s involvement in long-term Russian projects has prompted critics to argue that, as America’s top diplomat, it would be difficult for him to separate his own financial interest in lifting Russian sanctions from whatever is deemed to be in the national interest.

His nomination as secretary of state is “unacceptable”, said Tyson Slocum, director of the energy programme at the DC-based non-profit Public Citizen. Tillerson “would blur the line between diplomacy, national interests and corporate interests”, Slocum said in a December statement, adding: “Where would Tillerson’s advocacy for Exxon’s bottom line end and America’s needs begin?”

Steve Coll, author of the 2012 book “Private Empire: ExxonMobil and American Power”, called Tillerson’s nomination to head the State Department “astonishing”. His tenure “will certainly confirm the assumption of many people around the world that American power is best understood as a raw, neocolonial exercise in securing resources”, Coll wrote in the New Yorker.

Tillerson defied the Obama State Department in 2011 to negotiate an independent oil deal with the Kurdish government in northern Iraq, drawing the ire of both Baghdad and Washington. The State Department had asked Exxon to wait on the deal, but Tillerson spoke to US officials only after the agreement was concluded.

“I had to do what was best for my shareholders,” Coll cited him as saying.

“In nominating Tillerson, Trump is handing the State Department to a man who has worked his whole life running a parallel quasi-state, for the benefit of shareholders, fashioning relationships with foreign leaders that may or may not conform to the interests of the United States government,” Coll wrote.

Wilbur Ross, commerce secretary nominee

Wilbur Ross, Trump's pick for commerce secretary, has been in a long-standing business partnership with Viktor Vekselberg, a Russian billionaire and Putin ally. The men worked together on refinancing the Bank of Cyprus, once a favourite offshore destination for some $30 billion in Russian wealth. The bank collapsed in 2013, and during its restructuring a large portion of its assets were converted into shares, ostensibly giving Russian nationals majority ownership of the bank. In 2014, Ross led a €1 billion takeover of the bank that offered Russian shareholders a buyout. In the process, Vekselberg’s Renova Group became the bank's largest foreign stakeholder.

Ross proposed a new 16-member board of directors in October that year that included six Russian businessmen as well as several former Bank of Cyprus executives. Ross was named a vice chairman as was Vladimir Strzhalkovskiy, who previously sat on the bank’s board and who reportedly served with Putin in the KGB in the 1980s.

Jared Kushner, senior adviser

Trump has named his son-in-law, Jared Kushner, as his senior adviser despite critics’ charges of nepotism. An orthodox Jew who is married to Trump’s daughter Ivanka, Kushner has also conducted business with Russian interests as CEO of his family's real estate empire.

In May 2015, Kushner’s company paid $295 million for a majority share in the former New York Times Building in a deal with Lev Leviev, an Uzbek-Israeli diamond tycoon who serves as chairman of one of Russia’s largest real estate firms and is a self-professed “true friend” of Vladimir Putin.

Russian billionaire Yuri Milner invested in Kushner Companies (along with Chinese billionaire and Alibaba founder Jack Ma) when the firm founded Cadre, a real estate investment platform.

Kushner hired the law firm of WilmerHale to help him with financial disclosures ahead of taking up his official White House role. WilmerHale partner Jamie Gorelick said Kushner was taking steps to remove himself from his family’s business dealings.

“Mr. Kushner is committed to complying with federal ethics laws, and we have been consulting with the Office of Government Ethics regarding the steps he would take,” Gorelick said in a statement.

He will both resign as chief executive of the Kushner Companies and divest himself of “substantial assets”, she said.

A dark cloud

Some regional analysts say it is unsurprising that many in Trump’s entourage have extensive business dealings in Russia.

“Russia has been an emerging market in the last couple of decades with tremendous opportunities for those who dared to test the unknown,” said Alena Ledeneva, a professor of Politics and Society at University College London and an associate fellow in the Russia and Eurasia Programme of Chatham House. “Trump's connections are in this field, so it is not surprising to me that we hear more of the Russian theme.”

Ledeneva said this should not necessarily be viewed negatively, “as these people actually have an experience of Russia rather than simply a policy position”.

She said Trump and other high-fliers like him are likely to benefit from his administration's policies. “There is no doubt in my mind that these people will be working in the interests of US business elites,” Ledeneva said.

The House and Senate intelligence committees are currently investigating Russia's role in influencing the November election. But in light of Flynn's resignation, both parties have issued fresh calls for independent investigations into Team Trump's Russia ties.

“There was already a cloud hanging over the administration when it comes to Russia, and this darkens the cloud,” Eliot Cohen, an adviser to the George W. Bush administration, told the Washington Post. “This is serious.”

Missouri Senator Roy Blunt, a Republican who sits on the Senate Intelligence Committee, told a radio station in his home state on Tuesday that the committee must investigate any suspicious Russia connections “exhaustively, so that at the end of this process nobody wonders whether there was a stone left unturned".

Date created : 2017-02-15


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