Tuesday, February 05, 2019

In Which We Try Identify Maximum Bob's Mystery Bank. Is It Vnesheconombank?

Beyond the question of whether Robert Mueller can make the case that Donald Trump was neck deep in the collusion between his campaign and the Kremlin, it is the biggest imponderable of the Russia scandal: Which foreign government-owned financial institution is at the heart of the special counsel's mystery case? 
Prosecutors working for Mueller have been engaged in a series of face offs with lawyers for the financial institution (which we'll call a "bank" for the sake of brevity) over the issue of sovereign immunity, but because the court record is sealed, we've only gotten intriguing and sometimes contradictory hints regarding the identity of the bank and its owner country.   
Deepening the mystery is that these prosecutors are being so secretive that security officials at the U.S. Courthouse in Washington took the extraordinary step of barring public access to an entire floor of the building in December during a hearing on the matter so that reporters who had been staked out in a hallway could not identify the lawyers entering or exiting the courtroom.   Beyond the intrigue, we can be certain that this is a big deal since the leakproof Mueller doesn't bother with anything that isn't a big deal unless it happens to be a smaller piece of a big deal. 
If you've stuck around thus far, put on your inside baseball cap and we'll plunge on. 
The unknown bank is wholly owned by a foreign country (identified in heavily-redacted legal papers as "Country A").  The bank and the country have been fighting a subpoena from a Washington-based grand jury issued last summer to turn over certain unspecified information as it hears testimony from prosecutors as they attempt to build a criminal case.  
Lower courts ruled that the bank must turn over the information and imposed a $50,000 fine for every day it failed to do so.  That fine was suspended, although possibly only temporarily, when Chief Justice John Roberts of the U.S. Supreme Court agreed to hear the bank's last-resort appeal after a penultimate appeal to the U.S. Court of Appeals was unanimously rejected.  In ruling against the bank, the appeals court said the request fell within an exception to the Foreign Sovereign Immunities Act that limits foreign governments from being sued in U.S. courts.  
FSIA more or less codifies the legal doctrine of sovereign (or crown) immunity by which a sovereign state cannot commit a legal wrong and is immune from criminal or civil prosecution, while the exception in this case as argued by the prosecutors is that the bank's commercial activity directly affected the U.S. and relates to the grand jury investigation. 
Upping the stakes, the country is arguing to the Supreme Court that a ruling forcing it to turn over the information will upset international diplomacy.   
Legal observers say it is likely that the high court will reject the appeal after it is fully briefed because the justices already have refused to put the lower-court rulings on hold.  In any event, the court will discuss the possibility of hearing questions related to what should be public in the case -- but not the subpoena challenge itself -- on February 15.   
There are a number of arguments regarding which country and bank are at the heart of the mystery.   
They range from Qatar's Investment Authority (because Qatari officials have said that arch-foe United Arab Emirates sought to illegally influence Trump senior adviser and son-in-law Jared Kushner, who allegedly attempted to extort money from Qatar for his family's white elephant office building at 666 Park Avenue) to Russia-based Alfa Bank (because of suspected but unproven mischief stemming from two of the bank's computer servers repeatedly looking up the address of a Trump server nearly every day during the 2016 campaign).   
The Qatar angle doesn't work for me because there is no evidence Mueller has been barking up that particular tree, while Alfa is not state-owned.  Which clears the way for my best guess -- Vnesheconombank or VEB, as it is familiarly known. 
VEB is a development bank -- specifically the State Corporation Bank for Development and Foreign Economic Affairs -- that is  wholly owned by the Russian government, is deeply intertwined with Russian intelligence and, by law, its chairman is the Russian prime minister. 
VEB makes several appearances in the Russia scandal and related tentacles:
 In 2010, VEB financed the financially troubled Trump International Hotel and Tower in Toronto.  Silent partners included a convicted American embezzler and a Russian-born Canadian investor with close ties to Vladimir Putin's regime.  
In 2013, Russian spy Evgeny Buryakov posed as a banker in VEB's Manhattan office and attempted to recruit Carter Page, who was to become a Trump campaign adviser, as a spy.   
On July 16, 2014, the Obama administration imposed economic sanctions on VEB after the Russian-initiated unrest in Ukraine that prohibited U.S. banks and citizens from doing business with the bank.  
On January 15, 2015, the U.S. charged Buryakov and two other Russian operatives with acting as unregistered agents as part of a spy ring aimed at seeking information on U.S. sanctions.    
On March 11, 2016, Buryakov pleaded guilty to having acted as a secret agent and was deported.  His lawyers were paid by VEB.     
On December 13, 2016 and despite the sanctions, Kushner met with VEB CEO Sergei Gorkov, a former spy and close Putin associate, in Manhattan.  The meeting was at the request of then-Russian ambassador Sergey Kislyak, a key scandal player.  
While the subject of that meeting is assumed to be the lifting of the sanctions that were crippling VEB by the incoming Trump administration, a second purpose is possible.  Kushner may have been seeking money to keep afloat 666 Park Avenue from the Russian Direct Investment Fund (RDIF), a cutout for VEB that had severed ties with the mother bank to avoid sanctions.  
The CEO of RDIF is Kirill Dmitriev, with whom Erik Prince, working as an emissary for Trump, met secretly in the Seychelles islands on January 11, 2017 in an apparent effort to establish a secret backchannel between Moscow and the president-elect.   
Kushner had attempted to establish a similar backchannel when he met with Kislyak on December 1, 2016. 
Experienced Russia scandal hands well understand that while a sequence of events like these appear to make a case -- in this case that VEB may well be the mystery bank being pursued by Mueller -- that is not necessarily so.  Events that seem to add up to something don't necessarily do that.  Mueller knows a great deal more than we do, but for the time being Vnesheconombank appears to be a good bet.

Click HERE for a comprehensive timeline of the Russia scandal
and related developments.


Bscharlott said...

Nice sleuthing, Shaun. Tf it is VEB that Maximum Bob is after, I assume the bank will simply ignore the subpoena should he prevail. Putin and his mob routinely exploit the U.S. legal system; they certainly will feel free to say "fuck off" if issued a court order.

HCC said...

Alternately, it might be Bank of Cyprus, and we finally could get at Wilbur Ross and who knows else.