EXCLUSIVE: ‘8th Man’ in mystery purchase of U.S. Mining Co.


It’s been widely reported that Irakly “Ike” Kaveladze, the “8th man” who attended the June 2016 meeting where Donald Trump Jr. was promised dirt on Hillary Clinton, had years earlier laundered $800 million through Citibank.

What’s remained unknown until now is that Citibank ALSO loaned the exact same amount, $800 million, to Kaveladze’s Russian oligarch boss at the time.

 

An itinerary that refuses to come into the light

At the now-famous confab in Trump Towers, Kaveladze was representing Russian billionaire Aras Agalarov, who was paid $20 million to bring Trump’s Miss Universe Pageant to his family’s Moscow concert hall in 2013.

Reports stated Kaveladze began working for Agalarov in the early 1990s. Federal investigators were said to believe he began laundering money shortly thereafter.

However Ike Kaveladze’s U.S. itinerary is far more mysterious than what’s been so far reported. Here’s what’s already known:

In 2000, Kaveladze incorporated 2000 shell companies in Delaware, then ran their deposits through either Citibank, which investigators concluded had laundered $800 million for unknown Eastern European and Russian “clients,” or Commercial Bank of San Francisco, which laundered an additional $600 million.

Kaveladze’s actions— caught laundering hundreds of million of dollars for the Russian Mob— became the subject of a Congressional investigation into how Russians were able to so easily launder billions through U.S. banks.

 

Overnight a bank disappears

According to a report from the Government Accountability Office, Kaveladze was a central figure in a near decade-long effort to launder $1.4 billion of Russian and Eastern European money through U.S. banks.

A Government Accountability Office report—requested by then-Sen. Carl Levin (D-Mich.)— concluded it was “relatively easy” for foreigners to use shell companies to open U.S. bank accounts and route hidden money through the American financial system.

When U.S. authorities discovered the scam, Commercial Bank immediately disappeared from existence.

Citibank, being somewhat larger (assets of S1.7 trillion), did not have that option. The bank was forced to scrape their feet in the dust, admitting a few “lapses” in deliberately vague press releases.

Sen. Levin, who retired in 2014, issued a statement on Tuesday calling Kaveladze a “poster child” for the practice of using shell companies to launder dirty money.

Disquieting news: Neither Kaveladze nor either of the two U.S. bank were ever charged with any crime. “Lapses” allowing the laundering of $800 million of unknown money  apparently don’t even rise to the level of nuisance crime.

 

Citibank “dances with bears”

Kaveladze surfaced again several years later. The Mining Journal, a trade publication, reported on April 11, 2003:

“Metals producer MMC Norilsk Nickel of Russia has named five nominees to the board of Stillwater Mining Co. in respect of its proposed acquisition of a 51% interest in the US-based company.”

Kaveladze was working in the U.S. for another Russian oligarch, Vladimir Potanin, when he engaged two U.S. lobbyists, one a prominent Republican, the other a former Democratic Senator, to smooth the way for federal approval of the purchase of U.S. mining company Stillwater by Potanin’s Norilsk Mining, Russia’s largest, producing nickel, palladium, platinum, copper and cobalt.

One month before that purchase, in February 2003, Citibank loaned Norilsk Nickel $50 million, tightly secured by the export sale of nickel, and already the object of due diligence over many months by no less than ten other banks.

Eyebrows were raised a year later Citibank loaned Potanin’s Norilsk $800 million. Several years earlier, while head of Russian bank Uneximbank, Potanin had “defaulted” on billions of dollars of obligations, which is not a usual resume item for someone finding himself at the center of one of the largest Russian offshore transactions to date, and the largest-ever Russian borrowing from Citibank at that time.

 

Collateral is out. Kompromat is in

“Citibank’s credit committee and legal department wouldn’t readily approve lending $800 million to Potanin without trusting him,” said Moscow business journalist John Helmer, whose “Dances with Bears” website covers the Russian mining industry.

“Citibank had never loaned Norilsk more than $50 million before. That loan, in February 2003, was tightly secured by the export sale of nickel. Also, it had been the object of a due diligence effort over many months by no less than ten other banks.”

Citibank executives privately admitted to Helmer that they secured the $800 million loan from Citibank only with Norilsk’s guarantee to repay out of metal sales.

“Potanin’s intentions were plain,” Helmer reported. “He was trying to move the mining assets he secured by rigged privatization in the 1990’s beyond the reach of the Russian government.”

 

“The Perestroika 5K”

Ike Kaveladze first surfaced in American life during the summer of 1989, when he ran in a race in Gettysburg, Pennsylvania named “The Perestroika 5k” in his honor. Judith Ann Flinchbaugh from Gettysburg’s second husband was the director of the Gettysburg 5k race program.

When she died four years later, she named her two sons as her survivors, as well as Irakly Kaveladze, listed as her adopted son.

A few years later, on July 6, 1993, Kaveladze made news again. This time it was because it was hot in New York City. “As the city plunges into another heat wave this week, New Yorkers are seeking refuge from the sauna-like weather wherever they can find it,” reported Newsday.

“Nearby, in Central Park yesterday, some park-goers found shaded spots, under trees and on the grass. Others escaped the heat on the deck of the Boathouse Café, sipping a cool drink.

“But yesterday’s heat didn’t seem to deter the cyclists, joggers and roller-bladers roller-blading in Central Park. “For me, it’s a better workout,” said a breathless Ike Kaveladze, 28, who was roller-blading past the Great Lawn. “The hotter the day, the more weight I lose.”

Early on Kaveladze was involved with classic nested Russian dolls, called Matryoshkas, that reflect something of the nature of the Trump-Russia scandal itself. Billionaire Aras Agalarov set up a company to manufacture the dolls in Moscow and export them to the U.S.

Today it seems an odd coincidence—or something worse—that Citibank in 2004 loaned Ike Kaveladze’s Russian oligarch boss the exact same amount that Kaveladze had years earlier laundered through the bank.

Kaveladze has been under a harsh public spotlight before, but never one this incandescent. Is there something in Ike Kaveladze’s background that made Citibank’s $800 million loan in 2004 less risky?

It’s time to take a closer look at the two American political operatives who worked with the money laundering team to win quick federal approval of the Russian purchase of Stillwater Mining, a strategic U.S. mining company.

NEXT: MEET THE BOYS BEHIND THE BORSCHT BOYS

Daniel Hopsicker

Daniel Hopsicker is an investigative journalist and the author of two books on transnational crime, Welcome to Terrorland and Barry & the Boys.

5 Responses

  1. Steve says:

    President Trump is no different from the parade of puppet-presidents who are nothing more than marionettes jumping at the command of the satanic money loving, money changers who think they own this world as agents of their false god, Lucifer.

    The inexorable end of the road is nigh. Just as all Ponzi schemes must come to an end, so shall the crimes perpetrated by Rothschild and Vatican controlled banks also end. All along they thought they had “won”. They now control all the worthless Monopoly Money masquerading as currency. The average American has $400 in the bank and can afford neither a house nor even a new car. The game is soon over, the We the suckers are waking up to the fact that the American Dream is nothing more than slavery without chains a prison without barbed wire we willingly return to day after day to work for the slave masters. It has been rigged from the beginning but it’s becoming impossible to ignore now that all the money is in the hands of the money changers.

    As the hustled We The Peeps (WTP) wake up to that fact, WTP shall knock the game board off the table with furious anger and righteous rage as did Jesus knock over the tables of the money changers at the temple. Just as the money changers were beaten by Jesus, so shall WTP make the bankers suffer their inescapable punishment. The criminals shall know the wrath of God at our hands. Death will be preferable to the punishment they shall endure but death shall not come so easily. The tables, so to speak, are turning and the money changers are seeking safe places in which to retreat with their ill-gotten gains but our righteous God sees all and they shall know his name is Yahweh when he unleashes his anger upon them.

    And so it has been said. The meek shall inherit the earth but not before WTP kick the ever loving shit out of those who cannot hide from the true all seeing eyes of God.

  2. 2pop says:

    This planet is run like a whore house casino it’s one big crime scene and when the gig is up like all gangsters they will burn it down and collect the insurance $.

  3. Good to see Daniel expanding his field of vision to the other side of the Atlantic.. Even to the Caspian…. Lots of intrigues theez days to warm the cockles some of corruption in high places snoopers.. Let it be.. let it be.. Following the damn money in every queer deal, snatch, pitch & $nuff… Always checking in here to watch the game. Wish Daniel would tern the spotlight on the hateful Hillary witch… Certainty the “Way came, we saw, he died” dyke is just as deserving of an inquiring peek or two… Like, the $5Billion project in Ukraine… Or, Where is Gadaffi’s gold???

    Moreover Gadaffi’s rags to riches story brought the whole country along. Whereas that H woman seems to leave heaps of dead bodies behind her onteaurage of Neos & hawks… Maybe Trump will snatch a few wads of cash, but she is the big time, playing, ironically, Russian Roulette with the toughest power in the thermonuclear hood with MIRVED ICBMs and seemingly radar disabling computer jamming techo taco football pies.. Its quite a matchup….

  4. Good to see Daniel expanding his field of vision to the other side of the Atlantic.. Even to the Caspian…. Lots of intrigues theez days to warm the cockles some of corruption in high places snoopers.. Let it be.. let it be.. Following the damn money in every queer deal, snatch, putch & $nuff… Always checking in here to watch the game. Wish Daniel would tern the spotlight on the hateful Hillary witch… Certainty the “Way came, we saw, he died” dyke is just as deserving of an inquiring peek or two… Like, the $5Billion project in Ukraine… Or, Where is Gadaffi’s gold???

    Moreover Gadaffi’s rags to riches story brought the whole country along. Whereas that H woman seems to leave heaps of dead bodies behind her onteaurage of Neos & hawks… Maybe Trump will snatch a few wads of cash, but she is the big time, playing, ironically, Russian Roulette with the toughest power in the thermonuclear hood with MIRVED ICBMs and seemingly radar disabling computer jamming techo taco football pies.. Its quite a matchup….

  5. Please delete 1st comment, spelling error (pitch). Can’t see how to edit… Sorry & thanks….. For all the incisive reportage, shinning your light in those dark corners & all the great laughs Alon the way…