Dispatch January 15, 2019

Manafort and Deripaska: A Global Collusion Enterprise

Oleg Deripaska, a Russian billionaire aluminum magnate and Kremlin insider, has a business relationship with Paul Manafort that dates back more than a decade.

Deripaska is wealthy, determined, and very close to Putin.

U.S. officials have had their eye on Deripaska for years.

  • After Deripaska emerged as the heir apparent to the Russian aluminum industry, allegations of his connections to Russian organized crime led to the U.S. State Department to refuse to issue him a business visa.
  • The FBI interviewed Deripaska numerous times, and reports suggest that in 2009 he traveled to the US twice under “secret arrangements made by the Federal Bureau of Investigation.” Although these trips may have been related to his suspected links to Russian organized crime (which he has denied), details of the FBI’s interest in Deripaska are scarce.
  • Deripaska and his companies have appeared on sanctions lists prepared by the U.S. Treasury Department under the Countering America’s Adversaries Through Sanctions Act. However, there have also been repeated reports that the Treasury Department was offering Deripaska reprieve from the sanctions, prompting congressional scrutiny.
  • According to the U.S. Treasury Department, Deripaska has been investigated for money laundering, and has been accused of threatening the lives of business rivals, illegally wiretapping a government official, bribery, extortion and racketeering. He has even faced allegations of ordering the murder of a businessman.

Deripaska helped fund Manafort’s work on behalf of Russian interests for years.

Deripaska has been a key conduit of Russian money into Manafort’s work on behalf of Kremlin-supported candidates in several countries going back at least a decade.

  • United States: Manafort even secured a $10-million annual contract from Deripaska to push a plan to “greatly benefit the Putin government” in the United States in 2006—ten years before Donald Trump ran for president and Manafort became his campaign chairman.
    • In 2008, one of Manafort’s business partners arranged for Deripaska to meet John McCain when he was running for president. Deripaska emailed Manafort directly to thank him for helping to arrange this meeting.
  • Kyrgyzstan: Beginning in 2005, Deripaska reportedly paid for Manafort’s work pushing the Kremlin’s goals, including closing a U.S. military base in Manas.
  • Montenegro: In 2006, they reportedly worked together to help Montenegro break away from Serbia, in the hopes of gaining an ally economically dependent on Russia.
  • Cyprus: A 2009 memo from Manafort to Deripaska details efforts to expand the Kremlin’s favored party’s profile in Cyprus, and specifically asks for access to Deripaska’s “network.”

Deripaska’s business ties with Manafort run deep.

Manafort and Deripaska also had a business relationship that appears to have left Manafort deep in debt to Deripaska due to failed investments in Eastern Europe.

  • The work completed by Manafort under this contract is unclear, although it raises the question of whether Manafort should have registered as a foreign agent with the U.S. Justice Department during this time.
  • Manafort and Deripaska continued their direct business relationship by establishing Pericles Emerging Market Partners, a private-equity firm in the Cayman Islands, in 2007.
  • Deripaska backed this firm, which was established to invest in telecommunications assets in Eastern Europe. The firm attempted to buy assets in the Yanukovych-linked Ukrainian company Black Sea Cable.
  • The Black Sea Cable deal failed, and led to litigation filed in the Cayman Islands claiming that Manafort owes Deripaska $19 million. Deripaska accused Manafort of being dishonest about how the funds intended for the deal were actually used, and of not returning them. Although Manafort indicated in August 2016 that the matter was closed, the most recent Washington Post article states, “there are no signs in court documents that the case has been closed.” Manafort has not made any public statements regarding the outcome of this case, and in March 2017 his attorney did not respond to requests for an update on this case.
  • According to NBC News, as of October 2017, Manafort and Deripaska’s business relationship, including both their business together and loans exchanged between companies owned by the two men, totaled at least $60 million over more than a decade. Court filings in Special Counsel Robert Mueller’s investigation subsequently revealed that Manafort had received an additional $10 million in loans from Deripaska.

Manafort entered the 2016 election reportedly looking to “get whole” with Deripaska.

Leaked emails between Manafort and Konstantin Kilimnik, a former employee of Manafort with ties to Russian intelligence, suggest that Manafort believed he could use his position on Trump’s campaign to repay his debts to Deripaska.

  • Emails leaked to The Atlantic and The Washington Post in October 2017 strongly suggested that Manafort and Kilimnik discussed using Manafort’s position to repay his debts to Deripaska. The emails repeatedly refer to “OVD” (Deripaska’s initials” and “black caviar,” believed to be code for Black Sea Cable Company.
  • According to the emails, in April 2016, shortly after Manafort officially joined the Trump campaign, Manafort emailed Kilimnik asking if OVD had seen the coverage of Manafort’s work for Trump, and asked, “How do we use to get whole[?]”
  • Manafort subsequently suggested, “If [Deripaska] needs private briefings we can accommodate.” Whether such briefings ever occurred remains unknown.
  • Through his lawyer, Manafort has denied that he offered briefings as an attempt to repay his debts to Deripaska, even going so far as to claim that Deripaska owes Manafort money rather than the other way around. Deripaska’s spokesperson called the assertion “absurd,” and referred to the litigation in which Deripaska sought $19 million over the failed Black Sea Cable deal. Additionally, Time reported in December 2018 that Victor Boyarkin, a former arms dealer with ongoing ties to Russian intelligence, claimed that he had been in touch with Manafort on Deripaska’s behalf, claiming Manafort “owed us a lot of money” and “was offering ways to pay it back.”