GOP presidential nominee Donald J. Trump sent shudders through US foreign policy circles and the international community this week, when he suggested that, as president, he might not fulfill America’s promises to defend NATO members against a Russian attack. That departure from historical American policies, and Republican wisdom, came days after the Trump campaign reportedly softened the GOP platform’s hardline stance against pro-Russian rebels fighting to control Ukraine.
Those moves were less surprising to critics of Trump’s campaign manager, Paul Manafort, who for more than a decade has cultivated business ties to pro-Russian politicians and industrialists in Ukraine.
Now, Fusion has learned that the names of several of Manafort’s connections appear in shell company records from the notorious Panama Papers and the Offshore Leaks, troves of information on offshore companies unearthed in recent years by the International Consortium of Investigative Journalists.
From Washington to Kiev
After several fairly conventional decades in conservative American politics, Manafort won headlines in 2007 for his paid work rebranding former Ukraine president Viktor Yanukovych and his “Party of Regions” as mild-mannered reformers. That was no small feat for Yanukovych, a Ukrainian politician who had been described by the New York Times‘s Kiev reporter as “a divisive figure reviled by some here as a shady reactionary and Kremlin pawn,” and who was driven from power in 2005 amid allegations he’d tried to rig his re-election with Russian help. (His election opponent, Viktor Yushchenko, fell ill due to poisoning during the campaign — a mystery that still goes unsolved.)
“The West has not been willing to move beyond the cold war mentality and to see this man and the outreach that he has extended,” Manafort told the Times of Yanukovych.
Manafort’s efforts paid off: Over the next several years, the Party of Regions gained power in the legislative and judicial branches. By 2010, Yanukovych had made a stunning comeback, again winning the presidency, and overseeing a regime that held on to power by funneling government money to his “Family” of oligarchs and party apparatchiks. As a 2007 US embassy cable describing the Party of Regions inner circle put it: “Ukraine’s history is marred with non-transparent privatizations that have benefited a few well-connected insiders.”
Some of those party insiders were banned from travel to the United States or faced visa delays, based on allegations that they supported the pro-Russian forces who’ve occupied Eastern Ukraine since a 2014 popular uprising deposed Yanukovych, who remains in exile in Russia. Some of them have clear connections to Manafort. And some of them, or their relatives and associates, also appear in records of shell companies in the Panama Papers or Offshore Leaks.
As Fusion and its partners in the Panama Papers investigation have previously reported, there are benign reasons for individuals to set up offshore shell corporations. But the anonymity they provide owners, and the lack of transparency into where their money originates and is headed, make them attractive vehicles for funneling ill-gotten gains, concealing wealth, and sidestepping regulations and sanctions. A recent World Bank study of 213 major global corruption cases found that 70 percent of them involved the use of at least one secret corporation to hide true ownership.
It is unknown whether Manafort had any involvement with these shell companies; Fusion’s messages requesting comment from Manafort and the Trump campaign were not returned.
The Caribbean candy company
Manafort’s earliest engagement in Ukrainian affairs appears to have come in 2005, when he advised Rinat Akhmetov — the country’s richest man — on strategic communications for one of the billionaire’s many companies. But the pro-Russian Akhmetov quickly paired Manafort with his political ally, Yanukovych, for an image makeover.
Akhmetov, whose personal and political fortunes were allegedly enhanced by government funds and organized crime, does not appear in the Panama Papers — but his older brother, who stays out of the public limelight, does. Leaked records show that Igor Akhmetov was one of several secret beneficial owners of “Konti Confectionary Limited,” incorporated in the British Virgin Islands in 2014 and seeded with 23.4 million euros. The other beneficial owners included Boris Kolesnikov, another Yanukovich party insider and childhood friend of Rinat Ahkmetov’s who in 2007 praised Manafort as ‘one of a lot of good people” consulting Ukraine’s politicians.
The sour $26.3 million telecom deal
Many relationships Manafort made in Ukraine spilled over into US business relationships. These include Oleg Deripaska, a Russian oligarch who has been called “Vladimir Putin’s favourite industrialist.” Deripaska, who is barred from US travel over alleged organized crime ties that he denies, partnered up with Manafort in 2007 to form a Cayman Islands-based investment company. Deripaska reportedly paid Manafort’s firm $7.4 million in fees, then invested $18.9 million to buy a Ukrainian telecom firm. But Deripaska eventually pulled out and asked for that money back; according to a lawsuit filed in Virginia by Cayman liquidators, Manafort never returned the cash. A lawyer for Manafort, Richard Hibert, did not answer Fusion’s request for comment, but he told Yahoo in April that Manafort had been deposed in the case, which is ongoing.
As Fusion’s reporting partners in the McClatchy DC bureau reported last April, Deripaska shows up in the Panama Papers as the secret owner of a Mongolian coal company formed in the British Virgin Islands that sold part of itself to another of Deripaska’s Russian metal companies in 2006. Deripaska’s mother, Valentina, is also listed in the ICIJ’s Offshore Leaks as a beneficial owner of the BVI-incorporated “Bennet Select Corporation,” whose activities are unclear.
The billion-dollar firm that couldn’t pay its employees
In another lawsuit against Manafort and several associates, former workers in company he formed with an ex-Trump real estate employee allege that they didn’t receive their promised salaries. That company, according to court filings, set up a billion-dollar US-based property-investment vehicle for Dmitro Firtash, another controversial Yanukovych insider and billionaire. The filings allege that Manafort and Firtash also worked together on other deals, including an abandoned $850 million plan to buy the Drake Hotel in New York.
Firtash is now wanted by authorities in Washington on suspicion of bribery and organized criminal activity; he was arrested in Austria in 2014 and the US has sought his extradition since. (His company has called the charges a “misunderstanding.”)
Firtash is listed in ICIJ’s Offshore Leaks database; he set up an offshore holding company in 2006 for assets related to his government-aided businesses.
He also has business ties to what the ICIJ calls one of the Panama Papers’ key “malefactors,” Ukrainian mob boss Semion Mogilevich — a man the FBI once called a “global con artist and ruthless criminal” implicated in “weapons trafficking, contract murders, extortion, drug trafficking, and prostitution on an international scale.” According to an internal State Department cable, Firtash told the US ambassador to Ukraine “that he needed, and received, permission from Mogilievich when he established various businesses.”
Big government in Russia and Ukraine
Observers have long argued that one basis for most of these Russians’ and Ukrainians fortunes was their support for Yanukovych — and Russian leader Vladimir Putin’s desire for close coordination between the Moscow and Kiev regimes. Both times Yanukovych gained the presidency of Ukraine, Putin offered him incentives to keep the country in Russia’s orbit; those incentives included an eye-popping $15 billion aid package in 2013.
That same year, Forbes Ukraine reported that Yanukovych had taken advantage of relaxed government rules to award a lion’s share of state contracts to his inner circle. Two of the top contract-winners are former partners of Manafort’s: Akhmetov and Firtash. In the first 10 months of 2012 alone, they had raked in contracts worth billions of dollars.
In early 2014, just before Yanukovych and his cronies were thrown out of power for the last time — and several months before Akhmetov’s brother and other party associates set up the candy company listed in the Panama Papers — Akhmetov alone had won 31 percent of Ukraine’s state contracts, according to Forbes.
A murky record
How much money did Manafort make for his years of work on behalf of some of Ukraine’s richest, most influential pro-Moscow billionaires and politicians? The answer is unclear; consultants don’t have to publicly disclose their fees. Such campaign consulting relationships can typically command seven- or eight-fee figures. Department of Justice records show only that in 2008, Manafort hired the communications firm Edelman to lobby for Yanukovych’s party for $35,000 a month; the company collected $63,750 on the contract in the first half of that year.
Manafort “told a congressional oversight panel in 1989 that his firm normally accepted only clients who would pay at least $250,000 a year as a retainer,” according to Bloomberg View.
Manafort, the Trump campaign, Firtash, Deripaska, and Rinat Akhmetov did not respond Fusion’s requests for comment; Igor Akhmetov and Mogilevich could not be reached for comment, their whereabouts unknown.