By Brian E. Frydenborg (LinkedIn, Twitter @bfry1981, YouTube, Facebook)  November 3, 2020

SILVER SPRING—To call the report of the Intelligence and Security Committee (ISC) of the United Kingdom Parliament on Russia long-delayed would be far too charitable, as the report itself and its authors make clear.  We have the long-suppressed report now available to the public, and it is so embarrassing for the UK and its leaders that the motive for suppression may be understandable if not the gall of the effort to carry out said suppression.  The old adage “better late than never” surely applies here, and this report is many welcome things in spirit that present many terrifying things in substance, with lessons applicable often not only to the UK but to America (especially) and other democracies under cyberassault from Russia.

Not All Reports Are Equal

The report acknowledges publicly what we Russia-watchers have known for some time that Putin is a genius at leveraging not only both his country’s strengths and weaknesses to his agenda’s advantage, but those of many other nations, too, as I have noted for years.  Yes, the Mueller report and other U.S. official reports, not to mention multiple books and news reports, have made this clear for years now, but the terse boldness in the relatively short report, which says so much in such a condensed space, is truly remarkable.

It is also fair in many ways to compare this to the Mueller Report, mostly because for each country, we have the most in-depth official document detailing Russian interference.  But the hot-take that Special Counsel Robert Mueller “failed” or that he didn’t go “far-enough” misses the point: as I explained even before his full report was released, Mueller was setting up Congress to be able to take down, impeach, remove, and investigate a sitting president because the Constitution empowers Congress to be able to do this, not the Department of Justice or any Special Counsel.  And while the Senate Intelligence Committee Report did an admirable job of detailing Russian interference, it avoided going into Team Trump’s culpability on accepting, soliciting, and using Russian interference (i.e., collusion, as I noted) leaving that for readers to conclude, much like Mueller.  Democrats rightfully took the obvious unstated conclusions Mueller’s report set up (while Republicans gaslighted the public that the Mueller report was “exoneration” for Trump), yet  the Democrats’ impeachment effort remained focused on a narrow set of issues surrounding an attempt and coverup by President Trump to use powers of the presidency and the U.S. government to extract political favors from Ukraine’s government to damage his main political opponent, former Vice President Joe Biden, on (as I have noted before) entirely misleading, unsubstantiated, and false premises.  While in content we may compare the Mueller Report and the UK ISC report, then, in purpose and role it would be more apt to compare the ISC report to the Senate Intelligence Committee Report.

The UK’s Parliament’s ISC report has many redactions, but in a manner involving the dropping hints that seems to reveal far deeper indications of what is redacted than many U.S. government reports I have seen, throughout the reader is exposed to subtle hints that give tantalizing, pointed indications of the nature and level of what is redacted in ways that quickly raise eyebrows for those with background and familiarity with the topics being discussed, but would also raise eyebrows for the even the general public.

The report opens with one of the best short summaries of the strengths, weaknesses, intents, and capabilities of Russian President Vladimir Putin and his Kremlin regime.  In fact, as The Economist can be said to be the standard-bearer of the English language in terms of style, with a brevity that carries tremendous weight with each word, so, too, this ISC report is the standard-bearer of the English language for style as far as government reports go.  Even among British reports—admittedly I have not read too many  of those—it would seem to stand out, not to just to non-Brits but also for informed British readers, and it is certainly far better-written, far-more succinct, and far more enjoyable (can one even imagine using this word this about a government report?) a read than any U.S. Government report I have ever read, its pithy smoothness most impressive.

Coming to Grips with That Which Had Not Been Spoken

Just after my own country’s 2016 election, I was one of the first people—particularly as Democrat and a supporter of the Obama Administration—to recognize and come to grips with the fact that the Obama Administration had catastrophically failed in historically unique senses to protect the U.S. from hostile foreign intervention during the 2016 election cycle, the president being a victim of (among other things) a sensibility of wanting to appearing above the electoral fray.

Had President Obama and his people been able to peer into the future, they might have found this damning, astonishing line from the report helpful: “Overall, the issue of defending the UK’s democratic processes and discourse has appeared to be something of a ‘hot potato’, with no one organisation recognising itself as having an overall lead.”  For Americans not familiar with British understatement, this translates as “organizationally, no took responsibility, no one led, and no one protected us.”  Immediately after in the report, the redress is clear: “Whilst we understand the nervousness around any suggestion that the intelligence and security Agencies might be involved in democratic processes – certainly a fear that is writ large in other countries – that cannot apply when it comes to the protection of those processes,” later calling such an attitude of “extreme caution”—the report noted MI5 only provided six brief lines to the Committee’s for its inquiry as to whether the UK government had intelligence backing up multiple open-source studies that the Russians had worked to influence the UK’s Brexit vote—“illogical.”

(As a related aside, there is a tantalizing yet spare discussion in Footnote 50 of when “Arron Banks became the biggest donor in British political history when he gave £8m to the Leave.EU campaign,” which provided grounds for the UK’s Electoral Commission to refer its own inquiry on this highly suspicious activity to Britain’s National Crime Agency [NCA].  There are some glaring and telling redactions, and thirteen months after that submission it was announced NCA did not find laws had been broken by Mr. Banks or others referred by the Commission, but the context and redactions suggest serious malign influence from suspect money was involved and that the scandal here is that the UK’s legal system does not criminalize such activity, especially since this is one of the key conclusions of the whole report, along with recommendations to create new laws to make such operations involving foreign bad actors illegal).

Shockingly, later the report notes that “We have not been provided with any post-referendum assessment of Russian attempts at interference,” followed by a mysterious redaction and, following that, a contrast to U.S. efforts to produce such formal assessments and to do so quickly (one of our few favorable contrasts).  But take that in for a minute: no formal written assessment looking at overall Russian election interference in the UK was presented to the ISC over the course of its thorough investigation, which speaks for itself, and there is a clear implication that no such report makes it difficult to assure the public that British democracy was or is safe from major foreign interference operations.

Social (Media) Responsibility

The report’s initial expression of frustration of the lack of engagement of intelligence and security agencies in protecting British democracy is followed by sound criticism, echoed by a great many others, that social media companies have done a shameful job through their lack of regulation of their platforms and allowing the Russian government and other bad, even unwitting, actors—many of them domestic—to hijack their platforms quite easily to create targeted, destabilizing information warfare, even chaos, through a deluge of disinformation (on everything from our elections to the coronavirus and even both at the same time, as I have noted somewhat recently):  “we note that – as with so many other issues currently – it is the social media companies which hold the key and yet are failing to play their part.”

In just a few paragraphs, the report hits the nail on the head with a hammer in terms of core issues of responsibility spread across both government and social media companies.  Another succinct sentence comes after noting that British media during Brexit and other votes was not coopted in ways that the U.S. media has been and, as I have noted, still is, so in the U.S., we can add corporate media (mis)coverage as also bearing a huge amount of responsibility.  The report notes that the government has developed a relationship with social media companies to fight terrorism and that such a relationship should “be brought to bear against the hostile state threat,” and adds, in the report’s typically blunt yet understated (i.e., delightfully British) fashion: “indeed, it is not clear to us why the Government is not already doing this.”

Indeed.

In America, too, government- and social media company-synergy in fighting terrorism can be characterized as a serious effort, but similar combined efforts to fight hostile state action have been pathetic when they even have existed, with far more action being long- and inexcusably-overdue.  In fact, their sheer failure begs for regulation over “cooperation,” both of which there has been next to none.  As former FBI counterintelligence agent Asha Rangappa has noted, “platforms like Facebook and Twitter have little incentive to help counterintelligence beyond their own goodwill.  But Congress could pass legislation that requires social media companies to cooperate with counterintelligence in the same ways they do with law enforcement.”

The Russian Bear Runs Amok in Britain’s Backyard

The report notes that even before Brexit and the 2016 U.S. election, attempts to encourage a secessionist vote in Scotland’s 2014 independence-from-the-UK referendum may have been “the first post-Soviet Russian interference in a Western democratic process.”

The report also reveals that the UK is awash in both Russians and Russian money: a post-Cold War foreign investor system was introduced in 1994, in part, to draw Russian money in the UK economy, with at least some of the impetus being that the UK’s business standards would rub off on the Russians and Russian companies taking advantage of them.  This failed miserably, as the report notes that today, “what is now clear is that it was in fact counter-productive, in that it offered ideal mechanisms by which illicit finance could be recycled through what has been referred to as the London ‘laundromat’” and so much so that “Russian influence in the UK is ‘the new normal.’”

A lot of the massive Russian investment into the UK economy was about “extending patronage and building influence across a wide sphere of the British establishment – PR firms, charities, political interests, academia and cultural institutions were all willing beneficiaries of Russian money, contributing to a ‘reputation laundering’ process.”  This money has bought wealthy Russians close to Putin legitimacy and a home in Britain’s elite business and social scenes.  The report is also incredibly blunt that the problem is beyond fixing any time soon: “This level of integration…means that any measures now being taken by the Government are not preventative but rather constitute damage limitation” and “broad Russian influence in the UK…cannot be untangled.” 

Terrifyingly, UK authorities can only hope to mitigate the problem and do not even hope to neutralize it, a shocking sign of the degree to which Russia has successfully infiltrated and corrupted British business and society.  And all along the way, the report notes that the Russians have had help from a local “industry of enablers – individuals and organisations who manage and lobby for the Russian elite in the UK.  Lawyers, accountants, estate agents and PR professionals have played a role, wittingly or unwittingly, in the extension of Russian influence which is often linked to promoting the nefarious interests of the Russian state.”  The depths of these links are so embarrassing that the report actually redacts the degree to which the UK has been infiltrated by Russians, Russian money, and Russian businesses, a giant liability since Russian businesses are “completely intertwined” with “Russian intelligence.”  But the cooperation of Russian businesses with the Russian government goes far beyond that: the oligarchs who Run Russia’s big businesses often operate hand-in-hand with the Russian government and the Russian mafia (in some ways, the real trinity of branches of the Russian government) to advance Putin’s agenda at home and abroad, so that with many of these people—including Putin himself—it might be hard to distinguish their roles in these three overlapping worlds, as I have noted many times before.

These financial infiltrations have extended to charitable and political organizations, including political parties, and it even seems the report is strongly hinting that members of the House of Lords (the UK’s weakened version of the U.S. Senate) have been compromised, with this classically British quip appearing in the discussion: “It is important that the Code of Conduct for Members of the House of Lords, and the Register of Lords’ interests, including financial interests, provide the necessary transparency and are enforced.”  This is equivalent of a British official screaming “The House of Lords has been infiltrated and there is barely any effort at enforcing the rules.”

If you think this might be exaggeration, consider that right after this report was published, Prime Minister Boris Johnson’s Conservative Tory government, which had opposed releasing this ISC report, named Russian-born British immigrant and dual Russian-British citizen Evgeny Lebedev to the House of Lords.  As a prime example of Russian infiltration into British society, he owns the prominent UK media outlets The Independent and The Evening Standard and is the son of Russian oligarch Alexander Lebedev, a former KGB spy who worked in the UK during the cold war.  The father co-owns his son’s UK papers, and while Alexander additionally owns a Russian newspaper critical of Putin’s domestic actions, the elder Lebedev he has been personally supportive, even lobbied for, Putin’s aggressive foreign policy towards the west, as has the younger Lebedev. 

The report also notes that the UK has no law on the books like America’s Foreign Agents Registration Act (FARA), which requires agents in America working on behalf of the political (or “quasi-political”) interests of foreign governments to register and disclose their related finance sand activities.  However, since the last election cycle on, the old, outdated FARA has been shown to have been woefully inadequately for its mission in the modern digital age.

What is clear is that in light of all these developments, the authors of the report view “economic crime as a national security issue” that is not nearly prioritized enough, and American lawmakers and officials would do well do to the same.

The report also notes a Buzzfeed investigation into the deaths of fourteen deaths of “Russian business figures and British individuals linked to them,” with the ISC getting evidence on these deaths.  This evidence and any commentary on it is redacted, most likely meaning that effort is ongoing.  Perhaps most troublingly, the report indicates the police involved may be compromised, as the report quotes the UK Parliament’s Chair of the Home Affairs Select Committee, in an again-characteristically understated British style, that the Buzzfeed piecepresented “considerable concerning evidence [that raises] questions over the robustness of the police investigations.”

Much Room for Improvement

After the discussion of the Buzzfeed report, what follows is an important discussion of resourcing and info-sharing within the government, much of which is redacted, but it is still fascinating to read anyway, though it may be of less interest to non-policy wonk-types.

In reading this report, it is no secret that, as mentioned, Boris Johnson and other Conservative Tory governments have hardly been eager about its compilation or release.  In a remarkable section, the ISC argues for taking responsibility for the “Hostile State Activity” portfolio away from the National Security Secretariat in the Cabinet Office, right under Boris Johnson as Prime Minister; for the report’s ISC authors, “this appears unusual: the Home Office might seem a more natural home for it;” given the overt politicization of the process surrounding this report, its authors are essentially calling for a depoliticization of these responsibilities by taking them away from the people directly working under and for the Prime Minister and to have them given to a government department (albeit one that still reports through its head to the Prime Minister) that is seen as less political, a department that includes MI5 and the NCA (Americans can think of this as taking something away from a White House task force and entrusting it to one of our cabinet agencies like the Departments of Defense or Justice, something which I have argued needs to be done for pandemics in the future given the Trump Administration’s perhaps-singularly pathetic response to the coronavirus outbreak).

And as noted at the beginning of the report, Putin has an advantage in being able to autocratically combine whatever forces he wants to further his ends as far as political interference.  Thus, the ISC recommends that the mechanisms needed to respond to such Russian efforts should be unified and coordinated in such a way as to make the overall effort more robust, less redundant, and more able to plug any gaps.  Quite tellingly, under a headline “Less talk, more action?,” the ISC report authors feel that, as to the various bodies’ “plethora of plans and strategies…it has taken some time to understand the purposes behind each one and how they interlink: this suggests that the overall strategy framework is not as simple as it might be,” and they concludes these comments with a stinging “time spent strategising is only useful if done efficiently, and without getting in the way of the work itself.”  The U.S. should take a similar approach, with an interagency task force being formed as soon as possible to specifically handle the threat of Russian interference in America’s domestic political affairs, one that compels individual states to coordinate and be involved with it.

In related criticism right after, the report notes that its government Agencies (as opposed to Defence Intelligence) do not seem to have clear or useful performance measurement mechanisms when it comes to their evaluation of their success in fighting Russian political interference in the UK.  In a sharp rebuke of the Agencies’ transparency, the report notes that “We remind the Government that the Justice and Security Act 2013 does not oblige it to withhold information relevant to ongoing operations but merely provides the option of doing so… it is disappointing that in relation to a subject of such public interest this option has been exercised quite so broadly.”  Indeed, some of both the Obama Administration’s and (certainly more of) the Trump Administration’s secrecy on these matters were/are highly questionable, so such a sentiment is more than applicable to the U.S.

Lessons, Problems, and Solutions

In a section detailing why Russia is such a challenging adversary (“All witnesses agreed that Russia is one of the hardest intelligence challenges that there is.”), the ISC report notes that in some of its operations, Russian operatives have been rather clumsy, even seeming to be incompetent.  But the authors note, and I would wholly concur, that “whilst these attacks demonstrate that the RIS [Russian Intelligence Services] are not infallible, it would be foolhardy to think that they are any less dangerous because of these mistakes.”  I would make the case further that, while some of the more comical operatives or heavy-handed approaches have led to various Russian efforts being exposed, it is the smoother operators that were not caught (or not caught until much later) and whose attacks and effects are not even known that should be far more troubling.  Indeed, while the uncommonly bipartisan Senate Intelligence Committee released a much-redacted report in late July, 2019, revealing that all fifty U.S. states’ election systems were the objects of a Russian infiltration campaign in 2016, earlier assessments had a much smaller number of states affected (in late 2016 and early 2017, only some 21 states were determined by U.S. officials to have been targeted).  This means that, in the words of The New York Times, the Russian “effort [was] more far-reaching than previously acknowledged and one largely undetected by the states and federal officials at the time.”  The Senate report did not include many details on which states were compromised and actually masked the identity of which states were most heavily compromised.  A Democratic dissent added to the Senate report was deeply concerned that “there are currently no mandatory rules that require states to implement even minimum cybersecurity measures. There are not even any voluntary federal standards.”  In other words, we have no serious standards, who knows what we do not know about what we do not know, and who knows if whatever measures have been taken to defend our election systems—differing and spreading among fifty states as they are—are appropriate or will be effective.  We must assume, then, that there are other efforts and other successes on the part of the Russians beyond those of which we have become aware, whether thinking of the UK or U.S.

Because of Russia’s virtually non-existent check-and-balances, the ISC report notes that Putin and his inner circle can make and implement substantive decisions far more quickly than most Western governments in most situations can respond, lamenting that the UK and its allies “have yet found an effective way to respond to the pace of Russian decision-making.”  In a section that is heavily redacted in terms of explanations and specifics, it also notes the West faces a gap with Russia in terms of how it can use new technology to augment its intelligence capabilities, especially in recruiting and implementing human intelligence operatives to carry out operations on the ground.  Russia is also relatively likely to escalate because of the famous Russian paranoia coupled with Putin’s viewing virtually any challenge to him as an effort to delegitimize and overthrow him (as he famously viewed then-Secretary of State Hillary Clinton’s criticism of Russian elections in 2011, a perceived slight he certainly never forgot). 

The UK is also at a disadvantage because it does not have enough people working to recruit personnel to work on countering Russian malign influence, and certain redacted areas of work regarding Russia are not given enough attention, either.  This means that not only are there not enough people working on these issues, but that their areas of focus even when focusing on Russia are also not properly balanced.  A further weakness the report notes is that appropriate countermeasures require more care than the terrorism operations that have been of such focus in recent years because, while those operations seek to destroy and dismantle terrorist organizations, that cannot be an option with Russia.  As in the U.S., there has been something of an irrational reluctance to aggressively and publicly name and shame Russian malign actors, and the ISC would like to see a more aggressive stance taken by the UK.

As in the also case with the U.S., there is vast room for improvement in drafting and passing legislation to counter these Russian threats.  The MI5 chief is quoted as saying that “there are things that compellingly we must investigate, everybody would expect us to address, where there isn’t actually an obvious criminal offence because of the changing shape of the threat and that for me is fundamentally where this doesn’t make sense.”  To paraphrase, there are things the Russians are doing that are known to be bad and harmful but are not illegal, and the laws must be strengthened to include such activity and enable authorities to investigate and prosecute those carrying out these hostile acts, which is very much the situation in the U.S., too.  The same MI5 Director-General also noted that the current framework was “completely out of date” and “makes it very hard these days to deal with some of the situations we are talking about today in the realm of the economic sphere, cyber, things that could be, you know, more to do with influence.”  As happened earlier in the report, the lack of an ability to legally counter foreign agents seeking to “obfuscate” their missions and backers is noted as an obvious area of weakness.

Additionally, despite some recent new options (Unexplained Wealth Orders) to crack down on malign and foreign financing of such activities, the report notes that since so many Russians have had longstanding financial ties and investments in the U.K., they work around this new tool.  Furthermore, because these Russians are so wealthy, they are able to tie up government actions and lawyers in costly, lengthy litigation that the UK government does not have the resources or personnel with which to compete to the degree that the NCA said “we are, bluntly, concerned about the impact on our budget.”  That the UK government is nervous about taking on Russian agents because they have better resources and can outspend and outlast British officials using Britain’s own legal system is an incredibly disturbing revelation.

In discussing sanctions, the report notes that because the Russians merge organized crime and businesses into their government’s influence and interference operations, sanctions meant to stop hostile state actions must be broadened to be able to include not just government officials but also these other actors who are not officially in the government but are still working to further the Russian regime’s agenda.  The world has seen a number of countries adopt so-called Magnitsky legislation to go after government officials who perpetrate human rights abuses in response to a high-profile case involving Russian officials’ murder of a whistleblowing Russian lawyer named Sergei Magnitsky, including laws passed in the U.S. and the UK, but clearly, Russian campaigns against the West routinely include Russian businessmen and Russian organized crime, so rethinking sanctions is absolutely necessary.  This is likely one of the most effective ways to combat Russian hostile activity, as even the Magnitsky sanctions have enraged Putin and lobbying against them has been one of his top priorities, even to the point of Russian agents meeting with top Trump campaign officials—including campaign Chairman Paul Manafort, Trump’s son Donald Trump Jr., and Trump’s son-in-law Jared Kushner—on this issue at the height of the 2016 election, as I noted in a piece that was censored by a Russian government-linked think tank for which I previously wrote (free of any compensation), so sensitive are the Russians about this issue.  Reform in the area of sanctions is surely crucial for the U.S., then, too.

In an obvious suggested move with which few reasonable people would disagree, the ISC report also remarks that election laws in our new, digital era need a major update to cover how the internet is used in campaigns, one that expands the ways in which online and especially targeted advertising and outreach is regulated.  Obviously, this is needed in the U.S., too.

When discussing the issue of working with allies to counter Russian hostile acts, there is an interesting redaction in a section discussing the working relationship with the U.S. (“In responding to the Russian threat, the UK’s long-standing partnership with the US is important…However, there remains a question as to whether ***.”), and while there are many possibilities as far as the redaction, U.S. President Donald Trump’s odd relationship, history, and behavior in relation to Putin and Russia are of major concern for all U.S. allies and it is not without some foundation that one might think this redaction relates to this concern.

Of at least equal, perhaps even more concern, to the UK is, as the report notes, division within Europe over Russia, and France, Austria, and Italy are called out by name, as is Israel as an example outside of Europe.  Far earlier in the report, Footnote 25 is interesting because it references knowledge that France’s Marine Le Pen’s far-right nationalist party is either the subject of UK surveillance or that it has unwittingly produced hard evidence of some sort of quid pro quo involving the promise of cash transfers in exchange for supporting Russia’s annexation of Crimea.  Either way, it strongly suggests that UK intelligence has pretty deep knowledge on the degree to which Russia has infiltrated political parties, figures, and systems in continental Europe and the clear implication is that it is quite bad (infiltration and manipulation about which I have written for years).

One positive development is noted several times in the report: that not only was the UK government’s response to Russia’s attempt to murder a Russian defector, Sergei Skripal, (an attempt that he and his daughter survived but a local woman inadvertently exposed to the chemical weapon did not) on UK soil in Salisbury with a military-grade chemical weapons nerve agent, Novichok A234 swift and forceful, but so were a number of the responses of allies countries.  Sadly, this type of response is the exception and not the norm, but demonstrates that such type of coordinated action is possible.

Finally, the ISC report calls out the British government for placing too much effort in good-faith engagement of Russia:

Whilst it is possible that an improved relationship between Russia and the UK may one day reduce the threat to the UK, it is unrealistic to think that that might happen under the current Russian leadership.  It would have to be dependent on Russia ceasing its acts of aggression towards the UK, such as the use of chemical weapons on UK soil.  The UK, as a Western democracy, cannot allow Russia to flout the Rules Based International Order without there being commensurate consequences.  Any public move towards a more allied relationship with Russia at present would severely undermine the strength of the international response to Salisbury, and the UK’s leadership and credibility within this movement.

Such a lens should be applied to Trump’s nonsensical efforts to improve America’s relationship with Russia, as even now, Russia is actively interfering in the U.S. election.  There is only reason to believe that Donald Trump has improved his personal relationship with Vladimir Putin, not America’s with Russia.

Conclusion: The U.S. Needs to Take Massive Inspiration from This Exceptional British Report

To conclude, there is a certain level of brilliance that I have not seen in American government reports at work here.  Whereas most American reports are presented as a narrative, usually piece-by-piece and step-by-step, and analysis is usually presented at the end, here, it is presented throughout.  And this makes a big difference when it comes to redactions: with the commentary provided (sometimes itself redacted), we are actually being given hints by the committee as to the nature of the redacted material and the Committee’s views on this material and thus the degree to which we should be worried, and I would say this seems quite deliberate from the tone.  So it is, then, that while this report is much briefer than most American reports, it says so much more per page than its American counterparts.  Where the American equivalents often do not connect the dots on sensitive issues but leave that for the public, the media, and members of Congress, here the authors very much wish to guide the debate, even to the point of raising serious credibility issues of certain actors, pointing fingers, sometimes in the dark or hinting at names and institutions without naming them, other times being more direct but still with characteristic British blunt understatement.  And in this way, the report is so much more damning and valuable as a single document.  A typical American will not read the Mueller report and understand the big-picture in the same way or as deeply without expert commentary and additional analysis as a typical Brit reading this report can take away insight without such interpretative assistance.  As an example, one section header simply reads: “Did HMG [Her Majesty’s Government] take its eye off the ball?”  in big, bold lettering, something unimaginable in a U.S. Government report.

The bottom line is, this major UK report gave a succinct, highly-readable, even fun-to-read report that most Brits could go through relatively quickly and feel better informed on a key national security issue, taking away bold understandings on the drastic failings of the UK to protect the integrity of its democracy from Russian interference and able to see where a good chunk of the blame lay even if fingers are pointed in a somewhat indirect, terse, and understated manner.  Conversely, few Americans would be able to make it through the long, extremely detailed, and highly technical U.S. government reports that are actually bipartisan and credible, and whether the Mueller Report or the Senate Intelligence Committee reports, they mostly dance around anything sensitive politically and avoid laying much out directly or even indirectly as far as conclusions that would actually hold those who failed and fail to protect American democracy accountable, especially at the top of the current Trump Administration.  The typical U.S. citizen would be both overwhelmed by so much information and unable to draw appropriate conclusions from many of the complex, detailed segments, if they even managed to read the full reports, which few likely have.

That is not to say that such highly technical reports are not necessary—they certainly are, and are still extremely valuable—but America’s government must take a page from this praise-worthy UK ISC report and find a way not only to improve our defenses against Russian interference, but improve its ability to inform its citizens about threats and have them understand both our failures and the actions that must be taken to address those failures.  Executive summaries as we have done them are not enough, and, despite Americans not being British, we must find a way to produce momentous reports in the manner both the substance and style of the UK Parliament’s Intelligence and Security Committee.  That means, too, something of a lesson on the English language from the British, which this report also refreshingly offers.

Also see Brian’s eBook, A Song of Gas and Politics: How Ukraine Is at the Center of Trump-Russia, or, Ukrainegate: A “New” Phase in the Trump-Russia Saga Made from Recycled Materials, available for Amazon Kindle and Barnes & Noble Nook (preview here), and be sure to check out Brian’s new podcast!

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(Russian/Русский перевод) A major U.S. federal money laundering trial—one related to the Magnitsky murder and the largest ever tax fraud in Russian history—of a Russian firm with ties to both Putin and a major Russian Trump supporter was bizarrely settled without admission of guilt by the Acting U.S. Attorney. The trial could have been a major embarrassment and caused many problems for Russia at this delicate time, and none other than Preet Bharara had been running this case for three-and-a-half years before he was fired by Trump just two months ago. Naturally, questions arise and this looks pretty bad.

 Originally published on LinkedIn Pulse May 15, 2017   

By Brian E. Frydenborg (LinkedIn, Facebook, Twitter @bfry1981) May 15th, 2017; this article was censored when it was posted on a Russian government think tank (see below); see how this story and other Russian money laundering threads tie to Trump’s and Putin’s associates in my Twitter thread here. See related July 27th article with additional information on the Prevezon case, including Kushner’s ties to it: Think You Know How Deep Trump-Russia Goes? Think Again: This Chart/Info Will Blow Your Mind

Alexander Shcherbak/TASS

NOTE: July 12th, The Russian International Affairs Council editorial staff censored my below post that I had posted July 11th on its site (I am a regular contributor and was invited to be so some time ago), sending me the following message:

Dear Brian, 

We regret to inform you that based on the decision of RIAC’s editorial office, it will not be possible to further consider your latest blog post for publication.

We reaffirm your right as blogger to publish material in your blog without negotiating the approval of its content in advance or any censorship. However, we have to make sure all texts are in line with the norms of the Russian law for RIAC information resource acts within Russian legal framework and we are held responsible for any publications on our website.

As an information resource, we are obliged to prevent the spread of extremist information, unreliable data as well as exposure of personal data to the public.

Moreover, serving as a platform for scientific discussion on important, complicated and sometimes highly sensitive issues in the field of world politics, we maximize our effort to prevent the spread of fake news and propaganda, irrespective of who is their source and what motives they harbor disseminating them.

We are thankful for your understanding.

Sincerely, 

RIAC’s editorial office

I wrote the following responses:

Could you please identify yourself and kindly identify in detail the sources used and statements made in my latest piece that “extremist,” have “unreliable data,” and that exposed any “personal data?” Let’s be honest here: you’re censoring analysis that the Putin government doesn’t like that goes against the Kremlin narrative, plain and simple. Every single source I referenced is credible and reliable, and I challenge you to prove otherwise. Conversely, there are many blogs up there with poor research that remain simply because they are critical of American policy and give Putin a free pass or praise. If you do choose to go down this path after being one of the only sites Russia that truly allowed diverse opinion, I will publicize this and draw attention to your hypocrisy.

How does this violate Russian law? What statute specifically?

Was it because of the link to the original article being a LinkedIn article [Russia had banned LinkedIn]?

Here was the next response:

Dear Brian,

This decision was made collectively by the RIAC’s editorial team. your text contradicts RIAC’s internal regulations. We do our best to provide the platform for discussion for all experts regardless of their ideological and political views. The main criterion for us is the academic style of texts and substantial argumentation.

The main problem with the content of your latest piece is the use of data which can not be confirmed by other reliable and internationally recognized sources. The information which was published in your latest piece can put RIAC and you, as blogger, in danger of being accused of defamation.

You are writing a blog at RIAC since 2015 and it is the first time we encounter such a problem.

We hope for your understanding and hope that this incident will not stop you from writing for RIAC’s website.

Sincerely,

RIAC’s editorial office

Clearly, the reasons my post was censored were content-specific. My next message generated no response whatsoever, despite my request for RIAC to identify SPECIFIC information with which RIAC had a problem:

Please be specific and tell me what data cannot be confirmed by reliable and internationally recognized sources. That is false and you must be mistaken and I linked to sources that are only internationally recognized as credible so I await your specific citations and I will be happy to respond to your specific issues with specifics.

There are two possible explanations: something here (most likely the discussion of anything related to Magnitsky) is a red line, even for a blogger on this Russian government-sponsored think tank, or, things are so sensitive now that any post like this would be censored even in such a forum. This is very disappointing.

On July 24th, I reposted this with this chain and I CALLED AGAIN ON THE EDITORIAL STAFF OF THE RUSSIAN INTERNATIONAL AFFAIRS COUNCIL TO SPECIFICALLY IDENTIFY WHAT INFORMATION AND SOURCES ARE INAPPROPRIATE AND NOT BACKED BY CREDIBLE REPORTING. It is sad that even a think tank must be co-opted by Putin’s agenda and cannot allow a free expression of a well-sourced, meticulously researched view that differs from that of Putin, the Kremlin, and the Russian Foreign Ministry.

On July 25th, my post was again censored and my login credentials revoked.

*****

UPDATE July 24th: Bill Browder has filed a complaint with the U.S. Treasury’s Office of Foreign Assets Control (OFAC) against Rep. Dana Rohrbacher (R-CA) and his staff director for violating the Magnitsky Act.

UPDATE July 8th: The New York Times is reporting that on June 9th, 2016, Paul Manafort, Jared Kushner, and Donald Trump Jr. met a lawyer for Prevezon-head Denis Katsyv named Natalia Veselnitskaya, an anti-Magnitsky Act crusader and the wife of a close colleague of her client’s father, in Trump Tower, a meeting arranged by Donald Jr.

AMMAN — THE TRIAL was set to begin in three days, a mammoth trial a decade in the making, one of international intrigue, massive money laundering, the biggest tax fraud in Russian history, posh Manhattan real estate, powerful Russians with connections to Russian President Vladimir Putin, and the murder two people and attempted murder a third, each victim gathering evidence against the Russians. But, instead, the Acting U.S. Attorney for the Southern District of New York submitted a letter on May 12th, 2017, to the presiding judge, William H. Pauley, III, stating that the government had reached a settlement with the defendants, after his predecessor, Preet Bharara, had spent three-and-a-half years building his case.

In case you forgot—with all the Comey firing drama and the new Trump revealing classified information to the Russians brouhaha and dozens of other developing scandals that are unfolding with blistering speed—a newly-installed President Trump back in March fired U.S. Attorney for the Southern District of New York Preet Bharara from his prestigious position, a position from which Bharara played roles in past and current cases involved with and related to Trump (including busting a Russian mafia money laundering ring that was partly run from Trump tower and a current case investigating stock trades of Trump’s Secretary of Health and Human Services, Tom Price) and a role in which he would have been involved in possible future cases had he not been fired. Bharara also had a strong record of taking on Russian criminals, even those closely tied to Putin and the Russian government: he busted two major Russian arms dealers, including the notorious “Merchant of Death” Viktor Bout; he successfully prosecuted multiple Russians involved in hacking, cybertheft, and other cybercrimes; he was involved in cases against Russian spies, including the biggest post-Cold War Russian espionage situation (at least before the hacking) in which 10 undercover Russian agents were arrested and later traded with Russia; and he exposed a plot by dozens of Russian diplomats to defraud Medicaid in order to make extravagant purchases and/or go vacations.

Getty

Had he not been fired by Trump, Bharara would now be leading this case, too, and almost exactly two months from the day he was fired, the U.S. government, with his acting replacement acting in his stead, settled with a whimper a case stretching back a decade. It was a case U.S. had been building for close to four years and one in which one key lawyer working against Russian interests, Sergei Magnitsky, was murdered, and in which another lawyer working against the Kremlin on behalf of Magnitsky’s family, Nikolai Gorokhov, was thrown out of his fourth-story Moscow apartment window on March 21st of this year, just one day before a major Russian court appearance concerning the same crimes (such “accidents” are not uncommon with Putin critics); Gorokhov suffered severe head injuries and is apparently still hospitalized; he had provided key evidence for Bharara’s prosecution team and was set to be a star witness in the trial that was to start today, May 15th. Unsurprisingly, Bharara and his team were actually very concerned that something exactly like this would happen to Gorokhov and submitted a formal letter expressing that concern to the presiding judge back in October 2015.

The roots of the case go back over a decade to Russia, and for a thrilling read on its origins, you can pick up Bill Browder’s Red Notice: A True Story of High Finance, Murder and One Man’s Fight for Justice. Browder was running the wildly successful Hermitage Capital Management in Russia throughout the late 1990s and the 2000s. But when he fell out of favor with the Russian Government for trying to take on the corrupt system of doing business in Putin’s Russia, Putin started playing hardball, having Browder deported in late 2005 through the hands of the F.S.B., the K.G.B.’s main successor, labeling Browder, essentially, an enemy of the Russian state. In 2007, Hermitage’s Russian office was raided, one of its employees roughed-up; soon after, Browder’s intrepid lawyer, the previously mentioned Magnitsky, eventually helped to uncover a massive $230 million tax refund fraud scheme in Russia, the largest tax scam in Russian history and one carried out through collusion between (likely senior) Russian government officials and members of the Russian mafia. Together, they conspired to use profitable companies like Browder’s by seizing control of them on false legal pretexts, throwing a bunch of fake lawsuits at them, and then erasing the companies’ profits from the books and claiming the taxes those companies had paid as a refund since the profits generating those taxes had magically disappeared; Magnitsky was arrested for his efforts on trumped-up charges, and, once in custody, was beaten by guards and denied medical care in Russian prison, dying from his wounds and deliberate lack of medical attention in 2009.

Magnitsky’s death turned Browder into a crusader to expose Putin and honor Magnitsky’s memory; in 2012, when a Russian named Alexander Perepilichnyy began working with Browder to help and moved to the UK to do so, he mysteriously died while jogging near his new home, almost certainly the victim of a Kremlin operation, with an investigation into his death still underway; Browder bravely continued his efforts by pushing the U.S. Government to pass the Magnitsky Act in 2012, allowing for harsher punishments and sanctions of Russian officials involved in these crimes and pushing the EU to pass a similar law in 2014. This infuriated Putin, and when the U.S. applied sanctions to dozens of Russians under the authority of the new law in 2013, he responded by banning Americans from adopting Russian children and barring 18 U.S. current and former officials, including—and this is key—Preet Bharara for his earlier moves against Russian criminals. 

Enter Russian Denis Katsyv, the essential head of a Cyprus-based apparent real estate company Prevezon Holdings, which was one of the beneficiaries of the $230 million Russian tax scheme. In charges filed by Preet Bharara in a lengthy complaint submitted in September, 2013 (and in the complaints’ two amendments in November, 2014, and October of 2015), the U.S. affirmed Magnitsky’s findings and accused Prevezon of receiving through a convoluted series of transactions involving shell companies at least (roughly) $2 million (possibly more) of the $230 million of Russian scam money, some of which Prevezon then laundered through the purchase of luxury Manhattan real estate properties, partly because, as I’ve described before, America has famously lax regulations on money laundering through real estate. Among those who would end up helping Bharara with his case against money laundering was Bill Browder.

Office of the U.S. Attorney for the Southern District of New York

Here is where the world of coincidence gets to be a bit astounding: Katsyv is the son of Petr (Pyotr) Katsyv, a former Russian government minister who currently helps to run Russia’s state-owned Russian Railways, which until recently was led by Vladimir Yakunin, a close Putin ally with a history of corruption who began publicly backing Donald Trump’s presidential candidacy since at least June 2016; Yakunin and Petr Katsyv ran Russian Railways together for about a year. Yakunin had also partnered with Denis Katsyv and Republican Congressman Dana Rohrbacher in 2016 to lobby against a stronger version of the Magnitsky Act under consideration that would expand to cover any government officials around the world involved in human rights abuses, with this version known as Global Magnitsky; the efforts to fight it included promoting a controversial “documentary” trashing Magnitsky and Browder and accusing them of the tax fraud, which is Russia’s official version of who is responsible for the $230 million fleecing of Russian taxpayer money. Rohrbacher also met earlier this very month with an old Soviet spy-turned Putin lobbyist named Rinat Akhmetshin and specifically discussed the Prevezon case with him; the two had also worked with Katsyv on opposing Global Magnitsky.

There is also the fact that a prominent Russian activist and lawyer, Andrei Stolbunov, was targeted with very likely false extortion charges by the Russian government in 2014; the Russian government accused him of trying to extort money from Petr and Denis Katsyv and also accused him of working with Bharara’s office and Browder; fearful, Stolbunov applied for asylum in the U.S. even before Russia filed charges against him, seeing the writing on the wall.

*****

At this same time the above Russian laundering scheme at the center of the Prevezon case was underway, at least three other major Russian money laundering schemes were underway, about which I have gone into great detail in my previous writing (any new details I’ve received will have fresh links in this section, but for my other information for the following schemes, please do take a look at my detailed research in my other work):

1.) One scheme was Russian organized crime—led by the Russian “boss of bosses” Semion Mogilevich (who was linked to the money laundering ring partly run from Trump Tower that Bharara shut down)—working on behalf of the Russian government and close associates of Vladimir Putin—including Ukrainian oligarch Dmitry Firtash and the now disgraced former Ukrainian President Viktor Yanukovych—to launder money into the U.S. in Manhattan as part of a major laundering operation worth billions involving the Eurasian gas industry, especially Gazprom. The whole Eurasian gas/money laundering scheme was itself designed to help Russia dominate Ukraine politically by taking profits from crooked deals to bribe Ukrainians politicians and fund the campaigns of Yanukovych and his political party; the political side of these efforts was led then by future Trump presidential Campaign Chairman Paul Manafort, aided by his associate and future Trump campaign employee Rick Gates and with another Trump campaign advisor, Carter Page, advising two key entities on different ends of the scheme at the time; Manafort was key in setting up a series of laundering scams involving real estate in Manhattan, for which he was sued—along with Firtash, Mogilevich, and Yanukovuch—by an imprisoned former Prime Minister of Ukraine who had energetically fought Putin and the gas scheme: Yulia Tymoshenko. Tymoshenko was imprisoned on false charges after Manafort had orchestrated Yanukovych’s 2010 presidential comeback-win, in which the proceeds from that gas/laundering scheme were used to weaken her political power and empower her enemies; this would all help lead to the current war in Ukraine. Manafort apparently was paid some of his Russian money—from this illicit Russian scheme or possibly other illicit Russian schemes to handle the corrupt Yanukovych’s ill-gotten funds or promote abroad the general interests of the Russian Government—through the Bank of Cyprus, then run in-part by Wilbur Ross, Trump’s future Secretary of Commerce (who would also help Russians make deals using the bank to avoid sanctions imposed by the West after Russia’s annexation of Crimea; Ross remained with the Bank until he was confirmed to Trump’s cabinet in 2017). Also of note here is that Firtash is being held by Austrian authorities as the U.S. and Spain compete to extradite him for various criminal charges; a critical question is how vigorously the new Trump Administration officials are pursuing his extradition.

2.) At the same time as this was going on, the son of an alleged Mogilevich capo and convicted large-scale money-launderer Felix Sater (possibly also an associate of Mogilevich himself) set up a real estate office for his company, Bayrock, in Trump Tower in Manhattan, befriended Trump, and, along with a number of Russian/former-Soviet Republic characters, brokered and financed a series of disastrous and scandalous real estate deals with Trump that, viewed together, almost certainly were laundering schemes for dirty Russian money; even after all that scandal, Trump hired Sater to work directly for the Trump Organization and, once president, used him as back channel to push a peace deal very favorable to Russia for the Ukraine/Russia conflict. 

3.) A third concurrent scheme involved Russian laundering to the tune of billions through Deutsche Bank, which just happened to be the only major bank operating on Wall Street willing to loan to Donald Trump for most of the 2000s after a terrible series of high-profile bankruptcies, disputes, and shady, unethical business practices on the part of Trump made him a persona non grata among all other major Wall Street lenders. An internal Deutsche audit apparently found that the money loaned to Trump was not tainted by the dirty Russian money, but there is pressure to have an outside group conduct an open, transparent investigation to verify this. In what may be Trump’s largest conflict of interest as president (Trump owes the bank some $300 million), it is now his Department of Justice, run by his less-than-trusted Attorney General Jeff Sessions—who had to at least stated he would recuse himself on all things Russian and campaign 2016 because of his lies under oath about meetings with the Russian ambassador during Trump’s campaign—carrying on the U.S. investigation into Deutsche, and it remains to be seen how vigorously Sessions’ Department of Justice will pursue its part of the major international ongoing investigations into Deutsche for over $10 billion in Russian laundering and for which it has already been fined over $800 million.

*****

Taken together, all this is very worrying and very incriminating.

And yet, members of the media and the public not in the tank for Trump must be careful not to mistake their justified outrage and terror at the Trump Administration’s conduct any kind truly national feelings existing along the same lines: in a poll taken just after the Comey firing, not even half (only 46%) of Americans disapproved of Comey’s firing, while 39% actually approved of it; a more recent poll, after the firing scandal had had a few more days of exposure, shows 38% disapproving, and only 29% approving, and even with just two data points, there is clearly hardly a groundswell of support for something like impeachment or even being able to claim any kind of a national consensus that Trump’s conduct is outrageous (even though it clearly is). In the first poll, only 13% of Republicans disapproved of the Comey firing and only 8% in the second; in both polls, more independents disapproved than approved, but in neither did the independents’ disapproval figure surpass 45%, a very telling figure indeed. Meanwhile, the Republican numbers line up with two earlier polls from mid-March and mid-April showing that only about 3.5% and 2% of Trump voters, respectively, regret voting for him. It will be interesting to see how much, if any, his base of support drops after the Comey firing or the breaking classified information scandal, and I suspect there will be little to no change, with plenty of time before the 2018 midterms and 2020 presidential election for any wavering supporters to be distracted by new (faux) outrages directed at both the left and the media, whom Trump’s supporters despise.

One very disturbing similarity the circus of events surrounding the arrest and death of Magntisky, who was leading the investigation on behalf of Browder and his firm against the Russian government and their associates (including Russian mafia figures), shares with the current situation with Trump and the firing of the FBI Director James Comey, who was leading the investigation of candidate and then President Trump and his associates (possibly including Russian mafia figures), is the blatant lying the Russian government and Trump Administration engage(d) in regarding their respective situations, with astounding shifts in the rationales presented to the public as if they knew enough of the public would just shrug their shoulders and move on as if nothing important was happening, that they would not even take care to make sure their lies were not obvious to the public because did not respect the intelligence or the integrity of their own people would hold them accountable for their lies.

And those thinking the FBI investigation is some sort of political issue are, to a large extent, being myopic and petty; the issue of Russian interference is clearly one of national security, the only reason it’s become so political is because Republicans are treating this like any other sort of right-left issue, where this would benefit Democrats and hurt their Republican president, so they must start from the premise it’s just Democrats being sore losers—despite the incredible breathtaking breadth and depth of evidence it is not—and work from there, retreating using scorched-earth tactics only when forced to; THAT is where the politics lie, not in standing up to Russia, something which used to be an American thing but is now solidly a Democratic thing, not in any significant way a Republican thing in the era of Trump.

In the context of all of this and especially the many serious scandals and questions involving Russia, and after a key witness was nearly murdered not even two months ago and understanding that this case took nearly four years to prepare, it is very strange, even suspicious, that Bharara’s replacement went with a settlement for less than $6 million (given the long preparation, it is likely the U.S. government spent more than that pursuing the case) when the government initially sought to seize over $20 million in assets, and all with no admission of wrongdoing on the part of Prevezon in the settlement. A federal appeals court had even disqualified previous lawyers for the case last October, and in the final days before the trial, the judge had even ruled to admit important Russian case file as evidence provided by Gorokhov for the prosecution (the day the U.S. asked to have the evidence admitted was the same day Gorokhov was pushed out his window, and its admission be and was challenged by Prevezon, since the evidence was obtained in such an unusual way as Russia was refusing to cooperate and provide the evidence under its treaty obligations) and had also ruled against a defense motion to dismiss the case, so the prosecution even had some steam going into the trial. But then, there was no trial… Thus ended U.S. v. Prevezon Holdings, and though the Acting U.S. Attorney, Joon Kim, declared the settlement a victory, so did Prevezon, and it’s not hard to see why it did.

I have faith that Kim wasn’t corrupted or anything like that, and he seems to be a professional public servant; maybe so new into his position, he was more inclined to think of this settlement as a victory, but I will give him the benefit of the doubt and will not pretend to have any serious sense of his precise thinking. Bharara tweeted support for the settlement, though it’s hard to imagine him publicly criticizing his former subordinate, just as it’s hard to imagine him settling, as Kim did.

So there are some very important questions here:

1.) Did Trump or any of his people suggest—especially Kim’s direct boss, Attorney General Jeff Sessions—recommend, encourage, or pressure Kim in any way to accept a settlement?

2.) Why did Kim decide to settle?

3.) Why won’t the U.S. Attorney’s office comment or respond to media inquiries on the settlement?

These questions should be the subject of at least a Congressional investigation, as the decision to not to take this case to trial is confounding given all the context presented here and is just one more example of Russia being able to feel that, relatively, they have a friend in the Trump Administration.

Correction appended: changes made to reflect the alleged nature of Sater’s father’s ties to Mogilevich 

See how this story and other Russian money laundering threads tie to Trump’s and Putin’s associates in my Twitter thread here!

© 2017 Brian E. Frydenborg all rights reserved, no republication without permission, attributed quotations welcome

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Welcome to the Era of Rising Democratic Fascism Part I: Defining Democracy, Fascism, and Democratic Fascism Usefully, and Spin vs. Lies

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