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The Laikipia Crisis and the Disenfranchisement of Kenyans in the North

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The Laikipia Crisis and the Disenfranchisement of Kenyans in the North
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The widely publicised recent invasions of wildlife conservancies in Laikipia County in Kenya have often been framed as conflicts between pastoralist communities and conservationists. However, the conflicts in Laikipia and elsewhere in northern Kenya ought to be looked at as a national security issue exacerbated by historical land injustices and the pursuit of an inappropriate conservation model that relegates the true owners of the resources to the periphery.

It is instructive that the state has identified environmental degradation as constituting a threat to national security. This was highlighted in a story published in the Sunday Nation on May 7, 2017 on Kenya’s plans to expand the military. Quoting from The National Defence Policy, the reporter stated that the government had identified environmental degradation as one of the threats to Kenya’s security.

This admission is significant because for a long time the country has taken for granted fatal consequences of wanton destruction of forests, rivers, habitats, ecosystems, as well as serious erosion of biological diversity. How individual actions affect the environment appears not to preoccupy most people’s minds in the country. Collectively though, such injurious individual actions result in a situation that has far-reaching implications, not just on the well-being of the environment or inability of ecosystems to supply life-nurturing environmental resources to citizens, but also on the security of the country.

On its part, the state has kept making one policy pronouncement after another without putting in place the necessary resources and personnel to implement the policies or to whip everyone into line. For many years now, the discord between what is said in official statements and what is done by citizens, companies and the state itself has given rise to serious crises. This greatly affects the lives and livelihoods of millions of Kenyans, some of whom opt for extra-legal measures to stay alive.

Many have gone on to equate Laikipia to the Biblical Eden; “it represents a lost Eden in European settler thinking, epitomised by the writings of Kuki Gallman, which are infused with an imagined sense of entitlement to and identification with her adopted land.”

Added to this is the long-running official neglect of arid and semi-arid areas of the country. Individuals and organisations that constitute the country’s conservation fraternity have capitalised on officialdom’s disinterest by experimenting with a conservation model that is harmful to the communities there. With financial support from multilateral and bilateral donors, as well as big-bucks international NGOs, the fraternity has literary taken over and has been running not just conservation, but also security, livestock marketing and conflict resolution in a manner that greatly interferes with the sovereignty of the communities that claim ownership of the land there.

This sad state of affairs is epitomised by the fact that one organization, Northern Rangelands Trust (NRT), openly claims that it has brought into conservation a whopping 44,000 km2 of the lands in the upper Rift, north and coastal regions. The reaction to what happens there and how it affects the rights of the communities to their lands and resources, as well as how this translates into the apparent insecurity in Laikipia and elsewhere in the north, ought to be seen as social reverberations of historical land injustices and official neglect.

The historical narrative

In Moving the Maasai: A Colonial Misadventure, Lotte Hughes paints a picture of pastoralist communities disinherited from their land on two different occasions in 1904 and 1911. The British author says that between 1904 and 1905, colonial authorities forcibly moved the Maasai people from their favour­ite grazing grounds between Na­ivasha and Nakuru into two reserves in order to make way for white settlement. Laikipia was one of the reserves while the other was in the south, on the border with Tanzania. According to Hughes, this was done following the 1904 Maasai Agreement through which the community was promised that it could keep the reserved ar­eas “so long as the Maasai as a race shall exist.” She writes that the British did not honour their promise but went on to move the Maasai again seven years later “at gunpoint from Laikipia to an extended southern Maasai reserve.” More than 20,000 people and not less than 2.5 million livestock were moved between 1911 and 1913. All this was done mainly to pave way for white settlers, although, as Hughes says, there were other extraneous reasons, including the desire by the colonial administration to concentrate the Maasai in one reserve in order to better rule over them and to impose taxes. Consequently, the Maasai lost between 50% and 70% of the land they occupied be­fore 1904.

Since the second “move” was implemented, the Maasai have maintained that this was not an “agreement” per se as their leaders signed it under heavy duress and coercion. “This effectively ren­dered the first Agreement void,” writes Hughes. This supports the intermittent claims made by activists from the community that they have a legal claim over the land now occupied by the mainly white ranchers in Laikipia.

The campaign for redress for this historical injustice reached a crescendo in the early 2000s when the community, led by the defunct Osirigi NGO and people like the late Elijah Marima Sempeta, intensified calls for a return of the lost lands. The latter was a young lawyer who travelled to Britain and unearthed documentary evidence ascertaining that the leases given to the white ranchers had come to an end and that time had come for the ownership of the land to revert to the local community. Following a spirited campaign, the matter fizzled out after Sempeta was murdered outside his home in Ngong Town in circumstances that remain unexplained. However, the push appears to have borne fruit when lease periods were lowered from 999 years to 99 years in Kenya’s 2010 constitution.

Defeating the land rights campaign

The white lessees of the land in Laikipia have adopted a multi-pronged counter-campaign and have shown – in words and deeds – that they are not ready to forfeit the land. According to Hughes, many have gone on to equate Laikipia to the Biblical Eden; “it represents a lost Eden in European settler thinking, epitomised by the writings of Kuki Gallman, which are infused with an imagined sense of entitlement to and identification with her adopted land.”

In Land Deals in Kenya: The Genesis of Land Deals in Kenya and its Implication on Pastoral Livelihoods – A Case Study of Laikipia District, 2011, John Letai says that Laikipia has “profound inequalities” in land ownership, with 40.3% of the land being controlled by 48 individuals. Among the biggest landowners in Laikipia include Gallman, whose Ol Ari Nyiro ranch is said to be 100,000 acres. Other large ranches include the Ol Pejeta ranch (92,000 acres) that was once associated with Saudi billionaire arms dealer Adnan Khashoggi and the Ol Jogi ranch (67,000 acres) owned by the late French billionaire art dealer Daniel Wildenstein. But even with this kind of inequality, it has been apparent that the ranchers cannot countenance the idea of ever giving up the giant parcels of land to the original owners. Some have been offloading the land to other rich people (some of whom are foreigners) while top business and political elites in the country have also increasingly acquired land there.

The white lessees of the land in Laikipia have adopted a multi-pronged counter-campaign and have shown – in words and deeds – that they are not ready to forfeit the land.

Another approach has been to front the sprawling ranches as important wildlife conservation areas. Targeted in this approach is a powerful and moneyed audience in the West that has contributed immensely to support wildlife conservation in cash and kind. Initially, the white ranchers had not taken wildlife conservation as seriously. For a long time, many had taken to large-scale livestock keeping but later realised that they stood to gain much more by converting their properties to either mixed livestock-and-wildlife areas or to exclusive wildlife conservation zones. They appear to have been inspired by arguments put forward by people such as Dr. David Western, a former Kenya Wildlife Service director, who championed the parks-beyond-parks concept, as well as the outcome of the 2003 World Parks Congress organised by the World Conservation Union (IUCN) in Durban, South Africa. According to Dr Mordecai Ogada, a former chief executive of the Laikipia Wildlife Forum, the central theme and message coming out of the Congress was “benefits beyond boundaries”.

“The model that proposed establishment of conservancies outside protected areas … gained immediate currency and caught the eye of donors as well as statutory agencies like the Kenya Wildlife Service, which were keen to gain more habitat for wildlife and secure reservoir wildlife populations that could augment those in parks via wildlife corridors,” says Dr. Ogada.

He says that this led to a “carefully laid out and presented plan” to secure the future of wildlife in these vast lands and to get financial support from private and institutional donors.

To avoid paying taxes and to continue enjoying the largesse of global supporters of wildlife conservation, many of the Laikipia ranchers registered their conservancies as non-profit organisations. Today, Ian Craig’s Lewa Conservancy and Kuki Gallman’s Ol-Ari Nyiro Conservancy are registered as non-profit outfits. However, this is a misnomer because many of them run exclusive, high-end lodges and camps that charge tens of thousands of shillings daily to tourists. For instance, with 12 tents that can accommodate 26 guests, Lewa Safari Camp located in the Lewa Downs charges between Ksh15,500 ($155) and Ksh42,600 ($426) per night depending on the season.

The plot thickens

Getting the United Nations Education, Scientific and Cultural Organisation (UNESCO) to give world heritage status to the ranches is the third approach adopted by the ranch owners. The secret scheme to have UNESCO play ball is aimed at enabling the ranchers to maintain a lasting claim on the land and, therefore, “eternally” defeat any campaign to have it revert to the Maasai community. So far, this is a feat that only Lewa Conservancy has attained. The 60,000-acre ranch was given this status in 2013, as an extension of the Mount Kenya World Heritage Site together with the Ngare Ndare Forest, which is also in Laikipia.

However, there are those who say that the elevation of Lewa was an anomaly because according to the World Heritage Convention, the duty of ensuring the identification, protection and conservation of cultural and natural heritage sites “belongs primarily” to the state. In addition, Article 5(4) of the convention burdens states with the funding and the protection of such sites, besides coming up with laws to protect them. Further, Article 6(3) states: “Each State Party to this Convention undertakes not to take any deliberate measures which might damage directly or indirectly the cultural and natural heritage.”

Nevertheless, Lewa’s success appears to have encouraged others with huge ranches, some which were constituted through the NRT, to seek similar status for their property. According to what I found out, the ranchers commenced this in 2014 when 24 wildlife conservancies and private game ranches made applications to be included in the world database of protected areas. These include Ol Pejeta Conservancy, Segera, Solio Ranch, Ol-jogi Ranch, Kisima Farm and Ol Ari Nyiro Ranch (see: https://protectedplanet.net/ ).

“There is a rush to create a super big protected area stretching from Lewa to Solio – all of it under the cover of Word Heritage Convention,” says Njenga Kahiro, a former Project Officer with Laikipia Wildlife Forum.

If this goes through, it will mean that the conservancies and ranches will be declared of outstanding universal value and natural beauty. It is also bound to have far-reaching implications for Kenya, which is a signatory to the World Heritage Convention. Formulated in 1972, the Convention protects the world’s cultural and natural heritage. In essence, the ranchers appear to be putting forward the argument that the land is special and only its present owners can be trusted to keep it that way. But this has attracted criticism from members of the Maasai community. “This is a misplaced idea and it will receive serious challenges and resistance from human rights and indigenous people,” said Mali Ole Kaunga, the director of IMPACT, an NGO based in Laikipia County. Ole Kaunga accuses the ranch owners of “hiding behind international conventions…in order to get the Kenya government to protect them as it is obliged to by the Convention.”

Laikipia has “profound inequalities” in land ownership, with 40.3% of the land being controlled by 48 individuals.

Eustace Gitonga, the director of the Community Museums of Kenya, says that this will prevent Kenya from ever changing the use of such a vast segment of its real estate. “This will mean that Kenya cannot access any mineral wealth suspected to be in these lands.” Gitonga believes that this will also affect Kenya’s sovereign right to decide on how best to use its resources.

Other dynamics have also set in to further disenfranchise the pastoralist communities. This includes acquisition of large parcels of land by top politicians and rich people, from different ethnic groups in Kenya. Added to this is the phenomenon of absentee landlords and the resettlement of smallholders, mainly from the Kikuyu community, there. According to Letai, today, smallholder farms constitute 22.21% of the land. Many of the owners of the small farms have abandoned their parcels, as ascertained by a study done in 2013 titled The Abandoned Lands of Laikipia Land Use Options Study). A whopping 238,000 acres have been abandoned by some 85,000 titleholders, most of whom live elsewhere.

The absentee landowners, who were settled there by the first independent government under the late President Jomo Kenyatta, ended up using the land as collateral to acquire loans, mainly from the Agricultural Development Corporation. Letai says that there has been a rush to buy off the land from the absentee land owners. “Former commercial ranch managers are identifying the title holders of the absentee lands to convince them to consolidate their holdings and sell them to foreign diplomats, aid workers and even some former Zimbabwean white farmers. He adds that after purchasing the land, the latter have been fencing them which “has created tension with the Maasai and other pastoralists who have been using this land over a long period of time.

NRT’s approach

This situation is compounded by the fact that the inappropriate conservation approach and, to some extent, the goings-on in the private ranches of Laikipia, is replicated in the sprawling communally-owned lands within Laikipia and neighbouring counties. Northern Rangelands Trust has been championing the well-oiled conservation initiative, arguing that it enables communities to get revenue from conservation activities, promotes security in the north and has been facilitating the mainly pastoralist communities to put in place grazing plans that lessen their vulnerability to frequent and severe droughts occasioned by climate change. The organisation further says that it is involved in bringing more lands into wildlife conservation through the development of strong community-led institutions and that this forms the basis for investment in tourism and community development. NRT-inspired community conservancies have now spread across Laikipia, Samburu, Isiolo, Marsabit, Baringo/East Pokot, Garissa, Tana River and Lamu counties.

The largesse extended to the NRT is large and extensive to say the least. For instance, last November, the United States government channelled, through the United States Agency for International Development (USAID), some Ksh2 billion (US $20 million) in a new five-year scheme meant to expand NRT’s operations in 33 conservancies in Kenya’s coastal and northern regions. According to NRT’s website, the conservancies now cover 10.8 million acres (or 44,000km2) of the country and are spread across 11 counties. Announcing the grant, US ambassador Robert Godec said it was meant to “support the work of community rangers, conserve wildlife and fisheries, and improve livelihoods and advance women’s enterprises.”

The NRT was started in 2004 by Craig, with the initial aim of raising funds to aid the formation and running of wildlife conservancies. Its website says it supports the training of relevant communities and helps to “broker agreements between conservancies and investors.” It also says that it provides donors with “a degree of oversight and quality assurance.” Besides the US, the organisation’s activities are heavily funded by the Danish Development Agency (DANIDA), The Nature Conservancy (a US-based international NGO) and the French government’s Agence Francaise de Developpement (AFD). Other financiers include Fauna & Flora International, Zoos South Australia, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ of Germany), US Fish and Wildlife Service, San Diego Zoo, International Elephant Foundation, Saint Louis Zo, and Running Wild.

However, it is the massive grants from USAID and Tullow Oil, the British company that has struck oil in Turkana County, which has attracted curious interest from observers who believe that there’s more than is being said in official communication. Pundits say that NRT’s approach affects communities negatively. According to Dr Ogada, the launch of community conservancies “began the mass disenfranchisement of communities in the name of conservation, and the rest is history.”

“Conservation is a noble cause, but like all other sectors, should be properly regulated. Kenya is currently failing to do that.”

In an interview with this writer, Michael Lalampaa, an official with the Higher Education Loans Board who hails from Samburu County, said that “even when droughts occur, pastoralists cannot access part of their lands that are now set aside for wildlife conservation and which constitute the community conservancies.” Indeed, many of the NRT-inspired community conservancies visited by this writer in late December 2016 had set aside big portions of the community lands as exclusive wildlife areas (or core areas). Some of these zones have better ecological characteristics and impressive landscapes favoured by tourists. Lalampaa complains that NRT compels communities to set aside the best portions of their lands for the exclusive use of wildlife and investors subsequently lease it to set up tourist facilities.

What is interesting, as this writer found during a tour of the Kurikuri Conservancy close to Mukogondo forest, is that the NRT not only brokers the investment agreements, but has also insisted on having its employees as some of the signatories of conservancies’ bank accounts. More alarming, the community in Kurikuri is required to meet some of the costs of running the lodges, which eats deeply into the cash they get from leasing out their land and from each of the tourists who visit the conservancy.

To ensure that the operations within the conservancies have the support of relevant communities, NRT has identified and co-opted local leaders and elites who aid in persuading the pastoralists to set aside land for conservation. As a result, some of the prominent personalities within the Samburu, Borana, Maasai and Rendile communities are on the NRT’s board.

Drought part of the problem

Although the prolonged drought that ended last month is believed to have triggered the recent invasions of ranches and conservancies in Laikipia, there are claims that some of the pastoralist communities there have unwittingly locked themselves out of parts of their lands through the conservancy agreements. “Once the agreements are put in place, it becomes impossible for the herders to access pastures in the conservancies as they are confronted by armed scouts who kick them out. It is sad that at times, livestock end up dying simply because their owners cannot graze them in what used to be their lands,” says Lalampaa.

The setting aside of huge sections of community ranches (which is facilitated by the NRT) for conservation purposes has created a dilemma for the communities and is proving to worsen rather than diminish insecurity, particularly in the upper eastern and northern Kenya regions. According to media reports, the alienation of land has contributed to the hardships suffered by local pastoralists, especially during the current prolonged dry spell. Reports paint a worrisome picture of members of communities invading either the areas they had earlier set aside or other private game ranches. For instance, armed herdsmen invaded the ranch belonging to Will Jennings, a mixed race Kenyan, resulting in a shootout between members of the Rapid Deployment Unit of the Kenya Police and the rangers. Other ranches invaded recently include the Loisaba Conservancy and Sera Conservancies established by the pastoralists, the 50,000-acre Segera Ranch owned by Jochen Zeitz, a former CEO of the Puma sports brand, and the Sosian and Galmann ranches. So far, one rancher, Tristan Voorspuy, has been killed in Sosian Ranch, while Gallmann is still recovering in hospital after being shot by herders.

NRT’s security apparatus

Although the government has moved its security machinery into Laikipia, the long-running insecurity in Laikipia and other parts of the north is an indictment on its ability to pacify these areas. It is also apparent that the NRT has “filled the gap” by establishing a security apparatus that is considered one of the most controversial aspects of the organisation’s activities. On its website, the organisation says that it carries out anti-poaching operations, wildlife monitoring and that conservancy rangers are “invaluable to the Kenya Police in helping to tackle cattle rustling and road banditry.” NRT says that each conservancy has a team of uniformed rangers that are “employed by the communities and trained with support from NRT”. By 2014, there were some 645 such rangers.

Additional information posted on the organisation’s website shows that the rangers are given basic training by KWS personnel at the wildlife agency’s Manyani Training School. There, they learn “bush craft skills, as well as how to effectively gather and share intelligence, monitor wildlife and manage combat situations.” According to information posted on the website of the NGO Save the Rhino, some rangers have been given Kenya Police Reserve accreditation and “sufficient weapons handling training.” Such advanced training is done by 51 Degrees, a company associated with Batian Craig, the son of Ian Craig. Among the specifics of the training include tactical movement with weapons, ambush and anti-ambush drills, handling and effective usage of night-vision and thermal-imaging equipment and ground-to-air communications and coordination. The rangers are also taken through what is called “typical training of different operations in war situation”, as well as observation, stalking, camouflage and concealment, judging distance and map reading. NRT has also launched patrol boats for security operations in its coastal chapter, which has now benefitted from USAID’s finances.

The crisis is worsened by the pursuit of an inappropriate conservation model that has resulted in more disenfranchisement of the local people and led to rising incidences of severe drought as a result of climate change. The crisis is further exacerbated by neglect by the state and its unwillingness to stamp its authority in these areas –which has given undeserving space and say to the NRT and its foreign supporters.

“This formidable armed force is under the overall control of a CEO who is a civilian and isn’t even a citizen of this country,” said Dr. Ogada. He added that by allowing this to happen, KWS “has effectively abdicated its wildlife protection role” to the NRT.

Dr. Ogada believes that the immense foreign and private control over such a large proportion of the country’s resources and citizens calls for more overt dialogue and regulation. “Conservation is a noble cause, but like all other sectors, should be properly regulated. Kenya is currently failing to do that.” He adds that the sheer geographical, financial, cultural and political scale of this intervention calls for a lot more thought than has been given to it thus far.

It is apparent that the crisis in Laikipia and other areas in Northern Kenya is a multifaceted one that defies a simple explanation. It has its origins in historical land injustices that have not been addressed even after Kenya became independent. The crisis is worsened by the pursuit of an inappropriate conservation model that has resulted in more disenfranchisement of the local people and led to rising incidences of severe drought as a result of climate change. The crisis is further exacerbated by neglect by the state and its unwillingness to stamp its authority in these areas –which has given undeserving space and say to the NRT and its foreign supporters.

To address this crisis, all players must come together to examine, in a holistic and comprehensive manner, issues related to land ownership and use, security, economic well-being of the people, and vulnerability of the local communities to adverse effects of climate change, among other issues. The state must also pacify these areas, not merely by sending the police or members of the Kenya Defence Forces, but also by starting social and economic projects in a manner that will establish a meaningful and lasting economic footprint there.

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Gitau Mbaria is a freelance writer, journalist, author and researcher.

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Black Votes Don’t Matter: The Shrinking Civic Space of African Immigrants in the US

It is a difficult time to be an immigrant in the US. For those of African descent, theirs is a rare combination of challenges, not only in becoming part of a new nation but also in carrying the baggage that comes with being black in America.

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Black Votes Don’t Matter: The Shrinking Civic Space of African Immigrants in the US
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The United States of America has excelled in projecting an extraordinary image of itself as a free nation with a thriving democracy, where anyone can come and work their way towards a better life through civic participation. However, what the past few years in particular have peeled away betrays a somewhat different truth: that voting in the United States is hard and getting steadily more so. And there’s one group of people who face a particular set of difficulties when seeking to cast their ballot: African immigrants.

Some historic context is needed regarding voting issues within the US. First and foremost, there is a historic precedent of voter suppression in the US that is unequaled within the modern Western world. Much of the targeting of such efforts has directly affected African Americans and people of colour. After slavery was abolished, states would go to incredible lengths to suppress the black vote, including implementing taxes on voting, forcing black people to produce extraneous forms of personal and family identification and making would-be black voters pass vaguely worded and lengthy “literacy tests” in order to cast their ballot. These systems, a part of the infamous Jim Crow laws, were struck down as illegal in 1965 when the country passed the Voting Rights Act.

In the years that followed, those who sought to seek the vote sought out ways to circumvent the law and keep the voter turnout low. Since the latter half of the 20th century, high voter turnout translated to a more liberal result. Take, for example, that a Republican presidential candidate has won the popular vote once since 1988 (George W. Bush in 2004). In the cases of the victories of Donald J. Trump in 2016 and George W. Bush, they skated to victory through the electoral college; a system that traces its roots to suppress the popular vote.

When looking at US politics, it isn’t as much a matter of high voter turnout as it is who comprise the voters that are showing up to vote. The most telling demographic, the group with the highest disparity of aligning with Democrats over Republicans, is African Americans. Hillary Clinton carried the black vote by an 80 point margin – 88 per cent to 8 per cent over Trump in the 2016 election. This margin, coupled with the United States becoming more, not less, diverse has left those seeking to suppress the vote scrambling for answers.

In 2013, efforts to suppress voters gained a major boost when the US Supreme Court overturned section 4(b) of the Voting Rights Act, which outlined that states and districts that had previously been involved in voting discrimination needed pre-clearance of the validity of their electoral processes. The conservative judges ruled this as unconstitutional, that the section “punished” states for past mistakes, not for possible future successes. Justice Ruth Bader Ginsberg dissented strongly, stating that “throwing out preclearance when it has worked and is continuing to work to stop discriminatory changes is like throwing away your umbrella in a rainstorm because you are not getting wet.”

The Voting Rights Act had been brought before court in the wake of a series of issues across the US, primarily having to do with controversial voting ID laws, reports of voter suppression and other forms of disenfranchisement. In a theme that runs across America’s election process, the black community was disproportionately affected.

This brings the issue to focus on African immigrants in the United States. The issue of immigration in the United States has currently brought the federal government to a shutdown for over a month. There is constant rhetoric from the Trump administration targeting illegal immigrants as a major obstacle to the security and economic future of the United States. The issues of building a border wall with Mexico and continuing to provide guaranteed safeties (such as the Deferred Action for Childhood Arrivals programme, which offers protections to the children of illegal immigrants into the US) are being used as bargaining chips at the government level.

A difficult time

It is a difficult time to be an immigrant in the US. For those of African descent, theirs is a rare combination of challenges, not only in becoming part of a new nation, but also in carrying the baggage that comes with being black in America.

African immigrants in the US are a small but rapidly rising group. The increase has been marked since 1970, especially amongst sub-Saharan Africans. According to the Pew Research Center, the number of African-born individuals heading to the US increased nearly 250 per cent between 2000 and 2015, from 881,000 up to 2,060,000. Africans are also the fastest growing demographic among black immigrants, increasing by 137 per cent between 2000 and 2013.

It is a difficult time to be an immigrant in the US. For those of African descent, theirs is a rare combination of challenges, not only in becoming part of a new nation, but also in carrying the baggage that comes with being black in America.

In the US, a major aspect of any voting rights issue is where in the US you’re living. Different states hold different standards, different regulations and varying requirements. When examining how voting standards impacts African immigrants, there needs to be a brief examination of where African immigrants live.

The five states with the highest African immigrant population are California, New York, Texas, Maryland and Virginia. Cities such as Atlanta, Georgia and Minneapolis also have high numbers of such migrants. This is where context becomes even more important; California and New York are known as more immigrant-friendly destinations, and their major metropolitan areas are regarded as “sanctuary cities” for illegal immigrants. New York and Minnesota don’t require a photo ID whereas California may require one for a first-time voter (newly-naturalised US citizens are always first-time voters). Maryland holds a similar policy.

Texas, Virginia and Georgia, on the other hand, are a different matter entirely. Virginia requires a valid photo ID in order for an individual to vote in person. Texas and Georgia are both mired in controversy over the stringent regulations put in place regarding the standards for voter IDs. The state of Texas is currently mired in litigation over the voter ID laws, with opponents arguing that it disproportionately impacts minorities.

In Georgia, where over 70,000 African immigrants reside in the Atlanta metropolitan area, the man who was presiding as the Secretary of State (the office which controls the conducting of elections, a possible conflict of interest) won narrowly and controversially over Stacey Abrams, who would have been the first black woman elected to be a state governor in the US. Abrams repeatedly made claims that there was voter interference, particularly amongst black precincts, where electronic voting was in disarray and reports of voter suppression were rampant. These claims had much of their basis in and around Atlanta, Georgia.

Why does voter ID matter and how does it affect Africans living in America? For starters, the path to US citizenship (which is needed to vote in America) is extremely arduous, long and difficult. The paperwork hoops to jump through are staggering. On average, it takes an immigrant a minimum of five years of continuous residency to become a naturalised US citizen. In cases that need further legal counsel, it can take even longer as the legal side of American immigration courts have become steadily more choked and congested in the new millennium.

Why does voter ID matter and how does it affect Africans living in America? For starters, the path to US citizenship (which is needed to vote in America) is extremely arduous, long and difficult.

For immigrants, the issues surrounding voter ID can often be much murkier. For instance, immigrants can gain driver’s licenses within the United States, which is one of the key forms of identification needed in states with more stringent regulations. This doesn’t mean that immigrants have the appropriate information explained to them regarding the IDs being obtained. The African Advocacy Network of California notes that although driver’s licenses are applied for successfully by immigrants who aren’t naturalised, the fact that they are still unable to vote due to their status isn’t explained to them. This can lead to immigrants attempting to vote, unknowingly engaging in an illegal act of fraud. The penalties for such fraud in the US are harsh. Both illegal and legal immigrants can face deportation if found to be involved in fraudulent voting. Cases of actual voter fraud involving illegal immigrants are incredibly rare, but that doesn’t stop Trump from repeatedly claiming that Hillary Clinton won the popular vote because of millions of “illegals” somehow managing to cast ballots.

Illegal immigrants in Trump’s America

The Obama administration was noted for its strict approach to illegal immigration, deporting hundreds of thousands between 2009 and 2017. That same administration, however, did focus on expanding a programme called the H1-B visa, which encouraged workers from outside of the United States to enter the country to work. Many prominent corporations, including Amazon, Google and Microsoft, heavily leaned on the programme as it eased the transition for professionals to gain a foothold in the US workforce. In addition, the H1-B programme made the path to a Green Card visa (an initial step towards US citizenship) markedly smoother, encouraging immigrants to engage in the process of becoming a citizen.

The Trump administration, on the other hand, has taken a significantly different approach. The current White House passed an executive order titled “Buy American, Hire American” that directly encourages American companies to hire only the most skilled workers from outside of the United States. This will have a long-term impact on the number of H-1B applicants who can head down the path of gaining citizenship.

The Obama administration had an unfortunate track record of harshness regarding immigration, including reopening and examining case files of naturalised citizens (immigrants who gained their citizenship in the US). The Trump White House has, of course, seized on this idea and expanded it. Under this administration, the U.S. Citizenship and Immigration Service (U.S.C.I.S.) has created a new task force to look into cases and possibly “denaturalise” citizens for often muddied reasons, such as making a clerical mistake on a form. In essence, this leaves millions of naturalised United States citizens’ status at the discretion of officials appointed under the Trump administration, one noted for its blatantly anti-immigrant rhetoric.

A prominent path to Green Card visas for African immigrants is the Diversity Lottery programme, which grants visas to citizens from all over the world. Given the administration’s track record, it comes as little surprise that the White House has looked repeatedly into cutting the programme entirely. As egregious as this is, perhaps the repeated ransom holding of the so-called “dreamers” (children of illegal immigrants born in the United States and granted legal protections) is even more insidious. Trump has made a repeated talking point of ending protections for the dreamers, even going so far as to offer continued protection as a bargaining chip for $5.7 billion of funding for a border wall in January of this year.

The Obama administration had an unfortunate track record of harshness regarding immigration, including reopening and examining case files of naturalised citizens (immigrants who gained their citizenship in the US). The Trump White House has, of course, seized on this idea and expanded it.

So how does this apply to African immigrants, specifically? The numbers indicate that immigrants from sub-Saharan Africa are the fastest growing group, and that the vast majority of this immigration has occurred after 1960. This translates into African immigrants having less of an established civic network than other immigrant groups in the US.

Less civic engagement

Less network means less community engagement and less protection for Africans now calling the US their home. This, in turn, translates into issues surrounding social integration facing Africans in America. Those in questionable status are likely to eschew anything to do with getting on the record, including engaging in civic discourse. One example saw the city of San Francisco engaging with members of the African immigrant community to get involved with the local school board elections, despite many holding illegal immigrant status. Illegal immigrants worry about what will happen to their information and whether it will end up in the hands of Immigration and Customs Enforcement (ICE).

This is compounded by the constant shifting and swirling of regulations surrounding immigration within the US. Frankly put, in America, thing currently seem extremely uncertain. Those who would have gained the path to citizenship by being granted immigration visas are suddenly on the outside looking in. Immigrants from Libya, Sudan and Somalia (the three African nations affected under the Trump administration’s travel ban targeting Muslim-majority nations) are suddenly unsure of their status.

Noticeably, despite all of his talk of walls and increased military presence, Trump has not issued a travel ban to a Latin American country. The current administration is seemingly preoccupied with all things immigration, how to stop it, how to grandstand from it, how to flex political muscle by stopping it. In fact, in 2017, despite overall numbers of deportations falling, ICE deported a record number of African immigrants, more than double of the total from 2016. There were reported instances of poor treatment and abuse of deportees by ICE agents. While the numbers are comparatively small, increases in deportation can push African immigrant communities even farther outside of the democratic process. What was the number one country for African immigrant deportations from the US? Somalia.

Less network means less community engagement and less protection for Africans now calling the US their home. This, in turn, translates into issues surrounding social integration facing Africans in America. Those in questionable status are likely to eschew anything to do with getting on the record, including engaging in civic discourse.

Ilhan Omar, herself a Somali immigrant to the US, is now a first-term Congresswoman from Minneapolis, Minnesota. Her election is an indication of a potential future of US politics: that African immigrants can find a voice in politics, in part due to the rallying of their communities. She’s become an outspoken advocate for the Somali community in Minnesota while continually deriding the Trump administration’s anti-immigration policies.

Since her election, Omar has been a frequent target of scathing criticism from the conservative media and the Republican Party, who have even claimed that some of her pro-Palestine comments are blatantly anti-Semitic. While her election to the US Congress is historically significant (she’s the first African-born refugee in the history of the United States Congress), Omar is still just one member of Congress, one voice for an ever-growing population that seems ever-more targeted by executive orders of the Trump administration. Think of it this way: Omar wouldn’t be able to enter the US under the travel ban of Muslim majority countries passed down by Trump.

In essence, this message to newcomers to the US is: DON’T BOTHER GETTING ENGAGED BECAUSE THE CONSEQUENCES COULD OUTWEIGH YOUR EFFORTS. To those emigrating to the US from Africa, this messaging can appear even more insidious, as Adoubou Traore (who himself emigrated from the Ivory Coast), the director of the African Advocacy Network in San Francisco outlines: “Many Africans have inherent doubts about the legitimacy of elections, they’re a headache, their experience makes them not believe that their voices matter. When there is no guarantee that their information won’t be subject to being exploited, from their view: what’s the point?” There isn’t much that would prevent them from holding such views in America. It becomes a community question of why organise if doing so can only lead to more headache?

With issues surrounding racism against black people in America being dissected and moved further towards prominence in national dialogue, it would, at least on the surface, seem as though the communities of African Americans would provide a steady ally for Africans adjusting to life in America. Unfortunately, this is often not the case. There is a noted divide between Africans and black Americans, one that many coming to the US find difficult to bridge. Some of this gap is historically entrenched, some of it is due to the truly lacking breadth of coverage in the US education system regarding African history and culture. The awkward truth is: Africa as a topic in the US is regarded as a monolithic punch line to a bad joke, and is hardly rendered an after-thought in terms of democratic engagement.

In terms of vulnerability to less-than-democratic interests, there are myriad of groups in the United States that could use additional legal and outreach protections. Practically anywhere in America that can’t be categorised as white and suburban finds itself victim to voter suppression efforts. In the US context, the black community is systematically targeted the most.

Laws are seemingly rolled out in force yearly in dozens of states, implementing further restrictions and using scare tactics, lies and intimidation to influence local and national elections with a conservative slant.

The unavoidable truth is that Africans in the US find themselves at an ugly modern crossroads: the centuries of subversive efforts to reduce the so-called “urban” vote at a crossroads with the modern iteration of all-American xenophobic fervour. Though growing fast in population, the democratic influence has not kept stride.

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Death in Vienna: The Death of Erich Rebasso

In the last days of 2008, Erich Rebasso, an Austrian lawyer, sent a letter to the main Vienna headquarters of the Federal Criminal Police, the country’s top law enforcement agency. Its purpose was unusual — the father of four young children was blowing the whistle on himself.

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In the last days of 2008, Erich Rebasso, an Austrian lawyer, sent a letter to the main Vienna headquarters of the Federal Criminal Police, the country’s top law enforcement agency.

Its purpose was unusual — the father of four young children was blowing the whistle on himself.

“I deeply regret having been used for criminal purposes and I am willing to submit the matter to the required criminal review,” Rebasso’s five-page confession concluded.

But it had all come apart. Rebasso admitted he had been used to launder tens of millions of dollars. He explained that, for over a year, he had been accepting payments from Russian criminals and had sent the funds to other bank accounts at their instruction. Then 45, Rebasso specialized in advising Russian clients on how to do business in the West. He had an excellent reputation as a fast, reliable, and discreet partner, and he spoke Russian fluently.

As it turns out, those criminals were using companies that were part of the Troika Laundromat. The massive financial scheme revealed in OCCRP’s latest Laundromat investigation had been put together by Troika Dialog, then Russia’s largest private investment bank. Some of the accounts Rebasso wired to belonged to two of the system’s core offshore companies: Industrial Trade Corp. and Nixford Capital Corp.

Between December 2006 and February 2008, Rebasso used 150 individual transactions to send almost US$ 96 million to laundromat accounts at Ukio Bankas, a Lithuanian bank.

Many of the reasons specified for the transfers made little sense for a law firm. Along with trades involving “fruits and vegetables,” “consumer goods,” and “electronic goods,” Rebasso is even listed as buying “frozen herring” from companies with Ukio bank accounts. More likely, the description was a red herring aimed at Ukio’s compliance department.

Rebasso’s own Austrian bank accounts were held at Raiffeisenlandesbank Niederösterreich-Wien (RLB). Though the bank investigated his large transfers, it appeared to take no further action for two years — at which point it finally pressed him to stop.

The massive financial scheme revealed in OCCRP’s latest Laundromat investigation had been put together by Troika Dialog, then Russia’s largest private investment bank

Rebasso’s confessional letter had little effect. While police looked into the matter, it was two years later when they informed him that they had stopped the proceedings because they believed any potential crime had happened outside their jurisdiction and been committed by foreigners.

Two years after that, Rebasso was dead.

The Sheremetyevo Fraud

According to his statement, Rebasso’s involvement in the money laundering scheme began on a visit to Moscow in November 2006 where he was introduced to Viatcheslav Dremin, a Russian businessman. Dremin told him that he provided financial services to Russians who needed to transfer funds abroad. But the official system for sending money across borders was very bureaucratic, he said, and he needed to speed up the process. He wanted Rebasso to act as his trustee in Vienna to help him move the money faster.

The lawyer accepted. Soon, two Vienna bank accounts belonging to his Austrian company, Schulhof Investigation (later renamed Sostegno), began receiving large sums from companies Dremin represented, along with instructions on where to send them. In every instance, he received his directions via an anonymized email address.

Rebasso worked on behalf of three insurance companies registered in Dagestan, a troubled North Caucasus republic within the Russian Federation.

At least some of the money appeared to be of criminal origin.

One of the companies Dremin represented, National Insurance, was directed by Russian businessman Maxim Vedenin. In 2011, Vedenin would be sentenced to 19 years in prison for robbery and the murders of two prostitutes.

Prior to that, Vedenin’s company had received money from a widely-known fraudulent scheme involving fuel at Moscow’s Sheremetyevo airport that OCCRP uncovered in 2012.

Between 2003 and 2008, Moscow’s busiest airport bought fuel through a long chain of intermediaries that grossly inflated its cost. According to court documents, phantom companies earned at least $200 million in unnecessary markups in 2006 and 2007 alone. The Russian government lost more than 1 billion rubles ($40 million) in tax revenue from the scheme. The higher fuel costs also meant higher airplane ticket prices for the travelling public.

A portion of the money generated by the scheme was laundered through the Troika Laundromat. Vedenin’s company, National Insurance, received some of the proceeds, and then sent them on to Rebasso’s company.

The Austrian lawyer then sent the funds into the Troika Laundromat, using it as a money laundering system. Over the same period, between December 2006 and March 2007, he sent $19.4 million to the accounts of Nixford and Industrial Trade Corp. To justify the transfers to the bank, he provided false invoices indicating he had bought “consumer goods” from the Troika Laundromat companies, or was simply paying “for bills.”

All but one of Dremin’s companies have been dissolved, and he couldn’t be reached for comment.

Raiffeisen Looks In

Despite Rebasso’s efforts to mask his money transfers as legitimate trade deals, his own bank began to investigate the financial activity in the spring of 2007.

On March 15, Rebasso’s office received a letter from his bank’s legal department inquiring about a “sharp increase in transaction amounts” on one of his accounts. The bank wanted to know on whose behalf Rebasso was acting.

A few days later, Rebasso responded in a letter, explaining that he was handling “foreign payments” for three Russian insurance companies. He also provided their names, their information from the Russian commercial register, and evidence of his business relationship with them.

The bank appears to have been satisfied with Rebasso’s explanation, because afterward, his transfers continued.

(A representative of RLB said the bank could not comment on its clients and that it had complied with all anti-money-laundering obligations.)

A Last Client

In mid-2007, Rebasso’s statement to police says, Alfis Mirgunov, one of the Russian partners in his arrangement with Dremin, got in touch. Mirgunov planned to start his own financial enterprise and wanted Rebasso to open bank accounts in Austria on his behalf. Once again, the lawyer agreed.

He opened three new RLB accounts for his company, Schulhof, to handle the anticipated load. The accounts were denominated in U.S. dollars, euros, and Russian rubles and soon, more money started to pour in. Once again, Rebasso received his instructions from an anonymous e-mail address, this time identified only by a sequence of digits.

In mid-2007, Rebasso’s statement to police says, Alfis Mirgunov, one of the Russian partners in his arrangement with Dremin, got in touch. Mirgunov planned to start his own financial enterprise and wanted Rebasso to open bank accounts in Austria on his behalf. Once again, the lawyer agreed.

Over two months near the beginning of 2008, Rebasso wired $68.3 million in 106 individual transfers to a bank account owned by Vantrel Invest Ltd., a New Zealand–registered shelf company.

Vantrel doesn’t appear to be a Troika Laundromat company; rather it is an intermediary that sent millions on to the Laundromat. (Vantrel’s bank account was held at Ukio Bankas, where many Laundromat companies held their accounts.) Documents related to the transactions said they were to buy mobile phones, though this explanation is almost certainly another fiction.

In his confessional letter, Rebasso told the Austrian police that he stopped working for the Russians in 2008. It isn’t known how much money he took for his services.

“I ended this activity at the end of February,” he wrote. “Among other reasons, primarily because the scope overwhelmed my control options.”

His hesitation appeared to be only part of the truth.

In fact, that month, Rebasso’s Austrian bank, RLB, had had enough. His transactions had apparently triggered another serious review, and senior executives told Rebasso he would need his own banking license to continue such large transfers.

The Finlist Fraud

Though he had stopped working with his Russian partners, Rebasso’s troubles were just beginning. He appeared to have become an unwitting facilitator of a fraudulent investment scheme.

According to his letter, in June 2008, Rebasso started receiving emailed complaints from ordinary Russians who said their savings had been stolen.

Rebasso described the correspondents as “rather simple-minded, not very wealthy people who were baited with internet ads.”

Apparently, the victims of the scheme had been offered what appeared to be lucrative investment opportunities through a platform called Finlist Forex Found. Then, without Rebasso’s knowledge, they were instructed to send their money to the accounts of his Austrian company, Sostegno.

Rebasso said the Russian fraudsters provided the investors with fake documents bearing his forged signature (some of these were shared with him by the angry correspondents). When the money arrived in his accounts, Rebasso sent it on without being aware of its origins.

Now the victims were furious, demanding repayment of money he had already sent on to the Laundromat.

Rebasso said the Russian fraudsters provided the investors with fake documents bearing his forged signature (some of these were shared with him by the angry correspondents). When the money arrived in his accounts, Rebasso sent it on without being aware of its origins

Rebasso got in touch with Mirgunov and asked what was happening. The Russian told him he would fix the problem and reimburse anyone who had lost money. But he never did, and by the end of the year, Rebasso sent his letter to the Federal Criminal police.

The Beginning of the End

The police forwarded the case to the public prosecutor’s office in Vienna. Nothing appeared to happen. On Dec. 3, 2010, two years after his complaint, Rebasso was notified that police had ended their case. It had been dismissed because the public prosecutor decided the case was outside Austrian jurisdiction. “Foreign acts of foreigners,” the statement read.

Rebasso’s own story was nearing its end.

In late July 2012, as he walked from his office to his Mercedes SUV in an underground parking lot, he was ambushed by two men. His car was later found empty in a different location, and shortly after his disappearance, his family received a demand: The kidnappers wanted a 435,000–euro ransom. After no deal was reached, Rebasso’s body was found three weeks later in a forest near Vienna. Austrian authorities concluded that he had been suffocated, probably while he was taken into a headlock.

Soon afterward, two former Moscow police officers were arrested and charged in connection with the ransom demand — but not for Rebasso’s kidnapping and murder. They were sentenced to eight and nine years in prison, respectively.

It’s still unclear who ordered Rebasso’s murder and why, though media and police speculated that victims of the investment fraud had hired the officers to recover the money.

More than six years later, the exact circumstances of Rebasso’s death are still unclear.

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The Troika Laundromat: How Vast Offshore Network Moved Billions With Help From Major Russian Bank

The Laundromat wasn’t just a money laundering system. It was also a hidden investment vehicle, a slush fund, a tax evasion scheme, and much more.

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The Troika Laundromat: How Vast Offshore Network Moved Billions With Help From Major Russian Bank
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At first blush, Ruben Vardanyan and Armen Ustyan have nothing in common beyond their Armenian roots.

Vardanyan is a wealthy Russian banker who once led Troika Dialog, the country’s largest private investment bank. He’s spoken at the World Economic Forum in Davos and spent tens of millions of dollars on philanthropic projects in his native Armenia. Ustyan is a seasonal construction worker who shares a chilly apartment with his wife and parents in northern Armenia when he isn’t renovating flats in Moscow.

Ustyan’s name and a copy of his passport appear in the bank documents for an offshore shell company that played a role in Troika’s system. The company was one of at least 75 that formed the complex financial web, which functioned from 2006 to early 2013. Over that period, Troika enabled the flow of US$ 4.6 billion into the system and directed the flow of $4.8 billion out. Among the counterparties on these transactions were major Western banks such as Citigroup Inc., Raiffeisen, and Deutsche Bank. The dozens of companies in the system also generated $8.8 billion of internal transactions to obscure the origin of the cash.But Ustyan’s signatures on documents he says he’s never seen draw a direct line to Troika — and to a financial Laundromat that shuffled billions of dollars through offshore companies on behalf of the bank’s clients, many of whom were members of Russia’s elite. The system enabled people to channel money out of Russia, sidestep restrictions in place at the time, hide their assets abroad, and launder money. It also supplied cash to Russian President Vladimir Putin’s friends and powerful oligarchs, and enabled criminals to mask the illicit origins of their cash.

(Citigroup didn’t respond to a request for comment on this story; Raiffeisen declined to comment, citing client confidentiality; and Deutsche Bank said it had “limited access” to information about Troika client transactions and couldn’t comment on specific businesses for legal reasons.)

At the time, Vardanyan was Troika’s president, chief executive officer, and principal partner. He enjoyed a reputation as a Western-friendly representative of Russian capitalism, known for working to improve the country’s business environment and for co-founding the Moscow School of Management Skolko

As with the previous Laundromats, many of the large transactions were made on the back of fictitious trade deals. The bogus deals were invoiced variously as “goods,” “food goods,” “metal goods,” “bills,” and “auto parts.” All the invoices included in the leak were signed by proxies and sent from Troika.ru email addresses. Meanwhile, employees at Troika were setting up the opaque financial system — dubbed here the Troika Laundromat because of its resemblance to previous money laundering schemes uncovered by OCCRP.

This portrait of the operation emerges from a trove of leaked banking transactions and other documents obtained by OCCRP and the Lithuanian news site 15min.lt, and shared with 21 media partners.

As a whole, the data set includes over 1.3 million banking transactions from 238,000 companies and people, as well as thousands of emails, contracts, and company registration forms. This analysis of Troika’s network is based on a subset of the data.

In an interview, Vardanyan said his bank did nothing wrong and that it acted as other investment banks did at the time. He stressed that he couldn’t have known about every deal his enormous bank facilitated for its clients. Reporters found no evidence that he was ever investigated or accused of any wrongdoing by authorities. His signature was found on only one document in the entire scheme, in which he gives a loan to a Troika Laundromat company.

Vardanyan described the system as a private wealth management service.

Referring to the constellation of offshore companies that comprised the Laundromat, he said: “Those are technical service companies of Troika Dialog clients, among them, mine.”

“It could be called a ‘multi-family office,’” he said. “A similar practice still exists at foreign banks. Most of their clients work through international companies. I repeat: We always acted according to the rules of the world financial market of that time … Obviously, rules change, but measuring a market in the past by today’s laws is like applying modern compliance standards to the time of the Great Depression. You’ll agree that this distorts the true situation.”

Asked about the fictitious trade deals, Vardanyan said Troika Dialog’s revenue topped 2 trillion rubles from 2006–2010 ($63–85 billion, depending on currency fluctuations) and that he “couldn’t possibly know about all the deals in a company of this size.”

Though such practices were considered business as usual in Russia at the time, specialists note that systems like the Troika Laundromat can have serious repercussions.

The schemes stunt national economic development, undermine human security, and diminish the quality of life for people left behind, said Louise Shelley, director and founder of George Mason University’s Terrorism, Transnational Crime, and Corruption Center and author of the book “Dark Commerce.”

“Money laundering countries, particularly in the developing world, are losing enormous amounts of capital that are needed for infrastructure development, education, health, [and] the development of new businesses, of entrepreneurship,” Shelley said. “With this much money lying overseas, you can do all sorts of malicious things. You can interfere in electoral processes. You can help pay for fake news.”

Criminal Services

The Laundromat wasn’t just a money laundering system. It was also a hidden investment vehicle, a slush fund, a tax evasion scheme, and much more.

Troika’s clients also used it to buy properties in Great Britain, Spain, and Montenegro; to acquire luxury yachts and artwork; to pay for medical services and World Cup tickets; to cover tuition at prestigious Western schools for their children, and even to make donations to churches.

In addition, the Troika Laundromat enabled organized criminal groups and fraudsters to launder the proceeds of their crimes. OCCRP and partners have identified several high-level frauds perpetrated in Russia that used Laundromat companies to hide the origins of their money.

Troika’s clients also used it to buy properties in Great Britain, Spain, and Montenegro; to acquire luxury yachts and artwork; to pay for medical services and World Cup tickets; to cover tuition at prestigious Western schools for their children, and even to make donations to churches.

One of these schemes, known as the Sheremetyevo Airport fuel fraud, took place from 2003 to 2008 and artificially inflated aviation fuel prices while depriving the Russian state of more than $40 million in tax revenue. The scheme led to a hike in plane ticket prices. More than $27 million was sent by companies involved in the fraud to Troika Laundromat accounts. Vardanyan has not been implicated in the scheme and said he had no knowledge of it. In 2010, two years after the fraud ended, Troika Dialog began consulting for the airport along with Credit Suisse.

A second significant criminal inquiry tied to the Laundromat, from which $17 million ended up in the system, involves a tax avoidance scheme allegedly perpetrated by several Russian insurance companies. A man named Sergei Tikhomirov was accused of concluding false service contracts with the insurers as a pretext for having them send him large sums of money, which his accusers say he cycled through several accounts before depositing it abroad or cashing in. A portion of the money ended up in the Laundromat. (Tikhomirov did not respond to phone calls seeking comment.)

Roldugin didn’t respond to an email requesting comment, and Vardanyan said that he knew of the cellist, but was not aware that he had any business dealings with Troika.In a third case, at least $69 million went to companies associated with Sergei Roldugin, a Russian cellist and one of Putin’s best friends, who became famous after his vast unexplained wealth was revealed by OCCRP, the International Consortium of Investigative Journalists, and other media partners in the Panama Papers project. Some of the money that Roldugin’s companies received from the Laundromat originated in a massive Russian tax fraud exposed by Sergei Magnitsky, a Russian lawyer who died in jail after revealing it.

The Troika Laundromat enabled organized criminal groups and fraudsters to launder the proceeds of their crimes. OCCRP and partners have identified several high-level frauds perpetrated in Russia that used Laundromat companies to hide the origins of their money.

Companies involved in the fraud exposed by Magnitsky moved more than $130 million through the Troika Laundromat. In fact, hundreds of millions of dollars went into and out of the Laundromat for unknown purposes.

Vardanyan said he was not aware of any of these transactions.

“Understand, I’m no angel,” he said. “In Russia, you have three paths: Be a revolutionary, leave the country, or be a conformist. So I’m a conformist. But I have my own internal restraints: I never participated in loans-for-shares schemes, I never worked with criminals, I’m not a member of any political party. That’s why, even in the ’90s, I went around with no security guards. … I’m trying to preserve myself and my principles.”

Vardanyan and his family were among those who received money from the Laundromat. More than $3.2 million was used to pay for his American Express card, went to accounts belonging to his wife and family, and paid school fees for his three children in Great Britain.

Asked about these sums, Vardanyan said the offshore companies Troika created serviced his own companies in addition to the bank’s clients.

Troika as Capstone

The Troika Laundromat is unique among the Laundromats that have been uncovered in recent years in that it was created by a prestigious financial institution.

Like all investment banks, Troika handled stock and bond issuance, initial public offerings, and acted as an underwriting agent. It also had a strong relationship with the local office of Citibank Inc., with up to 20 percent of Troika’s new investors coming via the American behemoth. That made New York-based Citibank Troika’s biggest “external agent,” according to a 2006 interview with Troika co-founder Pavel Teplukhin. (Citibank didn’t respond to requests for comment.)Established in the early 1990s, Troika Dialog became Russia’s largest private investment bank. It operated under Vardanyan’s leadership until 2012, when it was purchased by Sberbank, the nation’s largest state-owned lender.

The Troika Laundromat is unique among the Laundromats that have been uncovered in recent years in that it was created by a prestigious financial institution.

Other major international banks, including Credit Suisse and Standard Bank Group, did significant business with Troika as well.

Starting in 2006, Troika employees began putting together the pieces of the Troika Laundromat.

Four essential elements are needed to build a functioning Laundromat: a bank with low anti-money laundering compliance standards; a maze of secretive offshore companies to hold accounts at the bank; proxy directors and shareholders for both the companies and the accounts; and the so-called formation agents that can quickly create, maintain, and dissolve the offshore companies as needed.

The bank orchestrated all of these components of the Troika Laundromat, in addition to directing the money flows and fake trade deals that made up its operations.

The pivotal mechanism was based on trade: Shell companies created bogus invoices for non-existent goods and services to be purchased by other companies in the system. The practice provides a fig leaf of legitimate economic activity that makes the transactions appear less suspicious to regulators.

Al-Qaida founder Osama bin Laden used a similar system to move money around the Middle East, she said.“You’re disguising an illegal payment by pretending that it is linked to a shipment of goods,” said Shelley, the George Mason corruption expert. “The trade-based system is one of the most central parts of money laundering in the world today.”

If Troika was the capstone of the Laundromat, its cornerstones were three British Virgin Islands-based shell companies: Brightwell Capital Inc., Gotland Industrial Inc., and Quantus Division Ltd. Brightwell’s first known transaction was on April 12, 2005. Gotland was established on Feb. 17, 2006, and Quantus followed six months later on Aug. 23.

An analysis of these companies’ banking records reveals how they put the Laundromat together: Starting in 2006, they made numerous small payments to a formation agent called IOS Group Inc. to create the dozens of companies that comprised the complete Laundromat. IOS didn’t respond to requests for comment.

The three cornerstone companies then continued making payments to IOS ranging from 40 to almost 5,000 euros over almost six years to keep the entire network operating. Over that span, the total reached over 143,000 euros.

Quantus, for example, paid formation and maintenance fees for the British Virgin Islands-based Kentway SA. This company was later used, among many others, to send millions of dollars to Sandalwood Continental Ltd., a company connected to Sergei Roldugin, the cellist, and one of Vladimir Putin’s oldest friends.

Quantus’ involvement with Kentway demonstrates the many ways in which the Laundromat companies were interconnected. In this case, after first helping establish Kentway, Quantus then funded it with money that Kentway forwarded to Roldugin’s company.

The Bank

To direct the flow of funds through the Laundromat, Troika needed a commercial bank to host accounts for the companies involved. And it needed that bank to avoid looking too closely at the contracts and trades Laundromat businesses used to justify moving money from one offshore company to another.

Troika chose Lithuania’s Ukio Bankas for the job. (The Lithuanian lender would later be seized by the country’s National Bank in 2013 for engaging in risky deals and failing to follow regulators’ orders.) Ukio is known to have set up accounts for 35 companies used in the Troika Laundromat, and likely more.

Because Lithuania wasn’t yet using the euro, Ukio needed correspondent accounts at European banks, such as the Austrian Raiffeisen or the German Commerzbank AG, to handle euro-denominated transactions. Those two lenders and many other large European and U.S. financial institutions accepted Laundromat money, though they did sporadically inquire about the nature of some transactions. After prodding by one of the correspondent banks, for example, some Ukio compliance officers made inquiries about Laundromat payments that didn’t make commercial sense.

“What is the essence of this transaction? We have a contract (attached), but to be honest, I don’t really get what’s happening,” one officer wrote, adding an unhappy face, in relation to a payment that went to a company associated with Roldugin.

By this point, the money had already left Ukio’s accounts.

Asked why Ukio was chosen as the banker for the offshore companies Troika created, Vardanyan said it was just one of about 20 banks Troika used around the world.

The Armenian Proxies

A central figure in many of the transactions involving the Laundromat companies was Armen Ustyan. Far from being an investment banker, Ustyan, 34, works seasonally as a construction worker in Moscow.

Ustyan said he had never heard of Dino Capital SA, the Panama-based Laundromat company whose Ukio bank account was registered using his signature. A copy of his passport was attached, but Ustyan insisted he had no idea how it got there. Ustyan’s signature can be found on contracts and banking paperwork in the Troika Laundromat along with those of a few other Armenians. Wearing an old military jacket and hat, he sat down with reporters this January in his cold living room to answer questions about high finance.

At his mother’s request, he wrote his signature on a piece of paper and concluded that the one associated with Dino Capital had probably been forged.

The Armenian said he knew none of this, though he did recall a slim connection to Troika Dialog: While in Moscow looking for work, Ustyan stayed with a Russian Armenian whose brother he said worked for the investment bank and helped him find employment. In addition to having his signature associated with Dino Capital’s bank account, Ustyan is also listed as an attorney authorized to sign contracts on the company’s behalf, and his signature appears on at least $70 million worth of financial agreements.

The Moscow address is indeed that of Nerses Vagradyan, a Russian citizen of Armenian descent. Nerses’ brother, Samvel Vagradyan, is a director of a Russian company that received millions of dollars from Brightwell, a core Laundromat company. A Samvel Vagradyan is also mentioned on Vardanyan’s website as a donor to the banker’s charitable causes. It’s unknown whether Samvel really worked for Troika.

Neither of the Vagradyan brothers could be reached for comment. Ustyan said he doesn’t believe they used his identity.

Another Armenian front man in the Laundromat appears to be Edik Yeritsyan. His identity was used to register an account at Ukio for the Cyprus-based Popat Holdings Ltd. This company was involved in Laundromat transactions worth millions of dollars.

Yeritsyan told OCCRP that he lost his memory three years ago after a car accident and doesn’t remember some parts of his life. However, Ustyan said that he and Yeritsyan lived together in the same flat they were renovating in Moscow.

This article was first published by The Organized Crime and Corruption Reporting Project (OCCRP) a global network of investigative journalists.

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