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A NEGOTIATED DEMOCRACY: Factors that influenced Somaliland’s 2017 election

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A NEGOTIATED DEMOCRACY: Factors that influenced Somaliland’s 2017 election
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On 13 November 2017, the people of Somaliland went to the polls to choose their fifth president since breaking away from Somalia in May 1991. Despite a delay of 28 months, international and local observers described the election as credible and peaceful. The fact that the election finally took place, and did so in a calm and orderly manner, was welcomed with a tangible sigh of relief, at home and internationally, and with pride on the part of Somalilanders.

A number of “firsts” added to this sense of achievement. Voters were registered using iris recognition technology to preclude double voting, making Somaliland an early pioneer in embracing biometric technology in elections. Unlike in the past, the incumbent was not a candidate, paving the way for a more robust campaign that featured, for the first time, a televised debate between the three presidential candidates, and the three vice-presidential candidates. It was also the most inclusive election, with all six regions taking part. The government made its largest financial contribution to an election, underlining how seriously Somaliland was taking its political future. For the first time, the government agreed to a code of conduct with the media to ensure balanced coverage by the state-owned media.

The advances in the 2017 electoral process took place against a background of widespread and profound frustration within Somaliland with a hybrid system of government that combines clan-based representation with Western political institutions. Over time, the merger became a fusion of weaknesses, incorporating neither the integrity and clarity of the traditional system nor the institutions and levers of accountability that underpin Western norms of governance. The multiple delays in holding the presidential elections also led to the gradual erosion of public trust in government institutions and to diminishing international goodwill. By November 2017, there was a convergence between domestic dissatisfaction and international pressure, making the election a defining moment in Somaliland’s political trajectory.

From remote villages to big towns, everyone from nomadic pastoralists across Somaliland to the elites in the capital, Hargeisa and in the large Diaspora communities, followed the election closely even if they did not vote. While they had different views of what they hoped for, there was a strong consensus that the political landscape needed an overhaul after seven years of the same administration.

Voters’ priorities

Desire for tangible improvements in their living standards dominated voters’ expectations. In our conversations with both urban and rural voters, the provision of water and enhancing the quality and coverage of educational and health services was repeatedly emphasised. The urgency of tackling crippling inflation, which has increased food prices and made poor people feel even more impoverished, was underlined across the board. Employment among youth and the development of road networks, electricity and other public utilities were also high on the list of priorities for most people. Rural communities, reeling from the effects of a severe drought in which they lost most of their livestock, the main source of their livelihood, called for investment in agriculture.

The advances in the 2017 electoral process took place against a background of widespread and profound frustration within Somaliland with a hybrid system of government that combines clan-based representation with Western political institutions. Over time, the merger became a fusion of weaknesses, incorporating neither the integrity and clarity of the traditional system nor the institutions and levers of accountability that underpin Western norms of governance.

Voters in urban areas, particularly young people, view political favouritism as one of the major impediments to their employment prospects and the reason so many of them embark on the treacherous journey to Europe ((known as tahrib). Consequently, the role of government in creating a fair and equitable environment for employment, business opportunities, economic investments, the distribution of resources, access to government services and political appointments, mattered to all voters. Fighting corruption, making the legal system work for everyone, curbing the powers of the police and putting an end to the arrest and detention of journalists also carried weight with voters.

However, these priorities did not, for the most part, shape the decisions made when voters actually cast their ballots.

Official party programmes and campaigns

To guarantee the formation of political associations with cross-clan representations, the Constitution of 2001 imposed a limit of three political parties. In addition to Kulmiye, the party of the sitting President, two other parties, Waddani and the Justice and Welfare party (UCID), joined the contest in 2017. While Kulmiye and UCID were participating in a presidential election for the third time, Waddani, registered in 2012, was a newcomer to the political arena. The leader of UCID had sought the presidency in earlier elections, but Waddani and Kulmiye fielded new candidates.

All three political parties had written programmes, popularly referred to as manifestos. Those of the opposition – Waddani and UCID – were largely a response to what were described as the shortcomings of the ruling party. They pledged major changes across all sectors. The party in power, Kulmiye, spelt out what it saw as its achievements and promised continuity while making further improvements.

Economic and social issues, international recognition and good governance all featured prominently in the manifestos. With the use of social media and increased media coverage, more voters than ever had access to party manifestos. Some of the parties held presentation sessions across all six regions to give voters the chance to question senior officials about their stated plans.

The manifestos, however, were not intended for all voters, especially given the high levels of illiteracy, particularly outside the main towns. Target audiences were the slim minority of educated voters, mainly young people, seen as independent of clan interests and who might, therefore, be swayed by a party’s stance and ideology. But they constituted an insignificant proportion of voters, their impact further undermined by the fact that they are scattered.

Illiteracy, reinforced by a strong oral culture, meant that a large percentage of voters were influenced by what they heard at rallies and in private meetings and what they witnessed on television. An official for Waddani said his party put at 65% the voters “who are not interested in the programme.” Their recruitment, he added, required using what he called traditional methods to get their support. This largely consisted of bringing party officials from their area “to show where their clan fits in the party hierarchy and probably in the next government”, as well as discussions about the sharing of power and resources.

One civil servant blamed constituents for letting politicians get away with making “blank statements about impossible deliverables which lack the how part.” People, she said, never asked the parties for concrete solutions and preferred instead to listen to speeches about “heavenly rivers flowing through their neighbourhoods.” At the same time, she acknowledged that voters know, from experience, that party programmes are not implemented after elections precisely because “parties are built on the foundation of clan interests and not ideologies.”

Yusuf Osman Abdulle, a poet known as Shaacir, said it was unrealistic to expect the population in Somaliland to choose between political parties based on written documents. “Given the low literacy rate and the very poor quality of our educational system, you don’t expect our society to be where they can choose parties based on what they are promising or what they have done in the past,” he explained. “The thing everyone understands is: Who are the candidates? What clans do they belong to? What is the relationship between his clan and my clan?”

And that indeed was what mattered. The heartbeat, and heat, of the campaigns was not about policies.

Forging alliances

As happens with elections the world over, 2017 revealed the patronage system at work. In Somaliland, the politics of vote-seeking is directly tied to the clan-based social structure. Far more significant and decisive than the large public rallies held during the official 21-day campaign period were the numerous behind-the-scenes meetings between party leaders and traditional elders, politicians and businessmen, which had kicked off during the previous six months.

Voters in urban areas, particularly young people, view political favouritism as one of the major impediments to their employment prospects and the reason so many of them embark on the treacherous journey to Europe ((known as tahrib).

As in previous elections, parties found it easier to maximise votes by securing the loyalty of clan elders who then become responsible for bringing the vast majority of their constituents on board. The campaigns that mattered were outsourced to elders, often from the same clan as the candidates, to meet with other clan leaders and build coalitions. Historical relationships between their respective clans and forging new relationships going into the future became the focus of discussions.

At the same time, party leaders also met with the elites of clans – elders, politicians and businessmen – to give clan-specific assurances in exchange for garnering political support, including political posts and development projects. At times, these pledges were captured in written documents signed by the party leadership. Party officials from those clans were given centre stage to show how well they were represented in the party, photo opportunities which were then broadcast through the media.

An official involved in the youth wing of Kulmiye in Hargeisa was straightforward about the political calculations at play.” A key winning strategy both for the ruling party and the main opposition party [Waddani],” he said, “was to bring in as many known figures as possible in the party from a certain clan. You can then expect more votes from that clan.”

Saying it was too simplistic to argue that parties go out and seek votes from clans, he underlined the importance of “intermediaries” between the parties and the clans, or what others referred to as political brokers. These are men [always], close to both elders and the party leaders, who work hard to implement the elders’ decisions. Parties, he commented, make either personal or group promises to them in exchange for influencing their clan or constituency. “When we talk about political parties spending millions of dollars in election campaigns, this is where the bulk of it goes to. And perhaps these elites distribute a fraction of that money to their followers.”

A party official in Borama, the capital of Awdal region, contrasted his “official” responsibilities and his true mission. As a regional official, he was charged with overseeing different offices and addressing crowds. But what he defined as the more important task “took place behind the scenes and it was to mobilise voters from my sub-clan.”

His counterpart in the small town of Salahley, 60 kilometres from Hargeisa, said elders had more powers over the community. He conceded that they, and not he as a party official, attracted the most votes. He attributed their hold over people to the fact that “everyone knows they will need the elder at some point.”

In the small town of Abdaal, in Sahil region, a young Waddani supporter worked with other members of football teams to oppose the elders, most of whom were behind Kulmiye. He said people did not take the challenge of competing with elders for votes seriously and “they were right”. Asked about politicians and elders who were not strong advocates of clan solidarity, an elder in the same town, Abdaal, was quick in dismissing their relevance. “There were very few of them and they had almost no influence over voters since they had defied the position of their clans,” he said.

The task of the elders, supported by their politicians, is to persuade, or pressure, their clan members to fall in line with the party of their choice. The lure of public service jobs for the youth and commitments to develop the region are stressed. Financial contributions are made for ongoing activities in the area, such as the construction of roads, schools and clinics, and money and khat are liberally distributed to men during campaign periods. In rural areas, affected by the 2016/2017 drought, the distribution of water, food and non-food items made a crucial difference to the outcome.

The blend of the traditional clan structure with modern governance institutions is reflected in the fact that the clans of the three presidential candidates were the stable base of support for their parties. Success, therefore, depended on establishing as broad an array of partnerships as possible with other clans. This is demonstrated, for example, in the parties’ choice of their vice-presidential candidates.

Practical considerations deepen the dependence of parties on the political clout of elders. Political parties do not have permanent offices at the district or regional levels, as became apparent when we visited a number of regions in February and March. They are, instead, concentrated at their headquarters in Hargeisa. Without grassroots branches, there is little to bring parties close to communities and foster a sense of belonging to, and ownership of, the parties. By the time senior officials visit the districts, usually close to elections, elders have already laid the groundwork.

“The thing everyone understands is: Who are the candidates? What clans do they belong to? What is the relationship between his clan and my clan?”

The difficulties parties face in raising their own funds currently makes it nearly impossible for them to keep their distance from elders. The three parties are closely associated with their founders and/or individuals who occupy key positions. Consequently, they become dependent on businessmen and contributions from their clans, including households. One observer commented: “If they campaigned purely on policies, they will not generate funds.”

The political influence of clan elders

An academic in Hargeisa described the election as “a clan project run by elders, politicians and the economic class.” Despite its many encouraging aspects, the last election was seen as inimical to Somaliland’s future as a democracy. No election has been so openly clan-based and so visibly steered by elders.

The campaigns featured inflammatory speeches, ugly rhetoric and defamation of individuals and clans – messages that were spread by the traditional media and extensive use of social media. Since clans were the deciding factor, the messages were designed so as to attract a specific clan and unite some against others. Since clans tend to reside in the same localities, even in the same neighbourhoods in towns, it was easier to hone messages and target particular groups.

Having co-opted clan elders as their principal vote-gatherers, party leaders gave them unfettered power to guide voters. Elders did not mince their words or moderate their actions, threatening reprisals against those who did not toe the line. Several party offices for both Waddani and Kulmiye were attacked and vehicles stoned.

The fact that all three candidates came from the largest clan family in Somaliland, the Isaaq, amplified inter-clan dynamics, pushing people into further sub-sub-clan classifications. Small villages and towns, populated by the same clans or sub-clans, were divided into the smallest possible units, sometimes reaching household levels. A Kulmiye organiser in Salahley spoke of several sub-clan assemblies with each setting up meeting places for their party.

The media – print, television and websites – and especially the privately-owned outlets, contributed to the charged political atmosphere in countless ways, through selective reporting, fake news and endless reportage of elders and politicians insulting each other. The huge number of events hosted by parties, whereby people speaking in the name of a certain clan had deserted another party to join theirs, were given extensive exposure by virtually all news outlets. One TV network, in an effort to paint Waddani as a pro-Somalia party that planned to impose federalism on Somaliland, showed a false photo of the Waddani leader meeting with the current President of Somalia who was at the time a candidate for that office.

The toxic nature of these campaigns inevitably created a pernicious political environment that threatened Somaliland’s most treasured asset – a long reign of peace.

The moment of truth

Unfortunately, and to the detriment of Somaliland, the near exclusive emphasis on clan considerations, channelled through the media, social media and clan gatherings, swayed many voters, including the youth. Discussions with those who voted show they had, for the most part, positive expectations of candidates from their clan or the candidate supported by their clan, and voted to express support for the clan’s position. They also paint an entirely negative picture of the opposing candidates from other clans, out of fear and/or animosity. A young university student in Hargeisa spoke of her mindset when she voted: “I was influenced by what I saw as a threat that can personally affect me should the candidates from other clans win the election. It was a battle between clans.”

Underlining the extent to which voting along clan lines is inextricably linked with perceptions of self-interest and fairness, she added: “You have better chances of getting employed if the President or a Minister is from your clan. I know it is not a healthy feeling, but it is just a reality.”

Angry about what he saw as the political marginalisation of his clan, a young and educated employee of an NGO said resolving social and economic problems did not figure in his calculations. His sole aim was to see his candidate triumph even though he considered the other two candidates “way better on most issues.”

A party official in Borama, the capital of Awdal region, contrasted his “official” responsibilities and his true mission. As a regional official, he was charged with overseeing different offices and addressing crowds. But what he defined as the more important task “took place behind the scenes and it was to mobilise voters from my sub-clan.”

Some voters, while admitting they voted in line with their clan, believe this was in the broader interests of Somaliland. A man living in the small town of Dilla in Awdal region argued that voting in step with his clan “was for the good of Somaliland so as to prevent two clans establishing dominance.”

Amal said that politicians only come to her village of Tuli in Awdal during elections and she expects nothing in return. Nevertheless, she found herself vulnerable when politicians descended on Tuli in 2017 and “labelled us as sub-clan X and sub-clan Y.” Amal, along with her neighbours, succumbed to the messages the intensified as 13 November, the date of the election, approached. Speaking in late February, she said a united community had been torn apart and people no longer communicated as easily as in the past.

Bucking the trend

Not everyone, of course, bowed to the wishes of their elders and local politicians. Some voters made independent choices. But many of those who stood their ground, particularly women who were expected to vote as decreed by their menfolk, said they paid a heavy price for their position.

Many of those who did not vote, despite the insistence of close relatives relaying messages from elders, said they based their decision on what they regarded as the absence of realistic and feasible programmes by the parties. A staff member of a human rights group in Hargeisa said he failed to find “timelines or convincing details of exactly how they would carry out their commitments.” A long-term civil servant in Hargeisa said she had seen ministers come and go over the years without any attention paid to election manifestoes. So why, she asked, “should I spend my energy for nothing?”

Khadar, a driver in Dilla, said his income had doubled, and his life had become easier and safer since a tarmac road was built by the previous administration connecting Dilla, Borama and Hargeisa. When it came to the elections, the construction of this road, he said, and not the opinion of his elders, determined which party he voted for.

Maimuna in Dilla held out against intense pressure, including being labelled a traitor. Elders, her own children and her in-laws failed to convince her when she refused to support one of the opposition parties. Her customers boycotted her business but she would not budge. Calling her position “odd and 100% personal because women’s choices are strongly affected by their husbands and male community elders”, she cited an aversion to change as the reason she went with the ruling party. Describing 2017 as “a very divisive election”, she said “it ruined relationships between individuals and families.”

In Salahley, Rahma had initially agreed with her elders to back Waddani. But when the head of UCID announced the Quran would guide the actions of his party, she switched to UCID and refused to back down despite entreaties from her local elders.

Regardless of internal divisions, voters in Somaliland see elections as an important step towards the prospects of international recognition.

Aspirations for international recognition

Asked about the most vital issue at stake in November 2017, Mustafa Awad, who follows Somaliland’s political fortunes closely, did not hesitate to say it was “the same as every other election since the 2001 referendum – international recognition.” The pursuit of Somaliland’s recognition by the international community is of course intensely political, not only domestically, but also in the region and internationally. It is also a practical issue, in terms of greater diplomatic and commercial ties with the outside world, acceptance of Somaliland passports to ease the current nightmare of travel and an increase in foreign aid.

An academic in Hargeisa described the election as “a clan project run by elders, politicians and the economic class.” Despite its many encouraging aspects, the last election was seen as inimical to Somaliland’s future as a democracy. No election has been so openly clan-based and so visibly steered by elders.

The feeling of being a voiceless and invisible people, of not belonging to the community of nations, has left a deeply felt psychological wound. Commitment to the electoral process, and consolidating Somaliland’s position as a democratic oasis in a region not known for free, fair and peaceful elections, is regarded as “the gateway to this much-coveted recognition” in the words of Mustafa.

The aftermath

It is imperative for Somaliland to reflect collectively over the recent elections, particularly because elections for both parliamentary and local government councils will be held in less than a year. To move forward and capitalise on its achievements, every society needs self-analysis in order to correct mistakes, assess weaknesses and improve on its successes.

Some of the key challenges mentioned by voters, and those who abstained, include healing the rifts created or magnified by the elections. The extent to which relationships between clans, between communities living in close proximity and even within families were disrupted, entrenching old divides and creating new political and social fault lines, is uppermost in the minds of most people. The consequences of the unparalleled level of discord are still felt across Somaliland, especially because the animosity was intimate, between people who know each other and interact on a daily basis.

Other issues of common concern include how to hold the new government accountable from a non-political perspective and as ordinary citizens and the absence of opportunities for remaining politically engaged outside the existing parties. Dissatisfaction with the role and performance of parliamentarians and local councils, the absence of sufficient platforms for political debate and discussion and a host of problems related to the mechanics of voting were also mentioned repeatedly.

The transition of elders from politically neutral peacemakers to powerful politicians is an acute and widely shared source of disquiet. The pivotal role of elders in enabling Somaliland to overcome the internal conflicts of the 1990s, precisely because of their detachment from political squabbles and their prioritisation of peace above all else, has been well-documented. The loss of this neutrality has worrying implications for the resolution of future conflicts and for democratisation.

Safia, a civil servant, wants to see elders confined to their traditional role, and banned from speaking on behalf of voters, in the hope that people will then organise themselves into groupings of their choice. The difficulty of coaxing people to demand public action over a common cause, such as poor roads or the absence of water, underlines for many the dangerous and debilitating encroachment of clan politics in everyday life.

Focusing on the larger public interest, however, requires room for manoeuvre, which parties in Somaliland currently do not have, given their dependence on their clan constituencies. Cutting ties with elders and prominent clan figures risks loss of support and creates resistance, a prospect no politician with an eye on the next election is likely to welcome.

The transition of elders from politically neutral peacemakers to powerful politicians is an acute and widely shared source of disquiet. The pivotal role of elders in enabling Somaliland to overcome the internal conflicts of the 1990s, precisely because of their detachment from political squabbles and their prioritisation of peace above all else, has been well-documented. The loss of this neutrality has worrying implications for the resolution of future conflicts and for democratisation.

Unless voters can hold a government to account, it is impossible to compel a new administration to deliver on its election commitments. The space for accountability in Somaliland is already limited. This is further constrained by the low level of rights awareness among both the public and government officials, and by the nature of a system where most people voted out of clan allegiance. Successive governments have promoted a perception of demands for accountability as an opposition-fuelled process, leading to controversy and pitting pro-government and anti-government supporters against each other, often along clan lines. This situation will persist as long as politics is trapped in its current form.

The irony, as pointed out by Khaled Ismail Abdi, who works with media groups, is that people who voted for change then wait for the government to solve all their problems, imposing an unrealistic burden on an administration with few resources. When the hoped-for-changes fail to materialise, there are few avenues, outside of the clan, to seek redress. Addressing the government, as an expression of civic responsibility and a right, is not seen as an option.

Two decades is a very short period, particularly in the wake of war and conflict, to institutionalise the norms of a full-fledged democracy. In that time, Somaliland has indeed made strides that can be built upon to strengthen its political infrastructure and, for the sake of future generations, move away from being a clan-based polity. This requires an engaged citizenry to encourage the emergence of political leaders and parties independent of clan identity and committed to reinforcing Somaliland’s nascent democratic institutions.

Note: Pseudonyms have been used throughout this article.

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Rakiya Omaar is the Director of the Horizon Institute and Mubarik Muse Ali is a Research Programme Officer at the Horizon Institute based in Hargeisa, Somaliland.

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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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