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DREAMS OF EMPIRE: Stepping out of America’s Fading Lustre

As Donald Trump surrenders America’s global preeminence, Africans – at home and in the diaspora – should work to build an African superpower rather than succumb to Chinese colonization. By MKAWASI MCHARO HALL

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DREAMS OF EMPIRE: Stepping out of America’s Fading Lustre
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The first African Diaspora Young Leaders summit was coming to a close in Washington DC. The State Department had sent me an invitation to the closing dinner. RSVP for one, I wrote back. State Department dinners are often a microcosm of the global political structure, and schmoozing around with the diplomatic corps is like listening to the whispers of countries bottled up in one room.

Sometimes you catch the ambitious Washington-based African ambassador gunning for the presidency in his or her country, but I’m yet to catch one with a big idea for a United States of Africa. Most of the African envoys do not want to stay in America once their tour of duty is done. They are not economic refugees and their dreams are made. I want to find out from the room filled with ambitious African youth if they want to stay on and catch the American dream. They are also looking to lead the continent in conquering an uncertain 21st century and the US might just be a launching pad.

I asked as many as I could, and without hesitation they all quipped a version of, “I’m going back home of course!” I qualified my question further and asked, “If you got an offer for a job or graduate studies here, would you stay?” One tall Malian fellow hesitated and shook his head in a circular manner. That was the extent of his commitment to pursuing the American dream. He did not care for pecan pie either. These are not singular-story instances meant to create a bias. America has lost its lustre even among young Africans.

In a short while, this realisation would be ascertained by none other than the Under Secretary of State for African Affairs. He stood up to speak and asked the young Africans to speak well of America when they got back to their countries; that America is not as bad as they show it on television. I almost keeled right off my playing-diplomat-for-a-night seat. When did the script change so drastically? It’s no longer Africa asking America to stop spreading the unsavoury story about a dark continent. Now an American top-ranking diplomat is trying to right the image of a superpower that’s suffering an ugly meltdown and the whole world has a front row seat.

In spite of America’s fading lustre, there is still a growing African diaspora in the United States, and they will in a few decades be part of the “people-of-color” majority in the United States. For the American-Africans or Continental Africans who have become citizens, this is their home, one that enables them to play out their transnational citizenship as successfully as other diasporas before them have. An understanding of Continental Africans’ positioning along the timeline of American empire-making is important. It should help get Africans becoming more proactive in establishing an influential presence in American politics and policy-making, and also in pushing Africans to conquer their own continent for themselves.

A savage inspiration

Empire rises through stages: Conquest of territory; elimination or assimilation of indigenous peoples; and the building of new and more efficient trade routes. Those who lead conquests embody the animus dominandi, a necessary force of evil in the usurpation of power, wealth and security.

The end goal in a humane conquest, if the oxymoron can be believed, is the establishment of peaceful coexistence with those conquered, or the removal of oppressive leadership from the land invaded. In modern history, only one humane conquest comes to mind: Tanzania’s invasion of Uganda in 1979 to dislodge the brutal regime of Idi Amin. It lasted all of five months. America’s preemptive invasion of Iraq post-9/11 was sold to the people as a remedy that mirrored Mwalimu Julius Nyerere’s Uganda invasion: to free the people of Iraq from Saddam Hussein’s oppressive rule. But it soon became clear it was a greed-driven opportunity for war profiteering and expansion of the American corporate empire that had become a monstrosity.

Empire rises through stages: Conquest of territory; elimination or assimilation of indigenous peoples; and the building of new and more efficient trade routes. Those who lead conquests embody the animus dominandi, a necessary force of evil in the usurpation of power, wealth and security.

There are many wars that America has fueled to maintain its interests and footprint in foreign soil. It wasn’t always like that. America grew out of European immigrants who were running away from persecution, famine, and war in their own lands. They came to America seeking fortune and new beginnings, and they formed a country that rejected monarchy and its extreme powers. America was the biggest and boldest experiment in democracy and freedoms that attracted people from all over the globe. This roaring inspiration was also ruthless as European immigrants who became white Americans held millions of Africans in bondage and massacred millions within indigenous nations, with the survivors confined to reservations. Vicious greed easily becomes a reality in empire-building.

Eventually, a civil war that killed over 600,000 Americans brought an end to slavery. This is a price they had to pay for the dream of a truly free nation whose citizens were all considered as created equal and endowed with the same inalienable rights. It took bold and selfless political leadership to apply this principle of freedom to enslaved persons. President Abraham Lincoln’s emancipation proclamation in 1863 was met with disdain and dismissal from his friends and enemies alike. It ranked poorly as a political move.

Lincoln was driven by his own conscience and the American Constitution, a document that captures the ideals of a people, written with the ink of human kindness. It is also a document that has made America the “home of the free and land of the brave”. The irony of it all is that America was also built through the savage inspiration of those who stopped at nothing to succeed; immigrants who never gave up, never made excuses, and never let hunger, disease or the ravages of unpredictable Mother Nature stop them.

Dust bowls came and threatened famine, and the new Americans started afresh. The Ireland famine they escaped from was far worse as it had killed over a million. Floods came and carried the homes of new Americans carving a home from scrub in the wild West, and they rebuilt. They had far worse memories of homes shelled with bombs and bullets in war-torn Europe. Religious persecution in Europe brought the Anabaptist Amish to America where they found freedom and thrived in exclusive communities of their own defining. Persecuted Mormons trekked west through harsh territory and built their city on the hill out of a mirage of hope. Diseases came and killed families that moved to nowhere-places in the expanding America, and they picked up their shredded hearts and kept on striving. The Chinese suffered calculated segregation through the Exclusion Act but they found a way to remain an important part of building America throughout the 1800s.

Enter the Africans

How could anyone not feel inspired by a country made up of people who came from every corner of the world and found more ways than one to dream and achieve? Is it any wonder that the American Dream phenomenon took root and became the country’s biggest thought export that kept drawing in the rest of the world? The land where every dream is possible also became the allure for African immigrants from the mid-twentieth century, their numbers spiking from the early 1980s.

New legislation broke the Europeans-only influx into America and allowed more Africans to become part of America’s citizenry. A place of great contradictions: on one extreme, African descendants were enslaved for two-and-a-half centuries, and on the other extreme, free and educated Continental Africans were provided a way in through the Immigration and Nationality Act of 1965.

Empire and smart nation-building knows that human capital is key in its expansion and stability. From the Roman Empire that had earlier been the cradle of modern democracy to the United States of America, citizenship held the highest value for the inhabitants. It gave them the power to vote, to gain access to economic opportunities, to hold office, and to move freely.

New legislation broke the Europeans-only influx into America and allowed more Africans to become part of America’s citizenry. A place of great contradictions: on one extreme, African descendants were enslaved for two-and-a-half centuries, and on the other extreme, free and educated Continental Africans were provided a way in through the Immigration and Nationality Act of 1965.

Stages to citizenship become goals that an immigrant works very hard to achieve. In a land where the biggest pull factor is the American Dream, achieving that dream becomes a calculated get for African immigrants so that tales of their personal conquest will vindicate their desertion of home. When Europeans set out for the United States on boats and scraps of boot, many died out of pride, refusing to return to homes that still had their arms open wide for them in case things did not work out. The shame of not achieving that dream would be too much to bear. They would die in the gold rush melee, in the coal mines, in the cowboy ventures, in the farmers’ fight against nature, and in the run-in with Native Americans fighting to hold on to their lands.

Africans who come to the United States are no different from those first immigrants. Much as most come with a mind to acquire their education, a slice of the American Dream, and promptly go back to beloved Africa, they discover that the road to achieving what they came for is entangled in legislation and privilege. They are outsiders standing in a long line of immigrants waiting to get in to the gates of a new belonging.

Becoming American for an African is very rarely a personal goal but a necessity acquired to assist with personal conquest. Africans do not carry the pride of nation as Americans do. My neighbours, like many Americans, fly the US flag every public holiday and any other odd day. I have recently purchased a Kenyan and a US flag that I will fly on my front porch to test out the feel of nationalism. In Kenya, I would not be allowed to fly my Kenyan flag. However, in a changing America, pro-Trump neighbours will also look at my Kenyan flag askance as it will indicate an unwelcome immigrant presence.

As the latecomers in the game of American belonging, there isn’t much out there on African immigration statistics. Shaw-Taylor and Tuch (2007) surmise that about a million Africans immigrated to the United States between 1965 and 2007. These records are usually far below the real numbers as many who come and stay do not participate in the census. Second generation Continental Africans have also increased significantly. The Nigerian diaspora has become one of the fastest growing, both in numbers and in economic success. A Bloomberg research bursts the myth that Asians are the only ones at the top of the intellectual wealth pyramid.

The Kenyan diaspora, meanwhile, continues to astonish as its remittances to Kenya grow to a whopping Sh197 billion (nearly US$2 billion) this year, up from Sh174 billion (about US$ 1.8 billion) last year. The tragedy of the Kenyan diaspora, at least those in the US, remains their insistence on staying cocooned in cliques and tribal mindsets while abroad, an attitude that makes them ineffective pawns in America. A long straw extends from the mouths of family and community in Kenya and dips into diaspora pockets, and each year, the gulp gets bigger, thanks to the powerless generosity of a splintered diaspora. With all their smarts, Kenyans in the US have refused to invest in the strategy of building a united front as a power bloc, and so their remittances remain untapped influence. Eight years after the constitutional enshrining of their right to vote, the Kenyan diaspora in the US still cannot vote back home.

The Kenyan diaspora, meanwhile, continues to astonish as its remittances to Kenya grow to a whopping Sh197 billion (nearly US$2 billion) this year, up from Sh174 billion (about US$ 1.8 billion) last year. The tragedy of the Kenyan diaspora, at least those in the US, remains their insistence on staying cocooned in cliques and tribal mindsets while abroad, an attitude that makes them ineffective pawns in America.

No immigrant community has ever achieved influence without the strategic politics of mobilisation and organisation in their adopted country. Kenyans are adept at splitting their power by dismissing each other’s efforts. They duplicate, triplicate and quadruplicate initiatives instead of supporting what is on the ground. The new entrants to a cause will dismiss others as failures and with great humility argue that they are the ones who will make it happen. The community politics of the Kenyan diaspora is not only a microcosm of Kenyan society in Kenya but a far darker version of it.

Lessons from how other immigrant communities in the United States conquered in spite of their political or ethnic diversity are yet to sink in for the Kenyans. Collective intelligence is a switch that an initiative-taker turns on, but the bulb will not light up until the people with their hands around it stop the sabotage. (I have played significant roles in the Kenyan community in America long enough to observe its ways, which gives me a measure of authority on the subject.) Perhaps the growing second-generation Kenyan-Americans will shape its power.

Conquest, China and African superpowerdom

If the American republic has risen to superpowerdom through conquering occupied lands, eliminating indigenous peoples, and building infrastructure through the wilderness, all while using stolen labour and the legitimisation of a cruel injustice, why hasn’t the African continent achieved as much in its own continent where its nations are free? Dreams of a Pan-African state have flared up with the staunchest Africanists and died like a kerosene flame, leaving only a smoky trace of it that still lingers.

To build empire, Africa would not need to engage in the cruelty of displacing or enslaving anyone. The Morgenthaunian animus dominandi or necessary evil-nature approach to raising empire has to be redefined if Africa is to use it to achieve superpowerdom. By superpowerdom I do not mean a hunger for domination over others, but a reaching towards the highest levels of self-realisation as Africans. Such realisation comes with technological advancement, an end to poverty, the inalienable right to freely acquire knowledge for its own sake, and definitely the restructuring of political systems and inculcation of integrity in the continent’s democratic processes.

But is Africa interested? The current trend has African countries firmly serving nationalistic self-interest at best, and more of individual strongman interests. A continental trading bloc covering at least fifty African countries has been in the works, but its success is yet to unfold. The assumption that an African economic bloc could set the giant continent off to the 21st century superpowerdom is unlikely; at least not without independent institutions powerful enough to ensure economic accountability and social justice.

The success of America’s rise, savage inspiration that it was, also came from the independent institutions that checked its rogue politics, demanded a righting of wrongs, and allowed for people power. If African is not ready to hold its rogue leaders to account as South Korea recently did by throwing its corrupt president in jail, an economic bloc will only create a deeper chasm between those who can manipulate trade and those too far from the decision-making table.

Africa is a willing victim in the unfolding conquest by the rising Chinese global power, which is carrying out open surgery on the continent. As they open up the innards of Africa and plant Confucius centres in colleges, popularise Mandarin classes, establish television stations to transmit Chinese propaganda, and build breathtaking infrastructure, Africa seems content with the drip of modernisation-on-loan feeding its arteries. There is nothing the Chinese are doing that global powers of the past – Malian, Roman, British, American and others – did not do.

China’s Belt and Road Initiative (BRI) that seeks to etch the most ambitious trade routes across several continents is reminiscent of the Trans-Sahara trade routes that gave superpower status to the kingdom of Mali for a span of seven hundred years – until the Europeans made more efficient trade routes through the Atlantic. It wasn’t until America built the Transcontinental railway that connected it from sea to shining sea that the country actually started its rise to superpower status. Throughout history, control of new and more efficient trade routes have led to the rise of new empires. How is it that free African nations and their rich diasporas cannot build an engineering marvel from Cape to Cairo all by themselves?

The unfolding conquest of Africa is a willing victim eyes-wide-open surgery on the continent by the Chinese rising global power. As they open up the innards of Africa and plant Confucius centres in colleges, popularise Mandarin classes, establish television stations to transmit Chinese propaganda, and build breathtaking infrastructure, Africa seems content with the Chinese drip of modernisation-on-loan feeding its arteries.

White nationalism and the Age of Trump

Trump’s America is a surrender of empire in exchange for white nationalism. Stoking trade wars and supporting white extremism is a calculated recipe for white nationalism. The president has been on an anti-globalisation rampage. He has attacked regional and inter-governmental trade treaties, environmental agreements and military alliances that have kept America at the helm of the current global political structure. The president is in the throes of a ferocious tariff war against China, Canada and European countries, all trading allies of the United States. It has become common to wake up to news about American industries now making significant losses and some shutting down because the targeted countries are no longer buying American products. Farmers and fishermen whose products are exported to China now need a government bailout to survive.

Anti-immigrant policies have restricted temporary work visas that usually bring in seasonal workers from Mexico to work on farms and in the crab industry. As a result, massive fields of unpicked crop have gone to waste and the crab industry has suffered. The same policies have created the parent-child separation debacle in Texas, a racket that turns out to be, no surprise at all, a profiteering racket. While the world reels in shock at how low America has sunk, the detention business continues to thrive as it nets in new clients in immigrants seeking asylum. The GEO Group that runs private prisons also happens to be the biggest contractor for the U.S. Immigration and Customs Enforcement (ICE). The company is also accused of sponsoring politicians in Texas, the same state where unconscionable detention of children is happening.

In all this, good old American activism stays fired up and keeps agitating its way to justice. A company as powerful as the GEO Group now feels threatened by the Dream Defenders Action who have exposed them. A strategic and sustained fist pumped in the air has proven a formidable weapon against massive corruption in a country as powerful as America.

As the Mexican border immigration wars rage, some African immigrants who never thought themselves unsafe now find themselves targets of the government’s ransacking of those who supposedly cheated in their citizenship interviews. The U.S. Citizenship and Immigration Services is on record explaining the task to de-naturalise “errant” Americans who took up citizenship since 1990. That is the decade the numbers of Africans in America started rising significantly.

It is well-known that Trump has an issue with Nigerians, an identifier he uses to mean Africans. And he’s not alone in calling all Africans Nigerians. Perhaps it is the rising power of Nigerians in America that feels too threatening. The whitening of America in the Trump era is real. The immigration witch-hunts conjure up histories that led to some of the worst human atrocities in places like Nazi Germany where unwanted groups of people who had started thriving were exterminated.

While this remains an interesting time in America, perhaps the incredulous nature of it drives one to the conclusion that it is all in futility. The numbers will sort it all out. Unless white people increase their population at an astronomical rate in the next few decades, America is destined to become a country of majority “people of colour”, for lack of a better term. It is a scary thought that stoked the flames of white nationalism in Britain, leading to Brexit, and now in the United States. Human civility is superficial. Once threatened with the possibility of extinction, conquest or minority status, the human becomes the brute in a jungle where all civility disappears.

While this remains an interesting time in America, perhaps the incredulous nature of it drives one to the conclusion that it is all in futility. The numbers will sort it all out. Unless white people increase their population at an astronomical rate in the next few decades, America is destined to become a country of majority “people of colour”, for lack of a better term.

Only communities that have lived in close connection to the earth will tend to have a greater sense of civility and welcome for the stranger, conquering only to ensure their own survival, but not to fuel uncontrollable greed. America is a corporate empire built upon unexpiated savagery, and like all empires, it will come to its end.

An ode to indigenous peoples

Sitting Bull. Crazy Horse. Little Wolf. Spotted Tail. Red Cloud…the list is long. These Native American warriors who defended the usurpation of their land with fierce skill and legendary valour will inspire for ages. Their defeat will also depress the human spirit that cheers on the emancipation of the conquered. Victories of Native American nations against American expansion are filled with breathtaking courage. The Lakota, the Nez Perce, Cherokee, Navajo, Sioux, and many of the almost 600 indigenous nations held their ground against an army with numbers, resources and technology they could not match. As with most peoples who get conquered, the lack of a united front plays into their defeat.

A story is told in the annals of history that Sitting Bull once had a dream that his Lakota people of Standing Rock would vanquish the approaching American army led by the feared General Custer who had never lost a battle. On this day, Sitting Bull and his vastly outnumbered Lakota warriors prepared to fight yet again. His dream came true, and to America’s shock, the inconquerable Custer was killed and his army decimated at the famed battle of Little Bighorn.

But it wasn’t the dreams of one who prayed to the Great Spirit that won the battle; it was the ferocious zeal to survive when faced with extinction. It was the same zeal that led Shaka Zulu to victory against a British army with superior weaponry at the battle of Isandlwana; the same Ethiopian dare that trounced the invading Italians at the battle of Adoa; the same fire that led to the Mau Mau uprising against Empire in Kenya.

It is the same fire of indigenous African peoples that need instruction to rise and conquer a continent they already occupy, lands that already belong to them, resources that are theirs to exploit. The unfolding development in Africa is the footprint of another encroaching superpower. Africa should not surrender to a second colonisation so soon.

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Ms Hall is a freelance writer based in the USA

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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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