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No Longer at Ease: Uthamaki, Uhuru and a Dream Deferred

In moments when an ethnic community finds itself in a crisis, its spontaneous response is to blame everyone but itself: introspection becomes anathema – it searches for scapegoats and scarecrows to explain away its internal contradictions and confusion. By DAUTI KAHURA

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NO LONGER AT EASE: Uthamaki, Uhuru and a Dream Deferred
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I returned to Kirimukuyu village, in Tumu Tumu sub-location, which is seven kilometres from Karatina town in Mathira constituency, Nyeri County, exactly twelve months after I had first travelled there to see an old lady by the name of Felistus Waguthi.

In the twelve months that had passed, Waguthi, who will be 76 years old this year, had lost her only brother, and in the last three months, she had been marooned in her house after breaking her leg. “I tripped on a slippery slope one morning as I went to the shamba, fracturing my leg bone and twisting my ankle,” she said to me, her left leg heavily bandaged and in a cast lifted up to rest on the bed. She was also hard of hearing, but “everything else considered, I have been okay, you’ve found me alive.”

When I met Waguthi in January 2018, President Uhuru Kenyatta and former Prime Minister Raila Odinga, political rivals in the controversial 2017 general elections, had not “greeted” each other. The “handshake” between them that took place on 9 March, 2018, gave birth to the Building Bridges Initiative (BBI), which is supposed to unite the country and ease political tensions.

Waguthi is not so convinced that BBI will work. “The fate of the country as currently constituted does not augur well for the future,” surmised the old lady, pointing out that the only thing the “greeting” had succeeded in doing was to forestall the mounting tension that cast a cloud of political uncertainty soon after the controversial 8 August presidential elections of and the repeat elections on 26 October.

“The political trajectory the country is taking is perilous and doubly uncertain because not only have things gone from bad to worse economically, but politically, the country’s leadership is groping around as President Uhuru and his cohorts seem clueless and rudderless as they steer the ship in the yet unsettled stormy waters, apparently from day to day.”

I had gone back to see Waguthi to help me reflect on the leadership of the Jubilee Party, a leadership that after retaking presidential powers in 2017 had left its base – the Kikuyu voter – seemingly confused and discombobulated. At 76 and having lived in a rural area for the better part of her adult life, Waguthi’s contemporary political analysis and sensibilities were sophisticated and on point.

“Uhuru has mortgaged the country to the Chinese…the debt now is in trillions, isn’t it?” mused the old lady, waving her fingers at me. “How much money is that? Those are mindboggling figures, yet all that money has been stolen by his friends and relatives. His government has been the most corrupt to date since I came of age and got to know what politics was all about. It is riddled with thieves and robbers and all he does is curse, threaten and talk big. I’ve never seen a president with no backbone like Uhuru. The current Kenyan leadership is in a crisis and this greeting between Uhuru and Raila, whose agenda is neither known nor understood by Kenyans, is just a gimmick to confuse the people even further,” analysed the old lady. “This is Uhuru’s last term, it is incumbent he vacates power and lets the constitution guide the next elections. Any attempt to tamper with the constitution so that he and Raila can create new centres of powers can only plunge this country into turmoil,” said Waguthi.

“Uhuru has mortgaged the country to the Chinese…the debt now is in trillions, isn’t it?” mused the old lady, waving her fingers at me. “How much money is that? Those are mindboggling figures, yet all that money has been stolen by his friends and relatives. His government has been the most corrupt to date since I came of age and got to know what politics was all about. It is riddled with thieves and robbers and all he does is curse, threaten and talk big…”

Waguthi told me that Uthamaki – the notion that only Kikuyus are entitled to political leadership in the country – had become a mirage, a dream deferred, a paradise lost that had left a bitter taste in the mouths of the Kikuyu people. “President Uhuru seems still hell bent in his political schemes to misuse the Kikuyus in abusing state power…That’s why there is this talk of changing the constitution…this will be disastrous, and if this is a harbinger of things to come, woe unto Kenyans. Don’t these African leaders ever learn?” Africa, she said, had been plagued with bad leadership, with leaders never wanting to leave office, which had led to many deaths and wanton destruction. Kenya, she added, was on its way to joining the league of failed state nations.

The old lady said that the move to change the 2010 constitution so that President Uhuru and Raila can presumably upstage Deputy President William Ruto in his bid to succeed Uhuru was devious and would jeopardise the security of Kikuyus in the greater Rift Valley diaspora and elsewhere in Kenya. “There has never been a time when the security of the Kikuyu people in the country has been as precarious and threatened as now…there is seemingly a truce in the country today, no doubt, brought about by the ten-month-old greeting, but one stupid move by the Uhuru leadership could see the Kikuyu peoples’ lives wrought in mortal danger.

“If it were not for the young Kalenjin man [Ruto], Uhuru would not be president, and our people would probably not live comfortably in the Rift Valley. That is a disturbing fact and, however much a section of the Kikuyu people and their political leaders will now pretend that this is not so, they owe it to Ruto,” said Waguthi matter-of-factly. “Many Kikuyus are now remembering to say many things about Ruto…that’s very interesting and those things could as well be true…but be knowing this, if you choose to welcome an ogre into your house, don’t complain afterwards that it is overfeeding and has taken over the whole house.”

“Uhuru was never a man worth being a president,” observed Waguthi. “The presidency was forced on him and six years later, he has made a total mess of it. He has never been in control, much less concerned with the destiny and plight of the people. Now that he has realised that he will be leaving the powerful position, fear and despondency have gripped his presidency – he’s been creating commotions and distractions to appear like he’s on top of things.”

Dusk was setting in and the lady who had been taking care of her was on her way back from Tumu Tumu trading centre where she had gone to recharge Waguthi’s mobile phone. Waguthi summed up her prognosis: “The president led a life of privilege. He has never done anything for himself. He is laid back. Everything has always been done for him, and even in politics that has been the case. That’s how a prince behaves…it isn’t his fault, because that’s how he was socialised. The fault has been the people who entrusted their political fortunes to a man, not because he was fit for the job, but because he came from a big political family, and therefore presumed that political power was his right.” The old lady said Uhuru pales in comparison to Ruto, who is tough, hardworking and does not come off as having been pampered in his early life.

Waguthi had given me some political food for thought, surprising and unpalatable as it may have been, coming especially from an old lady. But her analysis had been echoed by a much- travelled man, who was as educated and professional as they come. Three weeks before going to meet Waguthi, I had spent some time with a former World Bank financial consultant in Ngegu on the outskirts of Kiambu town in Kiambu County.

A teetotaler and staunch Protestant Christian, the soft-spoken 68-year-old Gikandi strikes you as a man of really few words – until he is provoked to give his prevailing political views. “The handshake had calmed down the palpable tension that had been building up in the country soon after the two elections…the county is much less tense now, but that was not a license for Uhuru and Raila to introduce a hideous agenda through the formation of the Building the Bridges Initiative,” posited Gikandi. “Let us be clear about one thing: were it not for William Ruto, Uhuru would not be president of Kenya. Have you forgotten how the two campaigned together in folded white shirts? We’ll not be drawn into distractions. The prevailing talk about political debts or the lack thereof, state corruption, revived past sins are all unhelpful and unnecessary.”

“I have lived long enough to know who has been stealing money from state coffers,” said Gikandi. “Kikuyus have stolen more money from successive governments than anybody cares to know or investigate. That I can tell you for a fact: Money was stolen in Kenyatta (I), during Daniel arap Moi’s tenure, during Mwai Kibaki’s rule and now, more than ever before, in Kenyatta (II).”

Jomo Kenyatta, father to Uhuru, was the founding president who ruled as an imperial president for 15 years, from 1963 to 1978. His Vice President, Moi, took over from 1978 till 2003, when his second term ended and his “project” Uhuru Kenyatta, the Kanu flagbearer who he had primed and propped up to take over from him, was defeated by Kibaki on a National Rainbow Coalition (Narc) party ticket.

“What we want post-2022 is security and stability for all,” said the former World Bank auditor. “President Uhuru must be very careful how he fashions his politics now as we head to 2022. It would be extremely devious of him to not think of the security of our people in the Rift Valley. I do not want to belabour that fact, but you and I know that a political misstep or mishap could easily trigger mayhem in that part of the country. We do not want a repeat of 2008. Some Kikuyus are now remembering Ruto’s past sins. They should have remembered them in 2012, not now.”

“I believe Ruto will get things done,” said Gikandi, “because he is focused, hardworking and he is always on top of things. All the President’s men, past and present, have stolen. I am not persuaded that it is the DP and his men that have allegedly siphoned all the money from the state. We cannot have double standards if we want to curb corruption and, by the way, why has President Uhuru chosen to ‘fight’ corruption now?”

“What we want post-2022 is security and stability for all,” said the former World Bank auditor. “President Uhuru must be very careful how he fashions his politics now as we head to 2022. It would be extremely devious of him to not think of the security of our people in the Rift Valley. I do not want to belabour that fact, but you and I know that a political misstep or mishap could easily trigger mayhem in that part of the country. We do not want a repeat of 2008…”

The financial risk management consultant, who is also a revered church elder of a big Anglican church in Mt Kenya South diocese, said that if BBI lives up to its demand of holding a referendum so that the constitution is changed, he will robustly oppose it. “Uhuru should just honour the constitution and peacefully leave office. More importantly, he should honour the promise to his deputy. We can still remember it very well, made in the lead-up to 2013 general election.”

While in Nyeri County, I also spoke to millennials. Their political views were equally surprising. I met Mureithi from Skuta, a trading town six kilometres from Nyeri town. Mureithi, who is in his mid-30s, runs an electronics shop at Thunguma centre, which is separated from Skuta by two kilometres.

“We do not want to hear anything about President Uhuru,” said an embittered Mureithi. “He has wasted us, he fought so hard to reclaim the presidency only to plunge us further into deep poverty and political uncertainty. I am struggling to stay afloat. In the past one year, Uthamaki rulership has turned into ultimatums and angry outbursts from the president when confronted with issues of Central Kenya development issues. We, the young people of Nyeri County, have made up our minds. We have nothing to do with Uhuru, his projects, or his political schemes.”

In retrospect, Mureithi told me, President Uhuru’s six years at the helm was for self-aggrandisement and enriching his friends and relatives. “Tell me what one thing the Kikuyu youth anywhere can be proud of after his unswerving support for Uthamaki? Nothing. Instead, we have been served with disappointment, disillusionment and dispossession. And these 3Ds have given way to a great sense of betrayal. I made a mistake in voting for him twice last year. I will never do that mistake again,” said Mureithi.

Nigute. This Kikuyu word has in the last year become the political catchword for the disaffected Kikuyus whose views of Uthamaki presidential rule in the run-up to the first presidential elections was clouded by a vista of imagined economic Shangri-La and paradise revisited. Literally, the word means to throw away. Figuratively, it means to be wasted, to be misused, to be of no value after use, to be dumped.

“I threw my vote away,” said Mureithi, “So is the feeling of many Kikuyus. They are stuck in a rut, angry, bamboozled and embittered. They were deceived…the truth is, they have always been cheated, but this particular deceit could not have come at a worse time: Uhuru’s government has plundered the economy and destroyed Kikuyu businesses. The people have no money and they have no one and nowhere to turn to.”

Mureithi told me that BBI will come a cropper, spearheaded as it is by political dynastic powers that believe it is they who must always rule Kenya and nobody else. “It is headed for defeat because we shall fight it. We know what they are up to. Here in Nyeri, the youth have decreed that they will not support the referendum that is being pushed by Building the Bridges Initiative. We shall vigorously oppose it. We are tired of Uthamaki and its appendages.”

“There are some Central Kenya leaders who have been moving around the region telling us it is Ruto who is the source of all corruption and theft in government and that corruption must be fought by all means,” said Mureithi. “Those leaders include our own MP here for Nyeri town constituency, Ngunjiri Wambugu. We’ve already warned Ngunjiri that, like Uhuru, it was a mistake to have voted for him. We should not have abandoned Esther Murugi, [the former MP].” Ngunjiri is looking at his only one term in parliament, Mureithi promised me.

“The greatest theft in government has been orchestrated by President Uhuru’s close friends, who have stashed away billions of shillings,” observed Mureithi. “How is it that now it is Ruto who has stolen all the money and that it is he who is the source of all our economic and political problems? By allegedly trying to antagonise the deputy president, President Uhuru and BBI are stoking future political violence and insecurity for Kikuyus resident outside Central Kenya. I have relatives in Rift Valley. I know how nervous the Kikuyus of that region are with all this careless talk about rethinking Ruto’s Kikuyu support in 2022.”

“Corrupt or not corrupt, I will be supporting William Ruto,” said Mureithi. “What has our own Uhuru done for us? Born in riches, Uhuru has been overindulged throughout his life. That’s why he couldn’t care less whether the Kikuyus eat grass or sleep hungry, as long as he can get them to die for his dangerous political ventures. President Uhuru has been saying this is his legacy term for Kenya. We know what that means: ‘This is my legacy for the Kenyatta Family, not Kenya, the country.’”

I wound up my Nyeri County visit by engaging Lilian Wambui from Gikondi village in Mukurwe-ini. Barely a year ago, Wambui would have killed for President Uhuru Kenyatta. “I was so indoctrinated by the Uthamaki logic and the person of Uhuru Muigai Kenyatta that I’d brazenly taunt my Luo friends to go fishing in Lake Victoria and catch thamaki (fish) because we the Kikuyus had Uthamaki.”

Wambui is a businesswoman: she once rented a quarry in Njiru that borders Mwiki to the north and Ruai to the southeast in Nairobi County, where her employees were all Luo men who broke and carved stones that would be picked in truckloads at the site. Wambui has also engaged in the mitumba business, where she specialised in camera (as-good-as-new) children’s designer clothes. Lately, she has been dealing in wholesale fruits and vegetables. In three and half years, all the three businesses have collapsed. In December last year, she escaped to her rural home to run away from the hustle and bustle of Nairobi and to rethink her future.

“Corrupt or not corrupt, I will be supporting William Ruto,” said Mureithi. “What has our own Uhuru done for us? Born in riches, Uhuru has been overindulged throughout his life. That’s why he couldn’t care less whether the Kikuyus eat grass or sleep hungry, as long as he can get them to die for his dangerous political ventures. President Uhuru has been saying this is his legacy term for Kenya. We know what he means: ‘This is my legacy for the Kenyatta Family, not Kenya, the country.’”

“President Uhuru is a total failure: all the money from the government has been stolen while he stood by and watched. Now he is fighting Ruto, pretending to combat corruption. He should give us a break. I never believed he would waste us [Kikuyus] after all the support we lent him. I think we Kikuyus have been bewitched. It is not possible for one family to bestrode an entire community so easily and take advantage of their political foolishness for so long,” she commented.

Wambui told me that she vividly remembers President Uhuru specifically campaigning among the Kikuyus in downtown Nairobi in 2017. “On 9 February, 2017, taking time off from his State House duties, the president joined the Jubilee Party’s Nairobi governorship aspirants to galvanise the people into registering as voters. The then contestants were Peter Kenneth and the ‘Gang of Four’ – Mike Sonko, Denis Waweru, Margaret Wanjiru and Johnstone Sakaja.”

The businesswoman recalled that everyone, including the president, congregated at Wakulima Market on Haile Selassie Avenue, famously known as Marigiti. “It is not for want of a better place to mobilise the Nairobi voter that the Jubilee Party cabal chose the marketplace. Because when the president spoke, it become rather obvious why Marigiti was a good starting point. “Wooooi andu aitu muiga nyinuke….wooooi mutikandekererie…..mutikareke nyinuke,” (Oh my people, are you sending me home….please don’t abandon me…don’t let me go home) urged the President.

“Two months earlier, campaigning in Ruaka and its environs which are in his home county Kiambu, President Uhuru at one stop addressed the people thus: ‘I have information that some people are saying they will not vote on the 8th of August. I appeal to you, particularly the youth, not to let me down. I know what we are defending. What did President Kenyatta mean by I know what we are defending?’” posed Wambui. “The Kenyatta Family legacy. Period. President Uhuru has let down every Kikuyu voter, other than his tenderpreneur friends and relatives, who came out to vote for him. And the Kikuyu youth, abused during the campaigns and ignored after power had been recaptured, have received the short end of the stick. They are now called thieves. Nigute.”

I spent half of 2017 and the better part of 2018 talking and oftentimes animatedly holding court with Uthamaki ardent followers who, just before the August 8 general elections, had immersed themselves in Uthamaki’s noxious rhetoric of political perpetuity. All of them – from market women to matatu drivers, conductors, freelance touts, hawkers, street vendors, street prowlers, petty traders, seasoned businessmen and women, college students, university dons, professionals and state bureaucrats – were seemingly hypnotised by the Uthamaki political conquest: “Seek ye first the political kingdom and all the rest shall be added unto you,” one born-again lawyer had reminded me, “but we are still humble about it.” (It was Kwame Nkrumah, the first president of independent Ghana, who famously coined the maxim, which would soon become a clarion call for many an African country seeking political independence in the 1960s.)

I spent half of 2017 and the better part of 2018 talking and oftentimes animatedly holding court with Uthamaki ardent followers who, just before the August 8 general elections, had immersed themselves in Uthamaki’s noxious rhetoric of political perpetuity. All of them…were seemingly hypnotised by the Uthamaki political conquest: “Seek ye first the political kingdom and all the rest shall be added unto you,” one born-again lawyer had reminded me…”

Yet, nothing has captured for me the hypnotic, trance-like behaviour of an Uthamaki fundamentalist who revels in sporadic moments of lunacy than the story as told to me by my friend Baba Otis.

On 1 June, 2018, Madaraka Day, Baba Otis was drying obamboo (dissected tilapia fish that is smoked and oftentimes dried for storage and which is eaten over a long period). Known by its variant name, obambla, its tasty soup is very delicious and nutritious, especially for children. In the evening, On that day, Baba Otis heard a knock on his door in the estate plot where he lives with other tenants in Nairobi. It was Mama Shiru. “Sasa Baba Otis, aki watoto wangu hawajakula siku tatu, nisaidia tu na piece moja ya samaki niwatengenezee.” (Hi Otis’s father, I swear my children have not eaten for three days. Please just give me one piece of the smoked fish. I will prepare it for my children.)

The evening visit by Mama Shiru was interesting, given that on 29 October, 2017, a Sunday and three days after the repeat presidential elections in which the Jubilee Party largely competed against itself, Mama Shiru, a mother of two, had broken into a frenzied dance of jubilation and had yelled for all to hear: “Uthamaki ni witu….thamaki ni ciao….mekuigwa uguo”. (The rulership is ours (Kikuyus)….fish is theirs (Luos)…they can go hang.)

Baba Otis was there to witness the hippy dance of a woman who, for all intents and purposes, behaved as if she had been possessed by Lucifer himself. She was sporting a wristband and bandana fashioned along the colours of the Kenyan flag that have come to be associated with chauvinistic Kikuyu men and women. That night, Mama Shiru must have slept like a king in the knowledge that her tribesman had once again settled in the hallowed sanctuary of the mighty State House. Uthamaki ni witu…thamaki ni ciao.

Barely seven months later, when Mama Shiru stood outside Baba Otis’s door, she had discarded her wristband and tossed away her bandanna. The uthamaki ni witu, thamaki ni ciao alliterative singsong had long been expunged from her now pursed lips. The bravado that had accompanied the wearing of the Jubilee Party paraphernalia and totems had gone. Crude reality had by then sunk in…perhaps…perhaps not.

One fact was clear though from Mama Shiru’s predicament – you cannot feed your children on a tribal ideology, much less if your tribesman is the country’s president. “But Kikuyus can also be impervious and shameless,” commented Baba Otis.

In moments when an ethnic community finds itself in a crisis, its spontaneous response is to blame everyone but itself: introspection becomes anathema – it searches for scapegoats and scarecrows to explain away its internal contradictions and confusion. “It is the handshake.” “This problem we are in now is one for all of us.” “It is William Ruto who is engaged in all these state thefts”. “Ni mang’auro marea marigiciiria munene.” (It is the scoundrels that encircle (our) leader.) “Muthamaki ndakararagio na ti wa garari,” (The tribal chieftain should not be criticized or contradicted.)

John Njoroge Michuki is on record after Narc came to power in 2003 for proclaiming that Kenyans (read: Kikuyus) had been agitating for constitutional reforms to remove Daniel T. arap Moi: Moi was the problem – not the almighty powerful presidency that the 1960, 1962 and 1963 Lancaster House constitution conferences had bestowed on Kenyans. But hey, as long as that individual was a Kikuyu, it was business as usual. Many Kikuyus conflate Kikuyu nationalism with Kenyan statehood. And they care less for this contradiction.

The grandstanding of kumira kumira (a clarion call that means to get out in large numbers), thuraku (safari ants) and all that toxic talk about Uthamaki and “ni ithui twathanaga guku,” (it is we (Kikuyus) who call the political shots) has melted away barely a year into the Jubilee Party’s second term.

After my interviews and interactions with Uthamaki believers, I could not help but ponder over what could be a priority in their minds as they struggle to contextualise their economic hardships and situate their political path come 2022.

Post-2022, the Kikuyus are thinking very hard about their security and survival in ways that they have never thought before. The presidency has become a burden to them: Like a millstone around their necks, it is weighing them down. But they made their bed and must lie on it. In a real sense, the president has stopped being a factor in their yet undecided political trajectory.

For the very first time, Kikuyus do not have a bankable political leader. Ten months into BBI, not all Kikuyus are persuaded that it augurs well for their political insurance. So far, they do not know what to make of it. Suspicion abounds.

Painfully, the Kikuyus are learning to internalise their political suffering, trapped as they are like a caged bird, its only freedom being to pitter-patter around the cage. Hence, their desire to extricate themselves from the clutches of political serfdom, and hopefully, from the pain of the (late) realisation that they have been duped and dumped.

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Mr Kahura is a senior writer for The Elephant.

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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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