Silicon Valley VC’s, Goldman Sachs, Tesla, Batteries and Afghanistan = Afghani-Scam
Ingredients: Silicon Valley VC/Campaign funders; Russian miners; Goldman Sachs; Knowingly complicit federal officials; Innocent goat herders; Over $1 Trillion Dollars in profiteering; Hookers; Taxpayer cash; Criminally corrupt senators; Toxic gas; Explosions; Dead people and Electric cars.
The stuff (Chemical ore) that Solyndra, Abound, Fisker, Tesla, A123, Enerdel, and the rest of the failures, needed to make their scheme pan out, was buried under some goat farmers in Afghanistan! Almost all of these companies had their products blow up, in average use, (Even the solar panels caught fire) and, in most cases, release a “Cancer-Cocktail” of toxic gas; Tens of thousands of Lithium fires and explosions have now been documented to have crashed planes, exploded cars, set data centers on fire, burned children, blown up IPAD’s and have just been a very bad chemical concept. Lithium has gone off many, many more times than the public has been told. Over time, the compounds become MORE likely to go off! To make the chemicals work for Solyndra, Abound, Tesla, Fisker and the rest, these companies mixed them together into a compound that ends up being a military-grade toxicity, carcinogenic powder. Even making the compounds kills overseas factory workers. Not very good research on the part of the bad guys, but greed often outpaces sanity!
… and the money people behind everything were the same exact handful of bad guys in each and every case.
If Silicon Valley created the latest version of the Afghan War for private gain, they got screwed.
Not only do they now realize that the cost of the war was many, many magnitudes more than just giving the goat herders a check and buying the rocks, but the stuff they were trying to monopolize turns out to be explosively dangerous, hard to use and cancer-causing.
Cowboys and Indium:
Solyndra was exploiting Indium, and a large number of other key chemicals, from Afghanistan that directly paid into the “DOE insider profit pool”.
Abound was exploiting key chemicals from Afghanistan that directly paid into the “DOE insider profit pool”.
Nissan‘s Smyrna plant, Tesla, A123, Ener1, Fisker and Ford were exploiting Lithium from Afghanistan that directly paid into the “DOE insider profit pool”. Other “failed DOE winners” had the same connected materials supply routes.
In this Watergate-type scandal (Should we call it Lithium-Gate, instead?) Secretary of Energy Steven Chu appears to have been told to let no applicant through unless they were in the “DOE insider profit pool”. The pool consisted of Deloitte staff, Goldman Sachs staff, DOE staff, Silicon Valley venture capitalists and, possibly, at least two White House staff. Rahm Emanual is known to have had an intimate connection with the Argonne labs lithium ion program research funding while in the White House and after he returned to Chicago. Dianne Feinstein personally arranged for, and opened, the NUMMI plant for Tesla. Her husband’s company CBRE were the real estate hooks for the Tesla, and next door, Solyndra property deals. Her staff and lobby people work there now. Her husband goes to Mongolia all the time for “special meetings” according to Sunshine. So one wonders if Feinstein got on the intelligence committee so she could see if she was about to get caught or if a savvy NSA section chief “helped” her get there on the premise of “keep your friends close and your enemies closer” so the NSA could watch her in intimate detail. The recent hack of her files by intelligence officers seems to be indicative.
(Editors Note: There have been letters to SOMO charging that the CIA is leaking information to SOMO, and other reporters, in order to expose Feinstein. To the best knowledge of all queried SOMO reporters and editors, this is not the case. The facts speak for themselves – Ed. Team)
Many high level politicians made a grab for their piece of the trillion dollars so investigations keep getting squashed by them. Steven Chu killed off the non-toxic fuel cell, wind and natural gas programs while at DOE to give a clear runway to his “DOE insider profit pool”, in which he participated.
The Russian mining connections run throughout the above group but now that the U.S. is back in a Cold War with Russia, Russian insiders are delighted to spill the beans, on the whole deal, to reporters. One is even out taking competitive bids for exclusive whistleblower interviews.
The insider profit pool consisted of the same investors in the above efforts, who also happen to be the same people who nominated and lobbied for the appointment of Steven Chu, according to his nomination docket. All of these people had a personal profit side deal in the same profit pool through stock holdings, trusts, revolving doors and repercussive gains. All of the above are connected in a very tiny business circle. The odds of that circle of 30, or so, people, out of 318 million Americans, being the only people to have access to these profits and federal funds, without rigging the program, is calculated on a book-makers metric at 12 billion to 1. Even now, one can easily see the disparity between the NHTSA wave-through of the coddled White House campaign-backer funded Tesla (hushed up by Tesla silent owner: Google) and the bone crunching hearings and fines that GM and Toyota have had to endure, at the same time, for less dangerous defects.
The Senate Ethics Committee members have hundreds of thousands of background documents on this matter but they have been stone-walled. The FBI has nearly a million documents on this matter and reporters are eager to see the anticipated indictments from years of surveillance of the key parties of interest. NSA, DIA and CIA have tens of millions of documents on this matter from nearly a decade of surveillance of parties of interest, but they are stalled up with inter-party politics. The press has vast amounts of this evidence. The Russians are shopping vast new repositories of disclosure. Within the year, expectations are high for a tsunami of enforcement activity. The recent record-breaking number of White House and Congressional “retirement announcements” may be the first wave of the storm. Asfound out, the “no comment” responses are piling up. That is always a good sign that the “We just got caught” Freak-Out Factor Frenzy has begun among the Politicos.
While party mouth-foamers are trying to make the Afghani-scam scandal not about their party, with their constant drone of “Nothing’s been proven…” they are now realizing that it is not a Democrat Vs. Republican issue. It is about being for, or against, Organized Crime. It is about being part of, or not part of, Organized Crime. It is about losing their federal pensions because of crimes they may have knowingly supported.
When investigative reporters found that Goldman Sachs and Silicon Valley VC’s were involved in almost every single one of the DOE money deals, they had to ask why? How much did they make in, around and through the whole thing? Who was connected to them and decision makers? Would they really rig a whole market (and a war?) just to get a few TRILLION dollars worth of lithium cornered? Looks like they did…
Link to this page: http://wp.me/P4e1uX-22I
Everything in this collaborative article can be researched and verified by YOU, online, from thousands of published documents. If you are a reporter; acquire confirming data from your group database, FOIA’s, associate investigators, web search and standard sources. If you are a member of the public use Sunshine disclosure sites like those at the bottom of this page and file a FOIA request via this information: http://www.nolo.com/legal-encyclopedia/how-use-freedom-of-information-32508-2.html
TH, HJK, H-LATIMES, J-Post, JL, et al (Over 40 reporters and editors, and growing, have participated in the production of this effort)
(Oh snap, bad guys! All of your secret scheming plans have gone to shit in a speed-car. Your companies are going bankrupt, missing milestones, making things nobody in the market wants, under investigation and failing to deliver; faster than anybody can count. Maybe crime doesn’t pay after all! -TD)
KEY DETAILS OF THE KEY PLAYERS IN THE SCAM:
See Additional details at- LITHIUM BATTERY ORGANIZED CRIME LAWSUITS
See Additional details at- TOXIC TESLA: THE CANCER-COCKTAIL FROM THEIR BATTERY FIRES
See Additional details at- THE LITHIUM VC’s
See Additional details at – SILICON VALLEY VC’s PARTNER WITH RUSSIAN MOBSTERS TO AVOID TAXES, AND THE LAW, IN “AFGHANI-SCAM”
See Additional details at- HOW THEY MADE CONGRESS “LOOK THE OTHER WAY”
The future of Silicon Valley’s technological prowess may well lie in the war-scarred mountains and salt flats of Western Afghanistan.
United States Geological Survey teams discovered one of the world’s largest untapped reserves of lithium there six years ago. (Editorial Team Note: Right about the time the DOE started rounding up the key ATVM and LG program insiders) The USGS was scouting the volatile country at the behest of the U.S. Department of Defense’s Task Force for Business and Stability Operations. Lithium is a soft metal used to make the lithium-ion and lithium-polymer batteries essential for powering desktop computers, laptops, smartphones, and tablets. And increasingly, electric cars like Tesla’s.
The vast discovery could very well propel Afghanistan — a war-ravaged land with a population of 31 million largely uneducated Pashtuns and Tajiks, and whose primary exports today are opium, hashish, and marijuana — into becoming the world’s next “Saudi Arabia of lithium,” according to an internal Pentagon memo cited by the New York Times.
The USGS survey report on Afghanistan that detailed the findings also noted that, in addition to lithium, the country also contains huge deposits of iron ore, gold, cobalt, copper, and potash, among many other valuable minerals.
“The mineral wealth there is astonishing,” said professor Michel Chossudovsky of the Montreal-based Center for Research and Globalization, who has written extensively on Afghanistan.
A conservative estimate of the riches is $1 trillion. In some circles, it’s as high as $5 trillion.
In Silicon Valley and beyond, tech companies like Apple, Google, Amazon, Microsoft, Hewlett-Packard, Samsung, Sony, and Tesla rely on continual, and uninterrupted, access to lithium, as lithium-based batteries are the primary power storage devices in their mobile hardware.
Without these batteries, MacBooks, iPads, iPhones, Kindles, Nooks, Galaxy IIIs, Chromebooks, and, yes, Tesla Model S cars would be largely worthless. If forced to use older, nonlithium batteries, their battery lives would certainly be much shorter.
The world’s current lithium heavyweight is Bolivia, the biggest exporter of the element. There, in the swamps and marshlands of the southern region of the country near where the borders of Chile and Argentina meet, are the biggest deposits.
Canada, China, Australia, and Serbia also have varying amounts of lithium, but not as much as Bolivia.
Or apparently, Afghanistan.
Enough to last a lifetime
Depending on who you talk to, the current lithium global reserves are adequate for at least another generation of lithium-ion battery manufacturers to produce them.
But not everybody thinks so, and some say the light metal compound may someday run dry. That could in turn spell trouble for any company whose business depends on light and portable mobile electronics — unless someone comes up with an alternative to lithium batteries before then.
The experts VentureBeat interviewed pointed to sharp year-on-year increases in the demand for lithium. That’s putting heavy pressure on existing stockpiles.
According to Lithium Americas, a Canadian lithium-mining company with significant business interests in Argentina, lithium demand will more than double in the next 10 years, while lithium prices have nearly quadrupled during the same timeframe.
Tesla, for its part, is in the process of investing up to $5 billion to build its own lithium-ion Gigafactory in Texas, a plant capable of churning out 500,000 expensive battery packs a year by 2020 for its line of zero-emission, all-electric cars.
A Tesla spokeswoman did not return calls seeking comment.
As a potential source to feed that demand, enter Afghanistan.
“At some point, if present trends continue, demand [for lithium] will outstrip the supply. And again, at some point, the market for lithium-ion could get so big that it actually affects the supply chain,” said Donald R. Sadoway, a professor of the Materials Chemistry Department of Materials Science and Engineering at MIT.
Looking at Afghanistan, Sadoway says the war-ravaged nation, which has no effective mining infrastructure in place, may well be attractive to the world’s mining outfits.
“In this regard,” Sadoway, one of the world’s foremost experts on energy sources, says, “the deposits in Afghanistan could be important.”
Andrew Chung, a venture capitalist with Khosla Ventures in Silicon Valley who has invested in multiple startups producing alternative batteries, says lithium-ion batteries are limited in their lifetime cycles, scalability, and cost. Despite this, Chung says, he can understand how the untapped reserves of Afghan lithium are now an increasing focus.
“It is an issue of the supply chain, whether it’s Afghanistan or other [countries]. There is a finite supply, and lithium-ion will continue to be the [power] choice for the next decade,” Chung said.
Some of the Valley’s biggest and most powerful tech companies either declined to comment for this story or never returned calls. But they didn’t deny the importance of lithium-ion batteries.
For instance, an Apple spokesperson declined to comment for this story but provided VentureBeat with a 2014 “Suppliers List” of the 200-plus vendors it uses to produce its products. A related post made the Cupertino, Calif.-based company’s commitment to lithium batteries clear, at least in the short term.
“Rechargeable, lithium-based technology currently provides the best performance for your Apple notebook computer, iPod, iPhone, or iPad,” the Apple post says.
Sony Energy Devices Corp. invented the lithium-ion battery in 1994. It was hailed as a breakthrough, providing longer battery life and without the “memory effect” that gradually reduced the effective capacity of previous types of batteries.
Since then, companies have gradually refined lithium battery technology but have not succeeded in moving beyond it. Indeed, early Tesla cars are actually powered by large packs of industry-standard lithium-ion battery cells — the same type of cells found in many laptop batteries.
And here is where it gets interesting.
If electric car manufacturers begin ramping up production of lithium-ion battery-powered cars, the global demand for lithium will skyrocket. This could potentially come about at the same time for increasing demand for handheld consumer goods like tablets and laptops, Chung said, thus creating a perfect storm.
“So you want to start looking at other sources producing it with current supplies being called into question, if we move more toward production of electric cars,” Chung said.
Which is why, increasingly, eyes are turning to Afghanistan and its new purported lithium reserves, a country long referred to as the “graveyard of empires.” The U.S. invaded Afghanistan after the terror attacks of Sept. 11, 2001, and according to iCasualties, 2,315 American servicemen and women have been killed there.
Analyst Jay Jacobs of Global X Funds in New York, which has interests in lithium mining, said demand for the compound is growing, and that “there are two regions that have been revealed to contain huge lithium reserves: Afghanistan and Bolivia.”
William Tahil, a respected lithium expert who lives in France and is the general director for Material International Research, argues that lithium deposits in Bolivia will at some point be depleted.
Jacobs was sanguine about safely extracting lithium from Afghanistan. He said political risks there were considerable.
“With that being said, should there be a substantial and sustained increase in demand for lithium, lithium miners may become increasingly interested in the country as it has an abundance of the resource,” Jacobs said.
It was the Soviets who first discovered the country’s deposits when they invaded in 1979. Soviet geologists began mapping Afghanistan’s lithium, gold, and potash fields but abandoned their efforts after the former communist superpower pulled out of the country in 1989.
But with a weak and corruption-plagued “central government,” Afghanistan is now ripe for the picking, Chossudovsky said. Indeed, the country is still very much divided into fiefdoms, with the Muslim fundamentalist Taliban, warlords, and drug traffickers controlling large swaths of the country — and using violence to advance their interests.
“There’s no question the mining companies will go in there. No question. There’s no real functioning government there to reap the foreign investment of the mineral deposits. This makes it all the more enticing to the mining companies because nobody in the government of [President] Hamid Karzai will be regulating the bonanza of lithium, so they can do what they want,” he said.
Jockeying for position
For its part, the U.S. government, which helped locate the lithium deposits using flyovers with a sensor-filled Lockheed P-3 Orion and teams of geologists fielding soil samples, knows a potential gold rush when it sees one. And it has no intention of being left on the sidelines. Especially since the Chinese are now — and quickly — making deals with Afghan pols for mineral rights to copper deposits.
The USGS did return multiple calls seeking comment. Nor did the Pentagon.
Despite what some say are the shortcomings of lithium-ion batteries, venture capitalists and investors continue pouring money into them. Amprius, a lithium battery maker based in Sunnyvale, Calif., snared a $30 million infusion round of investor cash in January.
Over at the Afghan embassy in Washington, D.C., the Afghans are licking their lips at the potential lithium and mineral windfall despite the country’s continued conflict with a resurgent Taliban. What this may portend for the impoverished and war-torn nation is anybody’s guess. But the Afghans are playing up the finds — or they were, until recently.
“In recent years, headlines from the Afghan mineral sector have competed to outdo each other in scale: from the landmark $3 billion Chinese investment in the Aynak copper concession to the astounding survey work of the U.S., Afghan, and British Geological Services estimating anywhere between $1 trillion and $3 trillion in mineral potential, to the historic $11 billion deal now being finalized with an Indian consortium for the Hajigak iron ore concession,” said a posting on the Afghani Washington DC website.
The post has since been removed.
Afghanistan’s ambassador to the U.S., Eklil Hakimi, presided over a press conference at the Afghan embassy in Washington, D.C., on March 10, where he talked about the untapped deposits, along with reps from the USGS and other U.S. politicians.
But Hakimi, through a spokesman, told me he simply didn’t have the time to talk.
Solyndra, Abound and Tesla need these chemicals. The investors and the campaign backers and the product owners are all the same people. Tesla doesn’t care about selling cars, they car about selling LITHIUM. The car is like the handle for the razor blade, they want to sell the razor blades, not the shaver. But the idiots backing the scheme rushed into it, without checking into things, because they saw all the free Department of Energy and TARP cash. They did not realize that Lithium blows up all the time and, when mixed, becomes a “Cancer Cocktail”, gives off toxic smoke, kills factory workers and is just kinda’ bad stuff… ooops
Don W- NYT
“AFGHANISTAN THE SAUDI ARABIA OF LITHIUM”:
Lithium Ion Batteries and Organized Crime
The ultimate goal of a career criminal politician is to run an agency, or top committee, in order to conduit money to friends and keep the lid on cover-ups. Those at the heads of agencies and committees are often the dirtiest of the dirty. They get themselves put there in order to run the scams. Who ran agencies that conduit-ed money and covered up and stalled investigations?
Was Tesla funded not to build cars but to lock-up lithium ion deals for it’s investors?
Why are dozens of conspiracy lawsuits now filed on lithium ion company racketeering?
Why are there multiple “task forces” looking at lithium ion finance relationships?
Why was the Russian mob involved in Lithium Ion mining?
S- Denver Post, C- NY Times
… Hitachi, LG Chem, Samsung, and Sanyo for allegedly conspiring to fix and raise the prices of lithium–ion rechargeable batteries in violation of U.S. antitrust law …
The Defendants’ Conspiracy Stabilized and Raised Lithium Ion …. The subject of this lawsuit and the Defendants’ conspiracy is Lithium Ion Rechargeable.
5 Feb 2014 … In the lithium ion battery cells case, the defendant manufacturers argued that the … A direct purchaser subsidiary is unlikely to bring a lawsuit for damages …. 2nd Circuit Rejects DOJ’s “Continuing Conspiracy” Theory In …
Price-Fixing Class Action for Lithium Ion Rechargeable Batteries … agreement, or conspiracy to fix, raise, maintain, or stabilize the prices of these batteries.
The current trend in the industry is towards the development of lithium–ion …. guilty of conspiring to buy and dismantle the Los Angeles electric street car system, … In August 2008, Mercedes-Benz sued Cobasys for again refusing to fill a large, …
12 Nov 2012 … The world’s largest manufacturers of rechargeable lithium ion … are being sued for allegedly engaging in a decade-long conspiracy to fix prices …
8 May 2013… are alleged to have conspired to fix prices of Li-Ion batteries that were included in … Palo Alto purchased many devices containing Li-Ion batteries, … These staff costs will be fully reimbursed in any resolution of the litigation.
http://www.cityofpaloalto.org/ news/ displaynews.asp?NewsID=2236 &TargetID=268, 60, 75, 235, 94, 84, 85, 87, 287, 288, 106, 99, 121, 2, 124, 125, 126, 133, 134, 328, 137, 145, 140, 239, 322, 325 – View by Ixquick Proxy – Highlight
ALLEGED ILLEGAL OVER-PRICING OF LITHIUM ION BATTERIES … into whether certain manufacturers illegally conspired to over-price Lithium Ion batteries …
Jul 18, 2013 … SANYO and LG Chem Ltd. have agreed to plead guilty for their roles in a conspiracy to fix the prices of cylindrical lithium ion battery cells sold …
Lithium Ion Rechargeable Batteries are used as a power source for … of major securities, antitrust, and employee retirement plan class action lawsuits.
Oct 31, 2012 … Manufacturers of lithium ion batteries face at least 10 class action lawsuits … The plaintiffs allege the defendants entered into the conspiracy …
Oct 24, 2012 … Litigation is mounting against the world’s biggest manufacturers of rechargeable lithium ion batteries, who consumers accuse of complicity in an illegal … Class Suits Charge Battery Makers With Global Price-Fixing Conspiracy.
The Los Angeles antitrust litigation lawyers of Pearson, Simon & Warshaw have prevailed in class action lawsuits against major corporations for price fixing conspiracies. … Lithium Ion Batteries: PSW attorneys currently serve as interim co -lead …
… Hitachi, LG Chem, Samsung, and Sanyo for allegedly conspiring to fix and raise the prices of lithium–ion rechargeable batteries in violation of U.S. antitrust law …
Jul 19, 2013 … Sanyo agreed to pay $10.7 million for the battery cells conspiracy and … into anticompetitive conduct in the cylindrical lithium–ion battery cell …
It is the nature of human males to seek to kill each other in large numbers at regular intervals.
History has demonstrated, since the dawn of written documentation, that men will congeal and chop, hack, maim, rape, butcher, torture and kill other groups of men in vastly large numbers.
There are always tribal wars, territory wars, regional wars and ethnic wars devastating large groups of people at every point in time, somewhere in the world.
The women and children are, generally, hacked up too, if they are in the vicinity.
This has brought about government support for sports stadiums in every city, in order to provide an outlet for the more brutal members of society. (There appear to be a lot of the more brutal members according to sports participation statistics.)
Once men get mad in groups, some vapors, brain chemistry or electromagnetic mish-mosh seems to keep increasing the anger, increasing the lack of compassion and increasing the willingness to suspend social decency. Then the atrocity cycles begin. Atrocity, revenge, atrocity, revenge; ad infinitude.
Back at the HQ, once the statisticians finally realize that no economic gain can come from the event, the whole thing is called off.
That part of world then mourns, despairs, cries out “never again”… and then it all starts up and repeats again, 15 to 20 years later, or so.
In the modern world, we have some new wrinkles. You can now go from your part of the world to somebody else s part of the world in less than a day. In most of those cases, the other side can’t afford to get to your part of the world. The warfare scenarios can be more like slumming than like full-on ground-for-ground battles than ever before.
The other wrinkle is that, in some countries, only four or five men can start a war for personal gain. A factory owner, a distributor and a law firm can get together and say, for example: “hmmmm, if only we could control the main part of the lithium production…?” “what if we made lithium suddenly become very important after we had already roped in all of the big sources for it…?” “we could monopolize a multi TRILLION dollar market!”
Then, if their partners said: “oh yes, that’s a great scheme”, all they need to do is put $200,000.00 into 15 senators pockets and war will happen in a region which they think they can take over.
Unless the public is paying attention. This time, the public might have been paying attention…
The Green mobsters of the 1% and their Divine Disinformation Campaigns. Raiding the Lithium for their electric car bank accounts.
Like Bin Laden, Al Capone and many of the biggest, most notorious, criminals, they hide in plain sight. They use the cover story of “saving the planet”.
They think that the auditors and investigative reporters won’t look at them so hard if everyone believes they are just feeding unicorns and doing happy wonderful things instead of running secret societies, high-end sex clubs and doing crime.
The Bohemian Club, The Stanford Guardsmen, The Key Club, Kappa Beta Phi …
One-Percent Jokes and Plutocrats in Drag: What I Saw When I Crashed a Wall Street Secret Society
Recently, our nation’s financial chieftains have been feeling a little unloved. Venture capitalists are comparing the persecution of the rich to the plight of Jews at Kristallnacht, Wall Street titans are saying that they’re sick of being beaten up, and this week, a billionaire investor, Wilbur Ross, proclaimed that “the 1 percent is being picked on for political reasons.”
Ross’s statement seemed particularly odd, because two years ago, I met Ross at an event that might single-handedly explain why the rest of the country still hates financial tycoons – the annual black-tie induction ceremony of a secret Wall Street fraternity called Kappa Beta Phi.Adapted
from Kevin Roose’s book Young Money, published today by Grand Central Publishing.
“Good evening, Exalted High Council, former Grand Swipes, Grand Swipes-in-waiting, fellow Wall Street Kappas, Kappas from the Spring Street and Montgomery Street chapters, and worthless neophytes!”
It was January 2012, and Ross, wearing a tuxedo and purple velvet moccasins embroidered with the fraternity’s Greek letters, was standing at the dais of the St. Regis Hotel ballroom, welcoming a crowd of two hundred wealthy and famous Wall Street figures to the Kappa Beta Phi dinner. Ross, the leader (or “Grand Swipe”) of the fraternity, was preparing to invite 21 new members — “neophytes,” as the group called them — to join its exclusive ranks.
Looking up at him from an elegant dinner of rack of lamb and foie gras were many of the most famous investors in the world, including executives from nearly every too-big-to-fail bank, private equity megafirm, and major hedge fund. AIG CEO Bob Benmosche was there, as were Wall Street superlawyer Marty Lipton and Alan “Ace” Greenberg, the former chairman of Bear Stearns. And those were just the returning members. Among the neophytes were hedge fund billionaire and major Obama donor Marc Lasry and Joe Reece, a high-ranking dealmaker at Credit Suisse. [To see the full Kappa Beta Phi member list, click here.] All told, enough wealth and power was concentrated in the St. Regis that night that if you had dropped a bomb on the roof, global finance as we know it might have ceased to exist.
During his introductory remarks, Ross spoke for several minutes about the legend of Kappa Beta Phi – how it had been started in 1929 by “four C+ William and Mary students”; how its crest, depicting a “macho right hand in a proper Savile Row suit and a Turnbull and Asser shirtsleeve,” was superior to that of its namesake Phi Beta Kappa (Ross called Phi Beta Kappa’s ruffled-sleeve logo a “tacit confession of homosexuality”); and how the fraternity’s motto, “Dum vivamus edimus et biberimus,” was Latin for “While we live, we eat and drink.”
On cue, the financiers shouted out in a thundering bellow: “DUM VIVAMUS EDIMUS ET BIBERIMUS.”
The only person not saying the chant along with Ross was me — a journalist who had sneaked into the event, and who was hiding out at a table in the back corner in a rented tuxedo.
I’d heard whisperings about the existence of Kappa Beta Phi, whose members included both incredibly successful financiers (New York City’s Mayor Michael Bloomberg, former Goldman Sachs chairman John Whitehead, hedge-fund billionaire Paul Tudor Jones) and incredibly unsuccessful ones (Lehman Brothers CEO Dick Fuld, Bear Stearns CEO Jimmy Cayne, former New Jersey governor and MF Global flameout Jon Corzine). It was a secret fraternity, founded at the beginning of the Great Depression, that functioned as a sort of one-percenter’s Friars Club. Each year, the group’s dinner features comedy skits, musical acts in drag, and off-color jokes, and its group’s privacy mantra is “What happens at the St. Regis stays at the St. Regis.” For eight decades, it worked. No outsider in living memory had witnessed the entire proceedings firsthand.
I wanted to break the streak for several reasons. As part of my research for my book, Young Money, I’d been investigating the lives of young Wall Street bankers – the 22-year-olds toiling at the bottom of the financial sector’s food chain. I knew what made those people tick. But in my career as a financial journalist, one question that proved stubbornly elusive was what happened to Wall Streeters as they climbed the ladder to adulthood. Whenever I’d interviewed CEOs and chairmen at big Wall Street firms, they were always too guarded, too on-message and wrapped in media-relations armor to reveal anything interesting about the psychology of the ultra-wealthy. But if I could somehow see these barons in their natural environment, with their defenses down, I might be able to understand the world my young subjects were stepping into.
So when I learned when and where Kappa Beta Phi’s annual dinner was being held, I knew I needed to try to go.
Getting in was shockingly easy — a brisk walk past the sign-in desk, and I was inside cocktail hour. Immediately, I saw faces I recognized from the papers. I picked up an event program and saw that there were other boldface names on the Kappa Beta Phi membership roll — among them, then-Citigroup CEO Vikram Pandit, BlackRock CEO Larry Fink, Home Depot billionaire Ken Langone, Morgan Stanley bigwig Greg Fleming, and JPMorgan Chase vice chairman Jimmy Lee. Any way you count, this was one of the most powerful groups of business executives in the world. (Since I was a good 20 years younger than any other attendee, I suspect that anyone taking note of my presence assumed I was a waiter.)
I hadn’t counted on getting in to the Kappa Beta Phi dinner, and now that I had gotten past security, I wasn’t sure quite what to do. I wanted to avoid rousing suspicion, and I knew that talking to people would get me outed in short order. So I did the next best thing — slouched against a far wall of the room, and pretended to tap out emails on my phone.
After cocktail hour, the new inductees – all of whom were required to dress in leotards and gold-sequined skirts, with costume wigs – began their variety-show acts. Among the night’s lowlights:
• Paul Queally, a private-equity executive with Welsh, Carson, Anderson, & Stowe, told off-color jokes to Ted Virtue, another private-equity bigwig with MidOcean Partners. The jokes ranged from unfunny and sexist (Q: “What’s the biggest difference between Hillary Clinton and a catfish?” A: “One has whiskers and stinks, and the other is a fish”) to unfunny and homophobic (Q: “What’s the biggest difference between Barney Frank and a Fenway Frank?” A: “Barney Frank comes in different-size buns”).
• Bill Mulrow, a top executive at the Blackstone Group (who was later appointed chairman of the New York State Housing Finance Agency), and Emil Henry, a hedge fund manager with Tiger Infrastructure Partners and former assistant secretary of the Treasury, performed a bizarre two-man comedy skit. Mulrow was dressed in raggedy, tie-dye clothes to play the part of a liberal radical, and Henry was playing the part of a wealthy baron. They exchanged lines as if staging a debate between the 99 percent and the 1 percent. (“Bill, look at you! You’re pathetic, you liberal! You need a bath!” Henry shouted. “My God, you callow, insensitive Republican! Don’t you know what we need to do? We need to create jobs,” Mulrow shot back.)
• David Moore, Marc Lasry, and Keith Meister — respectively, a holding company CEO, a billionaire hedge-fund manager, and an activist investor — sang a few seconds of a finance-themed parody of “YMCA” before getting the hook.
• Warren Stephens, an investment banking CEO, took the stage in a Confederate flag hat and sang a song about the financial crisis, set to the tune of “Dixie.” (“In Wall Street land we’ll take our stand, said Morgan and Goldman. But first we better get some loans, so quick, get to the Fed, man.”)
A few more acts followed, during which the veteran Kappas continued to gorge themselves on racks of lamb, throw petits fours at the stage, and laugh uproariously. Michael Novogratz, a former Army helicopter pilot with a shaved head and a stocky build whose firm, Fortress Investment Group, had made him a billionaire, was sitting next to me, drinking liberally and annotating each performance with jokes and insults.
“Can you fuckin’ believe Lasry up there?” Novogratz asked me. I nodded. He added, “He just gave me a ride in his jet a month ago.”
The neophytes – who had changed from their drag outfits into Mormon missionary costumes — broke into their musical finale: a parody version of “I Believe,” the hit ballad from The Book of Mormon, with customized lyrics like “I believe that God has a plan for all of us. I believe my plan involves a seven-figure bonus.” Amused, I pulled out my phone, and began recording the proceedings on video. Wrong move.
“Who the hell are you?” Novogratz demanded.
I felt my pulse spike. I was tempted to make a run for it, but – due to the ethics code of the New York Times, my then-employer – I had no choice but to out myself.
“I’m a reporter,” I said.
Novogratz stood up from the table.
“You’re not allowed to be here,” he said.
I, too, stood, and tried to excuse myself, but he grabbed my arm and wouldn’t let go.
“Give me that or I’ll fucking break it!” Novogratz yelled, grabbing for my phone, which was filled with damning evidence. His eyes were bloodshot, and his neck veins were bulging. The song onstage was now over, and a number of prominent Kappas had rushed over to our table. Before the situation could escalate dangerously, a bond investor and former Grand Swipe named Alexandra Lebenthal stepped in between us. Wilbur Ross quickly followed, and the two of them led me out into the lobby, past a throng of Wall Street tycoons, some of whom seemed to be hyperventilating.
Once we made it to the lobby, Ross and Lebenthal reassured me that what I’d just seen wasn’t really a group of wealthy and powerful financiers making homophobic jokes, making light of the financial crisis, and bragging about their business conquests at Main Street’s expense. No, it was just a group of friends who came together to roast each other in a benign and self-deprecating manner. Nothing to see here.
But the extent of their worry wasn’t made clear until Ross offered himself up as a source for future stories in exchange for my cooperation.
“I’ll pick up the phone anytime, get you any help you need,” he said.
“Yeah, the people in this group could be very helpful,” Lebenthal chimed in. “If you could just keep their privacy in mind.”
I wasn’t going to be bribed off my story, but I understood their panic. Here, after all, was a group that included many of the executives whose firms had collectively wrecked the global economy in 2008 and 2009. And they were laughing off the entire disaster in private, as if it were a long-forgotten lark. (Or worse, sing about it — one of the last skits of the night was a self-congratulatory parody of ABBA’s “Dancing Queen,” called “Bailout King.”) These were activities that amounted to a gigantic middle finger to Main Street and that, if made public, could end careers and damage very public reputations.
After several more minutes spent trying to do damage control, Ross and Lebenthal escorted me out of the St. Regis.
As I walked through the streets of midtown in my ill-fitting tuxedo, I thought about the implications of what I’d just seen.
The first and most obvious conclusion was that the upper ranks of finance are composed of people who have completely divorced themselves from reality. No self-aware and socially conscious Wall Street executive would have agreed to be part of a group whose tacit mission is to make light of the financial sector’s foibles. Not when those foibles had resulted in real harm to millions of people in the form of foreclosures, wrecked 401(k)s, and a devastating unemployment crisis.
The second thing I realized was that Kappa Beta Phi was, in large part, a fear-based organization. Here were executives who had strong ideas about politics, society, and the work of their colleagues, but who would never have the courage to voice those opinions in a public setting. Their cowardice had reduced them to sniping at their perceived enemies in the form of satirical songs and sketches, among only those people who had been handpicked to share their view of the world. And the idea of a reporter making those views public had caused them to throw a mass temper tantrum.
The last thought I had, and the saddest, was that many of these self-righteous Kappa Beta Phi members had surely been first-year bankers once. And in the 20, 30, or 40 years since, something fundamental about them had changed. Their pursuit of money and power had removed them from the larger world to the sad extent that, now, in the primes of their careers, the only people with whom they could be truly themselves were a handful of other prominent financiers.
Perhaps, I realized, this social isolation is why despite extraordinary evidence to the contrary, one-percenters like Ross keep saying how badly persecuted they are. When you’re a member of the fraternity of money, it can be hard to see past the foie gras to the real world.
Copyright 2014 by Kevin Roose. Reprinted by permission of Grand Central Publishing. All rights reserved.
Why did the key investors of Tesla meet with persons and groups from the Russian government and business sectors who State Department has identified as having mob connections? Could it have to do with all of the trillions of dollars of materials used for making lithium ion electric car batteries that those Russian groups control? If those investors helped grease the deal, they certainly wouldn’t cash in on that… would they? Here is the NY Times research on some of their backgrounds:
Russian Organized Crime Data Pull- State- :
Multiple meetings with Silicon Valley Suspects
Received DOE Funds Via Severstal:
Alexey Mordashov -General director of “Severstal group”, Chairman of the board of directors in “Power Machines”, the largest shareholder of “Arcelor”,
Position: General director of “Severstal group”, Chairman of the board of directors in “Power Machines”, the largest shareholder of “Arcelor”, a member of board of RSPP.
Mordashov Alexey Aleksandrovich was born on September 26, 1965 in Cherepovets in the Vologda area in workers’ family; Russian. In 1988 he graduated with excellence from the Leningrad Engineering-Economical Institute. During study he got acquainted with Anatoly Chubais.
From 1988 till 1989 – Senior Economist in maintenance and repair shop #1 of the Cherepovets Metallurgical Plant (CMP).
In 1989-1991 – Head of Bureau of Economics and Labor of MRS#1 at CMP.
In 1991-1992 – Deputy Director of planning department of CMP.
In 1992-1993 – Deputy Director of Economics and Finance at CMP.
Since 1993 – Financial Director of CMP (now CMP is renamed into Open Joint-Stock Company “Severstal”). Simultaneously the chairman of board of directors of joint-stock company “Severstal-Invest”. He was one of creators of the plant privatization program, and transition to active marketing practice in metal trading. Company “Severstal-Invest” was engaged in sale of rolled metal products, motor vehicles and the weapon, cultivation, processing and sale of fish, realtor and security-detective activity.
Since March, 1996 – chairman of board of “Severstal-holding” LLC (Cherepovets).
Since March, 1996 – chairman of board of directors of Joint-Stock Company “Severstal-invest” (Cherepovets).
Since September 1996 till June, 2002 – General Director of “Severstal” OAO.
Since November, 1997 – chairman of board of directors in Metkombank (Cherepovets). He was a councilor of bank “Metallinvest”. Then he was trained on courses of managers in England (in the late nineties he completed the MBA program of Newcastle Business school (NBS) in the University of Northumbria (UNN, Great Britain).
Since June, 2000 – the councilor of directors of Joint-Stock Company «Izhora pipe factory», joint venture of «Izhora factories» OAO and “Severstal” OAO. In October, 2000 he was selected as a member of bureau of board of the Russian Union of Industrialists and Entrepreneurs (RSPP).
Since June, 2001 – coordinator of RSPP Working group.
From April 2001 till April, 2003 – member of the Supervisory board of «Industrial Construction Bank» (ICB).
Since June, 2002 – chairman of the board of directors of “Severstal” OAO.
Since 2002 – General Director of “Severstal group” ZAO.
Since August, 2002 – the chairman of the board of directors of “SSM-Tyazhmash” LLC, subsidiary of “Severstal group” ZAO.
Since December, 2002 – the judicial arbitrator at the Commission on Ethics of RSPP created for settlement of corporate disputes.
In May, 2003 he was included in structure of Business Council at the government of the Russian Federation.
In December, 2003 he became the authorized representative of president Putin on presidential election on March, 14th, 2004.
In 2003 Forbes magazine included Mordashov in the list of 500 richest people in the world (348th place, fortune – 1.2 billion dollars).
In February, 2004 “Severstal” OAO informed that Mordashov supervised 82.75% of stocks of “Severstal”.
Since June, 2004 – councilor of directors of bank “Rossiya” (St.-Petersburg).
In February 2006 “Finance” magazine estimated Mordashov’s capital at 6.0 billion dollars (the tenth place in Russia).
In March, 2006 there was a next rating of Forbes Magazine in which Mordashov was on the 64th place in the world (fortune – 7.6 billion dollars).
Member of Board of guardians of RDC «Expert institute» at Russian Union of Industrialists and Entrepreneurs (RSPP);
Member of Advisory council on the innovations created by Ministry of Industry and Science of the Russian Federation.
He is awarded with the order «For Merits for Country» of the I and II degrees.
The winner of the All-Russia competition of businessmen “Career-96”. In December, 2000 Russian Union of Industrialists and Entrepreneurs called him the best businessman of the year.
Speaks English and German.
Mordashov is married for the second time. He has three sons – one from the first marriage, two – from the second one.
Takes a great interest in poetry, painting, active winter kinds of sports.
By 2001 there were no any compromising materials concerning Mordashov on pages of the mass-media. As for unpleasant stories – only divorce with the wife and the ignominious alimony to the son. The only thing that was spoken about him appeared in July, 2001. Mordashov was supposed to be offered a post of the chairman in the Russian government. In reply to that Mordashov declared that even if he had been offered the post he would have had to refuse of it.
In 2004 in mass media the materials convicting Mordashov of dishonest engagement of “Severstal” were published. The ex-general director of Cherepovets Metallurgical Plant Yury Lipuhin – who promoted Mordashov on a career ladder – became an information source. When Mordashov was already the director of “Severstal” the plant suffered from an attempt of raid capture. Trans-World Group tried to persuade Mordashov to sell the plant (it was represented by well known businessmen Vladimir Lisin, Mikhail Chernoy, Oleg Deripaska) but he resisted. After those events Mordashov convinced Lipuhin that the plant shares needed to be privatized not to admit strangers to the enterprise. The plant released metal under the low prices to the company “Severstal-Invest” created for that purpose; Mordashov spent millions of gross margin from resale on purchase of vouchers and shares from workers. So he became the owner of 51% of shares of “Severstal” and Lipuhin – 49 %.
In 1998 there was a conflict between two proprietors – Mordashov decided to diversify business and began to buy up industrial actives: stocks of ports in St.Petersburg, Tuapse and East port, coal mines, Kolomna diesel factory, UAZ factory. Lipuhin was against of such diversification of the business. In the beginning of 2001 Mordashov redeemed from Lipuhin 49 % of “Severstal-Guarant” with the big discount; Lipuhin is still offended by Mordashov for that. The latter during had enemies that period – Zavolzhsky motor factory became a subject of his conflict to GAZ owner Oleg Deripaska. Together with the head of “Eurazholding” Alexander Abramov, Mordashov struggled for “Kuzbassugol”, the metallurgical market was divided with Iskander Mahmudov.
Source: «Forbes», 4/10/2004
In youth during internship in Austria Mordashov had a conflict with the son of the minister of ferrous metallurgy Serafim Kolpakov Sergey. The minister demanded for Yury Lipuhin dismissed Mordashov, but Lipuhin then defended the young perspective employee.
Source: «Forbes», 4/10/2004
In 2001 the first spouse of Mordashov, Elena declared that Alexey Mordashov did not help their son sufficiently, didn’t let her arrange private life and promoted her dismissal from work. For 2000 Mordashov declared his income at 80 million dollars (Mordashov denied the sum soon after that), his former wife took advantage and sued for alimony and separation of jointly acquired property (he had been paying to the wife 650 dollars monthly for the son). Mordashova demanded a share in business of the husband and developed huge information war. The businessman considered that behind that claim there were competitors of metallurgical holding – the Ural mountain-metallurgical plant and “Sibal”, in particular their owner Iskander Mahmudov who was at that time the main contender of Mordashov in the metallurgical market. In August, 2001 the former wife applied to Nikulinsky Office of Public Prosecutor of Moscow with the requirement to force former husband to give 25% of the income for education of the son from first marriage. In her opinion the underpaid alimony of Mordashov made more than semi billion dollars. In maintenance of the claim the Office of Public Prosecutor managed to arrest 32.5 % of stocks of “Severstal”. Claims of former spouse Elena Mordashova for a quarter of incomes of the husband were recognized by Moscow court as groundless, and attachment was removed from property. And after that Cherepovets court took Mordashov’s side and decided that he did not owe to the former spouse 40 percent of shares of “Severstal” (Elena Mordashova had declared such requirements in the statement of claim). As a result Elena Mordashova lost both suits.
Source: «Moscow Komsomolets», 8/20/2001, “Vedomosti”, 10/30/2002
On presidential election of 2004 Alexey Mordashov was Vladimir Putin’s authorized representative. Support of the head of the country helped Mordashov to create the steel-making company the largest in Russia, which possessed the largest actives abroad on the basis of the Cherepovets plant.
In February, 2005 Alexey Mordashov made scandal at airport Vnukovo-3. He left the plane together with two girls accompanying him in the trip. One of his companions unexpectedly found out that she had lost a buckle from the handbag. Mordashov unexpectedly began to behave inadequately: for about a half an hour he loudly shouted at employees of the airport, and demanded to pay him one thousand dollars for the lost buckle.
Source: “Life”, 2/9/2005
Alexey Mordashov tried to unite his business with metallurgical group Arcelor being absorbed, but owners of the company refused the offer of Mordashov and group “aggressors” – Mittal Steel became its owner.
Source: Investments ? 3(334) 01.02-07.02.2010
In September, 2006 Alexey Mordashov decided to hold again the post of the general director of “Severstal”; in this connection he carried out administrative reform at the enterprise. General Director Anatoly Kruchinin, the hired manager, was removed by Mordashov from the post. Later he was appointed as the General Director of «Severstal. Russian steel» (in April, 2008 management of “Severstal” divided it into three directions: «Severstal. Russian steel», «Severstal. Resources», «Severstal Internationa»). Mordashov’s return on a post of the director of according to his plan should promote success of IPO – Kruchinin was unknown person in business while Mordashov after attempt to become the largest owner of Arcelor received world popularity. In some months Mordashov arranged IPO in London which observers considered to be not successful.
Source: “Vedomosti”, 9/21/2006
Due to lack of more interesting actual metallurgical actives for purchase, Mordashov once again tried to diversify business in adjacent spheres. New object of interest of the businessman – the main Russian manufacturer of the equipment for electric power industry, “Power machines”. Structures “Severstal” then requested permissions for the transaction in Federal antimonopoly service (FAS). Stocks of “Power machines” were the personal investment of Mordashov which was not connected with mountain-metallurgical company “Severstal”. Competitors of Mordashov in struggle for “Power machines” became Victor Vekselberg and Oleg Deripaska.
Source: http://www.newsru.com from 6/9/2007
In December, 2003 bank “Rossiya” informed that it would make additional share issue for 30 million rubles face value in advantage of Alexey Mordashov’s “Severstal-groups” under the price in 20 times above face value. Thus, the holding should pay 600 million rubles for 9% of shares of bank with own capital of 616 million rubles. The General Director of “Rossiya” Victor Myachin explained the high cost of package with consideration of the «occurrence of the foreign investor» in the capital of bank and dynamics of its development (for a year actives and the capital have trebled). Experts consider such estimation of a minority package as absolutely inadequate. The most probable explanation of such an odd act – rupture of relations with Industrial Construction Bank (ICB) and transfer of money resources to bank “Rossiya”. At the same time Mordashov since 90th years kept partner relations with Petersburg banker Vladimir Kogan, ex-founder of ICB – in the beginning of 2001 Mordashov sold a share holding of “Metkombank” to Kogan.
Source: http://www.mfd.ru News
In the beginning of 2007 in the central mass-media, in particular, in newspapers “Commersant” and “Newspaper” the information began to appear that soon there would be a merge of two largest metallurgical companies – “Eurazholding” and “Severstal”. Besides it was written about nationalization of branch and government plans about it. As there were no any concrete facts confirming possibilities of such changes, there were assumptions that this “canard” in respectful newspapers was created by their owners. The owner of “Commersant” – Alisher Usmanov was simultaneously the owner of “Metalloinvest”, the largest metallurgical companies; “Newspaper” belonged to other large “metallurgist” Vladimir Lisin, the owner of Novolipetsk metallurgical plant. The purpose: to press on competitors or to force them to buy, for example, business for high price, probably even to frighten and force to cease to put up money in development of the enterprise, to sell to competitor.
Source: «Komsomol truth», 5/30/2007
In August, 2008 at Mordashov’s company “Power machine” shareholders were replaced: 63.1 % of shares of company have appeared concentrated in three offshore now. Among shareholders of OAO there were two offshore, King Rail Trading and Ashington Trading, each owns 16,55 % of his actions. Presumably, these companies are under control of Alexey Mordashov and re-structuring of actives allows him to bypass the requirement about exhibiting of the obligatory offer by minoritaries. If Alexey Mordashov exposed the offer, he should redeem shares from minoritaries with 9 percent award to market quotations. He did not expose it but bought up company shares in the off-exchange market from many sellers. Redistribution of actives gave Mordashov also the joint-stock control over the company.
Source: “Money” ? 33 (688), 8/25/2008
The Office of Public Prosecutor accused Alexey Mordashov of legislation infringement – he, having dismissed employees of Kostomuksha mining and concentrating mill, in October, 2009 replaced them with less paid Gastarbeiters. Active workers of the enterprise arranged several meetings in the city, the Office of Public Prosecutor of Karelia began investigation. Trade-union active workers were accused of extremism and Alexey Mordashov was required by the public prosecutor of republic Karelia to exclude infringement of the labor and social rights of citizens and to provide measures on prevention social and political tension in «Karelian pellet OAO. Thereof Mordashev stopped employment of migrants.
Source: Rusmet.ru 24.12.09
Alexey Mordashova’s name was mentioned in a context of preparation of amendments by the Ministry of Finance to the article 7 of the Tax code depriving Russian businessmen of possibility to minimize taxes by using the companies in the countries having agreements with Russia on avoidance of the double taxation. It was declared that Alexey Mordashov had supervised “Severstal” through the Cyprian companies, thereby minimized taxes in the federal budget of our country.
Source: http://www.polit.ru/news, 12/2/2009
The family conflict of Alexey Mordashov with the first wife Elena Novitskaya passed to a new stage – in 2004 she submitted the claim to the Strasbourg court where she accused Russia of partiality of justice. In January, 2010 Novitskaya’s case received a priority. Few years ago the court dismissed Novitskaya’s claim about property separation, as all agreements on property division between spouses had been signed back in 1996, and Novitskaya did not apply for shares and refused them voluntarily. Having lost the court, Elena Novitskaya still owed the state duty of 213 million rubles. In European court Novitskaya demanded from Russia for compensation at amount of 500 million dollars, referring to article 6 of the European convention about human rights. Now Russia should prove that at the moment of divorce Alexey Mordashov did not possess influence on justice.
Boris G. Zingarevich
Received DOE funds through Ener1
Boris Zingarevich – Deputy Director General of Ilim Group
Position: Deputy Director General of Ilim Group
Date of Birth: 08 July 1959.
Place of Birth: Sebezh (Pskov region).
1981: Graduated from the Leningrad Technological Institute of Pulp and Paper Industry (specialty: machines and apparatus of PPI)
1991-1992: “Tekhnoferm”, the CEO
1985-1991: Leningrad carton factory, Master of cardboard shop, Production Manager
1981-1985: Kondopozhsky PPM, mechanic
Since 1992 – Deputy Director General of Ilim
Until the early 90’s Boris Zingarevich, along with his brother Michael worked as a mechanic at the Leningrad cardboard factory. In 1992 they created “Ilim Pulp” – a company for export of paper products. Then they got reassigned to the woods production, and over the years have bought about 30 logging companies – then timber industry enterprises were sold at very low prices.
Easy money in the timber industry caused competition that turned into criminal fights. Most of them appeared to be in Arkhangelsk region, where the main enterprise of the holding – Kotlas PPM was. In the region, the company has developed a bad reputation to the extent that one day in January 2002, half the guests did not appear on the anniversary of the governor Anatoly Efremov, having learnt that Zingarevich brothers and their partner Zakhar Smushkin were going to be there.
In spring 1999 the house of the head of the Arkhangelsk PPC Vladimir Krupchak was bombed. In the summer of 1999 the head of OAO “Solombalskiy LDK” Evgeny Drachev and his driver were kidnapped by unknown. A few months later director general of forestry complex the department of the regional administration, Alexander Bulatov was beaten. It’s difficult to say whether those events were connected to the activities of Ilim Pulp. However, its top managers- Smushkin and the Zingareviches could have argued with those people, because the struggle for supremacy in the timber industry was very tough, and Arkhangelsk region was considered a “fiefdom” of Ilim Pulp in the field. The regional law enforcement agencies had a huge dirt on the heads of the holding, but for some reason the case went “down on the brakes” every time.
For example, the same story happened with the murder of Dmitry Varvarin, Director General of ZAP “Concern” Orimi”, the main competitor of Ilim Pulp. He was shot in St. Petersburg in March of 2000. The heads of Ilim Pulp, including Boris Zingarevich had sufficient motives for the killing, including the competition and the fact that Varvarin supported the campaign of Yuri Boldyrev for the post of mayor of St. Petersburg, which was obviously to fail. In addition, Varvarin owned shares of Ilim Pulp, so he begged Smushkin and Zingarevichey as his partners to allocate money for it.
A few days after the murder of Varvarin, unknown people killed another founder of “Orimi”, Sergey Krizhan together with his family.
Law enforcement agencies considered the version according to which the two murders were connected with the management of Ilim Pulp, as the most probable, but somehow forgot about it; the team of investigators was excluded from the investigation.
Source: Kompromat.ru from 31.07.2002
The involvement of the heads of “Ilim Pulp” in the second killing has not been confirmed, as in 2005, Andrey Yurevich – the son of commercial director of “Plastpolymer”, Victor Yurevich, and two accomplices – Alexander Ulyanov and Vyacheslav Shinkarev were sentenced for that murder. Krizhan was chairman of the board of directors of the company and clashed with Viktor Yurevich.
The newspaper “Kommersant-Petersburg” ? 216 (3300) on 17.11.2005
In spring and autumn of 2000, a new wave of crime passed.
In March, the director of Agency Company, lumber exporter – Vladimir Malkov was attacked. And in October, the hotel “Polina”, owned by Krupchak was set on fire. As leader of the Arkhangelsk Pulp and Paper Mill, he was a major player in timber market and he could have possibly conflicted to the Zingarevicheses and Smushkin quite often. In 2001 Dmitry Belyaev, External Manager of LDK-4 was attacked. Again, the connection with the management of Ilim Pulp was not confirmed, but it was on the cards, as Ilim Pulp had been seeking for the rule in the forest sector, and Belyaev could have threatened the interests of their company by his business, or could have simply competed with its leaders.
Boris Zingarevich together with the companions did the business of “Ilim Pulp” not very successful, at least for their enterprises. The main one was the debts of Kotlas pulp and paper mill in Arkhangelsk region, Bratsk Timber Complex in the Irkutsk region, as well as others, they had ruthlessly cut down the forest, accidents happened frequently, the equipment was worn out or even broken. At the same salaries were miserable.
Until 2000, the shareholders of Ilim Pulp had not received dividends. Ostensibly, they were invested in production development, but in reality everything was falling apart. The problem was that all the investments in production then were exempt from taxation. Once the tax credit was abolished, dividends went.
In addition, it became clear that Kotlas Pulp came under the control of Ilim Pulp illegally: during the investment competition the money, which the company pledged to invest in a company, were transferred to its account for one day and then were sent back to the accounts of Smushkin and the Zingarevicheses. But formally everything looked legitimate.
They purchased equipment for the companies in an interesting way: at very high prices, while in fact only half of it was brought. The money also flowed to foreign accounts of the firms affiliated with Ilim Pulp.
Other financial frauds by the Zingarevicheses and Smushkin were turned in the Bratsk Timber Industry Complex (BTIC). First they formed huge debts for electricity for the budget of Bratsk and many others. And in 1998 the company established a subsidiary company OAO “Pulp and Cardboard Plant (PCP) and began to place there their liquid assets. Thus, BTIC eventually had unprofitable production and debts. The state had a stake in BTIC and did not impede the withdrawal of assets.
Only Dmitry Medvedev, the current president objected that, then in 1993 he was Director of Legal Affairs “Ilim Pulp”, and since 1998 -a member of the Board of Directors in BTIC. His relationship with the Zingarevicheses and Smushkin worsened, and in 1999 they were completely stopped – he was distracted by new concerns associated with climbing the career ladder.
In October 2001 it became known that Ilim Pulp committed deals for the sale of pulp and paper factory to offshore companies. Then the shareholders of OAO “Irkutskenergo” which was the main creditor of BTIC – appealed to the federal agencies. They failed to find out the truth because of the legal tricks: documents submitted to the commission, were valid, but for the period prior to the fraud.
After that the minority shareholders of BTIC went to court, and it ordered to reinstate the dismissed general director BTIC George Trifonov. He restored an order, paid the debts. The Zingarevicheses and Smushkin were defeated. But when in 2002 BTIC came under their control again, they began to restore the old order by dismissing disloyal people and replacing them with loyal ones, uncomprehending in the timber industry.
In addition, the holding company began the blockade of the Ust-Ilim Timber Complex (UiLPK) by not sending paid commodity to the company. All forces were driven to expell the head of the trade union, Yuri Savinkov, they wrote denunciations to the prosecutor’s office against the former Complex director Andrey Prokopov. The new head of UiLPK Vladimir Batishchev reported that Prokopov took away the production equipment. It was a slander – he just took jeeps belonging to the management company “Continental Invest”.
In early February 2002 UILPK was entirely under the control of Ilim Pulp.
Source: Kompromat.ru from 13.02.2002
In April 2002, Ilim Pulp lost control over Kotlas and Bratsk pulp and paper mills. There were two lawsuits from shareholders, after which the company’s shares were arrested, and then purchased for the benefit of companies affiliated with the actual new owners – “Basic Element”, “Continental management” and “Banking House” Sankt-Petersburg”. Oleg Deripaska was behind those machinations, who wanted to get a strategic advantage in the industry.
Source: corp-gov.ru from 29.09.2003
The management of “Ilim Pulp” disputed the transaction through numerous courts. There were information wars. The information agencies had the news spread that the Court invalidated the new board of directors elected by shareholders. It was misinformation. To gain access to the documents of Kotlassky PPM they forged execution lists and sent them to the office of registry holders. According to them it was necessary to issue registry documents. They also launched “a fake” that the registry of the Bratsk TIC was lost.
In the end, “Ilim Pulp” prevailed in the information and judicial war. Businessmen managed to agree, but the true owner of the enterprises is still unknown. Representatives of “Bazel” argued that the blocking stake in the enterprises was still in the structures of Basel. Smushkin also announced that he possessed more than 90%. As the court ruled, the enterprises passed to Ilim Pulp. Perhaps the company paid Bazel some compensation. In any case, that was a good lesson for the Zingarevicheses and Smushkin and a signal that the empire they built up may well falter without gaining a strong support.
Source: Kompromat.ru from 31.07.2002
In 2004, the media reported that Boris Zingarevich intended to acquire a large stake in English football club Everton. Upon the request of Zingarevich, that information was retracted. According to British media, the football club was really interesting to Zingarevich’s son Anton. He himself had no money to buy it, but he practiced abroad as a football manager. There is no information confirming the purchase plans. This episode is insignificant, but given that Boris Zingarevich studiously avoided the media spotlight, it looks interesting. Maybe it was advantageous for someone to put Zingarevich as a reckless spender and a wasteful man.
Source: “Kommersant» ? 155 (2994) on 24.08.2004
Also in 2004, there were rumors in the media that the company “Ilim Pulp” is going to buy the state Vneshtorgbank, and the then owner of Promstroibank Vladimir Kogan was to be an intermediary in the transaction. The price was to be inflated in more than a billion dollars. Journalists advanced the version of such a bizarre waste of public funds. They supposed, the billion would be withdraw from the State Bank and shared by individuals, including Zingarevich. In their opinion, the deal was scheduled to be held “under the guise of” Finance Minister Alexey Kudrin. However, no further speculation happened a the possible grand scam failed for unknown reasons.
Source: Kompromat.ru from 23.09.2004
In 2006 the Zingareviches and Smushkin sold half of the holding to a foreign company International Paper, the world’s largest pulp and paper corporation. In the name of the company they found a strong partner and a way to overcome the crisis that had began with the attack by Mr. Deripaska on Kotlas and Bratsk pulp and paper mills. Once they returned the enterprises, Deripaska exchanged his remaining shares to the stake in the Arkhangelsk Pulp and Paper Mill of Vladimir Kogan, and the latter gave them to the shareholders of Ilim Pulp. That is, everything returned to business as usual. However, after such a shake-up the Zingareviches and Smushkin realized they were not omnipotent, and their old methods to maintain the credibility in the timber industry had been no longer working. The holding company needed a powerful protection of the parties and they found such a support in the name of the foreign company.
Source: Journal “Secret Firmy» ? 48 (183) on 25.12.2006
In spring 2010 the authorities of St. Petersburg passed at once three buildings – the monuments of federal importance for the reconstruction of them as hotels – to the companies close to Zingarevich brothers. OOO “Lotus Oteli” received a historic building of the former barracks of the Life Guards of the Pavlovsky Regiment on the Marsovo Pole, 1. OOO “Orange-Development” acquired the building of the former court stables Office at Konyushennaya Ploshad, 1a. The third building was on Nevsky Prospekt, 7-9A, which is the Central Agency of Aviation and airline ticket place passed to OOO “IFG-Basis-Project”. Experts say that at the auction the buildings could cost a lot of money. However, they gave them under the decision taken at a closed meeting of the government. Thus, not only the interests of the city budget were violated, but of the potential buyers who could acquire the right to use the buildings through a fair competition.
Source: “Kommersant” dated 05/21/2010
————————————————The Russian oligarch has spent the past decade buying up nine flats across two buildings in the exclusive Lowndes Square. … John Doerr; John Frederiksen; John Paul DeJoria; John Paulson; Jon and Karen Huntsman; Jose Mourinho; Joseph Lau; Jr. Julian H. Robertson; Ken Fisher;agent4stars.com/tag/oligarch/