Friday, March 04, 2022

Indicted U.S. Rep. CORRINE BROWN Flew to Ukraine to Help Russian Oligarch -- Quid Pro Quo? (Florida Trend 2001; WaPo 1998)

Corrupt then U.S. Rep. CORRINE BROWN (D-Jacksonville) flew to Ukraine to assist sanctioned Russian oligarch IGOR MAKAROV collect payments from Ukraine. So reported Florida Trend magaine in 2001, in an article that appears to describe a qui pro quo, never prosecuted by Justice Department.

IGOR MAKAROV's company "paid $27,861 for Rep. Corrine Brown (D-Fla.) and two aides to tour the former Soviet Union," the Washington Post reported in 1998.

After a Court of Appeals remand, disgraced ex-Congresman CORRINE BROWN faces a federal criminal trial. involving her allegedly defrauding a charity. 

Billionaire Russian oligarch IGOR MAKAROV's corporate interests here in Florida and the United States are all subject to 2018 and 2022 federal sanctions.

The assets need to be seized after civil, criminal and administrative investigation. 


From Florida Trend and the Washington Post:

Moscow on the St. Johns

John Finotti | 5/1/2001
In the fall of 1991, as the collapse of communism set off an unparalleled asset grab throughout the former Soviet Union, Lazar Finker left Kazan for a job as a visiting professor of education at Florida Community College at Jacksonville. An educator and trained concert violinist, Finker had helped start the first community college in his native Kazan. In Jacksonville, he enjoyed teaching, and FCCJ administrators liked him, extending his initial one-year contract several times. But it wasn't long before his love for teaching gave way to a new passion: Business. 

Finker says he saw opportunities in the economic free-for-all emerging throughout Russia and the former Soviet republics. "I had commercial contacts in Russia," says Finker, in heavily accented English. "I thought I could introduce them to U.S. counterparts." 

Today, a decade after leaving Kazan for the U.S., Finker is indeed a businessman. A very successful businessman. Out of nowhere, Itera International, a small trading company that Finker helped start in Jacksonville in 1992, has burst onto the international scene as the world's second-largest supplier of natural gas. Itera's clout is awesome: It can cut off gas supplies to entire countries such as Georgia and Ukraine, where it has virtual monopolies on gas distribution.

Itera is using its new wealth on a number of projects in the U.S.: It's financing the construction of a high-end, $15-million office building in suburban Jacksonville. The firm and related companies have invested in a shopping center at World Golf Village in St. Augustine and a string of 7-Eleven convenience stores in Massachusetts. The company is negotiating to buy a fertilizer factory in Oklahoma and an oil and gas exploration company in Texas. 

Finker says more deals are in the works. Itera is working on "serious projects" involving energy and real estate in the U.S. "Within six months to maybe one year, many people will see the accomplishments of Itera in the United States," he says. 

Back in Moscow, however, where 2,000 of Itera's 7,000 employees work, the company's meteoric rise is raising eyebrows. The mystery: How could an obscure company in Jacksonville morph into a sprawling, worldwide enterprise with 120 companies and $3 billion a year in sales? Skeptics, including Boris Fyodorov, an articulate politician-turned-banker, suggest that Itera has benefited from a special relationship with RAO Gazprom, the huge state-run natural gas producer.

Gazprom's minority shareholders, including Fyodorov, allege Gazprom has transferred gas fields and customers to Itera because Gazprom managers are silent shareholders in Itera. Gazprom and Itera deny this. "Talk that Gazprom is doing us a special favor by giving us super-lucrative contracts or something is groundless," Itera Chairman and CEO Igor Makarov told the Moscow News. 

Watchful eye
Nevertheless, questions about the relationship between Itera and Gazprom -- and darker murmurs that dog successful businesses in Russia's organized crime-plagued economy -- aren't fading away. BusinessWeek reported that law enforcement officials in Europe and the U.S. are scrutinizing Itera's activities for possible money-laundering. The European Bank for Reconstruction and Development -- by far Russia's biggest investor -- has held up $500 million in loans to Gazprom pending answers. Gazprom's board has rejected calls for an outside audit, saying a planned probe by its longtime auditor PricewaterhouseCoopers will suffice. "They won't find nothing. Zero," Finker says.

Itera's remarkable ascent from obscurity is emblematic of Russia's lurching progress into capitalism -- and of the new breed of businessmen who've made fortunes in the chaos that followed the Soviet Union's breakup.

In 1992, while still teaching at FCCJ, Finker began looking for deals and partners. He met Makarov, a young, ambitious former world-class cyclist from Turkmenistan who was making jeans. Together with Finker's wife, Raissa Frenkel, an economist, and a Jacksonville businessman, Ted Kavalieros, they formed Itera. The name comes, Finker says, from the word "iteration" -- repetition. (Makarov still works in Moscow but, every other month, travels to Jacksonville, where he's building a 15,000-sq.-ft. oceanfront mansion with a wine cellar and indoor pool in Ponte Vedra Beach.) 

Sitting at the conference table at Itera's Jacksonville office, Finker, a friendly man, sports closely cropped gray hair and a dark suit over a black T-shirt. He says the company started out trading commodities such as clothes, beer, cigarettes and frozen chickens in Russia and other former Soviet republics. 

The group was partially backed by American investors whom it has been reluctant to identify. But the company now promises to publish a list of shareholders and detailed financial information as part of a campaign to raise international funding.

As Itera got on its feet, Makarov began selling goods back to his homeland of Turkmenistan. At one point in 1995, the government of Turkmenistan owed Itera about $30 million. Unable to pay, government officials gave Makarov an option: Wait to get paid in cash or take natural gas shipments now. He took the gas. Despite having no expertise in the field, Makarov successfully sold the gas to Ukraine. More gas deals followed.

Pulling strings
Shipping natural gas from one former Soviet republic to another generally meant transporting it through Gazprom's extensive pipelines. Itera got better and better at bartering natural gas throughout the region, Finker says, and Gazprom, which was having difficulty collecting payment for its shipments, took notice. 

Eventually, "Gazprom decided to let Itera deliver the gas because they realized we get paid," Finker says.

Getting paid is no easy matter in that part of the world, however. Several years ago, Itera was having a tough time getting Ukraine to cough up any of the $1 billion it owed for gas. "What happens when Ukraine doesn't pay, we need U.S. help," Finker says. "We have a right as a U.S. registered company. We pay taxes."

Itera did what most U.S. companies do. It sought the help of its elected official, U.S. Rep. Corrine Brown. She traveled to Ukraine with Itera executives to press their claim and also wrote a letter to the Ukrainian Embassy in Washington on Itera's behalf. Ukraine promptly released $150 million worth of grain, Finker says.

In return, Itera has helped Brown. Company executives and their family members contributed $10,000 to her campaign. Also, at her direction, the company donated money to Edward Waters College, the Jacksonville Urban League and disabled children. "She never asked for anything for herself," Finker says.

Finker says he's got big plans for Jacksonville. Itera sponsors forums at the First Coast School of Law. Finker personally contributes generously to the Jacksonville Jewish Community Center and provides assistance to Russian emigres who have been moving to the area in recent years. He wants to develop trade fairs to show off goods made in Russia, Ukraine and Kazan. He'd like to bring more entertainment to the city and a five-star Russian restaurant.

In the meantime, however, Itera labors under the questions and speculation surrounding its dealings back in Russia.

Finker says no one has contacted Itera, but he believes U.S. law enforcement officials are "looking" at the company. "We are not mafia," he offers, unprompted. "The FBI will get to the truth."

From The Washington Post:


By Dan Morgan; David B. Ottaway

May 31, 1998

Washington Post

On visits from Moscow, youthful entrepreneur Igor Makarov soaks in a super-heated hot tub before downing a few vodkas. Soulful ballads blare from his Mercedes' tape deck as the former world-class cyclist cruises in a heat that reminds him of Turkmenistan, his Central Asian birthplace.

Makarov brings his distinctly Russian flavor here when monitoring the small U.S. office of Itera International Energy Corp., a phenomenally successful gas trading company. Over four years, Makarov has built Itera into a $3 billion-a-year worldwide conglomerate boasting 52 affiliates and 1,400 employees.

A piece of Itera drifted onto U.S. shores here in 1994, when Makarov incorporated a Jacksonville affiliate with about a dozen employees and began building U.S. government and political connections. Itera paid $27,861 for Rep. Corrine Brown (D-Fla.) and two aides to tour the former Soviet Union, sought meetings at federal agencies in Washington with mixed success and published a brochure declaring that the firm is "pioneering gas sales by American companies" overseas.

Makarov flies an American flag outside the office, but in truth, very little is clear about Itera's mission here or its worldwide connections.

The mysteries surrounding Itera reflect a rising problem the Clinton administration faces as it seeks to promote U.S. interests in the trillion-dollar-a-year global energy economy: Some of the hottest deals involving American oil and gas companies lie in the former Soviet Union, where bizness can be a treacherous and confusing game involving sprawling, opaque multinationals.

Dozens of companies like Itera, many with ties to the former Soviet Union and with executives carrying passports from around the world, have sprung up in recent years as part of a global rush to exploit untapped Caspian Sea oil and gas reserves, the biggest accessible energy prize outside the Middle East.

America's post-Cold War foreign and trade policies in the Caspian region have been geared to help America's friends and elbow out its adversaries in these deals. But for U.S. politicians and trade officials involved -- besieged by bidders, influence-seekers and other supplicants -- it is often difficult to tell who is on whose side and why. Indeed, political and business alliances in the Caspian region can change as rapidly as prices on the oil futures markets.

Itera's story is typical of the confusion often fogging the region's emerging energy rush. Some American politicians have supported Itera and welcomed contributions from its U.S. officers, figuring that its Jacksonville presence is enough to warrant U.S. support. But some federal agencies are skeptical of helping a company with what they say is a questionable American pedigree.

Some competing U.S. energy companies question Itera's mission because it has been closely aligned with Gazprom, the Russian energy monopoly that has fought U.S. plans to expand in the Caspian Sea.

Makarov insisted in an interview that Itera is completely independent from Gazprom. But in Turkmenistan, a source of huge gas reserves and scene of Makarov's first triumphs, officials privately describe Itera as a "child of Gazprom," which was founded in 1988 by future Russian Prime Minister Viktor Chernomyrdin.

Gazprom wants to head off a U.S.-backed Caspian pipeline that would undermine its near monopoly of the gas distribution network throughout the former Soviet republics.

The Clinton administration favors a pipeline that would carry gas from Turkmenistan to Turkey -- bypassing Russia and reducing Gazprom dominance. U.S. officials consider this essential to establishing the economic independence of the energy-rich Caspian nations.

Itera became aligned with Gazprom in gas sales to the Ukraine and in a dispute still raging over Itera's role in the deal. Itera was the middleman between Gazprom and Turkmenistan's government, but in March 1997, President Saparmurad Niyazov terminated Itera's contract and halted gas shipments through Gazprom's lines, saying Itera owed Turkmenistan $200 million.

Since then, Gazprom has insisted that Turkmenistan cannot resume stalled shipments through its pipelines unless Itera again becomes part of the deal.

U.S. officials have reacted ambivalently to Itera. Makarov has met with officials at the State Department and several other agencies. But Commerce Department officials declined to meet with Itera representatives, who have not yet formally applied for assistance. A senior government official, who asked not to be named, said Itera "did not fit the profile of companies we assist. . . . We did not see that it {currently} was doing enough business in the United States to qualify."

Commerce requires companies to prove that more than 50 percent of their business involves U.S. goods or services or that they operate in the U.S. national interest.

Itera's Jacksonville attorney and registered agent, Steven C. Koegler, said the Florida operation is "an administrative and support office." The company recently has been looking at possible oil deals in Paraguay and various investments in the Jacksonville area, he said.

Some of the office's activities involve side investments by companies operated by Makarov or other Itera employees, rather than by Itera itself, according to state records.

In January, for example, Eaglestar Intertrade Ltd., a British Virgin Islands company that lists Makarov as president, paid $2 million for an undeveloped beachfront property on Ponte Vedra Beach, an exclusive resort, property records show.

Eaglestar also has been acquiring other properties nearby. Koegler, the registered agent for Eaglestar as well as Itera, said the two companies are entirely separate. Florida records show that Koegler also has set up several other Florida companies using Itera's address that list individuals connected with Itera as officers.

Regarding Itera's ownership, Koegler described the shareholders as "an international group," but declined to give further details.

Makarov said in an interview that he was attracted to Jacksonville through his friendship with Lazar Finker, who left Russia to teach in Jacksonville and hosted Makarov's first visit in 1992.

As Makarov tells it, he was learning the tricks of the trade even when the communists still banned private business. After retiring from cycling competition in the mid-1980s, when Turkmenistan was still part of the Soviet Union, he set up a blue jeans factory in Kazan. When the Soviet system collapsed, Makarov said, he "saw many gaps in the market" for selling food and clothing.

In 1992, he registered his Omrania Trading Co. in Cyprus, listing himself, two Russian associates and a Cypriot as directors, company records reveal.

By 1993, Makarov said, he was supplying Turkmenistan with $30 million a year in food and exchanging New Zealand butter for Turkmen crude oil.

Boyhood friends were moving into key government positions in Turkmenistan, and "it was like a snowball," he said. "We found out there were items like sugar and poultry that were not available in Russia, Turkmenistan or Tajikistan, and we understood we had to go to Western countries to find them."

In 1994, he set up Itera's Jacksonville operation. That same year, Makarov stumbled into the gas business when the Turkmen government offered him natural gas from state-owned fields in lieu of cash.

"They provided us with all the documents {showing} that this gas belonged to us, and with all these documents I came to Moscow, just as a private citizen," he said.

Makarov went straight to Gazprom and found that with the gas bookings, he was warmly received. Through Itera, Gazprom saw a way to reknit frayed ties to Turkmenistan. And Itera offered a way for Gazprom to hand over the nuisance of bill collecting from financially strapped Ukraine enterprises.

Makarov's company was authorized to sell 20 billion cubic meters of Turkmen natural gas to Ukraine, and had the "exclusive right" to transmit it through Russian territory, according to a letter written by Sen. Tom Harkin (D-Iowa) at the time.

In 1996, Gazprom gave Itera 4 percent of a new joint venture that was to sell Turkmen gas to Ukraine and develop a pipeline to Pakistan. Other Gazprom-Itera ventures followed in Armenia, Georgia and Moldova.

In Ukraine, gas trading involved intrigue and intense rivalry. Itera had to compete with the government gas monopoly and other politically connected private firms. At one point, in a gangland-style slaying, Itera's top official in Ukraine was killed.

Itera had plenty of support from Gazprom, records and public statements suggest. Gazprom President Rem Vyakhirev spoke glowingly, and protectively, of Itera last year, calling it "one of the best, if not the best, company."

Makarov's efforts to win help in Washington were a logical step, given the U.S. government's influence in Ukraine and Turkmenistan. Forging business deals with American energy companies has been a strategy of those governments as they seek to ease away from domination by Moscow, U.S. officials note.

In 1995, according to a source, a consulting firm with Democratic connections arranged for Makarov to meet President Clinton at a Washington reception. Makarov got a handshake and a photo later used in an Itera brochure but no serious discussion, an Itera official said. The White House said it has no record of the meeting.

In May 1995, Makarov used an acquaintance to gain a 20-minute meeting with Harkin. A month later, Harkin wrote Ukraine's ambassador, Yuri M. Shcherbak, expressing concern about Itera's treatment in Ukraine.

Noting that the Ukrainian government had suspended direct private sales of Turkmen gas to Ukraine enterprises, Harkin warned that the action risked "impairing the business activities of a United States company" and raised "significant concerns about detrimental effects on . . . future trade and business relationships involving the Ukraine and the United States."

The next February, three Itera officials and one of their wives contributed $8,000 to Harkin's campaign.

In October, Makarov and an Itera team met top officials of the Overseas Private Investment Corp., the federal agency that provides U.S. firms with financing and insurance abroad. Makarov said Itera "knew OPIC provides guarantees from political risk in those {former Soviet} countries; that's why we came."

Harkin's wife, Ruth, who was then OPIC's president, said she does not recall a meeting. An OPIC spokeswoman said the Itera group met with finance officials and "may have come to the executive office."

But the meeting was disappointing, Makarov said.

Two months later, Makarov paid for Jacksonville's Rep. Brown and two aides to visit Moscow and other cities. Brown held a news conference in Kiev with Itera's Ukrainian chief and met with President Niyazov in Turkmenistan.

A local press report of the Turkmen visit identified Brown as "representing Itera," a description she strongly rejects. In a statement, she said she had "no problem with my decision to make this historic trip" as the first House member to visit independent Turkmenistan. She highlighted her success in persuading Ukraine to deliver 500,000 tons of wheat owed to Turkmenistan on its Itera deals.

Looking back now, Makarov expresses disappointment with his efforts in Washington.

"Everybody could win from my proposals," he said of his unsuccessful pitch to OPIC. "I can tell you who is losing -- the USA."

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