American Kompromat Page 5

  As for contacts, unlike agents, a trusted contact is someone who does favors for his Russian handler, but because of a personal relationship, not because he is tasked. In most cases, Shvets notes, trusted contacts understand that they are dealing with Russian intelligence, but they are usually not told that. “Trusted contacts, they are not recruited,” said Shvets. “Relations with them are cultivated over time. You just build relations over time with a trusted contact.”

  And, according to Shvets, Kislin had spotted Donald Trump, who, under the KGB classification, eventually became a special unofficial contact—a rare variation of trusted contact that was applied to high-level KGB intelligence assets, like the late industrialist Armand Hammer and the late British media mogul Robert Maxwell.

  CHAPTER THREE

  THE ASSET

  Serious observers of the Trump–Russia saga know the backstory. It began in the seventies when New York City was on the brink of bankruptcy, when the mere thought of investing in the city was considered reckless, and a young, vain, narcissistic, and ruthlessly ambitious real estate developer named Donald Trump was just starting out. It was a time when Soviet émigrés had just begun to trickle into Brooklyn’s Brighton Beach and nearby Coney Island, bringing with them Soviet bakers, meat markets, pushcarts, and stores selling blintzes, borscht, herring, and knishes—plus enormous gaudy supper clubs and cabarets.

  The Soviets also brought with them other less desirable commodities—most notably numerous mafiosi who had black belts in corruption and later engaged in money laundering, pump-and-dump stock manipulations, and scams that were specially devised to exploit loopholes in tax laws and manipulate markets.

  In the end, of course, their various lucrative enterprises would create the need to launder untold billions of dollars, a need that could best be filled by a wealthy real estate developer who had loads of luxury condos to sell and was willing to look the other way when it came to the source of the money.

  To a large extent, Trump’s involvement with the Russian Mafia and his subsequent financial dealings with the Russians is a matter of public record—even though it was strikingly absent from the Mueller Report. For more than three decades, at least thirteen people with known or alleged links to the Russian Mafia held the deeds to, lived in, or ran criminal operations out of Trump Tower in New York or other Trump properties. Many of them used Trump-branded real estate to launder vast amounts of money by buying multimillion-dollar condos through anonymous shell companies. And the Bayrock Group, the real estate development company that was based in Trump Tower and had ties to the Kremlin, came up with a new business model to franchise Trump condos after he’d lost billions of dollars in his Atlantic City casino developments—all of which made the perpetually bankrupt Donald Trump rich again and would lead to a new post-Soviet age of kleptocracy, in which America was injected with the virus of oligarchy and ended up with Donald Trump in the White House.

  In fact, the KGB had initiated surveillance of Trump even before Kislin came into the picture. It began in 1977, after Trump married Ivana Zelníčková, a Czech national from a town in Moravia called Zlín in the Gottwaldov district, where the Czechoslovakian secret service (StB) had a plainclothes secret police force that was very much in league with the KGB. That meant Zlín was sort of the Czech equivalent to Langley or Quantico.

  According to a joint report by the UK’s Guardian and the Czech Republic’s Respekt, in the late seventies the StB started keeping a close eye on Ivana and her wealthy husband, in part by surveillance of Ivana’s father. “We knew Trump was influential,” former StB Gottwaldov district boss Vlastimil Daněk told Respekt. “He announced that he wanted to become president one day, we were interested in knowing more about him. And not only us, the intelligence part of the StB also showed interest in him. But I don’t want to say details, I don’t want to have any problems.”1

  The Respekt article concluded that the StB received information about Trump and his wife that was “of a private nature (about their children and their illnesses, about the private journeys of the influential couple).” It added that the StB also showed interest in Trump’s political ambitions and the high circles in Washington to which he had access.

  Shvets says the report is accurate, but he questioned whether the information had any real value, given the distance between Trump and his Czech in-laws. “Once people married a foreigner in the West and got out of the country, the possibility of using the entire KGB against their spouse was really very, very limited,” Shvets said. “And what kind of intelligence could [Trump’s] father-in-law provide? They were living separately. There was an ocean separating them.”

  Moreover, even though the StB reported directly to the KGB, Shvets says it is not clear the Czechs would have shared their files on Trump. “There was a system of cooperation between the intelligence services,” he said. “Both countries had databases of individuals and subjects, and they would share information if asked to.”

  That meant if the KGB’s New York rezidentura wanted information from the Czechs on Trump, they could reach out to the StB—theoretically.

  But in practice, the system did not work as well as it was meant to. “The whole system was unreliable,” said Shvets. “When you reveal your interest to another intelligence service, it’s not confidential anymore.” As he saw it, if he shared information with a rival intelligence service, they might well turn around and try to recruit the same man.

  In any case, the StB continued to keep an eye on Trump for many years to come. According to The Guardian, after the 1988 election of George H. W. Bush, it became increasingly aware of Trump’s political ambitions and its interest in him intensified—enough to send an operative to meet with Trump.2

  Less than a year later, in September 1989, a small delegation from Czechoslovakia, led by František Čuba, the chairman of Czechoslovakia’s showcase model farm, went to New York and met with Trump in Trump Tower, a meeting that was closely monitored by the StB. According to the reports, the essence of the meeting was relatively anodyne—Trump advised Čuba to buy a Sikorsky helicopter, and Čuba invited Trump to visit his agricultural cooperative, Slušovice. He hoped to initiate relationships with large capitalist companies. More significant than the content of the meeting, however, was the fact that it was monitored closely by Jaroslav Jansa, an StB collaborator.

  What may have been an ambitious long-term operation suffered a major setback, however, two months later when the Velvet Revolution led to the end of communism in Czechoslovakia. As for Trump, he eventually did visit Čuba in Slušovice when he went to Czechoslovakia for the funeral of Ivana’s father. Though the occasion was a sad one, it was not without intrigue. According to The Guardian, one of the mourners was the StB’s Jansa, who was stationed about a hundred yards away from the Trumps.3

  * * *

  —

  There’s no reason to believe Kislin’s opening to Trump was in any way related to the Czech operation. They may have been simply two independent operations that eventually zeroed in on the same target.

  On its face, the sale of television sets between Kislin and Trump had a few anomalies that were more than a bit puzzling. The Hyatt Corporation has been a blue-chip outfit in the world of franchises for decades. Why was it getting television sets from a small Soviet shop like Joy-Lud instead of a reliable wholesaler? And those kinds of small electronic stores rarely if ever extended credit. Why was Kislin doing such favors for Trump? And why would the Grand Hyatt New York need TVs that had dual systems that could receive broadcasts from the Soviet Union? The answers may be lost to the ravages of time.

  Barbara Res later worked for Trump for forty years as the most highly placed female executive in his company, but at that time she was working for the general contractor HOH Construction as superintendent and project manager developing the Grand Hyatt. In a text message to me, Res said she was unfamiliar with Kislin or the transaction.

  But fr
om Trump’s point of view, the purchase made no sense, unless, perhaps, he was getting the TVs at a spectacularly low price. According to Yuri Shvets, the KGB modus operandi would have been to have Kislin offer the TV sets to Trump at low, low prices. Once the deal was made, he said, the KGB may have discreetly installed bugging devices in them—but that is merely speculation. However, this was the way the KGB got its foot in the door and got close enough to prospective assets to see whether they were worth the effort to cultivate.

  At the time, however, Trump was not yet a particularly well-known name outside New York—especially to the KGB. Remember, this was before the eighties, with its greed-is-good ethos, the big swinging dicks of Wall Street, and money, money, money. New York was still at its nadir. The glitz of Trump Tower, Trump trumpeting his sexual exploits in the tabloids, the insanely extravagant casinos in Atlantic City—none of that had happened yet.

  So it is likely that, initially at least, Kislin was less concerned about targeting Trump as a KGB asset and may have been just trying to score a new bulk sale. “I am almost positive that Kislin was not thinking in terms of target, penetration, or recruitment when he first thought of Trump,” said Shvets. “The guy is about money. He just saw an opportunity, and he reported to the KGB handler.”

  And once the contact with Trump had been reported to the KGB, the process had begun.

  * * *

  —

  But why should we believe Yuri Shvets? Or, for that matter, any other KGB agent? After all, there’s no such thing as a former KGB agent, or so the saying goes. But it is also true that when one is investigating the world of intelligence, espionage, organized crime, politics, and other deeply corrupt precincts, the most knowledgeable sources—the ones who often have firsthand information and are familiar with the arcane tradecraft and practices of clandestine operations and criminal conspiracies—are the very same people who are engaged in such practices: spies, criminals, and people who are in one way or another professional liars. Moreover, as anyone who has watched a cop show on American TV knows, it is a verity of our own criminal justice system, and the world of intelligence, that such sources should neither be dismissed nor accepted unquestioningly but should be heard out and their stories corroborated or refuted.

  Shvets has considerable experience in such matters, having served in the DC rezidentura, a.k.a. Washington station, where he tried—and sometimes succeeded—in recruiting Americans to spy for the Soviet Union. A 1980 graduate of Patrice Lumumba People’s Friendship University in Moscow, Shvets went on to do postgraduate work at the Academy of Foreign Intelligence (Andropov Red Banner Institute of the KGB), the prestigious espionage academy that served the Soviet spy agency and its successor, the Foreign Intelligence Service (SVR). There, he and his classmates—Vladimir Putin, among them—were taught the secrets of the espionage trade.

  In 1985, Shvets moved with his wife and children to Washington, where he led his double life as reporter for the Soviet news agency TASS who really served in the KGB’s First Chief Directorate, the counterintelligence department widely regarded as the most prestigious division in the entire Soviet spy service. And within that context, Shvets had one of the most desirable postings in the entire KGB.

  Five years later, however, Shvets became deeply disillusioned with the KGB and resigned on political grounds. “It was clear to me and to many of my colleagues that the leadership of the KGB and the Soviet Communist Party were ruining the country,” he said in 1999, in testimony before the US Congress.

  In the mid-nineties, he was granted political asylum in the United States, eventually settling in suburban Virginia, not far from the Langley headquarters of the Central Intelligence Agency, his once-reviled foe.

  A friend and colleague of former FSB officer Alexander Litvinenko, Yuri helped Litvinenko assemble and analyze a dossier linking senior Kremlin officials, including Vladimir Putin, to the Tambov organized crime group, which laundered money and facilitated drug trafficking for the Colombian cartels.4 In 2006, Litvinenko was poisoned by radioactive polonium-210 in what appeared to be a state-sponsored assassination ordered by Putin.

  In 1995, Shvets published Washington Station: My Life as a KGB Spy in America, his memoir about recruiting two American spies in the eighties, one of whom had been an aide in Jimmy Carter’s administration and the other a journalist in Washington. Two years later, he started a business as a security investigator/consultant with Bob Levinson, a former FBI and DEA agent who disappeared in 2007 after being kidnapped on Iran’s Kish Island. (Levinson’s death was announced by his family on March 25, 2020.)

  In 1999, Shvets testified before Congress, warning the nation about widespread Russian money laundering in the United States as a means through which “high-ranking officials of the Soviet Communist Party, top KGB leadership, and top bosses of the criminal world” had begun to infiltrate the Western banking system. And seven years later, he became a key witness in the investigation into Litvinenko’s murder.

  Like a number of other former spooks, Shvets now plies his craft in the world of corporate intelligence, providing commercial research and strategic intelligence on the former Soviet Union to American and western European banks, hedge funds, aerospace companies, energy companies, and the like. Long steeped in the particulars of KGB tradecraft, he’d had a front-row seat at the birth of post-Soviet Russia as a Mafia state and on the waves of kleptocrats and oligarchs who have been sweeping into the West, along with authoritarian right-wing populist politicians.

  Of course, when the KGB first made contact with Trump, it could not have foreseen his ascent, but it still played the long game, and the simple act of making a bulk sale of television sets to Trump was enough to get the ball rolling. According to Shvets, when Kislin reached out to Trump, he would have had to notify his KGB handler about the transaction. That was standard procedure. Once Kislin’s handler had been activated, New York station, in the First Chief Directorate of the KGB, had an opportunity to develop Trump as a new asset.

  If they followed that procedure, Shvets said, this is almost certainly the point at which Donald Trump’s name first entered KGB files. “I’m ninety-nine percent positive this is how they started their file on Trump,” Shvets said. “Kislin would have gone to his handler and said he had an interesting contact. ‘The guy is Donald Trump. He is young, ambitious, rich. He might have a future.’”

  From the KGB’s point of view, the most appealing quality about Trump was probably that he had a personality that was ideal for a potential asset—vain, narcissistic, highly susceptible to flattery, and greedy. It was unclear whether time invested in developing him would pay off, but that’s the way the KGB sometimes operated. It was like throwing spaghetti against the wall and seeing what would stick.

  In any case, after Kislin met with Trump, a report would have been filed in the KGB’s New York rezidentura—New York station—and sent to headquarters. A few weeks later, the handler would have followed up with Kislin, and if Kislin had seen Trump or obtained additional information, he would have shared it with the handler. “So you accumulate about ten meaningful reports on the guy,” said Shvets, “and you examine them to see if this guy can be cultivated to the point where he can be useful in either of two capacities. Capacity number one: as a trusted contact. Capacity number two, which is more ambitious: as an agent. You want to know if this guy can be cultivated to the point where he can be brought to cooperate.”

  Assuming they moved forward with Trump, Shvets said, New York station would have had a handler who met with Trump, but who that person was remains an important unanswered question.

  Still, Shvets was not the only source saying that Joy-Lud Electronics was secretly an outpost for the KGB. The FBI had it under surveillance because of investigations into the Russian Mafia, which was very much a state actor working in concert with the KGB. “I know guys from Brighton Beach and the Soviet embassy would be spotted going in and out of there,” said Ke
nneth McCallion, a former federal prosecutor who worked closely with the FBI during that era. “There were some surveillance applications at the time, and some of the evidence that was put forward was about the activities at that store.”

  The bottom line was that the KGB had gotten its foot in the door in what was likely one of its first interactions with Donald Trump—one that was the launching pad for other highly productive and lucrative transactions over the next forty years. “The KGB was happy. Kislin was happy. Everybody was happy,” said Shvets. “It was a win-win situation.”

  * * *

  —

  Within the new wave of Soviet émigrés, Semyon Kislin came to epitomize the rags-to-riches immigrant who ended up a billionaire, or close to it. That was the narrative as it generally appeared in the press, but few articles explained the chasm between his humble origins and his vast wealth. The truth is that it was more than being a really good cab driver or business owner.

  The first real story on Kislin was published by the Center for Public Integrity, a 1999 article by Pulitzer Prize winner Knute Royce that cited a 1994 FBI file characterizing him as a “member/associate” of the mob organization headed by Vyacheslav Ivankov, the “godfather of Russian organized crime in the United States.” By then, Kislin had started Trans Commodities Inc., a firm that, according to the FBI report, “is known to have laundered millions of dollars from Russia to New York.”* Kislin’s firm, Trans Commodities, and Anton Malevsky, a contract killer for the Russian Mafia, were also allegedly tied to oligarch Mikhail Chernoy, who was a major figure in the so-called Aluminum Wars, which were marked by embezzlement, money laundering, and murder. Finally, the report said that Kislin was also a “close associate” of the late arms smuggler Babeck Seroush and that he had cosponsored a visa for Malevsky.