American Kompromat Read online

  By this time, the former Soviet Union had been dissolved, and Russia had emerged as the new Wild West, with former mobsters jockeying for control of steel, aluminum, oil, and other commodities. The Chernoys were among the roughest players in those battles, particularly the bloody and brutal Aluminum Wars, during which they claimed to have made a onetime partner of Putin crony Oleg Deripaska, but ended up in conflict with him.

  For his part, Kislin was never charged with any crime, and in 1999 he denied any ties to the Russian mob, insisting, “I have done nothing evil.” He has also denied charges that Trans Commodities laundered money for Russian organized crime. In an email for this book, Kislin again disputed Royce’s story. “I have never known or had any ties to anyone named Vyacheslav Ivankov, and I have never been involved in money laundering, either directly or through any company,” he wrote.

  Meanwhile, Kislin donated more than $40,000 to Rudy Giuliani’s successful mayoral campaigns in New York in 1993 and 1997, as well as to the campaigns of Giuliani allies, and raised millions more for him at fundraising events for an abortive Senate run.5 Giuliani appointed Kislin to serve on the New York City Economic Development Corporation from 1996 to 2000, a patronage job the mayor reserved for trusted allies.

  And that, according to Shvets, was a very wise decision on his part. “Kislin felt vulnerable,” said Shvets, “especially after he became an FBI target because of his connection to Chernoy. He knew he was being investigated and needed some kind of protection. And this is what brought him to Giuliani. He invested money into Giuliani’s campaign, and then Giuliani made him an adviser. It was very smart move.”

  And as we shall see, it enabled Kislin to have a mutually rewarding relationship with Trump as well, one that spanned more than forty years and played a role in the 2019 impeachment and the 2020 election.

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  After the New York rezidentura had amassed several reports on Trump and established that Trump was a viable prospect for development as an asset, according to Shvets, an officer of the New York station of the First Chief Directorate would have had to open what’s known as a delo operativnoy razrabotky (DOR), or file of operational development. DOR files were classified as top secret and given a code name and file number with which to register in the First Chief Directorate’s database in its Yasenevo headquarters, just outside Moscow. The database consisted of catalog cards, similar to those found in libraries in the pre-digital era, and was kept in an especially secure room in the FCD basement. At the time, Shvets said, the KGB’s database did not use the real names of their American assets for security reasons.6

  Nevertheless, this is what happened with people targeted for cultivation like Trump.

  According to Shvets, there are three main bases for developing assets: ideology, money, and kompromat. Of them, ideology was long considered the best and most reliable basis for recruitment, but it has not been widely used with Americans since Stalin’s crimes were exposed in the fifties, and it was certainly never a consideration with Trump.

  In the seventies and eighties, Shvets says, money became very important in recruitment, and it was a key factor in the two most widely publicized cases of that era: CIA agent Aldrich Ames and FBI agent Robert Hanssen, both of whom spied for the Soviets.

  Finally, Soviet and Russian intelligence has a long history in acquiring kompromat to hold as leverage over its assets. When the private intelligence report known as the Steele Dossier was published in January 2017, Americans were titillated by the prospect that the Russians had videos of Donald Trump engaged in compromising sexual activities with Russian prostitutes—golden-shower videos and so forth. But more than three years later, none of that has surfaced.

  And according to Shvets, that kind of kompromat was rarely used by the KGB because the results were unreliable. Trump was an especially curious case in that he was both spectacularly vulnerable to being cultivated yet so shameless he would have been impervious to pressures most people would feel. Instead, for Trump, the real kompromat was the money trail that connected him to Russian intelligence through massive money laundering.

  “Trump was a dream for KGB officers looking to develop an asset,” Shvets told me. “Everybody has weaknesses. But with Trump it wasn’t just weakness. Everything was excessive. His vanity, excessive. Narcissism, excessive. Greed, excessive. Ignorance, excessive.”

  Shvets’s assessment is strikingly similar to those of various CIA officers. “Trump is extremely vulnerable to flattery,” Rolf Mowatt-Larssen told me. “He almost defines relationships entirely by who flatters him and who doesn’t, as opposed to the intrinsic value of what people say. He doesn’t care at all about the fact that Russians are masters at manipulation.”

  Similarly, retired CIA officer Glenn Carle, who spent twenty years in clandestine field operations, also saw Trump as “incredibly vulnerable” to the Russians. “I thought about how would I approach him if I were a foreign intelligence officer,” Carle told me. “The Russians are routine blackmailers, but Trump is hard to blackmail because he is so shameless. Still, there are things that Trump doesn’t want to come out—quite clearly his tax returns. So I think they probably have stuff on him, but that the Russian targeting and development of him started decades ago in the classic way.”

  And indeed, over four decades, whatever else happened between Trump and Soviet/Russian intelligence, the file on Trump would be updated as his life’s journey with them went from laundering money for the Russian Mafia through Trump luxury condos, to partnering with wealthy Soviet émigrés in franchising scams, to becoming involved in countless financial irregularities, to creating secret back channels with the Russians, to partying with Jeffrey Epstein, and on and on.

  Over time, the Donald Trump operation ripened. “Then,” Shvets added, “it paid off much, much more than anyone could possibly have imagined.”

  CHAPTER FOUR

  SPY WARS

  By the eighties, Brooklyn’s Brighton Beach had become a shadowy subculture filled with mysteries, secrets, and double lives for thousands of Soviet émigrés. There was always something hidden. Drop by a storefront for a late-night pizza and, likely as not, you would uncover a clandestine high-stakes gambling ring in a seedy back room. Passport and marriage license storefronts were everywhere—supplying phony IDs for the asking, as long as you had a few bucks. There were late-night supper clubs like the Odessa and the National and, later, Café Tatiana and Rasputin, with loud, festive nine-course dinners featuring borscht, sturgeon, sable, and more than enough vodka, while garish Vegas-style floor shows were under way. There was techno and disco music, Russian songs, and, on occasion, Iosif Kobzon, a.k.a. the Russian Frank Sinatra, who was notorious for his ties to the Solntsevskaya Bratva, the powerful Russian crime syndicate.

  Before long, up-and-coming gangsters from the real Odessa, the so-called Pearl of the Black Sea, arrived in force in “Little Odessa,” as Brighton Beach was known—among them people who later became tied to Donald Trump. The El Caribe Country Club, a banquet hall and restaurant in the Mill Basin section of Brooklyn, was owned by Dr. Morton Levine, who shared interests in it with his relatives, including nephew Michael Cohen. Cohen, of course, later became Donald Trump’s attorney, who, at this writing, was sentenced to three years in jail for campaign finance violations, tax fraud, and bank fraud. (As a result of the COVID-19 pandemic, Cohen was allowed to serve part of his sentence in home confinement. He is scheduled to be released in November 2021.)

  At night, El Caribe ceded the premises to Russian Mafia kingpin Marat Balagula. The first “modern” don in the Russian Mafia, Balagula, who had strong ties to the KGB, was a pioneer in taking the organizatsiya (organization, referring to the Russian Mafia) from relying on extortion rackets, black marketeering, and various other forms of vulgar thuggery into the more upscale, white-collar world of tax scams and pump-and-dump stock swindles on Wall Street. According to Shvets, Balagula was inf
iltrated to the United States in 1977 by the KGB in the wake of the Jackson–Vanik Amendment.1

  Just a few years after moving to the United States, Balagula won control over enough gas stations and fuel dealerships to partner with old-school Italian mobsters in operations that became known as the Red Daisy gas tax scam and skimmed millions of dollars in tax revenues from the coffers of hundreds of gas stations. Having arrived in America with no concept of a social contract, they began to go white collar.

  Meanwhile, vast sums from the Russian Mafia’s various scams had to be laundered. So in 1984, David Bogatin, a Russian mobster who had scored millions in the Red Daisy gas scam with Balagula, went shopping for apartments and ended up at 721 Fifth Avenue, Trump Tower, the glistening new fifty-eight-story building that was the home of Donald Trump.

  Bogatin, however, wasn’t looking for a home to live in so much as a place to park his excess cash, and at a closing, with Donald Trump himself in attendance, he bought not one but five condominiums, putting down $6 million in cash, the equivalent of more than $15 million in 2020 dollars. According to the New York State attorney general’s office, the upshot of the deal was that the Russian Mafia had just laundered money through Donald Trump’s real estate.

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  At about the same time, in early 1984, General Vladimir Kryuchkov launched a newly aggressive campaign to recruit American assets. Thanks to a compendium of his memos during this period, titled “Comrade Kryuchkov’s Instructions: Top Secret Files on KGB Foreign Operations,” we know that to Kryuchkov, absolutely nothing was more important than recruiting new American assets.2 By the eighties, however, finding left-wing Americans who were ideological soul mates with the Soviets was increasingly difficult. As a result, he ordered his officers to cultivate as assets not just the usual leftist suspects, who might have ideological sympathies with the Soviets, but also various influential people such as prominent businessmen.

  According to Shvets, recruiting American assets was much easier said than done, except in cases where they happened to be walk-ins who approached the KGB on their own, usually for monetary reasons. That was the case with the two new superstar US agents who betrayed the FBI and CIA, one of whom was active in Shvets’s turf shortly after he first came to Washington, on April 12, 1985.

  At the time, Shvets had just arrived in the United States and presented himself as a journalist working for the Soviet news agency TASS out of the National Press Club Building on Fourteenth Street Northwest—which he was. But more important, he was also working undercover for the First Chief Directorate’s Washington station. That meant he went to the rezidentura in the Soviet embassy on Sixteenth Street two or three times a week to write reports for KGB headquarters.

  After he entered the rezidentura for the first time, Shvets immediately went to chief of station Victor Cherkashin and reported for duty. But when Shvets was given his marching orders, they were somewhat puzzling.

  “Get lost,” Cherkashin told him. “Don’t come to the station for three months. Just establish your cover story, and don’t show up.” Translation: Establishing his cover meant that Shvets should go back to the TASS office and start working as a reporter.

  Shvets didn’t know it until later, but on April 16, four days after he started, Aldrich Ames, a CIA counterintelligence officer with access to all CIA plans against the KGB and Soviet military intelligence, widely known as the GRU (Glavnoye Razvedyvatelnoye Upravlenie), had walked into the Soviet embassy and established himself for the first time as a double agent selling secrets to the KGB.3

  At the time, Cherkashin was effectively the day-to-day manager of Soviet espionage operations in the United States. Ames was a huge score for the rezidentura—one of the biggest in history. As a result, overseeing Ames was top of mind for Washington station just as Yuri was getting started.4

  Meanwhile, Shvets had been tasked with two main assignments, the most important of which was uncovering evidence that the United States was preparing for nuclear war with the Soviets. At the Academy of Foreign Intelligence, his instructor had repeatedly asserted that “the United States is capable of wiping our country off the face of the earth.”

  Such paranoia was not unusual in the KGB. Before his death in 1984, General Secretary Yuri Andropov, former head of the KGB, asserted that “outrageous military psychosis” had taken over the United States, and the Reagan administration, “in its imperial ambitions, goes so far that one begins to doubt whether Washington has any brakes at all preventing it from crossing the point at which any sober-minded person must stop.”5

  Anatoly Dobrynin, the Soviet ambassador to Washington, later explained that Moscow had succumbed to a “paranoid interpretation” of Reagan’s policies that saw the Star Wars program—the antiballistic missile system, also known as the Strategic Defense Initiative, which was supposed to shield the United States from missile attacks—as a precursor to an apocalyptic nuclear war.6

  Similarly, Shvets soon realized that fear of an imminent US attack was largely unfounded and was a dark fantasy emerging from a power struggle between geriatric bureaucrats in the Kremlin more than from facts on the ground. “It took me a couple of months to realize that it was just silly. It was just insane,” he told me.

  The second of Shvets’s main tasks was to recruit new American assets. The pressure to deliver was intense. “It was very rare for a KGB intelligence officer to find, develop, and recruit an American citizen as an agent,” said Shvets. “All the agents who had been exposed—like Aldrich Ames, Robert Hanssen, and others—were volunteers who basically offered their services to the KGB for money or complex personal reasons. No one recruited them. To recruit an American citizen as an agent at that time was like for a regular pilot to fly to the moon and back.”

  One of the first cases Yuri encountered was that of a Soviet agent in Washington who developed a promising American congressman as an asset and used his “phenomenal mastery as a conversationalist,” as Shvets describes it in his memoir, Washington Station, to penetrate the innermost recesses of his soul.7

  Before long, the congressman had delivered stacks of documents to the Soviet operative and, Yuri assumed, was well on his way to becoming a new asset of the USSR. But in fact, exactly the opposite was the case: After the very first meeting, the congressman had alerted authorities, so all subsequent get-togethers had taken place under the watchful eye of the FBI.

  It wasn’t as easy as it looked.

  It was an extraordinary period in the spy game—all over the world. In January 1984, five Soviet spies were uncovered in Norway and expelled.8 In February, Viktor M. Lesiovsky, a Soviet diplomat who was reportedly linked to Soviet intelligence while he was working for the United Nations, died at the age of sixty-three. (In 1979, he told the BBC that Soviet intelligence had achieved a “very substantial” penetration of the UN Secretariat.)9 In late February, Ethiopia expelled two Soviet diplomats as spies.10 In May, Denmark expelled two members of a Soviet trade delegation as spies.11 In October, a Soviet diplomat stationed in San Francisco was outed as a spy,12 and several Soviet spies were expelled from Washington.

  During the next year, 1985, the so-called Year of the Spy, enough espionage took place to keep John le Carré busy for decades. It actually started in December 1984, when Thomas Patrick Cavanaugh, a former engineer at Northrop Corporation, was arrested for trying to sell the core of the technology behind the multimillion-dollar Stealth bomber for $25,000 to undercover FBI agents posing as Soviets. Then the John A. Walker family spy ring, which had operated for seventeen years and sold the Soviet Union information on the US Navy’s undersea sensor system, was blown by Walker’s mistress. Ronald Pelton, a former analyst for the National Security Agency who had allegedly sold secrets about US electronic listening posts to the Soviets, was identified as a spy by Vitaly Yurchenko, a KGB defector who came over to the American side in August.13 Later, Yurchenko turned up at a villa secretly owned
by the CIA in Virginia and began talking. When that happened, the KGB’s network of American agents suddenly began to collapse.14

  Meanwhile, American intelligence had been suffering huge losses as well, thanks to well-placed moles in both the CIA and the FBI. At the CIA, Aldrich Ames had provided classified information to the KGB identifying hundreds of Western (mostly American) agents, more than twenty of whom were executed or imprisoned.15 Horrifying as that was, Ames had stiff competition from FBI special agent Robert Hanssen, who, according to a 2002 Justice Department report, was responsible for “possibly the worst intelligence disaster in U.S. history.”16 At this writing, Ames is in prison for life without parole. Hanssen is serving fifteen consecutive life terms.

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  The Hanssen case may seem light-years away from the urgent national security issues that are related to Trump-Russia. But the way in which Hanssen escaped notice for twenty-two years is remarkably relevant when it comes to the generous treatment afforded to Russian assets by William Barr, first as attorney general in the administration of George H. W. Bush and later in the same position under Donald Trump.

  Married with six children, Robert Hanssen was a devout Catholic who was a member of Opus Dei, the deeply conservative Catholic lay organization, and attended Mass almost every day. According to a report by the Justice Department’s inspector general (IG), Hanssen had “poor interpersonal skills and a dour demeanor and was an awkward and uncommunicative loner who conveyed a sense of intellectual superiority that alienated many of his co-workers.”17