The most senior FSB agent at the June 2016 meeting at Trump Tower could have been the one that is talked about the least: Irakly Kaveladze.

The June 9, 2016 meeting at Trump Tower between Donald Trump Jr., Jared Kushner, Paul Manafort, and a delegation headed by Russian lawyer Natalia Veselnitskaya has become a focal point in the investigation into whether the Trump campaign colluded with Russia to win the 2016 U.S. presidential election. News stories have featured Veselnitskaya prominently, and her links to Russian President Vladimir Putin have been discussed in depth.

But Veselnitskaya was not the only Russian present; reports have confirmed that she was accompanied by three others, including an interpreter. One, an obscure figure and the last to be identified, may have been the meeting’s most influential Russian attendee. can confirm that Ike Kaveladze, a senior vice president at the Crocus Group, the real estate company owned by Aras Agalarov, is a long-serving intelligence agent of Russia’s Federal Security Service, or FSB – the modern-day successor to the KGB.

Ike Kaveladze

Irakly “Ike” Tomazovitch Kaveladze was born in 1965, in Soviet Georgia. He graduated from the Moscow Institute of Finance (MIF) in 1989, the same year the KGB, under the instruction of Vladimir Kryuchkov, launched its business empire. Financial experts were suddenly in high demand. High salaries and the chance to work abroad made work in the financial sector a dream for any Soviet college graduate.

While several of Kaveladze’s classmates were employed by security agencies, Kaveladze himself got a job with the KGB First Chief Directorate, the precursor to the modern-day Foreign Intelligence Service, or SVR. He was soon assigned to work with KGB agent Aras Agalarov, an association that will be discussed below. In 1991, Kaveladze moved to the United States.

According to our source in Russian intelligence, Kaveladze was initially run by Directorate S of the KGB First Chief Directorate, otherwise known as the Illegals Program, which sent sleeper agents into the West to operate on behalf of Russia under the guise of an alias. The program has most recently been dramatized to critical acclaim by the FX television show The Americans.

After the collapse of the Soviet Union, with Russian immigration to the West expanding and providing cover for agents, the “illegals” began using their own identities in place of aliases. An example is Anna Chapman, a Russian illegal detained in the U.S. in 2010.

Kaveladze was infiltrated to the U.S. in a process fit for television. In 1989, at the age of 24, he was adopted by Judith Ann Flinchbaugh of Gettysburg, Pennsylvania, the daughter of a local pastor. This method of infiltration, by changing personal status, became popular among Russian intelligence in light of the growing wave of immigration. Anna Chapman, mentioned above, infiltrated the West by marrying a British subject.

On February 24, 1993, Judith Ann died at the age of 49.

In the U.S., Kaveladze joined a vast network of Russian intelligence agents filtering in through the renewed access to legal immigration. This trend became even more pronounced after Vladimir Putin, the former FSB director, became president of Russia in 2000.

Money Laundering

Soon after arriving in the U.S., Kaveladze became the U.S. representative for Crocus, a closed joint stock company run by Aras Agalarov. He also established International Business Creations (IBC), which he used to incorporate companies for clients, primarily Russian brokers.

Kaveladze incorporated at least two thousand companies in Delaware for his clients, while his business partner Boris Goldstein opened around 100 accounts for them with the Commercial Bank of San Francisco. More than $600 million was wired to those accounts, mostly from Eastern Europe. Another $800 million was deposited from overseas into 136 accounts that Kaveladze opened with Citibank. Overall, money wired to accounts opened by Kaveladze and Goldstein amounted to about $1.4 billion.

In the first half of the 1990s this amount of U.S. dollars in Russia could be obtained in two ways only: by exporting commodities or through foreign assistance programs. Both of these channels, and therefore all the funds that were funneled through them, were controlled by the Kremlin and its security agencies. To find two thousand private businesses with $1.4 billion in cash was impossible. Kaveladze’s “clients,” therefore, were fronts for Russian intelligence.

In fact, according to the Russian mass media, out of the 136 accounts opened by Kaveladze at Citibank, only 42 were controlled by Russian individuals. The rest were controlled by foreigners used by the Russian intelligence as fronts. A 2000 investigation into Kaveladze revealed that it had been alarmingly easy for him to help foreigners hide their identities behind shell companies and thus launder money through American banks.

Kaveladze was also in contact with the subjects of a 1990s investigation into Russian money laundered through the Bank of New York. According to information provided by a top official in the Ukrainian intelligence community, money laundering through the BoNY was designed and executed by Russian intelligence through a network of agents controlled by Semion Mogilevich, a Ukrainian-born mobster and Russian intelligence agent. The funds, which totaled at least seven billion dollars, originated in Russia and were laundered through the Ukrainian banking system before ending up in the BoNY, a process that would have required the cooperation of the SBU, the KGB’s successor in Ukraine.

The role of the Russian government, as represented by its security agencies, in the BoNY scandal has never been acknowledged by the U.S. Government. In 2009 the Russian government and BoNY settled a 22.5 billion-dollar lawsuit, blaming the money laundering on a rogue employee but admitting no criminal wrongdoing. The failure to hold the Russian government accountable was a strategic blunder. It emboldened the Russians and led to increasingly brazen activities in the U.S., activities that climaxed in 2016 with Russia’s blatant meddling in the U.S. presidential elections.

Kaveladze later admitted to the Russian newspaper Vedomosty that the FBI had failed to investigate his involvement in this latter scandal.

A Play for Palladium

In 2003, Kaveladze was involved in yet another Russian strategic operation when the Kremlin decided to pay 341 million dollars to purchase Stillwater Mining of Montana. The only U.S. producer of palladium, Stillwater together with the Russian Norilsk Nickel controls over 50 percent of the world’s palladium. The purchase was central to Putin’s plan to use control over rare mineral resources, oil, and gas to “make Russian great again.”

The deal was the product of an enormous intelligence operation. A command center was set up in the Kremlin to coordinate the efforts of all relevant government agencies, including the FSB, the SVR, and the Ministry of Foreign Affairs. Success turned on harnessing powerful lobbying efforts in the U.S. due to the deal’s bearing on U.S. national security.

Formally, the buyer was Norilsk Nickel, at whose helm sat billionaires Mikhail Prokhorov and Vladimir Potanin. Unofficially, Prokhorov and Potanin followed the Kremlin’s instructions to a T.

To obtain federal approval of the deal in the U.S. the Russians retained Baker Botts, a Houston-based law firm run by James A. Baker III and two DC lobbyists: Craig Fuller, former chief of staff to George H.W. Bush and chairman of the 1992 Republican convention, and former Democratic Senator Donald W. Riegle.

Details of the deal were discussed during President Bush’s trip to St. Petersburg on June 3, 2003, during which he celebrated the 300th anniversary of the city alongside President Putin.

After the trip, U.S. federal agencies promptly signed off on the deal. The Federal Trade Commission (FTC) even granted early termination of the waiting period for the transaction, and it closed on June 23, 2003.

According to the U.S. media, everyone was happy: everyone except for the Montanans who lived in the vicinity of the Stillwater mines, and a flock of disgruntled mining industry analysts. “Just ten years after the Cold War ended, our once-mortal enemy now stands to control half of the world’s supply of palladium with its foot right in America’s heartland,” wrote one of them.

Kaveladze was an important part of the Stillwater project. A source who participated in the project told us that the FSB was encouraged by the lax investigation by the U.S. into the BoNY money laundering scandal. The agency also believed that after 9/11 the U.S. had lost a great deal of Saudi investments, and, as a result, the Bush administration was so desperate for Russian money that it would turn a blind eye to Kaveladze’s prior record. By involving Kaveladze in the project the FSB planned to elevate his standing in the U.S. and in doing so expand his intelligence capabilities.

Per the FSB, Russia included Kaveladze on the list of proposed members of the board that would manage Stillwater after its acquisition. He was listed as the president of IBC Group, and was the only individual member of the board who would represent the interests of the Russians. A task of this magnitude would have been entrusted only to the most experienced and trusted agents.

The list with Kaveladze’s name on it had already been submitted to the U.S. Department of Finance when Mikhail Prokhorov removed him. In an official statement hastily distributed overnight by Norilsk Nickel, Kaveladze resigned himself, for personal reasons. However, in his interview to Vedomosty, on March 31, 2013, Kaveladze recalled that an anonymous representative of Norilsk Nickel had said, “This deal is so important to us that we cannot run risks because of the reputational problems of Kaveladze.”
Since then the link to the interview has disappeared from Vedomosty’s website. It is still available, though, on CompromatWiki.

It remains unclear why Prokhorov, who had been Kaveladze’s classmate at the MIF and certainly knew of his intelligence background, waited so long to remove Kaveladze’s name from the list, or why he did it at all. The move would strain his relationship with the FSB for years to come.

Aras Agalarov

Like Kaveladze, the man who set up the now infamous June 9 meeting up – via his pop star son Emin’s music producer Rob Goldstone – is also a long-term FSB agent. Unlike Kaveladze, however, Aras Agalarov has been a close associate of Donald Trump for years, an association that led to his hosting of the 2013 Miss Universe pageant in Moscow.

Several sources in the Russian intelligence and organized crime communities told us that Agalarov started cooperating with the KGB in about 1989, when he set up a small cooperative manufacturing Russian dolls (Matryoshka). He intended to sell them in Sheremetyevo, the only international Soviet airport at the time. For this he needed authorization from the KGB.

The KGB proved amenable to Agalarov’s business proposition, and his business soared immediately. In a matter of months, Agalarov’s doll venture had grown into serious international business. Later that year, he established a joint Soviet-American venture called Crocus International, which from the start was supervised first by the KGB and then the FSB. In 1992, JV Crocus International evolved into the closed joint stock company Crocus, or the Crocus Group.

Agalarov’s associate and co-founder at Crocus was yet another KGB agent, Boris Kogan. Kogan has been closely connected with key Russian military-industrial enterprises, something that is possible only with FSB approval. He has been on the board of directors of companies controlled by Russian Technologies, a giant Russian state holding company led by Sergey Chemezov, a close associate of Putin since they served together in Dresden in the mid-1980s. One of the companies, RT-Logistika, has been active in sensitive shipments of top Russian weapon systems to foreign countries, including Syria. These shipments are supervised by the FSB.

Crocus, which today bills itself as a real estate development entity, was involved in multiple enterprises, but its primary activity at the time of its formation was money laundering. As a director for Crocus, Kaveladze was tasked with linking Russian companies connected to Agalarov with the money laundering ring he was to establish in the U.S. This ring would become part of the larger SVR and FSB network that would play a part in in the IBC and BoNY schemes discussed above.

While Kaveladze was dealing with the fallout from these various money laundering schemes, back in Moscow Aras Agalarov had become part of a select group of Vladimir Putin’s business fronts. Around 2005, he partnered with two Azeri individuals, God Nisanov and Zarakh Iliev, with whom he opened Grand Furniture.

Iliev and Nissanov, who were born in a remote mountain village of Azerbaijan, started their business operations in Moscow selling bootleg liquor, eventually taking over a large chunk of the heavily criminalized Cherkizovsky black market. In this venture they partnered with Telman Ismailov, a friend of Tevfik Arif, Trump’s business partner and the founder of Bayrock, an international real estate company based in New York.

Sources in the Russian police told us that operations on the Cherkizovsky black market brought Iliev and Nissanov business worth up to 500 million dollars a year, a great deal of which was channeled as kickbacks to the FSB and law enforcement for protection.

Through Nisanov, Iliev, Ismailov, and Tevfik Arif, Agalarov became part of about a dozen-strong closely connected group of Azeri businessmen, which also included Ilham Rahimov, Putin’s classmate at Leningrad University, who maintains a close relationship with the Russian president. Sources in the Russian business community told us that Rahimov acted as a front for Putin in the Moscow real estate arena, dealing in lucrative investments on the president’s behalf. This included obtaining a 15 percent stake in Grand Furniture.

At least until very recently, Rahimov also co-owned Sadovod, the largest wholesale market in Russia and the hotel Ukraine in Moscow. The total value of that property is estimated to be at least 500 million dollars. These projects were developed by Agalarov, Nisanov and Iliev, who gave a share to Rahimov with the understanding that he was Putin’s “purse.” In other words, Rahimov was merely the nominal holder of the property and the true owner was Putin. At least until recently, Rahimov’s office in Moscow was located at Venice Restaurant, which is owned by Nisanov and Iliev.

What does this mean?

Essentially, Aras Agalarov, Donald Trump’s main business partner in Russia, on top of his ties to Russian intelligence, also enjoys direct access to Putin through Ilham Rahimov.
A great deal of Agalarov’s development projects are located in the Moscow region. This is where he met Aleksandr Mitusov and Mitusov’s second wife, Natalia Veselnitskaya.

From 1993 to 2005, Mitusov was deputy prosecutor of the Moscow region and developed ingenious business practices: he would create problems for businessmen, which lawyer Veselnitskaya would help resolve for a hefty price. The couple was also active in providing legal assistance in raider attacks. On several occasions Agalarov needed to evict people in order to take over their land for use in his construction projects. Mitusov and Veselnitskaya were helpful to this end.

In their open letter to then-President Dmitry Medvedev, on October 31, 2008, shareholders of JSC Stroydormash indicated that “available facts show that… Mitusov and other members of organized crime group have managed to avoid prosecution thanks to a number of high-level officials… that have connections on the top level of the government.”
Agalarov has been close to Natalia Veselnitskaya and her husband for a long time. This explains why his son, Emin Agalarov, was used as an intermediary to deliver Veselnitskaya’s request for a meeting with Trump Jr.

June 9, 2016

On June 9, 2016, the FSB made a bold attempt to infiltrate Russian intelligence officer Ike Kaveladze into the Trumps’ inner circle.

Kaveladze came to the meeting accompanied by Natalia Veselnitskaya and Rinat Akhmetshin, a fixer working for shadowy individuals from the former Soviet Union. Sources familiar with the meeting told us that Kaveladze was the main actor in the group of visitors. Kaveladze used Veselnitskaya’s convenient connections to piggyback his way into the meeting.

At the meeting, Kaveladze had two objectives. First, he wanted to establish general contact with people close to the next U.S. president and, hopefully, with Donald Trump himself.
Confidential sources have indicated that he also had a message to deliver to Donald Trump, either directly or through his son, his son-in-law, or Manafort. The message was from Moscow, and it was concise: “Your friends in Russia will continue keeping everything confidential; they look forward to improving relations between our countries and to doing business with you when you return to private life.” The idea was to reassure the potential next president of the United States that any compromising materials on him in Moscow would continue to be sealed, and his business with Russia would be all set to thrive once he left office, but with a caveat: Trump had to move fast to lift the sanctions imposed on Russia by the Obama administration.

There were reports that the meeting lasted longer than initially reported and that at least one of the visitors was taken to another room in the Tower to meet Donald Trump.
Robert Mueller’s investigation is looking for individuals who can establish a link between Trump and the Russians. One individual uniquely placed to do so is Ike Kaveladze. If Mueller has not already done so, he should speak to Kaveladze again, with an eye to his background. Mueller should also summon Aras Agalarov for testimony. Given his connections in Moscow, Agalarov represents a concrete connection between Donald Trump and the FSB, and the Kremlin.

In Russian human intelligence tradecraft, the best cover for an intelligence connection is one that appears legitimate.

Among the many questions that remain, a big one is the role played by the meeting’s remaining attendee, Rinat Akhmetshin, a fixer working for various shadowy Russian individuals. Akhmetshin, also a former Russian intelligence officer, has worked for various oligarchs from the former Soviet Union including fertilizer magnate Andrey Melnichenko and Kazakh billionaire Bulat Utemuratov.

We can make educated guesses about what Kaveladze and Veselnitskaya wanted out of their venture into Trump Tower. But Akhmetshin is due for a deeper probe.
What exactly was he doing at the meeting? If he has anything in common with his fellow attendees, he wasn’t there just to make friends.

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