Why Putin chose Trump to get even with Clinton

A lesson in pipeline diplomacy


During a 2014 installment of CNN’s State of the Union, Sen. Lindsey Graham (R-S.C.) noted, “…without American leadership organizing Europe and the world, you see people like Putin, who has an economy the size of Italy — he’s playing a poker game with a pair of 2s and winning.”

Graham’s down-home analysis is both correct and more pertinent to today’s endless Trump/Russia news cycle than has been reported.

The Russian GDP is barely half that of France these days, despite the fact the Russians produce more natural gas than anyone on Earth with the exception of the U.S., while also being the third largest producer of oil.

The Russian GDP has contracted to less than one-tenth of that of the U.S. and it no longer ranks in the top 10 of global economies, according to the 2017 estimates of the International Monetary Fund.

A pair of 2s may be overstating it.

In many ways, Russia has become a failed state. An incredible 87 percent of the country’s wealth is now owned by the richest 10 percent. There has been speculation of late that Russian President Vladimir Putin is now the richest man in the world, and he’s not the only one of his countrymen who has prospered this century from what has become one of the world’s largest kleptocracies.

What all this adds up to is that a dangerous transformation has occurred. Russia has gone from being a global superpower to a somewhat insignificant state — not counting its nuclear arsenal — with a failing economy. But somewhere during this devolution, Russia became something else: the world’s most significant, dangerous, well-armed, well-funded and most profitable cartel in the world.

Donald Trump was the perfect instrument for Vladimir Putin’s 2016 attack on his long-time nemesis Hillary Clinton and American democracy. Wikimedia Commons/Kremlin.ru

To understand the unfolding Trump/Russia scandal, we must take off our Cold War blinders and see Russia as it truly is today: a cartel of wealthy oligarchs from Russia, Azerbaijan and Turkey manipulating the world’s political systems in order to maintain its cash flow, which, for the most part, stems from the sale of natural resources. Or put another way, the Trump/Russia scandal and the DNC/Clinton campaign email hacking were never about global politics. They were simply a matter of money, and more specifically, the money Putin and his fellow kleptocrats derive from the export of their respective countries’ oil and natural gas.

Putin’s cash cow

Fulfilling Europe’s energy needs is Putin’s primary source of income, both personally and for the nation he oversees.

Russia is the largest supplier of oil and natural gas to Europe. It accounts for 32 percent of Europe’s oil supply and nearly 40 percent of its natural gas. As of 2016, Europe imports 88 percent of the oil and gas it uses.

Because of Europe’s heavy dependence on Putin’s Russian cartel for its oil and gas needs, it is impossible to overstate the importance of the pipelines that carry Russia’s fossil fuels to Europe. There are many oil and gas producers in the world, including the United States and countries in the Middle East, that badly want to tap into the lucrative European market. But to do so at this time, these countries would have to rely on shipping as the principle means of delivering their liquid gold to the EU markets, whether it’s oil or liquefied natural gas, and both require the use of massive and expensive tankers. Because this form of transport is considerably more expensive than delivery by pipeline, and the process of liquifying natural gas also adds expense to the process, Russia has a decided advantage when it comes to pricing its hydrocarbons. So long as pipelines connect Russia’s oil and gas to Europe, it is unlikely that the governments of Europe will be tempted to purchase their fossil fuels elsewhere in any significant quantity. The additional cost would find its way into nearly every aspect of the European economy from food production to transportation to manufacturing and would likely be devastating to the already fragile EU economy.

But while the pipelines are Russia’s competitive strength, they are also its point of vulnerability.

Just ask Hillary Clinton.

Hillary Clinton spent much of her time as U.S. Secretary of State trying to undermine Putin’s ability to sell natural gas to European countries. Wkimedia Commons

Putin’s long-running feud with the Clintons

Since early in the 2016 U.S. presidential election cycle, it’s been obvious that Russia and the Putin cartel preferred anyone other than Hillary Clinton to win the election. And while elements of this cartel have economically supported Donald Trump and/or those close to him both before and during the recent election cycle, it’s still unclear if they did so because they believed he could actually win or they were simply using him as a convenient vehicle to embarrass and discredit Hillary Clinton, who they expected to win.

Most media speculation on the motive behind Putin’s dislike of Clinton has centered around her hawkish views that made her a greater threat to Russia’s interventions in places like Syria, Georgia and Ukraine than other candidates.

Through an old Cold War lens of two superpowers jostling for world domination based on their political ideologies — communism verses democracy — this would make sense. But we no longer live in that world. The new Cold War is about who gets the most money out of which resources being sold to what countries, and that determines the ultimate winner on the global stage. This is the war that Clinton was waging against Russia as U.S. Secretary of State and Putin knew she would continue it if elected president.

But Putin’s seeming hatred of Clinton predated her attempts to economically isolate his country and cut off his cartel’s cash flow.

In the 1990s, following the collapse of the Soviet Union, then-President Bill Clinton intervened in Russia’s political system and its election process in far more egregious ways than what Russia is currently accused of doing in our most recent election.

Viewed through the lens of the 2016 election cycle and what is now occurring within the Trump administration, the following passage from a Sept. 22, 1993 Los Angeles Times story takes on new significance.

“President Clinton offered enthusiastic support Tuesday to Russian President Boris N. Yeltsin’s decision to suspend Parliament, saying Yeltsin was trying to ensure that economic and political reforms will continue.

“‘There is no question that President Yeltsin acted in response to a constitutional crisis that had reached a critical impasse and had paralyzed the political process,’ Clinton said in a written statement.”

Clinton’s was a shocking response to an elected leader who had just suspended his country’s elected parliament.

Under President Clinton, the U.S. meddling in Russia’s elections was massive. When it appeared Yeltsin was going to lose the election by a large margin, Clinton sent campaign strategists and lots of cash to Russia to make sure he won. As the U.S. pushed privatization under Yeltsin, the transfer of wealth to the oligarchs began in earnest, leaving the Russian people hungry and hopeless.

Things in Russia got so bad, thanks in no small way to Clinton’s misguided policies and support of the corrupt Yeltsin, that the actual life expectancy of Russian men fell from 64 years of age to 58 and women from 74 to 71 years. According to the Journal of the American Medical Association, who published the mortality research, this downward spiral in life expectancy had never been seen before in an industrialized nation during peacetime. Clinton’s interference in Russia’s affairs allowed a struggling economy to be further raped by everyone from the oligarchs to U.S. investment banks, and it was all done at the expense of the Russian people.

In an article in January of this year, The Guardian summed up this period of Clinton meddling in Russian politics: “Without the chaos and deprivations of the U.S.-backed Yeltsin era, Putinism would surely not have established itself.”

Putin literally took power in response to U.S. meddling in Russian elections by Bill Clinton’s administration. Granted he took the mess and corruption and made it worse while personally capitalizing on it, but it was nonetheless a mess largely orchestrated by a Clinton and in Putin’s world, a Clinton has been trying to oust him one way or another ever since.

If it wasn’t Bill in the ’90s, it was Hillary taking aim at him as secretary of state.

So should it really come as a surprise that Putin, the former KGB mastermind, would have a bad taste in his mouth for any future Clinton administration? Not really.

Cut off the head

Remember all the election controversy around  Hillary Clinton’s paid speeches to Goldman Sachs and other Wall Street banks and her refusal to release the transcripts of those speeches? Well, WikiLeaks eventually released some of them for her and lo and behold if Russia and its natural gas exports weren’t right at the heart of Clinton’s message.

One transcript from a speech in July of 2014 reads, “We are now energy independent, something we have hoped for and worked for over many, many years. That gives us tools we didn’t have before. And it also gives us the opportunity not only to invest those resources in more manufacturing and other activities that benefit us directly here at home, but to be a bulwark with our supplies against the kind of intimidation we see going on from Russia.”

Newsweek summed up the content of Clinton’s paid speeches, several of which dealt with Russia and its energy exports, as being “the equivalent of a Molotov cocktail directed ‘right at the source of Russia’s wealth.’”

Clinton wanted to use U.S. oil and gas exports to weaken Russia’s grip over Europe, but she knew that the United States’ ability to export that much oil and gas was years away and that it would be difficult for its oil and liquefied natural gas to compete with Russia’s low price point due to its pipeline advantage over our tankers. So she used her position as secretary of state to launch other, broader attacks on Putin’s energy cartel.

The September 2014 issue of Mother Jones reported that Clinton had spent a significant amount of time during her tenure as secretary of state opening up shale oil and gas plays all around the world for U.S. oil and gas companies. She encouraged countries all over the world to quickly begin fracking their own shale resources.

Environmentalists were obviously concerned with this use of the State Department, which eventually created a 63-employee division to encourage the fracking of tight shale around the world. But Clinton was doing more than just the bidding of the major oil and gas corporations that had always supported her and her husband’s political ambitions. Right or wrong — and the newer science would lean toward the latter — Clinton saw natural gas as a clean energy fuel that would aid in the fight against global warming. But more importantly to the current political crisis we are facing, she also saw it as a tool to destroy Putin’s cartel and weaken his authoritarian grip on Russia. In her mind it was a win-win that would write the next chapter of global history with her as the principal author.

“This is a moment of profound change,” she said during an oft-quoted speech before a crowd at Georgetown University in 2012. “Countries that used to depend on others for their energy are now producers. How will this shape world events? Who will benefit, and who will not? … The answers to these questions are being written right now, and we intend to play a major role.”

As for who “will not” benefit, Putin was first on the list… and he knew it.

As secretary of state, Clinton used other political avenues as well to isolate Russia.

Part of the strategy of the U.S. and its allies included, to the chagrin of Putin, an increased courtship of former Soviet bloc countries with the ability to impact Russia’s hydrocarbon exports either by their geography or because they offered alternative supplies. Under U.S. leadership, the North Atlantic Treaty Organization (NATO) began to discuss the possible inclusion of countries like Ukraine, Georgia and Azerbaijan.

In 2010, NATO also began to develop a strategy for its energy security role. According to a 2016 article in the Oil and Gas Journal, energy security has become a NATO priority “in light of Russia’s assertive posture and ongoing threats emanating from the Middle East.”

One of NATO’s top energy security priorities is protecting the South Caucasus and Caspian basin, areas with substantial natural gas reserves that are viewed as an alternative source to Russia for European consumption. There are two pipelines in that region that EU countries and the U.S. believe are critical to combating Russia’s grip on the European natural gas market: the Baku-Tbilisi-Ceyhan (BTC) for oil and Baku-Tbilisi-Erzurum (also known as South Caucasus Pipeline, (SCP) for gas. These two pipelines will eventually connect to the Trans-Anatolian Gas Pipeline (TANAP), which will cross Turkey and should be completed by 2018.

Before we get bogged down in pipeline overload, here’s a simplified explanation.

Azerbaijan has substantial natural gas reserves in its Shah Deniz II field in the Caspian Sea. Europe wants access to a gas supply other than Russia and Shah Deniz II fits the bill perfectly. So a series of pipelines are being linked together to get natural gas from Azerbaijan across Georgia and Turkey and eventually to Italy by way of the Trans-Adriatic Pipeline. This pipeline route that is intended to thwart Europe’s over-dependence on Russian natural gas is known as the Southern Gas Corridor. More on that in a moment.

Another attempt to weaken Russia’s stranglehold on Europe’s gas market occurred in 2014 when the EU signed an agreement with Ukraine that started the ball rolling toward that country’s possible 2020 entry into the Union.

While many in the media saw the efforts of the U.S., NATO and EU as nothing more than the West’s desire to prop up these new fledgling democracies against any efforts of their former Russian overseer to reclaim them as satellite states, Putin understood the efforts for what they were — a well-thought-out plan to destroy his cartel’s primary revenue stream, thereby weakening his control over Russia.

Of all the former Soviet states that Putin could not allow to fall under the control of the U.S. or EU, Ukraine was most important, at least in the short run.

That’s because Ukraine was Putin’s pipeline to Europe, literally. More than 70 percent of Russia’s natural gas makes its way to European markets via pipelines running through Ukraine. It was the head of Putin’s pipeline snake and he knew Clinton and her allies intended to cut it off.

As much as 70 percent of the natural gas Russia sells to Europe moves through pipelines in Ukraine. Courtesy National Gas Union of Ukraine

Ukraine a catalyst for 2016 election meddling

The U.S. and EU’s courtship of Ukraine intensified during Clinton’s time leading the State Department. As a result of those efforts, the majority of Ukrainians wanted to see their country distance itself from Russia while increasing ties to or even joining the EU.

This embrace of the West posed a serious threat to Putin’s oil and gas operations.

With the majority of his product passing through Ukraine by way of pipelines, a Western-aligned Ukraine or worse, a NATO- or EU-member-state Ukraine, would give Putin’s adversaries an unacceptable level of control over Russia’s most important commodity.

To defend his pipelines as well as his country’s historical military buffer zone from the West, Putin propped up pro-Moscow Ukrainian president Viktor Yanukovych, who in return maintained loyalty to Russia despite the desires of the majority of the Ukrainian populace. This political and economic disconnect created a volatile political situation for Yanukovych, who looked to Putin for guidance. What he got was Paul Manafort, a seasoned political operator who was said to have been paid as much as $12 million for his services to Yanukovych.

Manafort would eventually become Donald Trump’s campaign manager in 2016, the first of many strange ties between members of Putin’s cartel and the Trump camp. But in the end, even Manafort could not save his Ukrainian client.

In 2013, when it came time to vote on a pending EU association agreement, Yanukovych rejected the agreement, choosing instead to pursue a Russian loan bailout and still closer ties with Putin. This led to bloody protests in the streets and eventually the occupation of Kiev’s Independence Square. By 2014 the violence had brought Ukraine to the brink of civil war.

In the end, Yanukovych was forced to flee to Crimea and eventually into Russia where he now has asylum. He is still wanted for treason in Ukraine.

The ouster of Yanukovych and the election of pro-West president Petro Poroshenko was viewed by Putin, understandably so, as an assault on Russia’s geographic buffer against its NATO enemies as well as the hijacking of his oil and gas distribution system to Europe. He had been pushed far enough.

In 2014, through a series of well-documented though often-denied military actions, Putin seized Crimea and other territory from Ukraine. Crimea then held a controversial and, by all accounts, rigged vote wherein 87 percent of its population declared Crimea a part of Russia, not Ukraine. The West was outraged, or at least acted so, by Putin’s aggression. In response, the U.S. and several European nations imposed harsh sanctions on Russia.

But nobody stopped buying Putin’s oil and gas.

The sanctions did harm Russia’s ability to replenish its reserves by drilling for new oil and gas fields. Its ability to finance such activity and partner with Western companies in new exploration is still tied up due to sanctions over Ukraine.

Perhaps the best example of the sanctions’ impact is the now-on-hold, $500 billion deal to develop 63.7 million acres of land ExxonMobile controls in partnership with Russian-government-owned Rosneft. Observers have questioned whether this single massive deal could have been the motive for Putin’s election meddling in the U.S. in 2016. As evidence, they are quick to point to Trump’s appointment of former ExxonMobile CEO Rex Tillerson, a seeming friend and previous business partner of Putin’s, as secretary of state. But such a limited explanation for Russia’s attacks on Clinton and support for Trump fails to explain Putin’s other efforts to disrupt Western democracies.

Ukraine’s courtship by the U.S., NATO and EU, and the sanctions that ultimately resulted, are yet another reason for Putin to dislike Hillary Clinton.

When Ukraine is added to all her other efforts to negatively impact Putin’s oil and gas business, Russia’s unprecedented assault on Clinton and its undermining of our democratic values may not have been justified, but at least make sense from Putin’s perspective.

The oil and gas motive for Russia’s election meddling is even reflected in more specific aspects of the cyber attack. For instance, why was it Clinton campaign manager John Podesta’s emails that were hacked?

After Clinton left her post as secretary of state, it was Podesta who began consulting with the State Department on how shale gas could be used as a foreign policy tool to enhance U.S. efforts to diversify Europe’s oil and gas supply. Podesta eventually became Obama’s energy adviser. In other words, he picked up where Clinton left off in the effort to create a global shale gas revolution that would ultimately diminish Putin’s political influence and his profits from oil and gas sales. Who better to embarrass and discredit with hacked emails if you are Vladimir Putin out to get even for Western meddling in his cartel’s business affairs?

Protecting his oil and gas network appears to be a primary motive behind Putin’s interference in our election, but it also explains his overt efforts to try to weaken the NATO alliance and his support for right-wing political parties in Europe that desire to exit or otherwise weaken the EU.

As for Putin’s support of Trump, the Russian president seems to be getting all he bargained for. We have seen the reality-show president support Putin’s positions through his distancing of the U.S. from its NATO partners to his cheering on Brexit and his support for hyper-conservative, anti-EU Marine Le Pen’s presidential run in France.

There is only one area wherein Donald Trump seems out of step with Vladimir Putin. Trump has publicly touted his support for the previously described Southern Gas Corridor (SGC), a position that, at least on the surface, would seem to be a significant threat to Putin’s oil and gas cash cow. In fact, Trump has held up his support for the SGC as proof that he is not in Putin’s pocket.

But a closer look at this supposed alternative to Russian gas for the European market exposes the real scope of the Putin cartel and its many financial connections to the current U.S. president.

Trump and the mythology of the Southern Gas Corridor

To understand Trump’s position within Russia’s assault on our democracy in 2016, we have to understand the connections between the players involved in the creation of the SGC and their economic ties to the U.S. president.

As stated previously, Europe has long felt vulnerable due to its heavy dependance upon Russian oil and gas. In response to this threat, the European Commission created an initiative to find an alternative source for natural gas and then develop a pipeline system that could deliver that gas to Europe at a price competitive to that currently being paid to Russia.

Europe found its alternative source for gas in the Shah Deniz field, located in the Caspian Sea off the coast of Azerbaijan.

The three pipelines that comprise the Southern Gas Corridor are expected to offer Europe a way to shrink its dependence on Russian gas. Courtesy BP Global

To get the Azeri gas to Europe, the plan calls for a $45 billion dollar investment to connect the existing South Caucasus Pipeline to the currently under construction Trans-Anatolian Pipeline, which would then connect to the Trans-Adriatic Pipeline.

In total, these three pipelines make up the SGC, which will cover 2,200 miles from the Caspian Sea to Italy and be capable of transporting 2.1–4.2 trillion cubic feet of natural gas per year.

At $6 to $7 per MMBtu, that would represent a substantial annual loss to Putin and Russia. But there is a reason the Russian president isn’t worried about the impact of this new gas route to Europe.

To understand Putin’s confidence and the reach of his cartel, a good starting point is the recently discovered and controversial meeting between Trump surrogates Donald Trump, Jr., Paul Manafort and Jared Kushner with five persons including several Russians promising to give them dirt on Hillary Clinton that came straight out of the Kremlin. Rather than rehashing the details of this meeting, which has been previously and extensively covered by other news outlets, the purpose within this discussion of the SGC is to establish Trump’s close ties to the Agalarovs.

According to emails released by Donald Trump, Jr., the meeting was the brainchild of close Putin ally Aras Agalarov, a billionaire oligarch who was born in Azerbaijan and now spends much of his time in Russia. Aras, along with his son Emin, owns a development company called Crocus Group. One of the emails to Trump, Jr. reads, “Emin just called and asked me to contact you with something very interesting. The Crown prosecutor of Russia met with his father Aras this morning and in their meeting offered to provide the Trump campaign with some official documents and information that would incriminate Hillary and her dealings with Russia and would be very useful to your father. This is obviously very high level and sensitive information but is part of Russia and its government’s support for Mr. Trump — helped along by Aras and Emin.”

Emin Agalarov who helped set up the controversial meeting with Donald Trump, Jr. was married to the President of Azerbaijan’s daughter Leyla Aliyeva. Coutesy of Crocus Group

Aras Agalarov has been called “Putin’s builder.” His son Emin is often referred to as a pop star and he is certainly that, but he is also a wealthy oligarch in his own right and his company has built a number of significant projects in Azerbaijan.

Aras hosted Trump’s Miss Universe contest in Moscow in 2013, paying Trump an estimated $12 million for the privilege. During that period in Moscow, Trump also had substantive talks with the Agalarovs about building a Trump Tower in Moscow at the site of their Crocus City development.

Billionaire oligarch Aras Agalarov pictured with Russian Prime Minister Dmitry Medvedev (pointing) is close to Vladimir Putin and according to emails released by Donald Trump, Jr., was instrumental in arranging the meeting between Don Jr., Jared Kushner, Paul Manafort and five others including several Russians who reportedly had ties to the Kremlin and dirt on Hillary Clinton. Wikimedia Commons/Kremlin.ru

Azerbaijan, and another Trump Tower

Until 2015, Emin was married to Leyla Aliyeva, the daughter of Azerbaijan president Ilham Aliyev, who controls the alternative to Russia’s natural gas source in the Caspian Sea. Despite their divorce, Emin and Leyla remain close and both are raising their children.

President Aliyev runs what the U.S. State Department refers to as one of the world’s most corrupt and authoritarian regimes. The U.S. largely supports the corrupt Aliyev government because of its potential to fill the pipeline of the SGC and because the U.S. is allowed to use a military base in the country, which aids in the Afghanistan theater.

One oil rich oligarch to another. Putin and Aliyev have many shared interest including a desire to move gas through the Southern Gas Corridor. Wikimedia Commons/Kremlin.ru

President Aliyev makes just over $200,000 a year, yet his family owns hundreds of millions of dollars worth of real estate from Baku to Dubai to London. Aliyev succeeded his father, Heydar, who was president for 10 years before him. Heydar Aliyev was a former KGB officer with close ties to the Kremlin.

They say there are only a few families who profit from the vast corruption of this energy-rich nation. One is obviously the Aliyev family, another is the Mammadovs, who also hold a variety of appointed government positions in Azerbaijan.

When the International Consortium of Investigative Journalists went through the Panama Papers — a collection of documents released in 2016 by WikiLeaks that show offshore shell companies — it found a number of connections between the Mammadovs and Aliyevs including companies apparently set up to benefit the next generation of both families by seemingly helping them control large stakes in the Azerbaijan’s mining and energy industries as well as tens of millions of dollars worth of real estate.

Leyla Aliyeva is the daughter or Azerbaijan President Ilhan Aliyev. She was previously married to Russian oligarch Emin Agalarov. Wikimedia Commons

The Washington Post reported that Leyla Aliyeva, her sister and then 11-year old brother owned $75 million worth of upscale real estate in Dubai. The only question was whether her father, President Aliyev, or her father-in-law, Aras “Putin’s builder” Agalarov, had purchased the properties in the Aliyev children’s names. Both Emin and Leyla definitively declined to answer the Post.

A new generation Azeri oligarch with close ties to the Aliyevs is Anar Mammadov, the son of the Azerbaijan transport minister who has been tied to questionable dealings in the transportation, banking, development and oil and gas industries. He is also the person who built the Trump Tower in Baku, Azerbaijan, paying millions to the current U.S. president for the use of his name.

Controversial oligarch Anar Mammadov built a Trump Tower in Baku. Courtesy of Azerbaijan American Alliance

A New Yorker investigation found that the Trump Tower Baku is now empty and its questionable construction in a poor location may have been used to benefit, among others, oligarchs tied to the Iranian Revolutionary Guard. Other evidence has raised questions about money laundering during the building’s construction.

Adding to the irony of using Azerbaijan’s Shah Deniz II field as the alternative source to Russia’s natural gas is the fact that Lukoil is one of the largest operators in the field and will be producing a good deal of any gas that moves through the pipelines of the SGC. Lukoil also happens to be one of Russia’s largest oil companies.

Socar, the state oil and gas company of Azerbaijan, will also be developing the Shah Deniz II. It has offices and economic interests in 13 countries, most along the SGC. Socar is investing $20 billion in energy and chemical projects in Turkey alone, making it the single largest foreign investor in Turkey. The company has its share of Aliyevs and Mammadovs in positions of power, and watchdog group Global Witness has called the company out for its lack of transparency on who is actually profiting from Socar’s oil and gas sales.

What is clear is that the Aliyevs, Mammadovs and those close to Turkey’s ruling Erdogan family have created a vast web of oil and gas and construction partnerships, all of which seem to be rolling in cash even though the SGC is still under construction. But before getting to Turkey, the SGC goes through Georgia.

Georgia, and yet another Trump Tower

On its way from Azerbaijan to Turkey, the SGC runs through the former Soviet republic of Georgia. In 2012, Trump stood beside then Georgian President Mikheil Saakashvili as he signed an agreement to put his name on two towers being constructed by Silk Road Group (SRG). SRG is one of Georgia’s largest conglomerates. It has its hand in fuel transport, energy and even has contracts to move U.S. military supplies from Iraq to Afghanistan.

According to the Center for American Progress, “The [Trump] project quickly stalled, however, after Saakashvili’s party lost the parliamentary elections in 2012. Saakashvili’s successor, Bidzina Ivanishvili, criticized the Trump-Silk Road deal and complained, ‘It was kind of like a trick. [The previous government] gave him money and they both played along, Saakashivli (sic) and Trump. And, as you know, Saakashvili was the master of lies. I don’t know what project this is, I’ve never been seriously interested. We won’t do anything based on such fairy tales.’”

In January 2017, just prior to taking office, it was announced that Trump had pulled out of the $250 million deal. It is unclear how much he was paid between 2011 and 2017 or the reasons to exit the project. For now, the project represents just another financial payout to Trump from a country involved in the SGC.

Turkey, Trump Towers and so much more

Moving along through the SGC kleptocracies we come to Turkey, perhaps the most critical stretch along the SGC as the country has positioned itself as the new central hub for all natural gas flowing to Europe.

Celebrating the opening of an earlier pipeline that supplied Russian natural gas to Europe are left to right, Russian President Vladimir Putin, Turkish President Recep Tayyip Erdrogan and former Italian Prime Minister Silvo Berlusconi.
It is President Erdogan’s plan to make Turkey an energy hub for natural gas headed for Europe. Wikimedia Commons/Kremlin.ru

In Turkey, all power now resides with the family of Turkish president and strongman Recep Tayyip Erdogan, who has seriously limited Turkey’s status as a democracy following a failed coup attempt against him in 2016.

Erdogan, like the other rulers along the corridor, has been oft-accused of enriching himself via corruption. His son-in-law Berat Albayrak is the head of Turkey’s Ministry of Energy and Natural Resources. Bilal Erdogan, the president’s son, has fallen under the shadow of investigations for corruption and money laundering in both Turkey and Italy.

There is a web of tangled finances between Erdogan, his family and his inner circle in Turkey, and Socor and members of the Azerbaijan kleptocracy, along with the occasional Russian thrown in for good measure. Together they own oil companies and media companies and pipeline companies and hotels and anything else you can think of.

The best unscrambling of this financial mess to date has been done via a six-month-long investigative project titled “The Pipeline of the Three Regimes” by l’Espresso magazine, the Italian partner of the International Consortium of Investigative Journalists.

As seems to be the case in every country crossed by the SGC, Turkey also has a Trump Tower that pays him millions of dollars just to use his name. But in Turkey, the money trail to Trump runs deeper.

You may recall that Trump’s original national security advisor, Michael Flynn, got into trouble after he was forced to belatedly declare more than a half million dollars he had received from a Turkish businessman named Ekim Alptekin (See Boulder Weekly, “The Russian connections to Michael Flynn’s Turkish benefactor”). The money was eventually said to have been paid for lobbying that could benefit the Erdogan government. Alptekin claimed he was representing an Israeli oil and gas company that wanted to ship its natural gas to Turkey. Alptekin would eventually set up a meeting at the Essex House hotel in New York City between Flynn and Turkish energy minister Berat Albayrak among others. It has been reported that the meeting was a discussion of how to spirit Fethullah Gulen, a cleric Erdogan blamed for the failed 2016 coup attempt, back to Turkey without going through normal deportation proceedures.

But perhaps most damaging of the potential money trails between Turkey and Trump is an email chain that has thus far escaped media scrutiny. The emails in question were leaked from the account of Erdogan son-in-law Berat Albayrak as part of a dump of 57,934 of the energy minister’s emails released by WikiLeaks in December 2016.

A little background. In 2014, a recording of  telephone calls reportedly between President Erdogan and his son Bilal was released on the internet. The recordings appeared to be conversations between the two men discussing possible ways to hide vast amounts of money.

The release of the recordings caused protest in the streets and sparked calls for Erdogan to step down. Both the president and his son claimed the recordings were fabricated.

In late 2015, Bilal Erdogan moved to Italy. Members of the Turkish opposition party claimed it was to avoid corruption investigations stemming from the 2014 recordings. Whatever his reason for moving to Italy, Bilal soon found himself being investigated for money laundering by Italian authorities, who had been told that Bilal had brought vast amounts of money with him to Italy. The charges were eventually dropped in September 2016.

It is this background that makes the email that turned up Berat Albayrak’s account so interesting. The email is to a Bilal Erdogan from Halil I Danismaz and dated June 21, 2013. The subject line reads “confidentiality agreement.” The following is an excerpt of text translated by Google. It’s a little rough but gets the point across.

“This building is located at 315 W35th St., NY, NY There is a building with Ave. The New Yorker Hotel we visited with you. NYC noble. 15 floors .. Both commercial and residential .. It is a super building but we have to go in and make a cost calculation. Everything is clear to the week. This is an agency, direct Trump Int’l. They show buildings that are not listed on the market.”

This email is part of a four email chain between Elena A. Baronoff of Trump International, whose title at the bottom of her emails is International Ambassador of the City of Sunny Isles Beach, Director of Sales & Marketing Trump International.

The content of the emails appears to show that Bilal Erdogan was looking for an empty multistory building in New York City to purchase. He appears to have a surrogate looking at properties, which include an empty 14-story building at 315 W. 35th Street. The search is being conducted through Trump International and the parties have been asked to sign a confidentiality agreement concerning the building on 35th Street.

It is unclear if the building was purchased by Bilal or an entity controlled by him, but the timing is striking considering he would soon be accused of attempting to hide or launder large amounts of money and that he was using a Trump company for his real estate needs.

As if all this apparent corruption and interaction between the oligarchs of Russia, including Putin, Azerbaijan, Georgia, Turkey and Trump isn’t enough to throw doubt into the SGC’s ability to counter Russia’s stranglehold on the European natural gas market. There is still one more important link between Russia and the kleptocracies of the SGC that should fully dispel any belief that Putin’s cartel will be harmed by the West’s grand plan to circumvent it. By the time the gas reaches Italy via the SGC, most or all of it will likely be the same Russian gas that used to pass through Ukraine.

Turkish Stream

In May of this year, Russia began construction of its Turkish Stream pipeline under the Black Sea. The pipeline will run some 570 miles from the Russkaya compressor station near Anapa, Russia, to Lüleburgaz, Turkey. Why Lüleburgaz? Because that is where the SGC kicks off its third leg to Europe by way of the Trans-Adriatic Pipeline that will connect Turkey to Italy.

The new Turkish Stream Pipeline will allow Russia to bypass Ukraine and add its gas to the Southern Gas Corridor. Courtesy Gazprom

It is likely that the Turkish Stream pipeline will cross through Crimean territorial waters — waters still claimed by Ukraine. But that is obviously not a problem for Putin, since Russia currently controls Crimea.

When it’s all said and done, Russia will continue to move its gas to Europe, albeit through Turkey rather than Ukraine. Critics of the SGC concept have long argued that Turkey can easily use all the gas from Azerbaijan’s Shah Deniz II field — whose reserves, researchers say have been wildly overestimated —  to supply its own rapidly growing natural gas needs. If that is true, then it will need the Russian gas that used to pass through Ukraine to serve its European customers.

Putin must be laughing all the way to the bank.

It is also likely that once the Turkish Stream pipeline connects to the SGC, Putin may suddenly be quite willing to discuss Russian withdrawal from Crimea provided his new pipeline is grandfathered into any deal. Such an arrangement would lift the crippling sanctions against his country and allow his cartel to start drilling with the likes of ExxonMobile once again.

There really is no longer a question about Trump’s economic ties to Russia. One news organization after another has documented his long three-decade relationship with Russian investors. His properties have long been filled with wealthy residents of the former Soviet Union. Trump’s world was and is the parking lot for oligarch cash.

What we now need to understand is how these wealthy kleptocrats from Russia, Turkey and Azerbaijan intend to use him to further their fortunes. One thing seems clear: oil and gas will likely be at the center of that story.

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