WASHINGTON -- U.S. authorities are investigating whether Russian billionaire Gennady Timchenko, an associate of Russian President Vladimir Putin, laundered money through the U.S. financial system, "The Wall Street Journal” reported this week.
Timchenko’s financial interests in the United States appear to be minor compared to his dealings in Russia, Europe, and elsewhere in the world.
But they have fallen within U.S. borders, including through Gunvor Group, the Geneva-based commodities firm he founded but divested from in March, a day before the United States announced sanctions against him.
Here are four things to know about Timchenko’s business footprint in the United States.
In 2009, Gunvor acquired a Delaware-incorporated oil trading firm called Castor Americas, which subsequently operated out of New York City and Houston, Texas.
Castor described itself in 2011 as "the largest independent nonrefiner marketer of crude oil on the U.S. West Coast," according to its archived website, which is no longer live.
The other main shareholder in Castor was Taurus Petroleum, according to Swiss corporate registry documents from 2009.
Taurus is run by American businessman Ben Pollner. A 2005 inquiry overseen by former U.S. Federal Reserve Chairman Paul Volcker said Pollner used his companies to pay $18.9 million in kickbacks to secure oil contracts during the UN-run oil-for-food program for Iraq, according to Reuters. Pollner denied accusations of impropriety and was never charged, Reuters said. Pollner's son-in-law, Sasha Moritz, serves as director and chairman of Castor Americas, according to public records.
Last year, Gunvor disclosed that in April 2011, the U.S. Attorney’s Office for the Eastern District of New York served a subpoena to Castor Americas, three Castor employees, and one Gunvor employee seeking documents “relating to Castor’s oil-trading activities, among other matters.”
Any allegations of wrongdoing with respect to our trading activities are baseless and entirely false."
The same U.S. Attorney’s Office is investigating whether Gunvor purchased oil from Russian state-owned oil major Rosneft and “later sold it to third parties,” according to the November 6 “Wall Street Journal" report. It is unclear if the 2011 Castor Americas subpoenas are related to the reported investigation of Timchenko.
Citing U.S. customs data compiled by the import-export tracking service PIERS, Reuters reported in March that, over the previous year, Gunvor imported “at least 4 million barrels of oil products” into the United States “and an additional 1.1 million barrels of crude oil, which came mostly from Colombia.”
It was not immediately clear whether Castor Americas is still operating.
Telephones listed for the firm in Texas and New York appear to have been disconnected. Moritz, the chairman of the company, did not return a message left by RFE/RL at his listed home telephone on November 6.
In October 2011, Gunvor used its wholly owned U.S. subsidiary Pinesdale LLC to acquire a 33 percent stake in the Signal Peak coal mine in the western U.S. state of Montana for $400 million. The coal company mined 8.7 short tons of clean coal in 2013, up 50 percent compared to 2012, according to Ohio-based Boich Companies, a Gunvor partner in the mine.
Public business listings show that Pinesdale and Castor Americas share a corporate address in Houston. A profile of a former Castor employee posted on the professional networking site LinkedIn indicates that Castor was involved in expanding Gunvor’s operations into the North American coal markets.
Gunvor says on its website that its ownership in the Signal Peak mine “enhances our competitive position in the Asian market” and that the mine “serves the U.S. domestic market and customers in Asia via transport links to ports on the U.S. and Canadian western seaboard.”
Timchenko and a company he co-owns have hired lobbyists to advocate on his behalf in Washington. Last year, Reuters reported that Timchenko hired a leading law firm, Patton Boggs, as he prepared to seek loan guarantees from the U.S. Export-Import Bank to purchase several luxury aircraft from the U.S. firm Gulfstream Aerospace.
"We know you have concerns about Gennady. We'd like to talk to you about this,” Laurence Harris, a Patton Boggs partner, wrote in a May 2013 e-mail requesting a meeting with a U.S. official, Reuters reported.
Meanwhile, Russia’s largest independent gas company, Novatek, has hired leading U.S. public relations firm Qorvis to lobby its interests in Washington, according to disclosures filed by the lobbying firm with the U.S. government in August.
Qorvis said in the disclosure that it would lobby for Novatek over U.S. President Barack Obama’s executive order on Ukraine-related sanctions, as well as the Russian Aggression Prevention Act, a Republican-sponsored sanctions bill not expected to get Senate approval.
Timchenko owns a 23.5-percent stake in Novatek, which has also been hit with U.S. sanctions.
Gunvor said in a November 6 statement that it has “never been notified” by the U.S. Justice Department “of any investigation against it” and that the firm “is simply caught up in political cross fire.
“Any allegations of wrongdoing with respect to our trading activities are baseless and entirely false,” the company said.
Timchenko’s Luxembourg-based holding company, Volga Group, also said in a statement that U.S. authorities have not notified the billionaire “of any investigation into his activities.”
“Mr. Timchenko has always conducted his business activities in strict compliance with the law and the highest standards of business ethics,” the company said, adding that Timchenko sold his 43 percent stake in Gunvor to his partner in March.
But if "The Wall Street Journal” report is accurate, Timchenko’s divestment from the firm is unlikely to stop U.S. authorities from an extremely thorough investigation of Gunvor’s activities, says Craig Pirrong, a professor of finance at the University of Houston and author of a March report on global commodities traders that was financed by Gunvor competitor Trafigura.
In a November 5 blog post, he said the investigation could threaten Gunvor with “the financial and legal equivalent of a proctological exam.”
“Assuming that the story’s correct, that they have engaged in an investigation, these financial investigations tend to be incredibly intrusive and thorough,” Pirrong told RFE/RL in a telephone interview. “That’s just the way that these folks operate.”