Deere’s astonishing ‘off the record’ statement proves that the Trump White House knew that a Knighthead lobbyist “may have worked on issues related to Gazprom and Croatia”, potentially establishing a direct line of complicity between the White House, Venable, and Knighthead’s activities in Croatia. The White House spokesperson could only have had such an “understanding” of work on Gazprom and Croatia from a senior White House official connected to Venable — likely Olmem himself — who knew about it.

In response to my further inquiries about this off the record admission, Deere denied having any information on Olmem’s colleagues at Venable, ex-White House staffer Meeks and ex-Gazprom lobbyist Nordwind. Neither Knighthead Capital nor its lobbyists at law firm Venable responded to requests for comment.

It is not entirely surprising in this context that the ultimate beneficiary from the Agrokor bailout, negotiated under Knighthead Capital’s leadership, was Gazprom. But before Gazprom got its foot in the door, it needed heavy political and economic leverage, which Knighthead helpfully provided by granting Russian banks Sberbank and VTB their massive stake in Agrokor.

The previous year, Russia’s ambassador to Zagreb, Anvar Azimov, had declared that any Russian assistance on Agrokor would be conditional on Croatia’s “cooperation with Moscow.” And “cooperate” it did.

Having saved Croatia and the wider region from a financial catastrophe, Putin moved swiftly to call in the favour. Within months, Gazprom Export — the Russian energy giant previously represented by Knighthead lobbyist William Nordwind — signed a ten-year gas supply contract with a Croatian oil company, PPD. The PPD has longstanding high-level connections to Croatian government officials, having financed the ruling conservative party, the Croatian Democratic Union, to the tune of 4.2 million kunas in 2016.

Under the new contract, Gazprom would supply Croatia 1 billion cubic meters of gas every year from October 2017 to December 2027, covering 70 percent of the Croatian market. The deal eliminated Croatia’s need for any further imports. It also, therefore, struck a blow against US and EU efforts to encourage Croatia to speed ahead with the Krk project, as it was no longer necessary to cover the country’s immediate gas needs.

Divide and rule

One of the main obstacles to the Krk project is money. To get it off the ground, investors are needed. And they can only be enticed if they know that the gas will find guaranteed buyers. Croatia itself would be a prime customer of gas transported via Krk, but the next major potential buyer is Hungary.

Having shut down the first potential buyer of gas from the Krk route, Russia’s second strategy was to shut down the next. A month after Russia signed the gas supply deal in Croatia, Hungary announced that its gas supply contract with Gazprom, due to expire in 2021, would also be renewed. A year later, Hungary confirmed that Gazprom would continue to supply gas to the country for both 2019 and 2020.

Russia’s third strategy has been to leverage an ongoing dispute between the two countries’ national energy companies — a dispute which seems to have been secretly egged on by interests aligned with both Trump and Putin.

In 2009, Hungary’s national oil firm MOL had acquired a 49 percent stake in Croatia’s state-owned energy company INA. In 2013, Croatia suddenly sought to annul the investment agreement. The Croatian state’s anti-corruption unit, USKOK, accused MOL Chairman Zsolt Hernadi of having rigged the investment deal by bribing former Prime Minister Ivo Sanader. An Interpol warrant was issued for Hernadi’s arrest at Croatia’s request.

According to Jeremy Warner, associate editor at the Telegraph, the Interpol warrant was little more than “a thinly disguised attempt to force the sale of key assets to Russia’s Gazprom.”

Russia has hardly been reticent about where it stands on the issue. In 2014, Gazprom had offered to buy up the entirety of MOL’s shareholding to acquire the Hungarian company’s stake in Croatia’s INA. In 2017, Rosneft followed up with an offer of its own to do the same.

As Croatia has responded coolly to these offers, Russia has tried another strategy. If it can’t beat the Krk project, join it — or rather, control it. Earlier last year, Russia had offered to singlehandedly underwrite the entire development of the Krk terminal with potentially billions worth of investments — throwing in the promise of further cheap Russian gas supplies to boot.

This has led some experts to speculate that the Interpol warrant was engineered by Russia. General Alexander Prokopchuk, Interpol’s Vice Chair for Europe, has been described by Marina Litvinenko, widow of poisoned dissident Alexander Litvinenko, as a close ally of Putin. He has been accused of repeatedly using Interpol to issue arrest warrants for political dissidents opposed to Putin.

Major General Alexander Prokopchuk

Equally, a number of sensitive sources in the region believe that elements of the US government had played a role in the Interpol warrant.

One Croatian diplomat based in an EU capital said that USKOK’s request alone would not be enough to trigger the Interpol warrant. “Only the Americans had enough clout to get that ball rolling”, he added.

A senior Croatian law enforcement official said he was aware that:

“The Americans had used their influence to have Interpol act as the mechanism through which to have Hernadi extradited.”

If true, the Interpol warrant may well have been the result of pressure from both Russia and elements of the Trump administration.

Team Trump targets Croatia

We cannot know for sure, although circumstantial evidence of a common approach between interests linked to both Trump and Putin emerged earlier last year when a major US firm close to Trump’s inner circle made an offer to Croatia premised on MOL breaking relations with INA.

In March 2018, the Croatian government received a letter from American conglomerate Castleton Commodities International (CCI), expressing interest in becoming INA’s “strategic partner” to assist in repurchasing MOL’s shares in the Croatian state energy firm.

“CCI would take over the role of a strategic investor and partner in INA, supporting the Croatian ministries in a range of key sectors,” reads the letter from CCI’s Fabrizio Zichichi. The letter offered help in “securing the financing and as an investment partner, as a commercial partner in contract relations such as the processing of raw oil and oil products, the trade and supply of final products, risk management, running investment projects in all business segments and HR management”.

At first glance the offer looks like a straightforward effort to compete with Russia, especially given that US officials have publicly expressed concern over Russia’s overtures to Croatia to purchase MOL’s shares. But a closer inspection suggests an alarmingly different view.

It was not entirely clear whether CCI’s offer would necessarily reject Russian overtures. And unlike the offers from Gazprom and Rosneft, the letter had not committed CCI to being ready to buy out the entire MOL stake — or ruled out helping another entity, whether Russian or otherwise, to buy in partially. Instead, the letter hinted at the latter by referring vaguely to the prospect of “securing financing” in addition to investing.

What remains clear are CCI’s connections to Trump, and internal sympathies with Russia. The US metals giant and energy trader was a long-time major client of Jay Clayton, Trump’s appointee to Chair of the Securities and Exchange Commission (SEC).

SEC Chairman and Trump appointee Jay Clayton

Clayton was previously senior partner at law firm Sullivan & Cromwell, where he profited from the firm’s work advising a wide range of companies doing business with the Russian government and Russian oligarchs.

These included multi-billion dollar energy projects involving efforts by the Russian government, Lukoil and Gazprom to export Russian gas to Central Asia through the Caspian Pipeline Consortium and to Central and Southeast Europe via the South Stream pipeline project. The latter involved contracts with Bulgaria, which Putin pushed through politically by deploying strategic investments from VTB, the Trump-connected bank which invested in Agrokor.

CCI itself was formed in 2012 when a group of hedge-fund and commodity trading hot-shots bought an energy trading business, LDH Energy, from its umbrella company Louis Dreyfus Group, majority-owned by the wealthiest woman in Russia, Margarita Louis-Dreyfus.

Clayton was involved in that deal too according to his own Wall Street bio, which was deleted after his SEC appointment.

The purchase helped fund Louis Dreyfus Group’s agricultural expansion. Operating in Russia, it is one of the largest agricultural conglomerates in the world, working in partnership with various Russian investment firms and regional Russian government agencies.

William C Reed II, President and Chief Executive of CCI

The deal saw LDH Energy’s former chief executive, William C. Reed II, move to head up the new company, CCI. Reed also has ties to Russia. He began his career as a junior energy trader at Enron, where he ended up becoming head of power trading. Before its collapse, Enron played an instrumental role in Russia’s energy assault on Europe, signing a historic agreement with Gazprom to supply gas to Russia in 1993. This set the course for Europe’s future growing dependence on Gazprom. Five years later, Enron signed a further 10-year ‘strategic alliance’ with Russia’s Unified Electricity Systems (UES) to identify joint projects in Russia, Europe and Central Asia.

Fabrizio Zichichi

Fabrizio Zichichi, CCI’s Global Co-Head of Oil Liquids, who signed the offer letter to Croatia, was previously Global Co-Head of the Physical Oil Business at Morgan Stanley. Zichichi had moved to CCI from Morgan Stanley after buying its giant physical oil merchant business for $1bn.

That deal, also advised on by Jay Clayton, only went ahead because the first choice had fallen through: Zichichi and his colleagues had already agreed to sell the business to Russian state-owned oil company Rosneft. The Rosneft deal fell through only because US sanctions were put in place due to the Ukraine conflict.

So the CCI offer was not just aligned closely with Trump’s inner circle — it came from executives with a history of sympathetic economic engagement with Russia, Gazprom and Rosneft. Requests for comment were sent to CCI and the SEC but received no reply.

Even more curiously, just over a month after the CCI offer letter went out, US Attorney General Jeff Sessions — who surfaced in the Trump-Russia collusion inquiry for lying about meetings with Russian government officials during the presidential campaign — made an unprecedented visit to Croatia.

Former Attorney General Jeff Sessions at Senate intelligence committee hearing

Sessions met a number of senior Croatian government officials, including President Kolinda Grabar-Kitarović, Prime Minister Andrei Plenković, Justice Minister Dražen Bošnjaković, Interior Minister Davor Božinović as well as Foreign Affairs Minister Andrej Metelko-Zgombić.

Public information on what was discussed during this strange diplomatic excursion is sparse. According to a statement from the US embassy in Croatia, Sessions’ visit was to “discuss bilateral and international law enforcement and judicial cooperation and discuss ways of further strengthening the close law enforcement relationship between the United States and Croatia.”

The US Department of Justice refused to provide me any further details on what this excursion was all about.

Then later that year, the Interpol warrant for MOL’s Hernadi — which had been dropped two years earlier after Hungary refused to comply with it — was suddenly renewed in November 2018.

The new Interpol warrant was issued weeks after US Energy Secretary Rick Perry urged Hungary to resolve its issues with Croatia and support the US-EU backed gas hub project in Krk.

Whoever was behind the Interpol warrant — elements of the Trump administration, Russia or both — it served to make the rapprochement that Perry was publicly calling for far more difficult in reality. Of course, Trump has refused to put money where Perry’s mouth is, failing to offer any financial support for the Krk project — unlike Russia.

There are strong grounds to doubt that the warrant was even justifiable. The basis of the warrant was rejected in 2014 when an arbitration tribunal convened under UNCITRAL, the UN’s highest trade law body, threw out Croatia’s case against Hernadi because it relied almost entirely on the testimony of a single witness in the absence of any material evidence — a witness representing an unexpected convergence of interests stretching from Putin to Trump.

Trial by oil

That witness, on whom the future energy map of Europe might depend, is a little-known Croatian tycoon named Robert Jezic, who happens to be connected to two Russian oligarchs, one of whom also has ties to Trump’s disgraced lawyer Michael Cohen.

Robert Jezic in a Croatian court in Zagreb (source: TPortal)

Jezic is the main witness for the claim that MOL chairman Zsolt Hernadi bribed a former prime minister to push through MOL’s big buy-out of Croatia’s state oil firm.

At the time of the alleged bribe, Jezic was head of the board of Dioki, a petrochemicals plant which operated on Krk, the island where the US and EU hope to support the Croatian government in building a new gas terminal.

But court testimony has alleged that Jezic’s bribery allegation against Hernadi conceals his role as a business partner in a secretive Russian effort to take control of the island. That testimony came from Russian billionaire, Mikhail Gutseriyev, owner of the seventh largest Russian oil company Russneft.

Gutseriyev, who is on a US Treasury list of Russian oligarchs with close ties to Putin, told a Croatian court in 2012 that he had invested €5 million through Jezic’s company, Dioki, to purchase land in the strategic port of Krk. The investment fits with Russia’s broad strategy of attempting to either disrupt or dominate the Krk project.

Russian billionaire oligarch Mikhail Gutseriyev (Source: Intellinews)

Unfortunately for the Russians, Jezic had simply stolen the investment — at least according to the oligarch, a claim strenuously denied by Jezic. To complicate matters further, although Jezic was ordered by a Croatian court to return the missing €5m seven years ago, he simply failed to do so.

Gutseriyev himself is a prime beneficiary of murky deals which lead directly to Trump. According to The Globe and Mail, the oligarch’s eldest son, Said Gutseriyev, controls Cypriot shell companies which own shares in a major Russian locomotive factory, a project financed entirely by Kremlin-run bank, VneshEconomBan, or VEB.

Despite being under US sanctions since 2014, VEB’s then chief executive Sergei Gorkov met with Jared Kushner, Trump’s son-in-law and senior advisor, in the Trump Tower after the 2016 election. The Gutseriyevs also happen to own the Hotel National, where Trump stayed during his first visit to Moscow in 1987.

Gutserieyev’s company, Russneft, was also a big beneficiary of a spike in Russian stocks after Trump’s election victory. Russia’s Micex index rose 3.8 percent, and oil and gas stocks rose 3.7 percent. Days after the election, the Trump-connected banks VTB and Sberbank coordinated the launch of a long-planned IPO for Russneft, which raised $500m.

Russneft is part-owned to the tune of 33 percent by the mining giant Glencore, which in December 2016 co-purchased with the Qatar Investment Authority a 19.5 percent stake in Rosneft, with VTB’s support. That deal seemed to cohere with the Steele dossier’s prescient claim that Rosneft had offered Trump through his advisor Carter Page “the brokerage of up to a 19 per cent (privatised) stake in Rosneft” in return for easing sanctions on Russia.

Jezic’s connection to Russia’s efforts to control the Krk project for its own ends were further corroborated in 2017. Jezic’s company, Dioki, had gone bankrupt in 2013 because it had been unable to pay off its loans — a major creditor was Austrian bank Hypo Alpe Adria. But four years on, a company called Gasfin had taken over the outstanding debt originally owed to Hypo.

Gasfin became the owner of the key area of land in Krk where the proposed LNG terminal is to be built. The company has pushed for an onshore solution, in contrast to US and EU calls to build an offshore terminal due to the inability to get control to the land. Though based in Luxembourg, Gasfin is widely viewed as a proxy for Russian interests — it is operating a number of projects in Russia, including building a major infrastructure project for Gazprom.

The Michael Cohen connection

Court records and testimony further confirm that the disappeared money, which Gutseriyev claimed was stolen from him by Jezic, was funnelled through another company of which Jezic was a shareholder, Xenoplast, whose executive director is Swiss lawyer Stephan Hurlimann.

Stephan Hurlimann, Partner/Of Counsel at Wenger & Vieli

Jezic, other witnesses, and Hurlimann himself have confirmed that the missing €5m was paid into his company Xenoplast’s account. But Hurlimann, who has refused to testify in person in Croatian courts despite multiple requests, had another very odd connection: Trump’s friend, a Russian oligarch, controls a company directly tied to his Swiss law firm.

Hurlimann is partner in the firm Wenger & Vieli. The law firm boasts of dealing with Russian clients, but does not identify them. A glimpse at the kind of clients it deals with emerges from the fact that Wenger & Veili has direct ties to firms controlled by a Putin-linked oligarch, including a company which secretly paid Trump’s disgraced lawyer Michael Cohen.

Dr Wolfgang Zurcher, Partner at Wenger & Vieli

Hurlimann’s fellow senior partner in Wenger & Vieli is Dr Wolfgang Zurcher, who since 2014 has sat on the Board of Directors of Zublin Group in Zurich, which is majority owned by the Russian billionaire oligarch Viktor Vekselberg. Wenger & Vieli did not respond to request for comment on this apparent conflict of interest.

Dr Iosif Bakaleynik and Iakov Tesis, two Vekselberg proxies, are representatives of the largest shareholding (40.7 percent) in Zublin, Lamesa Holding. Both are involved in Vekselberg’s Renova Group. To represent Vekselberg in Zublin, Bakaleynik, who continues to advise the oligarch, left his previous posts as chairman of the board of Renova Management and chairman of the supervisory board of Renova US Holdings, a subsidiary of the Renova Group. Tesis is still a director of Renova Group in Russia, and also acts as the authorised representative of the shareholder of GAZEX, a joint venture between Gazprom and Uncomtech.

Russian billionaire oligarch Viktor Vekselberg (left) with President Vladimir Putin (right)

Vekselberg and his Renova Group, which have been under US sanctions since April 2018, have controversial ties to Donald Trump. Both Vekselberg and his cousin Andrew Intrater had met Trump’s attorney Michael Cohen in person in Trump Tower, just eleven days before the presidential inauguration in January 2017, where they discussed improving US-Russia relations.

Later that year an affiliate subsidiary of Vekselberg’s Renova Group reportedly made substantial payments to Cohen’s account totalling at least half a million dollars.

Mike Pence (left), Donald Trump (middle), Michael Cohen (right)

The subsidiary, Columbus Nova, has been described in federal regulatory filings as an affiliate of the Renova Group, and Renova’s own website once listed Columbus Nova as part of the group. In 2017, Columbus Nova’s CEO Intrater also donated $250,000 to Trump’s inauguration fund and $35,000 to a joint fundraising committee for Trump’s re-election and the Republican National Committee.

And so the circle closes, though not without raising more questions than answers.

Robert Jezic’s direct and indirect alleged ties to Russian oligarchs friendly with both Trump and Putin raise questions about his credibility as the key witness in a case that has soured relations between Hungary and Croatia for years.

He was not only an alleged business partner of a Russian oligarch who owns one of Russia’s biggest oil companies, and wanted to buy up land in Krk; his debts have been absorbed by a company working closely with Gazprom which now controls that land in breach of European interests, and his Swiss law firm has ties to the very sanctioned Russian oligarch implicated in hiring Trump’s personal attorney after Trump was already in power.

It is not unreasonable to wonder whether these cross-cutting interests compromise the integrity of his claims, both past and present, and point to a pattern of behaviour that in different ways could well be serving those dubious interests.

So far the focus of the Trump-Russia collusion inquiry has been on the US presidential elections. But this investigation suggests that the inquiry may have overlooked the heat of the action.

There is mounting evidence that Trump’s liaisons with wealthy Russians, amply lubricated within the murky sinews of global finance, has set the scene for what is happening right now: Russia’s sophisticated pincer movement to consolidate control over Europe’s gas supplies.

The Steele dossier has been a polarising force, with many of its claims hotly contested. One of its suggestions was that Trump’s approach to the Balkans would end up playing into Russian energy interests. This investigation has shown that contention to be accurate.

People and companies who operate as part of Trump’s inner circle have not only systematically interfaced with Russian interests, they have done so in a way that has strengthened Russia’s hold on the Balkans, weakened efforts to pursue alternative energy transhipment routes, and undermined efforts to end Europe’s chronic dependence on Russian gas – all at a time when the world needs to urgently wean itself off fossil fuel dependence to avert dangerous climate change.

Some might consider this treasonous. Trump? He’d probably say it’s just business.