Seeing Russia the Abramoff way: a corrupt deal brokered by Jack Abramoff led Tom DeLay to sell a critical foreign-aid vote to the Russian mob.

In 1985, 26-year-old Jack Abramoff, at the time the head of the College Republicans, was approached to run Citizens for America (CFA), a group intended to generate public support for the Reagan administration's policy of arming and funding anti-communist rebels worldwide. That campaign took him to Jamba, Angola, for a two-day gathering of guerrillas from Latin America, Asia, and Africa. Upon his return, Abramoff was fired by CFA for blowing through the organization's $3 million budget.

Three years later, Abramoff decided to follow his older brother's example by becoming a movie producer. Working with South African contacts he had developed during his brief career as a freedom fighter, Abramoff produced Red Scorpion, a slapdash action movie starring Dolph Lundgren (best known as the steroid-enhanced, genetically engineered Soviet boxer who battled Rocky Balboa in Rocky IV). One critic described the flick as "the heartwarming tale of a freedom-loving ex-KGB agent killing masses of black African communists." Five years later Abramoff produced the direct-to-video sequel Red Scorpion II, featuring Lundgren's "freedom-loving ex-KGB agent" in a "heartwarming tale of freedom-loving men killing masses of white American militiamen."

It's tempting to see, in the odd ideological contrast offered by those two Abramoff-produced films, a parallel to his own ideological evolution. Roughly a decade after making his mark in Washington as a zealous anti-communist, Abramoff, acting as the Capitol City's most powerful lobbyist, helped broker a deal in which House Republican Leader Tom DeLay sold his vote on a foreign aid bill to a Russian energy conglomerate controlled by the KGB.

Russian Junketeering

"In August 1997," wrote Franklin Foer in the May 5, 2005 issue of The New Republic, "House Majority Leader Tom DeLay traveled to Russia in the company of his frequent companion, the now-infamous lobbyist Jack Abramoff. For six days, he huddled with government ministers and oil executives and golfed at the Moscow Country Club."

NaftaSib, the Russian client on whose behalf Abramoff arranged the junkets, was aligned with then-Russian Premier Viktor Chernomyrdin. During his Moscow visit, DeLay met with Chernomyrdin, as well as the shadowy but powerful figures heading NaftaSib: company president Alexander Koulakousky and its executive vice president, Marina Nevskaya. Mrs. Nevskaya, significantly, is a former instructor at a Russian military intelligence school.

"NaftaSib's line of business is as shady as it is menacing," comments Mark Ames, editor of the Moscow-based journal eXile. In addition to controlling interests in numerous oil and natural gas companies and the role it plays in dubious "buy-back" deals with regional governments in the former Soviet republics, NaftaSib is involved in what Ames calls "security" deals--what students of the American underworld would call "protection rackets." Many of the firm's top managers, Ames reports, are siloviki--a Russian term referring to "hard" or "powerful" figures connected to Soviet-era internal security and intelligence agencies, particularly the GRU (Russian military intelligence) and KGB.

NaftaSib is also "deeply tied into the MchS, the emergency situations ministry," continues Ames. MchS covered up the involvement of Russian intelligence agencies against Russian citizens and, notably, was "in charge of 'clean up' at the scene of the controversial apartment bombings in 1999 that helped propel Putin to power."

A handful of brave but isolated commentators pointed out that there was abundant evidence that the terrorist bombings, attributed to al-Qaeda, had been carried out by, or at least with the connivance of, the FSB (the renamed KGB)--and that the MchS had disposed of the critical physical evidence before it could be examined by local police authorities.

Evidence--intriguing but incomplete--indicates that Abramoff knew of NaftaSib's deep connections to Soviet-Russian intelligence. Among Abramoff's e-mails collected by the Senate Committee on Indian Affairs is one from a Russian named "Vadim," whose e-mail signature identifies him as "Assistant to Mrs. Nevskaya." The e-mail lists prices of thermal vision devices, suggesting that Abramoff--or somebody connected to him--was in the market for sophisticated, Russian-made military gear. That hardware could have found its way to militant Israeli West Bank settlers, who received large sums of money from Abramoff that had supposedly been raised for charitable purposes.

Gimme Some Money

In its Abramoff-brokered meetings with DeLay, Ames comments, "NaftaSib wanted what all companies want: To buy a politician's votes. And boy did their cash deliver!" Following the trip to Russia, DeLay broke with most House Republicans by casting his support to a foreign aid appropriation intended to facilitate an IMF [International Monetary Fund] bailout of the disintegrating Russian economy. On September 17, 1998--a date recognized by genuine conservatives as the anniversary of the U.S. Constitution--DeLay "voted for a foreign aid bill containing new funds to replenish [an] IMF account" to bail out Russia, reported the December 31 Washington Post.

The IMF bailout was arranged to stave off the utter collapse of the "post-Soviet" Russian economy, which had been brought about through a corrupt "privatization" scheme "paid for in large part by U.S. Taxpayers," in the words of Time Moscow correspondent Andrew Meier.

Some 145 million Russians received U.S.-subsidized vouchers "for shares in some 15,000 large state enterprises," recalls Meier. "But before long, it all started to go bad--really bad. Privatization began with the vouchers--but who would get the factories and mines was more often than not understood long beforehand. In many regions, the so-called Red Directors would retain the controlling stakes in their old enterprises." This outcome was not accidental; instead, it was the result of a carefully laid plan. On August 23, 1990, Nikolai Kruchin, administrative director of the Communist Party of the Soviet Union (CPSU), issued a document entitled "Emergency Measures to Organize Commercial and Foreign Economic Activity for the Party," which outlined the fashion in which the Soviet ruling elite would supervise "privatization" efforts. According to Kruchin, "confidentiality will be required and in some cases anonymous firms will have to be used disguising the direct ties to the CPSU. Obviously the final goal will be to systematically create structures of an 'invisible' party economy."

Anonymous firms and other shell companies--including illicitly chartered banks--proliferated in Russia during the mid-1990s. Huge amounts of money were flowing into the "invisible" Communist Party economy, and nothing was coming out. The "Red Directors" bought up--or simply stole--everything of value, and spirited their profits away into offshore havens. Meanwhile, Russia's public debt was soaring as a result of extravagant welfare promises made during Boris Yeltsin's 1996 reelection campaign--promises that resonated with hard-pressed Russian citizens who were left, in many instances, even more destitute than they had been prior to the "collapse" of communism.

The oligarchs running Russia's "invisible economy" turned to the IMF for yet another bailout; some elements of the oligarchy, such as NaftaSib, worked with the likes of Jack Abramoff to bring key congressmen, including Tom DeLay, onboard.

Enter Abramoff

The proposed bailout met some resistance. In the Senate, "Phil Gramm [of Texas] had actually succeeded in getting the votes necessary to nix new bailout money for the IMF, and it was [Nebraska Republican] Chuck Hagel who broke ranks and squirreled the deal," former Wall Street Journal Moscow correspondent Anne Williamson recalled to THE NEW AMERICAN.

The party-aligned Russian oligarchs "were using Israeli banks to move their ill-gotten gains out of Russia" at the time Abramoff was brought onboard as a lobbyist, reports Williamson. This was possible because "Israel had no money laundering law prior to 2000.... Abramoff, working his Israeli connections, probably met the NaftaSib people somewhere along the way, and--of course--they were happy to play whatever role necessary in the wake of the [economic] collapse to nab DeLay--the prize Abramoff was offering up."

In return for his vote betraying the trust of the American people, DeLay received a ritzy trip to Moscow. On the travel disclosure forms required of Congressmen after junkets, Rep. DeLay listed the National Center for Public Policy Research as the sponsor of his trip to Moscow, which cost a reported $57,238. However, according to the April 6, 2005 Washington Post, the funding actually came from Chelsea Commercial Enterprise Limited, a foreign corporation chartered in the Bahamas. Chelsea had paid $260,000 to Abramoff's lobbying firm, and $180,000 to a firm headed by lobbyist Julius Kaplan (who was also part of the Moscow excursion). The Post reported that Chelsea "was coordinating the effort with a Russian oil and gas company--NaftaSib--that has business ties with Russian security institutions."

Noted the Post: "House ethics rules bar the acceptance of travel reimbursement from registered lobbyists and foreign agents." Of course, the oath taken by all congressmen effectively bars them from voting for taxpayer subsidies on behalf of mobbed-up foreign commercial interests, let alone doing so in exchange for bribes.

RELATED ARTICLE: The Abramoff Democrats.

"It's absurdly hypocritical for Democrats to try to use the Abramoff scandal against Republicans," complained an editorial in the January 6 Investor's Business Daily. "Any recent instance of Republicans playing fast and loose with campaign laws can be topped by a similar case on the part of prominent Democrats." "Republicans aren't the problem. The system is."

That the Democrats are at least as corrupt and opportunistic as the Republicans is beyond dispute. The Clinton administration, after all, scooped up literally millions of dollars in illegal campaign donations from sources connected to the communist Chinese military-industrial complex, and then modified U.S. trade and export control policies in ways that benefited Beijing. But the Republicans have controlled the corrupt "system" for several years. Rather than seeking to abolish the institutionalized rent-seeking that has turned Washington into a cesspool of bribery and influence-peddling, the Republicans, like the Democrats before them, have simply exploited it for their advantage.

"It is true that any Washington influence peddler is going to spread cash and favors as widely as possible, and 210 members of Congress have received Abramoff-connected dollars," commented National Review editor Rich Lowry in his January 10 syndicated column. "But this is, in its essence, a Republican scandal, and any attempt to portray it otherwise is a misdirection. Abramoff is a Republican who worked closely with two of the country's most prominent conservative activists, Grover Norquist and Ralph Reed. Top aides to the most important Republican in Congress, Tom DeLay (R., Tex.) were party to his sleazy schemes. The only people referred to directly in Abramoff's recent plea agreement are a Republican congressman and two former Republican congressional aides. The GOP members can make a case that the scandal reflects more the way Washington works than the unique perfidy of their party, but even this is self-defeating, since Republicans run Washington."

--WILLIAM NORMAN GRIGG