With each passing day of the Bank of New York-Russian money scandal,
the family of suspect Russian companies whose names end in "-ex"
expands: Mabetex, Benex, Forex, Ostex, Torfinex and Dimalex. Once
again, Papa Bear "-Ex," Nordex, and its founder Grigori Loutchansky are
in the news.
Fingered in the spring of 1997 as one more dubious foreign
contributor to Clinton's re-election campaign, Loutchansky -- sounding
like the frustrated Rodney Dangerfield of alleged Russian nuke smugglers
-- had a scatological mouthful to say. "A big American game of big
bulls---!" he bellowed over the telephone line from corporate
headquarters in Vienna, "It's those bloody gangsters in the CIA!"
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Look, from Loutchansky's point of view, aspiring to Friend-of-Bill
status turned into a real nightmare. Think about it. One day you're
having your mug snapped alongside Bill Clinton's in the White House and
you're carrying messages from POTUS to POU (President of Ukraine) and
the next your good name is being dragged through the mud and your
once-proud firm's reputation is besmirched. Other campaign donors got
OPIC and Ex-Im Bank support, a night in the Lincoln bedroom, or a ride
on Air Force One.
But you? All you got were your hot deals in Kazakhstan with Canada's
Placer Dome, U.S. Steel and Mobil Oil trashed, visa refusals from the
U.S., Canada, Great Britain, and Hong Kong, your phone calls monitored
by NSA, a clutch of unflattering newspaper stories and a letter of
inquiry from a congressional investigatory committee. Talk about slings
"Americans consider us to be second rate people!" Loutchansky fumed.
I first stumbled on Nordex years ago in Baku when it was still a
provincial Soviet capital, utterly bereft of Texas oilmen. It was there
that I confronted a man whom I was sure was my KGB tail, but who
protested, saying he was a simple biznesman who'd "left the
service." But why?
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The question got me a shot of vodka and the guy's story at a corner
table in a tiny bar in a dreary hotel next to the Caspian Sea. His last
assignment while "in the service," he said, was accompanying shipments
of Soviet gold bars to Austria and something in the course of those
operations that I couldn't quite grasp had led to the career change, but
he did say I ought to remember the name "Nordex."
Naturally, I forgot all about Nordex until years later in Moscow when
I read in a William Safire column that "it's remarkable how the name
Nordex causes intelligence faces to turn to stone." For laughs, I looked
Nordex up in the Moscow Business Telephone Guide, an entrepreneurial
asset of the new age regnant in the capital, and to my surprise found
the listing with seven telephone numbers. This was serious blat
("pull"), very serious blat, since nobody, but nobody, had seven
published telephone numbers in Moscow in 1995.
After a day's long marathon of dialing, a cheerful voice answered,
"Ministerstvo Innostrannykh Del." This was unbelievable! The
Foreign Ministry? I stated my business.
"Oh, how lucky you are! I was just passing and almost didn't pick up
the phone and not only that, but I know everything about Nordex. You say
you're American?" a certain Aleksandr Konstantinovich queried.
I was stunned. It's a journalist's dream to hear anything so normal,
so friendly from Russian officialdom; it was impossible not to be
suspicious. Konstantinovich suggested that I call two days hence
mid-morning, saying we'd schedule a meeting for that day. And then with
the breezy suddenness of an Englishman's "Cheerio," he was gone.
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Naturally, Konstantinovich blew me off, and days more of dialing only
got me frazzled. Then, by chance, I stumbled on paydirt again while
leafing through a 1993 issue of VIP, the vanity organ of the
commercialized nomenklatura. Reading a boastful interview with
Vladimir Shcherbakov, the last first deputy prime minister of the Soviet
Union and today president of the International Foundation for
Privatization and Private Investment (FPI), I learned that FPI's charter
was legitimized by Gorbachev's signature and approved by 13 heads of
what were still constituent republics on Sept. 14, 1991 -- a time
when the ink on Boris Yeltsin's decree banning the Communist Party was
barely dry -- and that the foreign partner amongst the three
founders was an Austrian firm, Nordex GmbH.
In the interview, the nimble-footed Shcherbakov reported excellent
relations with the new regime of "eager young reformers" -- Yeltsin,
Gaidar and Chubais, all hail-fellows-well-met -- along with similarly
sympathetic connections to the EBRD, the IMF and the U.N. Industrial
Development Organization. Shcherbakov even bragged about FPI's "new
approach to the problem of the property of the Western Army Groups in
Eastern Germany that comes down to its joint exploitation by Russian and
German businesses," a mind-boggling admission considering that a year
after the interview was published, the Russian scandal was Bonn's
claim that Soviet weaponry sales to rogue regimes originating in the
Western Army Group had amounted to a $4 billion criminal take.
A week later, I stumbled again, right into the company of a former
employee of FPI, who spoke through clenched teeth while saying, "I don't
and didn't like this business. It's not an honest one, I decided I
didn't want to be involved."
But exactly why?
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"It's not a well-known organization, but it's one of the most wealthy
and most powerful organizations in Russia. Their main business is acting
as a sort of professional legal business for companies in the regions.
They go knock on the government's door and get some money for the
companies, or subsidies, or tax breaks. Then they take their commission.
I can't say it publicly, I can't prove my position with documents, but I
know they were privatizing companies, the very best companies, before we
had a privatization program."
And what about Nordex?
He clammed up at that, "I won't say one word about Nordex and you
shouldn't even pronounce the name."
When I tracked down an acquaintance with military intelligence who'd
been helpful in fleshing out a "Jewish mafia" scheme to swindle the
government over a pulp and paper mill on the Volga, he too showed a
sudden concern for his visitor at the mention of Nordex. "Anechka," he
murmured softly, "I want to help you, and I am doing so now in telling
you, and I am underlining these words, not to ask anybody any more
questions about Nordex." I've lived long enough that when guys twice my
size preface a warning with the equivalent of "dear Anniekins" and I was
in a country where overly nosy journalists sometimes explode --
literally -- I pay attention. I put Nordex to bed in a manila file
Imagine then my surprise to discover that no one had shown similar
concern for our own fair-haired boy in the White House, that Grigori
Loutchansky, in the company of one Sam Domb, a New York real estate
businessman and DNC Trustee good for $160,000 worth of support in
1993-94, was so close to Bill Clinton as to be photographed.
Intentionally. Not only that, but he gets a letter thanking him for his
support and a second dinner invite for January 1995. Out came the manila
I called up a high Russian government muckety-muck, who when I told
him the news, mumbled, "Oh, that's bad." He described Loutchansky as
"sort of an exile" and confirmed what my man in Baku had told me, "It's
definitely not a simple story because his business was a KGB cover-up
operation in the very beginning, a kind of firm in the West which
developed underground and after the original objective disappeared, he
used it for making money. He had very peculiar connections in Russia,
very peculiar connections, but it cost a few figures in the government.
It's not simple anyway."
Not according to the Time Magazine reporters who took up
Loutchansky's offer to examine his books in July 1996. Time's report
detailed deals involving PM Viktor Chernomyrdin, Moscow Mayor Yury
Lyuzhkov and former Soviet Minister of Metallurgy and hometown Yeltsin
crony Oleg Soskovets, scud missiles, nuclear smuggling and multimillion
dollar transfers through a network of Swiss bank accounts and dummy
companies set up in tax havens like the Isle of Man and Liechtenstein.
Loutchansky told Time that the very fact he was framed by Boris Pugo,
former head of the Latvian KGB, and served a two-year prison term for
embezzlement, was proof he never worked for the KGB.
"I was in the gulag in Russia! I was an activist fighting against
Communism," he hollered, when I asked him about the incident with Pugo,
"I was accused of Zionism, an ideology said to be against the USSR, at a
time when Pugo was the first secretary of the Komsomol. He didn't
recommend me for CPSU membership personally, but administratively. I
needed his signature for a position with the Central Committee of the
Latvian Party, which found summer work for students. The embezzlement
charge was all nonsense, it was a simple barter deal."
I didn't get a chance to ask how one could both be an activist
against Communism and an employee of the Latvian Central Committee when
we were off to the races again, "All these charges are 1000 percent not
true! The CIA was bugging my telephones without the Austrian
government's permission; they are working in the interests of big
Western monopolists with credits to the government. You, the West will
be responsible for Communist revanchism. That stuff in Time magazine
about a report from German intelligence, they have no file on me and
they were unable to introduce evidence about me in the court case I just
won today, and that so-called report from the KGB, it's nothing but
bulls--- for sale, a digest of different articles and some imagination.
That s--- about me shipping scud missiles to the Middle East, my family
lives in Israel, why would I do something like that?" demands
Loutchansky, who did possess an Israeli passport.
The missiles were on a Nordex plane that was leased and besides,
Loutchansky said, it was the USSR that sold a factory for scud
production to Iran in 1991, not Nordex.
It all began so promisingly, lamented Loutchansky when in the late
1980s he was appointed the Western representative of Soviet collective
farm Adazhi, "which was one of the best, most modern farms. We were
shipping fertilizer, raw materials and steel." Hey! That is one heck of
a collective farm that not only ships steel but racks up annual profits
of $2 billion; "OK, so we expanded."
"I've been to Kansas, to visit Fairmont, an agro firm," he continued,
plaintively. Funny, how credible a connection to Kansas makes a man
sound. His voice trailed off weakly, like maybe he was thinking he
wasn't going to get to go to nice places like Kansas any more, it was
all coming apart so quickly.
Sure he knew Shcherbakov, "a clever man," and he helped him to start
his business, but Nordex withdrew in 1994, and as far as the Western
Forces Group, Loutchansky says, he "withdrew voluntarily" when he saw
"they would be trying to get their piece." Why wouldn't he know
Soskovets, the former Soviet Minister of Metallurgy, when Nordex is
selling steel? Why wouldn't he know Chernomyrdin, the former Soviet
Minister of Energy, when Nordex is selling oil? He knew Lyuzhkov knew
back when the Moscow mayor had real power as the head of the fruit and
vegetable mafia (Agripol), but they had no business together. As far as
Sam Domb goes, he met him in Israel and they were thinking of restoring
a Manhattan hotel for Russian tourists, "I was introduced to Mr. Clinton
as a successful Russian businessman, who was not asking for money, but
wanting to invest his own into American real estate.
"Mr. Clinton remarked that he'd just come from Congress and that he
was worried about Ukraine getting nuclear material from missiles to
Russia and I said, 'I supply oil to the Ukraine and know President
Kravchuk,' and that's when Mr. Clinton asked me to tell Kravchuk the
United States wanted to help. Nothing more! As far as Sam Domb goes, I
haven't seen him for three or four years."
Only Christopher Ruddy, then with the Western Journalism Center,
managed to flush out Sam Domb. Domb told Ruddy he didn't have any idea
who Loutchansky was before having met him at the dinner, but was then
stumped to explain why he was photographed with Loutchansky and Clinton.
But Domb didn't need $160,000 from Loutchansky for his DNC contribution
since, besides being a heavy supporter of Likuud, he's a
multimillionaire. So why then was Loutchansky anxious enough for his
second DNC invitation, $25,000 a head, to race to the American Embassy
in Tel Aviv to attach a copy of it to his visa application?
"He was probably being extra-cautious. We know of no violation of
U.S. laws, but maybe Loutchansky knew differently," said the CIA man I
engaged on the matter.
"We know Nordex had three objectives: the first, a business, the
second, a front for the KGB and the third, crime. So what did he want?
Respectability. He is fighting very hard."
That was true. Loutchansky offered anyone a look at his books, he
had his attorney, Thomas Spencer, offer his appearance before Congress,
but Hannes Reichmann of Wirtschafts Woche, an Austrian business
magazine, laughed at Loutchansky's boast of winning a court case against
him, "Loutchansky didn't win any court case. The judge asked for more
evidence, which my lawyers and I have decided to provide. I already
published a facsimile of an excerpt from German intelligence's report on
Nordex. Now, he's shutting down his business in Vienna, and his partners
are fighting with him."
What about those numbers at the Foreign Ministry?
"A fluke, probably," the CIA man shrugged, "They might have just
gotten so screwed up in their own arrangements, the phone was ringing in
Nordex's office and they forgot that was a line meant for the Foreign
Ministry supposedly. Sometimes lower level people are just stupid."
Sometimes higher level folks are too.
Only now, with many billions down the Kremlin's rathole, are the
West's lamestream media and spendthrift legislators interested in
learning what happened. Only now do fleeced taxpayers learn that the
men to whom their resources were sent for the purpose of building a new
Russia were in league from day one with the exhausted Soviet
nomenklatura in a scheme to loot Russia's wealth and park it in
Nordex vacated its offices in Vienna some time ago, but not before a
congressional investigator and a security guard flew to Vienna to meet
with Loutchansky. According to the investigator, an unrepentant
Loutchansky shrugged, "Yeah, so OK, I was trying to bribe the president
of the United States. So what? In my country, it's normal."
Indeed. So what? After all, one man's freshly-laundered bribe is
another man's million dollar mortgage guarantee on a pricey,
post-presidential New York suburban Westchester County homestead.