CIA’s Dirty Games in Subverting Russia — Part 2

Rappaport, a business associate of Reagan’s CIA director, Bill Casey—the man who created the idea of the private National Endowment for Democracy as a front for dirty CIA operations—also owned a major share of Edmond Safra’s Bank of New York.

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This is a famous photo of Yeltsin defiantly standing atop a tank in the fake KGB–CIA coup of June 1991 that pushed Yeltsin to the top.

Barrick Gold was established in 1986 as American Barrick Resources and listed on the New York Stock Exchange. Khashoggi, Marcos’s intermediary in offloading the Japanese gold onto the market, was, in fact, the majority owner of Barrick Gold. Munk, a Canadian citizen, was said to be merely the frontman for the controversial CIA-tied Saudi arms dealer.

The operations of taking the Marcos gold from the Philippines and the founding of Barrick Gold by Khashoggi and Hungarian-born Munk were reportedly connected with the planned bankrupting and looting of the Russian Federation in the early 1990s by the clandestine network of George H.W. Bush, former CIA head and now US president.

The Marcos gold, laundered through Barrick, was to serve as collateral for the creation of billions of dollars of financial securities used to buy up priceless assets of the former Soviet state at pennies on the dollar. 

Notably, although the Canadian Barrick Gold held no mines in Europe, Barrick refined its gold at two Swiss gold refineries—MKS Finance S.A. and Argor-Heraeus S.A.—both on the Italian border and just hours away from the gold depository beneath the Zurich International Airport in Kloten, Switzerland. It led to a question that Barrick never answered: what gold was Barrick refining in Switzerland, as they had no mines in that region? Some were convinced it was the Marcos gold being readied as collateral for Operation Hammer, the CIA’s rape of Russia.

E.P. Heidner, a former employee of the Defense Intelligence Agency’s Office of Naval Intelligence, suggested that the Barrick Gold company had been set up by Khashoggi and Bush’s Enterprise old boys’ ex-CIA network to melt down the stolen Marcos gold and use it as collateral for billions of dollars in gold derivatives, so-called paper gold, that would stand as collateral for bank loans used in the looting of Russian state assets under Yeltsin and his notoriously corrupt economic advisers, Yegor Gaidar, and privatization head Anatoly Chubais.

In 1992, in one of Bush’s parting acts as president, he arranged for the US government to give Barrick the mining rights for Nevada gold deposits on US government lands, independently valued at $10 billion, for the nominal sum of $63 million. President George H.W. Bush had “arranged for an exception” that would allow Barrick to use its own assessors to determine the value of the deposits. Soon after leaving office, Bush himself was named to head the International Advisory Board of Barrick Gold. Barrick Gold had “spook,” as in CIA front company, written all over it.

The details of how much money the CIA spent buying key KGB generals, who would commit essentially treason against their Russian Federation, have not been published. However, the key KGB actors recruited by Washington to carry out the looting, players whom the CIA turned into Russian oligarchs, were gradually discovered. In the course of the Yeltsin years, as opposition grew inside Russia, more than 300 senior KGB officers, including generals, were smuggled into the US, where they were given life pensions by the US government. Others fled to Israel on Israeli passports they were given.

Corrupt KGB Generals and Their “Kids”

In the late 1980s, well before they staged a fake coup d’état that pushed Yeltsin to the top in 1991 as the leading opposition figure to Soviet chief Mikhail Gorbachev, Philipp Bobkov and Alexei Kondaurov, two corrupt KGB generals secretly working with Bush CIA networks in the West, sponsored several clever, ruthless and ambitious young Russian entrepreneurs and arranged for them to work with a group of US financial “consultants” out of Switzerland who would teach them the fine arts and secrets of international money laundering. 

Bobkov and Kondaurov handpicked four ambitious young Russians who would become the first Russian “oligarchs” in Yeltsin’s “wild west” free market Russia in the 1990s. Their names were Mikhail Khodorkovsky, Alex Konanykhin, Boris Berezovsky, and Roman Abramovich. Boris Berezovsky, forty-two years old at the time, was the senior member of the young entrepreneurs. Khodorkovsky was twenty-four, Konanykhin was twenty-two, and Abramovich was also twenty-two. They thus became known within the Bush CIA circles as the “kids.” 

General Philipp Bobkov was known within the Soviet intelligence community as the “KGB brain.” He headed the notorious KGB political police department responsible for controlling internal dissent, the infamous KGB Fifth Chief Directorate. His position enabled him to travel abroad and cultivate contacts in the West, and also with Western intelligence, without arousing undue suspicion. Alexei Kondaurov, another KGB general working with Bobkov, later joined Khodorkovsky’s Yukos Oil and remained, as of 2016, a Communist Party member of the Russian Federation State Duma—immune from state prosecution.

Kondaurov and Alexander Konanykhin had also played a key role in bringing an unknown regional politician and construction foreman named Boris Yeltsin from the hinterlands of Sverdlovsk to the forefront of Soviet Russian, and later post-Soviet Russian Federation, politics, making him known to Mikhail Gorbachev as a fresh, younger voice.

A third KGB general involved intimately with the Yeltsin operation was Alexander Korzhakov, Yeltsin’s personal bodyguard since 1985 and the man who stood beside Yeltsin in August 1991 when he climbed on the tank outside the Russian White House, then housing the Supreme Soviet of Russia.That tank stunt with Yeltsin was the turning point during the fake KGB coup attempt on Gorbachev that would propel Yeltsin to the forefront as Russia’s “democracy” opposition leader, with the help of CNN and other mainstream US and Western media. It was all carefully orchestrated.

Two months earlier, the corrupt CIA-tied KGB generals had arranged 50 percent of Yeltsin’s campaign funding for his successful June 1991 presidential elections for the newly declared Russian Federation, defeating Gorbachev’s preferred candidate, Nikolai Ryzhkov. That gave Yeltsin invaluable credibility as opposition to Gorbachev. Yeltsin rewarded Konanykhin by granting him a banking license to found the first Russian bank with an international currency-trading license, the Russian Exchange Bank. By 1992, Konanykhin would accompany Yeltsin to Washington to meet with President George H. W. Bush.

Khodorkovsky’s Menatep Bank was another front operation for the money-laundering operations run by rogue KGB Generals Philipp Bobkov and Alexei Kondaurov, operations sanctioned personally by President Boris Yeltsin. 

Beginning in 1987, Gorbachev, who had desperately sought ways of reforming the Soviet economy, had been convinced by his KGB generals to allow a touch of Western market economy for KGB-selected young communist “entrepreneurs” chosen from the Communist Party’s Komsomol youth organization. The young entrepreneurs began small companies in the USSR that were allowed to establish partnerships with Western businessmen. KGB officers usually headed the small companies, typically trading computers and such items bought from the West. Importantly, in terms of what was to happen after 1991, those enterprises had the rare privilege of getting hard currency cash, US dollars, from the Soviet State Bank.

The relevant point was who those Western financial or business partners committing crimes for the rogue KGB generals were. In the beginning of the Yeltsin operations in the early 1990s, two banks played a major role. One was Riggs Bank in Washington, D.C. The second was the Republic Bank of New York of Edmond Safra, which joined the looting and money-laundering Russian operations some months later.

Shadowy Figures of Riggs Bank

The key figures in setting up the financial structure to move Yeltsin “Family” funds out of Russia included a former Reagan–Bush administration deputy director of the National Security Council and former US Ambassador to NATO named Alton J. Keel Jr. In 1989, just as the corrupt Soviet KGB generals and their youthful protégés were setting up Menatep Bank and organizing the looting of Communist Party and Soviet assets, Keel began his term with Riggs Bank in Washington, a known CIA-tied bank since the 1960s’ Cuba Bay of Pigs CIA operations.

Former National Security Council deputy head Alton J. Keel was Riggs Bank’s deputy chairman, responsible for Riggs’s newly created International Banking Group, which was to include a new entity, Riggs Valmet S.A. Jonathan J. Bush, a “private banker” and brother of the US President, worked with Keel to set up the Riggs–Valmet money-laundering apparatus in Geneva, aiding Riggs in buying a major share of the Geneva Valmet S.A. to create Riggs Valmet S.A.

Jonathan J. Bush at the time was head of J. Bush & Co., which provided “discreet banking services” for the Washington, D.C.–embassies of unnamed foreign governments. Jonathan Bush went on in 1997, in the midst of the Yeltsin plunder orgy, to sell his J. Bush & Co. to Riggs Bank in Washington. Bush was made CEO of a new entity called Riggs Investment, based in Connecticut, as the looting of the Russian Federation under Yeltsin’s second term was in high gear.

Also working directly with Keel in setting up the Riggs Bank Russian money-laundering operation was a CIA-trained banker named Carter Beese, who had been schooled at the CIA training facilities of the US Army War College. George H.W. Bush had also named Beese a commissioner at the US Securities & Exchange Commission in 1992, a highly useful post for obscuring investigations into Russian assets being laundered to US corporations. 

Carter Beese was president of something called Riggs Capital Partners. At the same time he held the key Riggs post that was to be instrumental in laundering stolen Russian assets, Beese was chairman of a US private investment bank, Alex. Brown & Sons. In short, the same CIA-tied persons linked the Geneva-based Riggs Valmet S.A. together with Alex. Brown, later part of Bankers Trust and ultimately sold to Deutsche Bank in 1999.

When Alex. Brown was bought by the New York Bankers Trust, Beese then became vice chairman of Bankers Trust, another bank that was deeply involved in Yeltsin’s Russian financial scandals. Notably, Bankers Trust, beginning in 1982 through its Bankers Trust Zurich subsidiary, was also said to be the repository of large quantities of stolen Marcos gold.

Together with Beese at Alex. Brown was a CIA consultant named Alvin Bernard “Buzzy” Krongard. When Bankers Trust acquired Alex. Brown, Krongard became vice chairman of Bankers Trust alongside Carter Beese. In 1998, as the Russian ruble collapsed, Buzzy Krongard “formally” joined the CIA, where he soon became the Executive Director, third most influential post at the CIA.

Those four Riggs Bank CIA-linked shadowy figures—Beese, Krongard, Jonathan Bush, and Keel—would join with a secretive Geneva financial operation called Valmet S.A. to form a Riggs joint venture called Riggs Valmet S.A.

Riggs Valmet SA 

In 1988, George H.W. Bush and his old boys, the “retired” CIA network, with the aid of Bush’s brother Jonathan, set up the Switzerland financial entity Riggs Valmet S.A., headquartered at 14 Chemin Rieu in Geneva. Riggs Valmet S.A., legally incorporated in the offshore Isle of Man, was established to set up shell companies and accounts to hide and launder money, initially for companies controlled by Bank Menatep’s Khodorkovsky, Roman Abramovich, Boris Berezovsky, and other select “kids” of the corrupt Soviet KGB generals. The Geneva arm used the offshore bank’s secrecy on the Isle of Man to further hide the paper trail.

Without access to large Western banks, the new Yeltsin oligarchs could never have succeeded in moving tens of billions of dollars out of Russia and other newly independent former parts of the Soviet Union into Western offshore havens. For the Bush CIA network, the aim was to permanently drain the funds out of Russia into accounts in the West at their prechosen banks.

Valmet S.A., the Geneva predecessor of the Riggs joint enterprise, was a Gibraltar-registered, Geneva-based global trust business founded in 1975 by Christian Michel, who once described himself as a “self-made man.”

Menatep, Runicom, and RKB

By 1994, the closest partners, or “clients,” of Riggs Valmet were Mikhail Khodorkovsky’s Menatep Bank and Runicom S.A., a Swiss-registered arm of the giant Russian Sibneft Oil which, in turn, was then under the control of Roman Abramovich and his then partner, Boris Berezovsky, as well as the Moscow-based RKB bank.

Conveniently, the large scandal-plagued US accounting firm Arthur Andersen was made the accountant for Runicom. Arthur Andersen itself later dissolved in a wave of corrupt accounting scandals involving companies such as the Enron Corporation of Ken Lay, another close Bush-family corporation, which was used to launder Russian energy assets. The third major Russian client in 1994 of Riggs Valmet was the Moscow Rossiysky Kredit Bank, RKB. 

Mikhail Khodorkovsky’s Group Menatep Limited, with its Menatep Bank by the mid-1990s had ballooned into a $29 billion holding company involved in numerous money-laundering scandals. From 1989 to 1991, Leonid Nevzlin was president of Bank Menatep and, until 1996, vice chairman of the board. In November 1995, Bank Menatep took part in a crooked mortgage auction that resulted in its takeover of the oil company Yukos, part of the Bush Operation Hammer plan to grab control of major Russian energy assets. In 1996, Nevzlin became vice president of Yukos, which was then 78 percent owned by Menatep.

Another partner of Khodorkovsky’s money-laundering Bank Menatep was Konstantin Kagalovsky, who was named deputy chairman of Bank Menatep in November 1994. 

Conveniently, Kagalovsky was also Russia’s representative to the International Monetary Fund between 1992 and 1995 and was married to Natasha Gurfinkel Kagalovsky, a former senior vice president of Edmond Safra’s money-laundering Bank of New York. At the time, Safra’s Bank of New York was being prosecuted in the US for a tax evasion scandal dealing with $7 billion dollars channeled out of Russia from 1996 to 1999.

During the kleptocratic presidency of Boris Yeltsin, the Runicom S.A. company enjoyed an advantage that few rivals had. Along with Abramovich and Berezovsky, a third partner in Runicom S.A. was Leonid Dyachenko, son-in-law to President Yeltsin.

Toward the end of the 1990s, when billions of dollars of IMF funds sent to Russia—allegedly to avert a Ruble state default—disappeared, a Swiss judge revealed he had evidence that Berezovsky’s Runicom and his Sibneft Oil were implicated in diverting billions of IMF emergency loans prior to the 1998 Russia state default.

Stealing the Soviet Gold

One of the crucial operations of the Bush looting of the Soviet Union, as part of their four-part plan, was to grab the state gold reserves. This took place early in the looting process, in March 1991, just weeks before the dissolution of the Soviet Union. The theft would be critical in order to prevent a monetary defense of the ruble and, thus, to allow Washington’s financiers—such as George Soros and friends—to destabilize and severely devalue the currency, making Russian ruble assets vastly cheaper for Soros and other dollar investors. 

In November 1991, just three months after the fake August 1991 KGB generals’ coup against Gorbachev was used to propel little-known Soviet official Boris Yeltsin to the fore as “champion of democracy” and of a new Russia, Viktor V. Gerashchenko, Chairman of the Presidium of Gosbank, the state bank of the USSR, made a shocking brief announcement to the Russian Duma, or parliament. Of an estimated 2,000 to perhaps 3,000 tons of Gosbank state gold reserves then worth $35 billion at the market price, less than 400 tons could be accounted for. He told the shocked members of parliament that he had “no idea” what happened to the missing gold. That, of course, was a lie. 

After 1989, as head of Gosbank, Gerashchenko had created an offshore entity, Financial Management Co., known as FIMACO, based on the island of Jersey in the Channel Islands, situated in the English Channel near Normandy, to handle Russia’s foreign currency reserves. Jersey had a curious legal standing as not a part of the United Kingdom, nor of the Commonwealth of Nations or of the European Union, but instead are part of the British Empire. This made it exempt from European supervision, an ideal place to hide money dealings. 

By one estimate, the FIMACO offshore fund managed $37 billion between 1993 and 1998. The firm was a subsidiary of the Eurobank of Paris or Banque Commerciale pour l’Europe du Nord, which was 78 percent owned by Gerashchenko’s Russian Central Bank. Gerashchenko’s FIMACO funneled billions of dollars of Russian hard currency (mainly dollar) reserves out of Russia during the Yeltsin era as the first chairman of the post-Soviet, independent Central Bank of Russia.

Not missing a trick, the well-advised Yeltsin, following the fake KGB coup attempt of August 1991, along with the Ministry of Finance of the Russian Soviet Federated Socialist Republic (RSFSR), claimed authority over the Ministry of Finance of the entire USSR, the USSR State Bank, and the Bank of Foreign Economic Activity. This meant that the Soviet institutions could not carry out any orders without the consent of the RSFSR government, where Yeltsin was president. His finance minister was Vladimir Yefimovich Orlov. As of August 1991, Yeltsin and Orlov had control over the entire billions of dollars of Soviet gold. (In the next chapter, we will learn the mysterious fate of that gold.) 

To cover the trail of the missing gold and give his government the pretense of innocence, Yeltsin, on the advice of two former KGB generals, announced that he had hired the New York financial detective firm Jules Kroll Associates to track the whereabouts of the Soviet gold, as well as an estimated $14 billion in Soviet Communist Party and other assets. Kroll Associates, which was tied with the CIA-created AIG insurance group of Hank Greenberg and known in the US as a “private CIA,” was linked to the CIA, Mossad, and MI-6. Not surprisingly, a few months later, Yeltsin’s finance minister and shock therapy advocate, Yegor Gaidar, announced that Kroll was being discharged as there had been “no results” in the attempt to find the billions of dollars of missing Soviet Gosbank gold.

Enter Safra, Soros, and Rothschild

As the scale of the looting operation in Yeltsin’s Russian Federation became so mammoth, Riggs and Bush’s CIA old boys decided to bring in another trusted group to help move the funds out of Russia.

Riggs Bank was quickly solidifying banking relations with a couple of the old CIA hands from the Iran–Contra arms-for-drugs operation, Swiss bankers Baruch “Bruce” Rappaport, a shady financier born in Haifa to Russian émigré parents, and Alfred Hartmann, his partner. Through this group, George Soros was also enlisted to open a new front against the ruble. In turn, Rappaport and Hartmann included the Bank of New York and, from Israel, the Eisenberg Group, tied to the Israeli Mossad.

Rappaport, a business associate of Reagan’s CIA director, Bill Casey—the man who created the idea of the private National Endowment for Democracy as a front for dirty CIA operations—also owned a major share of Edmond Safra’s Bank of New York. Further, Rappaport created a joint Swiss venture with Safra called the Bank of New York–Inter Maritime Bank. That Bank of New York–Inter Maritime Bank operation was named in 1999 by US federal investigators as being “possibly one of the biggest money-laundering schemes in the United States.”

President George H.W. Bush knew Rappaport quite well from Rappaport’s role in helping set up the notorious CIA money-laundering Bank of Credit and Commerce International (BCCI), registered in Luxembourg with head offices in Karachi and London. 

In 1987, when Bush was still Reagan’s Vice President, Rappaport was under investigation by the US Independent Counsel for alleged activities on behalf of CIA Director William Casey, including the purchase of an Antiguan farm in the West Indies for Israeli arms dealers who were significant customers of BCCI in Miami. The US investigation was also looking at the circumstances behind placing Alfred Hartmann, then a BCCI employee, on the board of directors of the Inter Maritime Bank of Geneva and New York. BCCI was a major offshore private bank operating from the 1970s until it was forced shut down in 1991 by UK and other financial regulators. It was known as the bank of CIA “black operations,” of the Medellin drug cartel, and even of the US National Security Council.

Edmond Safra’s Bank of New York took a 20 percent ownership of Rappaport’s Bank of New York–Inter Maritime Bank in Geneva. Beginning in 1992 with the CIA’s looting of Russia via handpicked oligarchs such as Khodorkovsky and Berezovsky, Safra’s Bank of New York–Inter Maritime Bank was deep into money laundering billions for the select Yeltsin circle of oligarchs. In 1997, Rappaport was also conveniently named as Ambassador to Yeltsin’s Russia by the government of Antigua, the scenic Caribbean Island where his Swiss American Bank, Ltd., had a banking license. Antigua became a major destination for Russian oligarchs’ looted money.

As with most all of the illegal plunder operations to rob billions from the chaotic Russian Federation during the Yeltsin years, President George H.W. Bush, a former CIA head, used old cronies from past illegal CIA operations, such as Rappaport, in the dark world where CIA, Mossad, and organized crime crossed paths as congenial colleagues in crime and intelligence intrigues. 

George Soros, who had sponsored Harvard economist Jeffrey Sachs, architect of Poland’s shock therapy, got on the inside track of obscenely profitable Russian privatization deals together with key Russian oligarchs who had opted to work with Bush and the CIA to loot their native Russia. 

Soros was a major backer in the takeover of Russia’s Svyazinvest telecommunications giant. In 1994, the London Guardian would comment, “Soros’s extraordinary role, not only as the world’s most successful investor but now possibly, fantastically, as the single most powerful foreign influence in the whole of the former Soviet empire, attracts more suspicion than curiosity.”

It was at this stage that Jacob Lord Rothschild, scion of the famous banking family, joined Soros, Rappaport, and the Menatep’s Khodorkovsky as silent backers for major Russian privatization deals. In 2003, when the Russian state arrested Khodorkovsky for money laundering and tax evasion in the Menatep buyout of Yukos Oil, sending him to prison, Khodorkovsky revealed that he had signed over his shares in Yukos to Lord Rothschild just before going to prison. Rothschild, along with Henry Kissinger, sat on the international advisory board of Khodorkovsky’s Open Russia, a “charitable” foundation used to fund anti-Putin, “human rights” NGOs in Russia.

The Riggs Valmet and Bank of New York–Inter Maritime Bank looting nexus for Russian assets also involved a fugitive Swiss oil and aluminum trader named Marc Rich. Rich, reportedly a Mossad asset, had developed business ties with certain circles of the KGB involved in Western business beginning 1983, when he fled from the US to Zug, Switzerland, to avoid prosecution on an Iran oil embargo violation. When the US imposed a grain embargo on the Soviet Union that year because of their role in Afghanistan, Rich offered his high-level Soviet contacts to get grain for them from other sources. He gained top contacts in the KGB and Soviet hierarchy as a result, friends that he now would help in the great scheme to loot Russia after the breakup of the Soviet Union.


F. William Engdahl

F. William Engdahl is an award-winning geopolitical analyst, strategic risk consultant, author, professor and lecturer.
He has been researching and writing about the world political scene for more than thirty years. His various books on geopolitics—the interaction between international power politics, economics and geography—have been translated into 14 foreign languages from Chinese to French, from German to Japanese.

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