(Updates with background in eleventh paragraph)
By Stelios Orphanides
Paul Manafort, the former head of US President Donald Trump’s campaign, is linked with up to 10 Cypriot companies that maintained bank accounts, which were investigated for money laundering, the US broadcast network NBC News said.
PEM Advisors Ltd, one of the companies linked to Manafort, who stepped down in August after it emerged he had not disclosed lobby work he did for pro-Russian oligarchs, was used to transfer millions of dollars from Oleg Deripaska, a person described as an ally of Russia’s authoritarian leader Vladimir Putin, NBC reported.
The NBC report said PEM Advisors opened an account at Laiki Bank, which facilitated an $18.9m transaction involving the acquisition of a television network in Ukraine, NBC reported citing court documents from the Cayman Islands.
PEM Advisors was set up in June 2007 by Limassol-based law firm Nasos Kyriakides. In August 2007, the company notified the company registrar that it had changed its address to 1 Lampousas Street, Nicosia, 1095, the headquarters of Kypros Chrysostomides law office.
On August 8, 2007, all 1,000 shares of PEM Advisors, which was struck off in the meantime, were transferred from Petolin Consulting Ltd to Inter Jura (Services) Ltd, also based at 1 Lampousas Street, in Nicosia.
Chrysostomides, who served as government spokesman under late former president Tassos Papadopoulos between 2003 to 2006, justice minister under former president Demetris Christofias in 2008, was a lawmaker at the time.
Suspicion about money laundering relating to Manafort-linked accounts triggered an internal investigation by Laiki in 2012, which prompted Manafort to close the accounts, NBC said citing banking sources.
A former banker at Laiki, which went down in the 2013 banking crisis, a year after it was nationalised, said that back then it was “very difficult to open an account for a company which included a US citizen among its major shareholders”.
The Laiki source who spoke to the Cyprus Business Mail on condition of anonymity, cited US laws including Foreign Account Tax Compliance Act (FATCA) which forces US citizens to report every year about their non-US financial accounts. FATCA was enacted in 2010.
“It would have been very difficult for Laiki to proceed,” the former banker said, adding that in the event the company used nominees to open the accounts without declaring the ultimate beneficial owners to the bank, it could have legal consequences.
The Cyprus Business Mail understands that Bank of Cyprus which assumed Laiki’s operations in March 2013 as part of Cyprus’s bailout agreement has nothing to do with Manafort’s activities. According to the terms of the bailout, Cyprus, which back then was suspected of being a basis for money laundering activities by mainly Russian oligarchs, improved its anti-money laundering regulations and practices after 2013.
A recent report by anti-corruption watchdog Transparency International showed that Cyprus disclosed the most complete set of anti-money laundering data among 12 analysed countries, “with information available for 14 out of the 20 indicators”.
Chrysostomides declined to comment when contacted by the Cyprus Business Mail. A spokesperson for Manafort told NBC that that the bank accounts were set up at the direction of clients in Cyprus “for legitimate business purpose”.
Manafort disputed the authenticity of the report which said that he was on a $10m annual consulting contract with Deripaska in which he promised to influence politics and news in favour of the Putin regime.
NBC said Deripaska disputed an Associated Press report last week about his transactions with Manafort and threatened legal action.
On February 28, Politico reported about a conversation between Manafort’s daughter Andrea with her sister Jessica. The conversation, a product of hacking into Andrea’s iPhone posted on a darknet website, showed that she appeared disturbed over her father’s relation to Viktor Yanukovych, the former Ukrainian leader who was forced to step down amid protests in 2014.
“Don’t fool yourself,” Andrea Manafort wrote to Jessica according to Politico. “That money we have is blood money.”
Three years ago, the overthrow of Yanukovych, a close Putin ally, prompted the Russian leader to invade and annex the Crimean Peninsula and destabilise Ukraine by supporting pro-Russian rebels in the east of the country. The US and the European Union imposed sanctions against individuals and entities in Russia in response.
US authorities investigating possible Russian meddling into last year’s presidential elections in the US, are also looking into a possible collusion between the Trump campaign and Moscow. Trump’s former national security adviser Michael Flynn had to quit in February after it emerged he had not told the truth about his meetings with the Russian ambassador to Washington.
Last week, the head of the FBI, James Comey, told a hearing at the US Congress that Putin may have decided to help Trump win the election because of his hatred for his opponent, Democratic candidate Hillary Clinton.
NBC quoted Attorney-general Costas Clerides as saying that the anti-money laundering unit had handed information about Manafort’s financial activities to US Treasury investigators.
In a statement to the Cyprus Business Mail, he said that his office was not investigating the case.
The complete NBC report is here.