It’s Official

It’s official: the British political establishment, Benjamin Netanyahu, Jay-Z, “Moscow” Mitch McConnell, and Greyhound totally suck.

But you knew that, right?

thevoima

The Brexit process has already claimed victims: communities such as Scunthorpe, which are suffering job losses and hardship due to Brexit-related industrial closures; migrant workers from EU countries who find their lives thrown into uncertainty and themselves and their families vilified. Their anger is more than justified. But, in addition to this, the Brexit process has produced a gloom, a feeling of powerlessness, of fear, of uncertainty, that is obviously affecting millions of people. I think this feeling is the product of an illusion that our enemies are powerful enough to decide our fate above our heads. It’s another version of the illusions of power that have engendered fear, obedience and subservience to elites for centuries. It’s an illusion, because they, too, are tormented by crisis. It makes them more ruthless, it throws up the zealots – but it doesn’t necessarily make them stronger. We – social movements, communities, workplace organisations, movements about climate change – can find, and are finding, ways to challenge these enemies. (The FcK Boris demonstration when the new government took office was a reminder of this.) This is not a plea for false hope. It’s a suggestion that we evaluate our enemies’ strengths and weaknesses carefully. And be prepared for surprises.
—Gabriel Levy, “Zealots and Ditherers,” People and Nature, 15 August 2019

Tlaib and Omar aren’t the first critics of Israel penalized by the 2017 law, but they are the most prominent. The law targets those who “actively, consistently and continuously” promote boycotts of Israel. It applies to those who hold senior-level positions in pro-boycott organizations, are key activists in the boycott movements, or are prominent public figures (members of Congress, for instance) who support a boycott. More than 20 groups have been blacklisted, including the Nobel Peace Prize–winning American Friends Services Committee. One notable case was the banning of Lara Alqasem, an American college student of Palestinian descent who received a visa to study human rights at Hebrew University but was ordered deported and detained for two weeks on suspicion of being a boycott supporter. Her deportation was later overturned.
—Joshua Keating, “Israel Banned Rashida Tlaib and Ilhan Omar Because They’re Anti-Trump, Not Anti-Israel,” Slate, 15 August 2019

In Mazur’s photo, Jay-Z’s right arm is pointed like an arrow. Goodell looks in the same direction, as does everyone else in the frame. It’s irresistible that way. What is Jay talking about, and why is everyone so rapt? Here’s a Brooklyn-born kid who made good, raised himself up from the projects, became one of the most recognizable names in pop music, and can now claim status as a self-made billionaire. It’s the kind of story you want to believe in. But then you stare a beat longer, holding your gaze, and the mirage begins to wither.

Illusion works both ways: It’s as much about who is in the photo as who isn’t. You ask yourself, Where is Kaepernick or Reid, the two players who sparked the protest? Why are other players who’ve since scrutinized the league, especially those who comprise the Players Coalition, absent from the meeting? That’s the danger in illusion, especially one cast by the NFL. Even though one might see through its hollow spectacle, there’s little to be done to break its spell. Jay-Z commands attention and everyone looks on, ghostly captivated. His arm stretches into an unknowable future. There are those who will follow, and others, who will rightly wonder: Is this the right direction?
—Jason Parham, “Depth of Field: Where Is Jay-Z Taking the NFL?” Wired, 15 August 2019

In January, as the Senate debated whether to permit the Trump administration to lift sanctions on Russia’s largest aluminum producer, two men with millions of dollars riding on the outcome met for dinner at a restaurant in Zurich.

On one side of the table sat the head of sales for Rusal, the Russian aluminum producer that would benefit most immediately from a favorable Senate vote. The U.S. government had imposed sanctions on Rusal as part of a campaign to punish Russia for “malign activity around the globe,” including attempts to sway the 2016 presidential election.

On the other side sat Craig Bouchard, an American entrepreneur who had gained favor with officials in Kentucky, the home state of Senate Majority Leader Mitch McConnell. Bouchard was trying to build the first new aluminum-rolling mill in the United States in nearly four decades, in a corner of northeastern Kentucky ravaged by job losses and the opioid epidemic — a project that stood to benefit enormously if Rusal were able to get involved.

The men did not discuss the Senate debate that night at dinner, Bouchard said in an interview, describing it as an amicable introductory chat.

But the timing of their meeting shows how much a major venture in McConnell’s home state had riding on the Democratic-backed effort in January to keep sanctions in place.

By the next day, McConnell had successfully blocked the bill, despite the defection of 11 Republicans.

Within weeks, the U.S. government had formally lifted sanctions on Rusal, citing a deal with the company that reduced the ownership interest of its Kremlin-linked founder, Oleg Deripaska. And three months later, Rusal announced plans for an extraordinary partnership with Bouchard’s company, providing $200 million in capital to buy a 40 percent stake in the new aluminum plant in Ashland, Ky. — a project Gov. Matt Bevin (R) boasted was “as significant as any economic deal ever made in the history of Kentucky.”

A spokesman for McConnell said the majority leader did not know that Bouchard had hopes of a deal with Rusal at the time McConnell led the Senate effort to end the sanctions, citing the recommendation of Treasury Secretary Steven Mnuchin.

McConnell “was not aware of any potential Russian investor before the vote,” spokesman David Popp said.

Bouchard said no one from his company, Braidy Industries, told anyone in the U.S. government that lifting sanctions could help advance the project. Rusal’s parent company, EN+, said in a statement that the Kentucky project played no role in the company’s vigorous lobbying campaign to persuade U.S. officials to do away with sanctions.

But critics said the timing is disturbing.

“It is shocking how blatantly transactional this arrangement looks,” said Michael McFaul, who served as the U.S. ambassador to Russia during the Obama administration and now teaches at Stanford University.

Democratic senators have called for a government review of the deal, prompting a Rusal executive in Moscow last week to threaten to pull out of the investment.
—Tom Hamburger and Rosalind S. Helderman, “How a McConnell-Backed Effort to Lift Russian Sanctions Boosted a Kentucky Project,” Washington Post, 14 August 2019

Throughout the country, people rely on Greyhound to get to work, visit family, or to simply travel freely. But Greyhound has been letting Border Patrol board its buses to question and arrest passengers without a warrant or any suspicion of wrongdoing. The company is throwing its loyal customers under the bus.

For more than a year, we’ve been urging Greyhound to stop letting Border Patrol board its buses, but the company is refusing to issue a policy protecting its customers. So now we’re taking our fight to the next level.

Greyhound is owned by FirstGroup plc, a multi-national transport group based in the UK, whose own Code of Ethics and Corporate Responsibility contradicts what its subsidiary has been doing to passengers.

“We are committed to recognising human rights on a global basis. We have a zero-tolerance approach to any violations within our company or by business partners.”

Greyhound’s complicity in the Trump deportation machine is a clear violation of the human rights values that FirstGroup professes to uphold. We must raise our voices: Sign the petition to demand that FirstGroup direct Greyhound to comply with its code of ethics. Greyhound must stop throwing customers under the bus.
—ACLU: Buses Are No Place for Border Patrol

Image courtesy of The Voima

The Annals of PreCrime: “An Absolute Nightmare”

precriminals.jpegUnder legislation currently tabled in the Russian parliament, these up-and-coming Russian businesswomen could do hard time in a penal colony for the wholly fanciful crime of “complying” with western sanctions against target businesses and individuals. Image courtesy of Credit Bank of Moscow

Sanctions Victims Refuse the Russian State’s Protection
Big Business Categorically Rejects Adopting Law on Anti-Sanctions
Yelizaveta Bazanova, Anna Kholyavko and Yekaterina Burlakova
Vedomosti
May 16, 2018

“An absolute nightmare”: that was the phrase used by the majority of lawyers and executives of Russian and foreign companies whom we asked to comment on plans to imprison people who “implemented” foreign sanctions. On Monday, a law bill to this effect, tabled by State Duma Speaker Vyacheslav Volodin, Federation Council Speaker Valentina Matviyenko, and leaders of all four parliamentary factions was passed in its first reading. The second reading has been scheduled for Thursday.

Under the law bill, if a company refuses to sign a public contract with an entity on the sanctions list, the company and its executives would be threatened with a maximum fine of ₽600,000 [approx. €8,200] and a maximum prison term of four years.

The board of the Russian Union of Industrialists and Entrepreneurs (RSPP) has decided passage of the law would be completely unacceptable. Companies would find themselves between the frying pan and the fire: violations of sanctions would threaten them with secondary sanctions, while complying with sanctions would make them criminally prosecutable in Russia.

The RSPP’s resolution was supported even by board members who had themselves been sanctioned.

“We believe it would cause further damage to the Russian economy, including business with foreign and Russian companies, and both Comrade Vekselberg [Renova Group Chair Viktor Vekselberg] and I voted for the resolution,” Interfax has quoted VTB Bank president Andrei Kostin as saying.

A spokesperson for Vekselberg did not respond to our questions. We were also unable to contact a spokesperson for Oleg Deripaska, another target of western sanctions, yesterday evening.

If passed, the law would be unlikely to have a considerable impact on how businesses operate, but it could be a means of threatening and pressuring them, the entrepreneurs we surveyed said unanimously. The wording of the law bill is harsh. Nearly anyone could be prosecuted on the flimsiest of pretexts, complained an executive at a transnational food producer.

The key risk is the absence of clear criteria for defining what would constitute a violation of the proposed law, our sources all agreed. Even the Russian Finance Ministry could be prosecuted. In its Eurobonds prospectus, it pledged not to use the funds raised to support entities targeted by western sanctions. In January, Alfa Bank warned Russian defense companies it would not handle their accounts due to sanctions. Spokespeople for the Finance Ministry and Alfa Bank did not respond to our inquiries.

The Kremlin has also been unhappy with the law bill, said a federal official close to the presidential administration.

The law bill, if passed, would also generate risks for those companies who refuse to do business in Crimea due to sanctions, said Alexei Panich, a partner at Herbert Smith Freehills. These include the state banks Sberbank and VTB, as well as mobile telecom operators. Andrei Isayev, deputy head of the State Duma’s United Russia faction, claimed  companies who do not open branches in Crimea would not be affected by the law. What was at stake, he said, were the ordinary deals and transactions companies perform almost automatically. However, refusal to do business with counterparts in Crimea could be considered a criminal offense under the terms of the law, said an attorney at a major international law firm. The law could complicate public offerings, the issuing of loans, and contracts and transactions, he specified.

An employee at a major international firm explained it would be hard to determine whether a company refused a deal with a counterpart due to their bad reputation or the threat of sanctions. An auto dealer agreed the threat of criminal prosecution would be powerful leverage. To encourage its partners to agree to a deal, a business could threaten to report them to law enforcement agencies, argued Panich.

The proposed measures were excessive, agreed a spokesperson for an agricultural commodities trader. Some companies have in-house rules restricting such deals. Our source said the law bill appeared to be means of coercing such companies. Theoretically, it could be used as leverage. A company or person on the Specially Designated Nationals And Blocked Persons List (SDN) could show up and demand another company do business with them, agreed the head of major private bank. It was difficult to imagine how banks would solve such dilemmas, he said.

“There are many ambiguities in how the law would be interpreted, and what specific actions or inactions would be punishable,” he concluded.

Foreign businesses could interpret the law bill as a signal it was time to wrap up their operations in Russia, said the vice-president of a major foreign company that produces popular consumer products. No one has any intention of sacrificing their top executives to the Russian law enforcement and judicial system.

All issuers of bonds include in their covenants the refusal to do business with entities targeted by sanctions. Perhaps expatriates who do not want to take risks would leave the country, argued an employee at a large foreign company.

Passing the bill into law would be a mistake, said political scientist Yevgeny Minchenko. The law would have to be seriously amended over time.

“Knowing how this could affect both Russian companies and foreign business operating in Russia, this is very risky decision in my opinion,” Minchenko told us.

Spokespeople for Sberbank and Credit Bank of Moscow declined to comment.

With additional reporting by Vladimir Shtanov, Darya Borisyak, Alexandra Astapenko, and Svetlana Bocharova

Translated by the Russian Reader

Nice Work If You Can Get It

Oleg Derispaska
Oleg Deripaska. Photo courtesy of deripaska.com

“I believe that it takes just 100 people to change a country for the better provided that these people are driven professionals capable of creating something new. I am sure that in Russia there are far more than 100 such people, so let’s join forces and work together.”
Oleg Deripaska

_________

Deripaska’s Company Releases Sales Figures for “Olympic” Apartments
Natalya Derbysheva
RBC
May 27, 2016

sochi-olympic village marina
Mockup of the Sochi Olympic Village’s Coastal Cluster. Photo: Andrei Golovanov and Sergei Kivrin/TASS

Oleg Deripaska’s company RogSibAl has sold 20% of the luxury apartments it built on the Black Sea coast in Sochi for the Winter Olympics. The company believes this is a good result. 

RogSibAl, a subsidiary of Oleg Deripaska’s Basic Element, built 2,700 luxury  apartments on the Black Sea coast for the 2014 Winter Olympics in Sochi. Athletes lived in the apartments during the competition. According to Vnesheconombank, the project’s budget was 25.3 billion rubles, 22.3 billion rubles of which RogSibAl borrowed from Vnesheconombank.

The coastal Olympic Village is now known as the Imereti Resort District. It consists of four quarters, the Coastal Quarter, the Maritime Quarter, the Park Quarter, and the Reserve Quarter. Apartments are available for purchase in all four quarters. The price per square meter ranges from 152,000 rubles to 195,00 rubles [approx. 2,070 euro to 2,650 euros per square meter—TRR].

Since the apartments went on sale in 2013, 20% of them have been sold, a Basic Element spokesman told RBC, meaning that over 500 apartments in all have been sold. Basic Element’s spokesman added that the company had sold 118 apartments from January to May 2016.  The company plans to have sold 350 apartments for a total area of 25,000 square meters on the year.

Basic Element has been renting out the unsold apartments. According to the company’s spokesperson, the rental demand for the 2016 summer season is 97–100%.

The sales figures are worse than what Basic Element had planned in 2011. Igor Yevtushevsky, RogSibAl’s general director, had then told Vedomosti that the company was planning to sell 50% of the apartments before the start of the Olympics, and the other half in 2014–2015.

Basic Element’s spokesman said it would be unfair to compare current sales figures with projections made in 2011.

“The project has undergone big changes,” he explained.

The company cites data from the MACON Realty Group, according to which 387 business- and luxury-class real estate transactions were concluded in Sochi from January to May 2016, meaning that the Imereti District’s share of this business was 23%.

The government has discussed the conditions of restructuring the loans issued by Vnesheconombank for building Olympic sites, RBC’s sources told it earlier this week. A federal official explained that Deripaska’s companies were in the most complicated circumstances in terms of loans, since the demand for apartments was not great.

Sochi Olympic Village. Photo courtesy of Nikita Kulachenkov
Sochi Olympic Village. Photo courtesy of Nikita Kulachenkov

Basic Element has not disclosed the figures of the income from its sales of the properties. Its spokesman did say, however, that all the proceeds were being wholly turned over to Vnesheconombank in repayment of the loan and that RogSibAl had been fulfilling all its obligations to the bank.

Given that sales usually begin at the design and construction stage of a property, 20% sales in the second year after a property has been operation is hardly satisfactory, argues Marina Udachina, director of the Institute for Innovations, Infrastructure and Investments. According to her, the situation is partly due to a slowdown in economic growth and a reduction in the demand for luxury properties.

__________

Nikita Kulachenkov
Facebook
May 27, 2016

Only 20% of the apartments in the Olympic Village have been sold in two years.

Here is what we wrote about this a month before the Games:

“The site is being built by oligarch Oleg Deripaska, one of the few private investors in the Olympics. Only he is building with public money. Twenty-two of the twenty-five billion rubles in the project’s budget has been secured with a loan from state-owned Vnesheconombank. Derispaska’s company is planning to pay back this money by selling the village as a residential complex after the Games. It will be hard for them to find buyers. A single bed in the village costs as much as a two-room flat in Moscow.”

Of course, the crisis, sanctions, and being “surrounded by enemies” have inevitably led to a drop in demand for fairly pricey holiday apartments. On the other hand, this was offset by the fact that demand was supposed to shift to the domestic market from Greece, Cyprus, Turkey, and other countries where housing had become almost twice as expensive for Russians.

As a result, sales did not take off, which is a pity. I know that after the Games a good person, familiar to a lot of my people on my wall, worked on the project.

We can also add to this news the latest about Sberbank, which after agonizing for a long time has today finally sold the Mountain Carousel ski resort on the installment plan to the former governor and current minister Tkachyov* and his young but quite talented son-in-law. The joke there is that Sberbank invested 25 billion rubles into Mountain Carousel, while Vnesheconombank loaned it 55 billion rubles. Vnesheconombank fiercely resisted the sale, because it is one thing when Sberbank is in hock to you to the tune of 55 billion rubles, and quite another when it is Tkachyov and family. Apparently, Gref is tougher and stronger than the moribund Vnesheconombank, although it does not make our lives any easier.

Since for some reason business has not been booming at nearly all the former Olympic sites, the government has authorized the repayment of Olympic loans over a period of 25 years at a reduced 5% interest rate. And to keep Vnesheconombank from kicking the bucket altogether, the Finance Ministry will give it another 150 billion rubles straight from our pockets.

I probably do not need to remind you of the total amount that we, the taxpayers of the Russian Federation, paid for the construction of all these “great power” bells and whistles.

P.S. I’m going to do a little populism practice. Anyone in Russia want a twenty-five-year mortgage at five-percent interest? Ask Tkachyov, Potanin, Deripaska, and Vekselberg “how.” )))

Translated by the Russian Reader. Thanks to Alexei Navalny for the heads-up. This post should be read in tandem with my post for May 25, 2016, “The Decline Has Gone Uphill.”

* On August 2, 2012, Tkachyov announced plans to deploy a paramilitary force of Cossacks in Krasnodar Krai, beginning September 2012, as vigilantes to discourage internal immigration by Muslim Russians. In a speech to police, he stated, “What you can’t do, the Cossacks can. We have no other way—we shall stamp it out, instill order; we shall demand paperwork and enforce migration policies.”

Source: Wikipedia, New York Times