Russian Money Talks. America Was All Ears.

A rekindled nuclear scandal shows how Russia exports corruption to the West.

The biggest Russian threat to Western insti­tu­tions does­n’t come from dis­in­for­ma­tion or the clever use of social net­works but from a cer­tain kind of mon­ey that, by its very nature, cor­rupts every­thing it touch­es. To under­stand how that works, it’s worth re-exam­in­ing a ura­ni­um sto­ry that has resur­faced as part of the U.S. polit­i­cal debate after Washington, D.C. pub­li­ca­tion The Hill ran an arti­cle about it on Tuesday.

The arti­cle, which prompt­ed the Senate Judiciary Committee to open a probe into “Russian nuclear bribery,” recounts how the Obama admin­is­tra­tion approved the sale of Uranium One, a Canadian com­pa­ny with some U.S. min­ing assets, to Russian state-owned nuclear pow­er monop­oly Rosatom, despite an ongo­ing Federal Bureau of Investigation cor­rup­tion probe into the activ­i­ties of a Rosatom offi­cial in the U.S. The Uranium One case and the bribery case of the offi­cial, Vadim Mikerin, were report­ed by the media sep­a­rate­ly but it’s the link­ing of the two by The Hill that has caused a ruckus.

Tenam, the com­pa­ny Mikerin set up and ran in the U.S., is a sub­sidiary of Rosatom’s for­eign trade arm, known out­side Russia as Tenex. Vadim Zhivov, who became pres­i­dent of Uranium One after Rosatom assumed con­trol in three sep­a­rate deals between 2009 and 2013, was also deputy head of Tenex and might have run the com­pa­ny had he been will­ing to give up his Canadian dual cit­i­zen­ship. Mikerin, the son of a Soviet deputy min­is­ter for nuclear ener­gy, had only ever worked in the Rosatom-Tenex sys­tem, which he knew inside out and, it turned out, exploit­ed for per­son­al profit.

When Rosatom decid­ed in 2010 to acquire Uranium One and applied to the Committee on Foreign Investment in the U.S. (Cfius) for approval, Mikerin was the top Rosatom offi­cial in the U.S. Though his pri­ma­ry respon­si­bil­i­ty was to facil­i­tate the sales of Russian ura­ni­um to U.S. pow­er plants, it’s like­ly he was involved in plan­ning the Uranium One pur­chase. Mikerin was under an FBI inves­ti­ga­tion for offer­ing a U.S. busi­ness­man a con­sult­ing con­tract in exchange for kick­backs; the American went to the author­i­ties and was allowed to pay the kick­backs as the FBI and the Department of Energy watched and record­ed everything.

Along the way, they dis­cov­ered that Mikerin also received kick­backs from U.S. com­pa­nies involved in the trans­porta­tion of Russian ura­ni­um in the U.S., and that he appar­ent­ly shared the mon­ey — in cash — with his Rosatom supe­ri­ors when they vis­it­ed. Some of that was known to gov­ern­ment agents before Cfius approved the Uranium One deal, but, appar­ent­ly, it nev­er come up in dis­cus­sions, though Attorney General Eric Holder was on the committee.

Bill and Hillary Clinton in 2016. (Getty)

Secretary of State Hillary Clinton also sat on the com­mit­tee. By the time of the Uranium One deci­sion, the char­i­ta­ble foun­da­tion run by her hus­band Bill Clinton had received, but not ful­ly dis­closed, hun­dreds of thou­sands of dol­lars in dona­tions from a Uranium One share­hold­er and for­mer cha­ri­man, Ian Telfer, who stood to ben­e­fit from a gen­er­ous Rosatom offer of a pre­mi­um to the stock price. In June, 2010, when Rosatom made known its inter­est in con­trol­ling Uranium One, Bill Clinton received $500,000 for a speech orga­nized by Renaissance Capital, a Russian invest­ment bank that was talk­ing up Uranium One shares.

Ostensibly, these were all unre­lat­ed events: A kick­back probe into the work of a Rosaton offi­cial in the U.S.; Rosatom’s bid for Uranium One and for U.S. approval of the deal; Bill Clinton’s fundrais­ing. No one has man­aged to con­nect the dots con­vinc­ing­ly, since there was no for­mal link between Mikerin and Uranium One, Hillary Clinton main­tained she’d done noth­ing to expe­dite the deal, and Telfer insist­ed he’d nev­er talked to her about it.

Russia, how­ev­er, is a land of mag­ic. Whatever hap­pened in Washington in 2010, Rosatom end­ed up own­ing Uranium One. In 2016, it made an oper­at­ing prof­it of $67.8 mil­lion on $314.6 in revenue.

When Mikerin was final­ly arrest­ed in 2014, some four years after gov­ern­ment agents had proof of his kick­back schemes, Rosatom said the arrest could be “polit­i­cal­ly moti­vat­ed.” But the Russian gov­ern­ment did­n’t see much pro­pa­gan­da val­ue in his case; in 2015, he was qui­et­ly sen­tenced to four years’ impris­on­ment in a plea deal and the U.S. gov­ern­ment recov­ered $2.1 mil­lion in ill-got­ten gains from him.

The sto­ry of tox­ic Russian mon­ey — gov­ern­ment mon­ey han­dled by crooked offi­cials and the prof­its they make from it — is, how­ev­er, all about con­nect­ing the dots. For exam­ple, one of the com­pa­nies the U.S. court was told Mikerin used to receive kick­backs, the now-defunct U.K.-based Leila Global Limited, was part of a net­work of firms osten­si­bly con­trolled by Latvians Erik Vanagels and Stan Gorin. The com­pa­ny that owned Black Sea Cable — the only Ukrainian asset polit­i­cal con­sul­tant Paul Manafort attempt­ed to buy as part of an invest­ment project with Russian bil­lion­aire Oleg Deripaska — belonged to the same net­work, as did the firm to which own­er­ship revert­ed after the Manafort deal appar­ent­ly fell through.

The post-Soviet mon­ey web is there for any inter­est­ed agency to inves­ti­gate. So far, how­ev­er, it’s main­ly inves­tiga­tive jour­nal­ists who man­age to con­nect a few dots every once in a while.

As for the tox­ic mon­ey, it keeps cir­cu­lat­ing, car­ry­ing the cor­rup­tion virus to osten­si­bly unre­lat­ed parts of Western eco­nom­ic and polit­i­cal sys­tems. Sometimes, tiny amounts are recov­ered by the author­i­ties: the $2.1 mil­lion in the Mikerin case or the $5.9 mil­lion in the Prevezon case, relat­ed to a mas­sive Russian tax scam. The defen­dant in that case, Denis Katsyv, had hired Natalya Veselnitskaya, the lawyer who famous­ly met with with Manafort and Donald Trump’s son last year. With bil­lions of mis­ap­pro­pri­at­ed or mis­han­dled Russian mon­ey flow­ing through Western finan­cial sys­tems, such recov­er­ies are mock­ing­ly inadequate.

To get at Russian inter­fer­ence in Western pol­i­tics, Western nations must work dili­gent­ly at unrav­el­ing the shell com­pa­nies and net­works and keep fol­low­ing the mon­ey. They need to start ask­ing ques­tions about appar­ent­ly unre­lat­ed events that lead to Kremlin-favored out­comes. And they need to take a long, hard look at state-con­trolled Russian busi­ness enti­ties oper­at­ing in the West.

It’s a hard­er path than exam­in­ing Russian state TV pro­grams for pro­pa­gan­da and perus­ing Facebook for signs of inter­fer­ence. It is, how­ev­er, the only way to get at real, effec­tive Russian influ­ence and at Western politi­cians entan­gled in the cor­rupt web the Kremlin has spun. In the U.S., they’re like­ly to be a bipar­ti­san bunch: President Vladimir Putin’s Russia is com­mer­cial­ly, not ide­o­log­i­cal­ly motivated.

This col­umn does not nec­es­sar­i­ly reflect the opin­ion of the edi­to­r­i­al board or Bloomberg LP and its owners.


To con­tact the author of this story:
Leonid Bershidsky at

To con­tact the edi­tor respon­si­ble for this story:
Therese Raphael at

Russian Money Talks. America Was All Ears