Anti-frack­ers ex­ploited for Rus­sia’s gain

Shell com­pany in Ber­muda sus­pected of mov­ing money

The Washington Times Weekly - - Politics - BY DAN BOYLAN

Rus­sia’s pro­pa­ganda schemes and shell com­pa­nies are so com­plex that in­ves­ti­ga­tors call them “ma­tryoshkas” for the Rus­sian nest­ing dolls that hide one in­side the other. Capi­tol Hill law­mak­ers say they are now wrestling with one that ap­pears to have twisted Amer­i­can oil and gas pol­icy in Moscow’s fa­vor.

Adding fresh in­trigue to the mul­ti­ple Rus­sia probes un­der­way across Wash­ing­ton, top Repub­li­can law­mak­ers are de­mand­ing that the Trump ad­min­is­tra­tion im­me­di­ately in­ves­ti­gate a Ber­muda-based shell com­pany with sus­pected Krem­lin ties that is ac­cused of work­ing in the shad­ows to move mil­lions of dol­lars to anti-frack­ing ac­tivists across the U.S.

Capi­tol Hill in­ves­ti­ga­tors say the Ber­muda frack­ing case un­der­scores the com­plex­ity of re­cent Rus­sian in­flu­ence op­er­a­tions that at­tempt to use Amer­i­cans as pawns in money laun­der­ing or pro­pa­ganda schemes.

“If you con­nect the dots, it is clear that Rus­sia is fund­ing U.S. en­vi­ron­men­tal groups in an ef­fort to sup­press our do­mes­tic oil and gas in­dus­try, specif­i­cally hy­draulic frack­ing,” Rep. Lamar Smith, Repub­li­can Texas, said in a state­ment.

The frack­ing rev­e­la­tions dove­tail with a re­cently de­clas­si­fied re­port from the Of­fice of the Di­rec­tor of Na­tional In­tel­li­gence that con­cluded that Rus­sia’s state-owned me­dia out­let Rus­sia To­day, or RT, also en­gaged in a vig­or­ous anti-frack­ing cam­paign to ben­e­fit the lead­ing Rus­sian state-owned en­ergy firm Gazprom.

In re­cent years, NATO chiefs have crit­i­cized Rus­sia for con­spir­ing to un­der­mine tech­nol­ogy in Europe by sup­port­ing anti-frack­ing pro­test­ers in Ro­ma­nia and Bul­garia. For­mer NATO Sec­re­tary-Gen­eral An­ders Fogh Ras­mussen has claimed Rus­sian Pres­i­dent Vladimir Putin was be­hind the ef­forts.

Frack­ing in­volves blast­ing shale rock with wa­ter, sand and chem­i­cals to re­lease trapped nat­u­ral gas. Al­though it has led to a boom in U.S. gas pro­duc­tion, en­vi­ron­men­tal groups have voiced op­po­si­tion, say­ing it con­trib­utes to global warm­ing.

Rus­sia has aligned it­self with the an­tifrack­ing move­ment for fear that ag­gres­sive U.S. frack­ing will cut into Moscow’s global gas prof­its, an­a­lysts say.

An in­ves­ti­ga­tor speak­ing to The Wash­ing­ton Times on the con­di­tion of anonymity for se­cu­rity rea­sons said Moscow does not care whether it’s us­ing Democrats or Repub­li­cans in an in­flu­ence cam­paign.

“The Krem­lin seeks to in­flu­ence Amer­i­can de­bate in ways that look nat­u­ral,” the in­ves­ti­ga­tor said. “To do this, they use what we call ‘use­ful id­iots,’ or peo­ple who are un­aware they are be­ing used.”

Shell com­pa­nies

On Capi­tol Hill, wor­ries over the Rus­sian anti-frack­ing scheme led Mr. Smith, who chairs the House Com­mit­tee on Sci­ence, Space and Tech­nol­ogy, to send a let­ter late last month to Trea­sury Sec­re­tary Steve Mnuchin.

The six-page let­ter asks Trea­sury of­fi­cials to in­ves­ti­gate “what ap­pears to be a con­certed ef­fort by for­eign en­ti­ties to fun­nel mil­lions of dol­lars through var­i­ous non­profit en­ti­ties to in­flu­ence the U.S. en­ergy mar­ket.”

Co-signed by Rep. Randy K. Weber Sr., Texas Repub­li­can, the let­ter tar­gets the San Fran­cisco-based en­vi­ron­men­tal group the Sea Change Foun­da­tion, which is al­leged to have taken $23 mil­lion in 2010 and 2011 from Ber­muda-based shell com­pany Klein Ltd., which re­port­edly has ties to Rus­sian oli­garchs.

Ac­cord­ing to IRS doc­u­ments, Sea Change Foun­da­tion is a 501(c)(3) pri­vate foun­da­tion.

Af­ter re­ceiv­ing funds from Ber­muda, Sea Change is sus­pected of pass­ing mil­lions of dol­lars to U.S.-based en­vi­ron­men­tal groups op­posed to frack­ing, in­clud­ing the Nat­u­ral Re­sources De­fense Coun­cil, the Sierra Club and the League of Con­ser­va­tion Vot­ers.

Last week, Klein Ltd. re­sponded to the Capi­tol Hill ac­cu­sa­tions and de­nied fun­nel­ing Rus­sian money to en­vi­ron­men­tal groups.

“Our firm has rep­re­sented Klein since its in­cep­tion, and we can state cat­e­gor­i­cally that at no point did this phil­an­thropic or­ga­ni­za­tion re­ceive or ex­pend funds from Rus­sian sources or Rus­sian-con­nected sources and Klein has no Rus­sian con­nec­tion what­so­ever,” Klein at­tor­ney Rod­er­ick M. For­rest said in an email to The Times last week.

House in­ves­ti­ga­tors, led by Mr. Smith, be­lieve the scheme po­ten­tially vi­o­lates fed­eral statutes per­tain­ing to agents of for­eign gov­ern­ments or those lob­by­ing on be­half of do­mes­tic and for­eign in­ter­ests, but oth­ers on Capi­tol Hill are less sure. They note that pri­vate U.S. foun­da­tions may ac­cept for­eign con­tri­bu­tions and that Moscow might have ex­ploited that loop­hole in this par­tic­u­lar case.

The League of Con­ser­va­tion Vot­ers also de­nies all charges that it has any Krem­lin as­so­ci­a­tions.

“This seems like noth­ing more than an at­tempt at dis­trac­tion away from the Trump cam­paign’s well-pub­li­cized in­ter­ac­tions with Rus­sian in­ter­ests to in­flu­ence the elec­tion,” league spokesman David Wil­lett said in an email. “We have no con­nec­tions to Rus­sia and have been an ef­fec­tive ad­vo­cate for en­vi­ron­men­tal pro­tec­tion for over 45 years.”

Other en­vi­ron­men­tal groups have blasted the House Repub­li­cans’ call for an in­ves­ti­ga­tion as “pa­thetic,” and Klein in­sists all its work is le­gal and op­er­ates within Ber­muda’s strict reg­u­la­tions against money laun­der­ing.

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