By John Helmer, Moscow
Oleg Deripaska’s courtroom defence against the multi-billion dollar claim by his former patron and business partner, Mikhail Chernoy (Michael Cherney) collapsed into lawyer malfeasance and retraction of charges in federal US district court in New York last week.
A leak to the Rupert Murdoch-owned New York Post, published on March 26, has also triggered pending action for contempt of court. This relates to peddling on Deripaska’s part, publication on the Post’s part, of false allegations contained in a court filing which Deripaska was obliged to withdraw, and which was then placed under US court seal.
Across the Atlantic, Cherney’s five-year long battle to have the UK High Court adjudicate his contract and trust agreement with Deripaska for a 13% shareholding in Rusal, plus accumulated dividends, profit shares, and other costs, goes to trial in London in June.
After years of telling the press, and signing affidavits to his bank lenders that his business relationship with Cherney wasn’t what the evidence now proves it to have been; and after experts have found that Deripaska’s signature on Cherney’s primary evidence is genuine, Deripaska’s last defence is that he signed under duress. That defence rests in turn on claims that Deripaska was the guileless victim of a Russian gangland conspiracy to extort protection money.
After the High Court has ruled to reject preliminary claims on that score, and after the principal, Anton Malevsky, in the gangland conspiracy story turns out to have been closer to Deripaska than Cherney, Deripaska’s lawyers have attempted to gather evidence from a New York-based real estate developer and hotelier named Arik Kislin (right).
On March 9, Judd Spray, acting in New York for Quinn Emanuel, Deripaska’s lawyers in London and New York in the Cherney case, filed an application in the US District Court for the Eastern District of New York (Brooklyn). The docket is 1:12-mc-00186-JBW. The last three initials stand for Judge Jack Weinstein, the presiding judge in the case.
The application alleged that Arik Kislin had been part of a gangland conspiracy with Malevsky (now dead); that Kislin had also been in metal trading business with Cherney; and that by association he was likely to have been knowingly guilty of offences which Deripaska wants to tie to the reputation of Cherney in the High Court. Spray asked for a US court order to compel “discovery from Arik Kislin for use in an action pending in the High Court of Justice”; in short, to answer questions and provide testimony for use in Deripaska’s defence in London.
The offences, allegedly dating back for more than a decade, are grave enough for the Federal Bureau of Investigation (FBI) and the US District Attorney in New York to pursue, indict and prosecute Kislin. Only that hasn’t happened. Instead, the FBI has accused Deripaska and barred him from holding US visa to enter the US. The Swiss Federal Court has also investigated the allegations and rejected them as unsubstantiated gossip recycled in the media. The Swiss judgement has been accepted in the UK High Court as support for Cherney’s defence that Deripaska has been spreading the gangland and mobster calumnies and anathemas as his defence for breaking his contract with Cherney.
In proceedings in Germany and in Spain, Deripaska’s campaign has boomeranged; he himself has been named a suspect in the offences he has alleged against Cherney.
Lisa Cohen, Kislin’s attorney in Manhattan, a specialist in Russian law and the racketeering statute in the US, replied to the US court that the application should be withdrawn because the allegations were unfounded, false, and defamatory of Kislin. Her reply counter-charges that Deripaska and attorney Spray were on the courtroom equivalent of a fishing expedition using dynamite.
On March 14 Spray asked the court to retract his application and the claims against Kislin. Because they were false and defamatory, according to Cohen, Judge Weinstein ordered that the entire application dossier be sealed, thereby preventing their publication. That was on March 16.
Despite the retraction of the allegations against Kislin and Cherney, Deripaska’s allegations leaked to a reporter for the New York Post named Mitchel Maddux. He then reported the story on March 26, ten days after the court had ordered the sealing.
Maddux’s report claims “lawyers in London wanted Kislin to hand over documents they claimed would prove Cherney has involvement in Russian organized crime”. The report omits to report that the lawyers were Spray and others working for Deripaska. More importantly, Maddux failed to report that the entire process launched against Kislin had been abandoned by Spray, and dismissed by the judge. Maddux and the Post editors knew, or ought to have known, this. Their publication, attacking Kislin and Cherney, was an offence itself, according to lawyers close to the case. They hint that a complaint of contempt of court by Kislin against the Deripaska squad is in process.
Spray (right), who has an office in Manhattan, acknowledges that he withdrew Deripaska’s application and the judge dismissed the case. He refuses to answer questions about the publicly recorded dates of the Deripaska application and of its withdrawal from the court while he “consults” with his colleagues in London. He is also not providing a copy of the application or his client’s allegations. Asked for the reason for the withdrawal of the application to take Kislin’s testimony, Spray is mute.
From the court’s Brooklyn office, Spray’s letter to Judge Weinstein, dated March 14, and hand-delivered, reveals that “because counsel for Mr Kislin has informed us that Mr Kislin finds certain of the assertions made in support of our application objectionable, we hereby request that the papers in support of our application be sealed.” A US attorney with experience in Russian racketeering cases says this, and the judge’s seal order, are highly unusual. “Generally speaking,” he says, “pleadings should not be sealed.”
According to Cohen for Kislin, “the allegations published by the Post are outrageous and false. There was an application and it was unfounded. For that reason it was withdrawn almost immediately. The newspaper didn’t publish this.”
Maddux conceded in his New York Post report that “Kislin is not charged with any wrongdoing, but allegations about his activities are emerging in a massive civil suit in London pitting Russian metals oligarch Oleg Deripaska against Cherney in an ownership struggle over the world’s largest aluminum producer, Rusal.”
Maddux was asked whether the evidence of wrongdoing he alleged against Kislin and Cherney had come from the application by Deripaska’s lawyers in the Manhattan federal court. Maddux responded but off the record.
Maddux, a court reporter for the tabloid, is supervised by Neil Sloane, the courts editor at the Post; Richard Wilner, the business editor; and Joe Rabinowitz, the managing editor for news. The newspaper’s files reveal that Maddux has not reported before on Deripaska or on Kislin.
Three reports by the Post going back to 1999 refer to other media coverage of Arik Kislin’s uncle, Semyon (Sam) Kislin (right), and identical allegations are reported there about the uncle.
At the time, the newspaper reported the then Mayor of New York, Rudolf Giulani, a former prosecutor of gangsters in New York, as saying about the allegations: “I know Mr. [Sam] Kislin. I know his wife. I’m not aware of any of the allegations involving them. I think the report is wishful thinking on the part of the people who are trying to put it out.”
Maddux doesn’t report that Deripaska retracted his allegations. He also claims as source for the allegations “a 1994 FBI intelligence report”. But Maddux appears to have been cribbing from the backfile of his own newspaper. That reveals the Post was repeating claims about the FBI report which had already appeared in other media, and had no direct access itself to the FBI document.
This may also be the reason why Maddux confused the Kislin whom the Post reported in 1999 was the FBI report’s subject, and the Kislin who is the target of Deripaska’s allegations. The former was Semyon (Sam) Kislin; the latter is Arik Kislin, a nephew.
Another confusion of names also appears between Maddux’s report of March 26 and the 1999 publications by the Post. In the earlier reports, the FBI was said to have identified Vyacheslav Ivankov as its Russian gangster target (right, above). Known as Yaponchik, Ivankov was in prison in the US at the time. He was assassinated in Moscow ten years later in 2009.
In Deripaska’s claims and Maddux’s report this week, Anton Malevsky is the target. He died in a sky-diving accident in 2001.
In 1999 the Post also reported a former FBI agent and specialist in Russian mobsters in the US as flatly denying the allegations against Sam Kislin: ” “I personally can tell you there were no ties to Sam Kislin,” said [Joel] Bartow, a private investigator who was hired by Kislin. Bartow is also on retainer to Kislin’s law firm, Rosenman & Colin.”
Today the Post editors, Sloane, Wilner and Rabinowitz refuse to explain how the newspaper came to publish allegations from a document under court seal which had been retracted well before publication. A source close to the newspaper claims in its justification that Deripaska’s allegations were publicly accessible in the court files from March 9, when they were first filed. But the Post didn’t report them between then and March 16, when Judge Weinstein issued the gag.
Sloane, Wilner and Rabinowitz were asked: “supposing your newspaper knew, or ought to have known of the March 16 seal order requiring non-publication of the particulars of the application by Mr Deripaska, especially the allegations against Mr [Arik] Kislin, does your newspaper take the position that it is not liable for contempt of court for violation of the Weinstein gag?” They have yet to reply.
A source close to the Deripaska defence team in London conceded the New York attempt has been “a sign of despair from Oleg’s side. His case and his line of defence are falling apart. His PR people commissioned an article that has shot him in the foot. Higher up maybe.”