By John Helmer, Moscow

Melchior Wathelet (lead image, left), the Advocate-General of the European Court in Luxembourg, publicly recommended on May 31 that the court should dismiss a challenge to the legality of European Union sanctions by the Russian state oil company Rosneft. Wathelet has a history of secret operations against Moscow. That history ought to have disqualified Wathelet from participating in the Rosneft case, lawyers at the court say. “He should have done so voluntarily,” one of the lawyers adds. “Instead, Wathelet, along with the Belgian President of the Court, Koen Lenaerts, have kept the past secret, allowing a serious conflict of interest to influence the outcome of the case.”

As the minister of justice in his native Belgium, Wathelet supervised the Belgian state security service, and officially participated himself over several years in NATO spying, military operations and propaganda schemes against Russia and the Soviet Union. Details of Wathelet’s involvement in NATO’s Operation Gladio were not known to Rosneft when Wathelet was assigned to the case. Rosneft’s Anglo-American law firm did not investigate Wathelet’s bacckgournd. Also, the law firm, Hage Joseph Aaronson, has kept from Rosneft the knowledge that one of their own lawyers was a long-serving officer in the US Defence Intelligence Agency.

Lawyers engaged in European Court cases in Luxembourg say they are astonished by the conflict of interest. “This case is hugely important,” said one source engaged in a parallel sanctions proceeding. “If Rosneft were to win, the legality of sanctions would collapse”. A London lawyer adds he is surprised that Rosneft management and its lawyers in Luxembourg failed to challenge Wathelet’s participation in the case.

Wathelet is not denying the information about his past involvement in NATO operations. He won’t explain why he and the presiding judge, Court President Koen Lenaerts, acted together to arrange his assessment of the Rosneft legal papers.
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by Editor - Wednesday, June 29th, 2016
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By John Helmer, Moscow

A week ago, Russia’s leading retailer of shoes, TsentrObuv (“Shoe Center”), was taken to the Moscow Arbitrazh Court by 99 plaintiffs, the largest group of creditors ever recorded against an insolvent business of TsentrObuv’s size and national name recognition. This is only the most recent claim to be filed against TsentrObuv and its associated companies. More than a thousand cases are pending in the arbitrazh court system nationwide.

The debts are owed to Chinese and Russian suppliers of the shoes which the TsentrObuv chain of shops has been selling. Some of the debts are owed to owners and agents for the lease of hundreds of shops; to construction companies for their fitting out; to freight delivery companies; to advertisers and employees; and to banks and trade finance houses. The debts have yet to be toted up by the court –appointed trustees; they are estimated in the trade at more than Rb29 billion – that’s $446 million.

Offshore in Cyprus, British Virgin Islands (BVI), Liechtenstein, Hong Kong, and Delaware (US), where a chain of entities has been passing the Russian cashflow of TsentrObuv through to company names and trusts controlled by the shoe group’s shareholders, the debts personally guaranteed to banks have been reported by the company at $143 million in US dollars and Euros, plus almost $270 million equivalent in roubles. That was in 2012. How much of these offshore debts is still owed is not known. Just one of the companies, Kalisto Business Corporation of BVI, was reported as owing $33.5 million about one year ago. Since then the shops have been closing down, the revenues plummeting, the number of creditors multiplying.

Sources at TsentrObuv’s headquarters in Moscow admit the group is in liquidation. But this is not a normal bankruptcy. Criminal investigations now under way in Moscow, Tomsk, Ryazan, and other cities and regions indicate that shareholders and managers of TsentrObuv have been looting the cash takings of the shops, along with loans from banks, and hiding the money offshore. Theirs has been no soft-shoe routine. Altogether, the TsentrObuv stealing scheme appears to have made off with at least half a billion dollars.

When President Vladimir Putin promised last week in St. Petersburg that the Kremlin is committed to “drastically reduce illegal criminal prosecutions”, he might have asked the Russians in the audience to look down at their shoes. If they came from TsentrObuv, the question to be asked of the Kremlin’s new “working group on law enforcement in entrepreneurial activity” is not how much prosecutors have done to protect the shoe market, but why they have done so little for so long. The affair of TsentrObuv puts the Kremlin shoe on the other foot.
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by Editor - Tuesday, June 28th, 2016
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By John Helmer, Moscow

Secret negotiations have been under way for some time between high German and Russian officials, to which Chancellor Angela Merkel has been excluded. Warned by US Assistant Secretary of State Victoria Nuland, and in a recent coded communication from outgoing President Barack Obama that she must act to save her authority, and enforce European Union sanctions against Russia, Merkel has also received an ultimatum from her cabinet and party. This was delivered in the form of a page torn out of an Old German bible in which a large black spot had been inked. Either she step aside in secret, Merkel understood the signal, or she will be forced to resign in public.
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by Editor - Friday, June 24th, 2016
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By John Helmer, Moscow

On November 15, 2015, I told you so.

“Since the US started the regime dominoes falling in Kiev in February 2014, the Polish regime has already toppled, and the French one is doomed – President Francois Hollande will be defeated by every one of the candidates now running to succeed him, including Marine Le Pen of the National Front. The British Prime Minister David Cameron can postpone his day of reckoning, but on the margins of Europe, not inside. The German Chancellor Angela Merkel has less time, fewer supporters. When Merkel topples, she will take the European Union (EU) into the shambles with her.”
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by Editor - Friday, June 24th, 2016
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By John Helmer, Moscow

In countries where sugar is grown as a consumer staple or for export, the stuff is proverbially blamed for the temptation to exaggerate and to steal. In Madagascar, they say “truth is like sugar cane. Even if you chew it for a long time, it is still sweet.” But in Malawi, they say: “ants die in sugar”. If this means you can chew too much on a good thing, that isn’t so in India. According to the Indian maxim, “stolen sugar is the sweetest.”

In the villages of western Russia – one of the world’s largest producers of beets — the proverbial wisdom doesn’t even recognize the sugar content of the crop. In fact, the villagers warn: “Shut up, you beets! Remember shchi is cooked with cabbage.”

On April 29, Ros Agro (ticker AGRO:LI), one of Russia’s largest sugar producers and one of the London market’s sweetest Russian stocks, suddenly went sour. Almost 5 million shares, a record number for a day’s trading in Ros Agro, were sold, causing a price collapse. Was Vadim Moshkovich, the control shareholder, selling? Moshkovich is not explaining. So which is it – a case of the stolen sugar of the Indian proverb, or a case of the familiar Russian soup?
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by Editor - Thursday, June 23rd, 2016
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By John Helmer, Moscow

Between August 9 and 12, 1941, taking their battleships in turn to meet in a Canadian bay, US President Franklin Roosevelt (centre, left) and British Prime Minister Winston Churchill (centre, right) discussed what to do about their adversaries at the time, Germany and Japan. Roosevelt had whispered, and Churchill later reporting him as saying aloud: “I will wage war, but not declare it.”

Until February 21, 2014, President Barack Obama’s (right) whispers were audible; President Vladimir Putin (left) didn’t believe what he was hearing. Now there is armed US war against Russia on the Ukraine and Syria-Turkey fronts; exchanges of armed signals in the Black and Baltic Seas; and an all-fronts war against Russian capital. For the US, no declaration; for Russia, no way back.

Putin said as much at last week’s St. Petersburg meetings: “People feel no danger and that is alarming for me. Why can’t we see that we are dragging the world into an utterly new dimension? This is the problem.” “I am not interested in laying blame now. I simply want to say that if this policy of unilateral actions continues and if steps in the international arena that are very sensitive to the international community are not coordinated then such consequences are inevitable.” By consequences, Putin meant war, undeclared by the US against Russia, compelling Russia to forestall in its defence. “If we continue to act according to this logic, escalating [tensions] and redoubling efforts to scare each other, then one day it will come to a cold war.”

Cold is not the kind of war Putin means. “I don’t know where it [the deployment of the U.S. missile defense system in Europe] might lead to but I know for sure that we will have to respond.”
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by Editor - Sunday, June 19th, 2016
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By John Helmer, Moscow

President Barack Obama (lead image, left) and his advisors (right) spent at least a week, and as much as three weeks, planning to send up to 9,000 combat troops into eastern Ukraine, on the border with Russia, following the shoot-down of Malaysia Airlines Flight MH17 two years ago. The scheme, which was to have involved Dutch and Australian army units, with German ground and US air support, plus NATO direction, has inadvertently leaked from the publication of a report this week by a former Australian Army captain.

The military plan, according to James Brown, now head of research at the US Studies Centre of the University of Sydney, “would have consumed the bulk of the Australian Army.” Captain Brown also claims “planning for these military options consumed Australia’s intelligence agencies. The National Security Committee of [the Australian ministerial] Cabinet met every day for more than three weeks , and staff and agencies produced a frenzied stream of briefings on Ukraine, Russia and the intentions of [President] Vladimir Putin.”

According to Dutch sources, the military plan of attack was aborted when Germany refused to participate directly, or allow its bases and airspace to be used. Dutch Prime Minister Mark Rutte announced the Dutch were pulling their troops out of the plan on July 27. He said at the time: “Getting the military upper hand for an international mission in this area is, according to our conclusion, not realistic.” That was ten days after the MH17 crash. But Australian Prime Minister Tony Abbott and his cabinet continued, Brown and his sources reveal, to plan the operation with the US for another 10 days.
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by Editor - Wednesday, June 15th, 2016
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By John Helmer, Moscow

The Khotin family are either the cleverest new men on Russia’s billionaires’ row, strutting out with prime commercial real estate and oilfield assets, which will double or triple in value as soon as the war is over and the Russian market for corporate bonds and share listings revives. Or else the Khotins are walking corpses, whose income has plummeted below the level required to meet the interest instalments on their debts; their oilfields cost more to pump than the oil can be sold for, and their bank is going broke on defaulted loans from related parties – that’s themselves. The advantage of being, as one Moscow newspaper calls them, the “most secretive of Russian businessmen”, is that noone is certain whether the Khotins are alive or dead. In the current war, they may have been, or they are about to become, the costliest of casualties.

In the history of the last war the British have excelled in portraying themselves as secretly cleverer than their allies, the Russians and Americans, as well as their enemies, the Germans. In the archive of grand British intelligence deceptions, none was a more effectively kept secret — so the British claim — than Operation Mincemeat. That’s the one where the corpse of a London suicide was dropped by British submarine on to a Spanish beach, dressed in an officer’s uniform and carrying top-secret plans (lead image from the movie). The objective was to fool the Germans into opposing the 1943 allied Mediterranean invasion in Greece when the landings were really intended for Sicily. The way the British tell the story, the corpse was very persuasive.

In their business career so far, the Khotins are like that. Unrepayable debts, loaned by state banks on the personal say-so of high state officials, secured by future revenues enhanced by administrative favours, would be one reason for making the Khotins’ papers look exceptionally valuable, while keeping their existence secret. There’s another reason. No photograph of either Yury or Alexei Khotin is known to exist. The national photo archives of Tass, RIA-Novosti, Kommersant, Interfax, and Moskovsky Komsomolets all say they have no picture of them.
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by Editor - Monday, June 13th, 2016
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By John Helmer, Moscow

Cyprus President Nicos Anastasiades is holding secret negotiations this week with Victoria Nuland (lead image, right), the US State Department official in charge of Turkey, Ukraine and Russia, on a plan to maintain Turkish military forces in Cyprus under the flag of the North Atlantic Treaty Organization (NATO).

Anastasiades has sent his aide, Nicos Christodoulides (lead image, left), to negotiate in Washington; he met with Nuland on Monday.

After losing control of the Cyprus Parliament to an increasingly nationalist vote in an election on May 22, Anastasiades has remained behind at the presidential palace in Nicosia, where he met on Tuesday with the NATO official now conducting Cyprus negotiations for the United Nations, Espen Barth Eide. The Cyprus Foreign Minister, Ioannis Kasoulides, is due to met US Secretary of State John Kerry, on June 13.

So sensitive is the US-Turkish plan for Cyprus that American reporters for Associated Press and Reuters at the State Department have refused to ask Nuland about the talks. Gayane Chichakyan, a Washington-based reporter for the Russian government television company Russia Today (RT), has also refused to lift the news blackout.
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by Editor - Wednesday, June 8th, 2016
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By John Helmer, Moscow

European Union officials and German Chancellor Angela Merkel are so determined to wage sanctions war against Russia, they are refusing to obey judgements of the European Court in Luxembourg that sanctions are illegal if they lack reason and evidence.
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by Editor - Sunday, June 5th, 2016
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