By John Helmer in Moscow

Russian steelmakers in Moscow have confirmed that their export surge towards China, on which the revival of Russian mill capacity is currently based, is now threatened by an anti-dumping (AD) inquiry launched by Beijing.

According to an unconfirmed report from Interfax China this week, Beijing has ordered an AD investigation against Russian flat steel imports. Three Russian exporters — Novolipetsk, Severstal, and Magnitogorsk — decline to comment on the record, but they acknowledge knowing of the Chinese government’s trade move. One mill executive said that, for the time being “we have heard about the investigation starting. We don’t know the details. We are trying to find out.”

The Chinese move strikes at one of the most sensitive growth points of Russia’s current steel position, which is boosting mill output and increasing the proportion of steel exported abroad, mostly to China. Chinese imports in the first quarter have enabled Russian mills to lift production, and take the global lead among steel exporters.

It is believed in Moscow that Beijing may be retaliating against Russian anti-dumping moves against Chinese steel imports. The most recent of these was initiated by the Russian trade ministry in late March against stainless steel products, and was lobbied by the dominant Russian stainless producer, Mechel; Mechel’s Asian export market is primarily one for coal, not steel.

A representative of the Chinese steel industry association is reported by Interfax as having mentioned the new AD investigation in an interview with local press. Industry observers now concede that a serious steel trade row between Russia and China is brewing.

Alfa Bank steel analysts Barry Ehrlich and Dennis Vodnev told clients in Wednesday’s bank report: “Our view has been that protectionist retaliation from countries losing market share to Russian imports will begin much earlier in this cycle than in the post-1998 period. Unlike in 1999, Russia is not viewed sympathetically in most foreign capitals making it easy for domestic lobbies to push through measures to defend their markets.”
(more…)

by John Helmer - Thursday, May 21st, 2009
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By John Helmer in Moscow

The president of the Russian grain exporters’ association went on the offensive against Egypt today, charging the Egyptian government has so far failed to report any findings, or lodge any claims, against Russian wheat imports. According to Egyptian media reports, 137,000 tonnes of Russian grain cargoes have been detained from three shipments since May 13. The volume represents about 4.5% of this year’s estimated deliveries from Russia to Egypt of 3 million tonnes. GASC, the Egyptian state buyer and distributor of grain, and two commercial traders, Union Trade and Horus, have been identified as the consignees, according to Russian reports.

Russia provides roughly one-quarter of Egypt’s import requirement, more than double the next largest exporter, India. The cargo arrest orders appear to have been signed by the Egyptian Public Porsecutor’s Office, alleging infringement of the sanitary norms in the cargo contracts. The halt to the trade in the world’s largest-volume importer of wheat appears to have triggered a 4% increase in wheat futures trading in the US commodity market this week.

Arkady Zlochevsky, head of the Russian Grain Union, said that certificates of quality for Russian grain exports are routinely issued by the government’s farm product inspectorate, Rosselkhoznador, while sanitary checks and warranties are issued by international surveyors. Fumigation in ship holds then follows. According to Zlochevsky, allegations of infestation in cargoes that have arrived in the past week at the Egyptian ports of Safaga and Damietta are not official, but have been leaked to the press. Novorossiysk was the port of origin, he said. Novorossiysk port is reporting that the volume of its grain shipments in the four months of the year to April 30 is 3 million tonnes, a fourfold jump over the same period of 2008.

As of one hour ago, Rosselkhoznador has received no Egyptian complaint or cargo claim, Zlochevsky added. “No matter what is written in press,” he told Fairplay, “we have not received a single officially drafted claim. ” Neither the Egyptian Embassy in Moscow, nor GASC, the state wheat buyer, is speaking to the press.
(more…)

by John Helmer - Wednesday, May 20th, 2009
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By John Helmer in Moscow

Russia has abandoned its anti-piracy policy of fire, capture, arrest, and trial. Instead, the Defence Ministry and Navy have begun issuing orders to the destroyer Admiral Panteleyev, off the Horn of Africa, to put ashore the group of pirates it took on April 28. The Navy also appears to have changed the rules of engagement to emphasize firing to deter, disperse, or kill attackers, not to secure their surrender.

The General Prosecutor, Yury Chaika, has abandoned the stance he took at a meeting on May 4 with President Dmitry Medvedev to put on trial in Russia Somali pirates charged with attacking Russian vessels. Medvedev appears also to have abandoned the position he told Chaika to implement, in favour of an “international practice”. This was reported by Russian wires as a Kremlin proposal for an international court to try pirates.

However, the Rusian officials refuse to answer questions to clarify the policy shift. Instead, Captain Igor Dygalo, the Navy spokesman, requested a fax. There was no reply, and his office claimed to have lost it. The Defence Ministry spokesman told Fairplay: “I would comment if you were a friend of mine”, then insisted on a fax. The Foreign Ministry spokesman, Andrei Nesterenko, requested a fax, but did not reply. Marina Gridnevoi, spokesman for Chaika, did the same.

The only public admission came yesterday, after Fairplay began questioning, when Colonel-General Alexander Kolkmakov, the first deputy minister of defence, announced: “according to our legislation, we will hand them over to a third party.”
(more…)

by John Helmer - Wednesday, May 20th, 2009
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By John Helmer in Moscow

Severstal, the third-ranked Russian steelmaker, continues to suffer from owner and chief executive Alexei Mordashov’s past ambitions to be the world’s largest steelmaker, with safe-haven production lines in the United States. What has already happened to other Russian oligarchs has arrived for Mordashov: caught in the ring with his bankers, the debts he ran up to buy stakes beyond the Kremlin’s reach have now now turned into liabilities giving the foreign creditors power to dictate terms. Until now, the small print in Mordashov’s loan agreements, which give the bankers this punching power, has not been disclosed.

On May 15, Severstal headquarters reported in Moscow that in the first quarter ended March 31, the company sustained a negative earnings (Ebitda) figure of $158 million, and a foreign exchange loss from ruble devaluation of $381 million. On revenues for the quarter totaling $2,796 million, Severstal reported an after-tax loss of $644 million. This was well below industry analyst estimates, prior to the disclosure. Revenue was down 30% on the fourth quarter of 2008, and down 35% on Q1 2008.
The results were, according to Troika Dialog steel analyst Sergey Donskoy, “the lowest point in the company’s history since its London IPO.”

Mordashov claimed, in a statement attached to the financial report, “we continue to act decisively to reduce fixed costs and improve working capital management, with benefits already coming through in the first quarter…. Despite current difficulties we are well-positioned to weather the challenging year ahead given our robust financial position and competitive cost structure.”

The plummeting Ebitda, according to Michael Kavanagh, steel analyst for Uralsib Bank, was “driven mainly by the weaker operating performance of Russian steel operations (EBITDA margin of just 8%)…The biggest disappointment came from the company’s Russian steel operations, as EBITDA for the segment fell by 69% QoQ to $88 mln in 1Q09, implying a weak EBITDA margin of 7.6% (down from 16.2% in 4Q08). We view the deterioration in the operating performance of Russian operation as a very negative sign, which shows the very thin margins on export sales and high costs at Severstal’s coal assets, which were essentially subsidized by the profitable Russian steel segment.”
(more…)

by John Helmer - Tuesday, May 19th, 2009
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By John Helmer in Moscow

A meeting of Alrosa management board, followed by the board of directors, last week decided to modify earlier estimates of this year’s mine production plan, but slashed this year’s target profit figure. This is the first official indication of how effective the state purchasing scheme for Alrosa diamonds is proving to be. But it also reveals the low, virtual cost price at which the state stockpile agency Gokhran is purchasing the goods.

According to a prominent international diamantaire, the outcome should mean that Alrosa will operate a much higher capacity than its international rivals, De Beers and Rio Tinto, but without a bottom-line loss.

The Executive Board met on April 13, and was followed the next day by the Supervisory Board. No decision was taken on the highly sensitive issue of whether to replace the current chief executive, Sergei Vybornov. Sources close to the company confirm that the chief executive’s position has been under review and debate for months. It is now believed that if no consensus candidate is agreed by June 20, the scheduled date of the annual general meeting of Alrosa shareholders, Vybornov will have successfully fought off his critics and rivals.

The latter continue to maintain their confidence the chief executive will be replaced. But Vybornov, who has not responded to direct questions for some time, has issued an optimistic bulletin for the company’s prospects this year. “I believe there is a very good outlook in terms of demand for Russian rough,” he said in a series of statements recently delivered to the Russian news agency, Interfax. According to Vybornov, there is global shift in demand under way, away from the US. “On the whole, demand in America may drop considerably since they all there lived on credit for a long time…As for other markets, they are already recovering. Dubai is a very good market – it is a new world-scale center of diamond jewelry trade…It is likely that the market will shift to Asia and Europe and I think it will virtually balance off the drop in U.S. demand completely.”
(more…)

by John Helmer - Tuesday, May 19th, 2009
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By John Helmer in Moscow

The Russian Grain Union has accused the Egyptian government of a legal manoeuvre with an arriving wheat shipment, in order to force a cut in Russian export prices.

Alexander Korbut, vice-president of the producers’ union, told Fairplay a 52,000-tonne shipment of medium-quality wheat has been arrested at the Red Sea port of Safaga, on the warrant of the Egyptian Prosecutor-General. A vessel arriving with a second shipment has been prevented from discharging its cargo at Safaga until samples are checked.

The Egyptian claim is that the Russian grain contains impurities and is unfit for human consumption; officials at the Egyptian Embassy in Moscow were unavailable to substantiate the details.

Korbut said there had been a similar episode in 2006. Sources differ over whether the contamination discovered then had occurred after delivery and warehousing in Egypt, or in Russia before shipment.

Russia delivers more than 3 million tonnes of grain to Egypt annually, and is the largest of Egypt’s import sources for grain. The Russians charge that an Egyptian importer sought the cargo arrest to improve its bargaining position for new contracts.

by John Helmer - Sunday, May 17th, 2009
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By John Helmer in Moscow

Russia’s second oil producer, LUKoil, has successfully moored the first of its new oil production platforms in the Russian sector of the Caspian Sea. The company issued an announcement last Friday. The ice-resistant platform is a production unit of the Yury Korchagin oilfield, which is located at sea, 180 kilometres southeast of Astrakhan, where the platform was built; and 240 kilometres northeast of Makhachkala, where the crude oil will be transshipped. Korchagin is scheduled to come onstream later this year.

Caspian Sea production now ranks as an equally high priority in LUKoil’s future oil production and export plan as the Timan Pechora wells, which feed the Barents Sea terminal at Varandey, in Russia’s far north.

The Korchagin field is expected to produce up to 47,000 barrels daily of crude oil, and 1.2 billion cublic metres of gas per year. It will be followed by the second of the Caspian offshore fields, known as Vladimir Filanovsky, with much larger production — about 181,000 bd, commencing in 2011. Other fields in the same area are also under development, and are expected to come onstream by 2015. In testing so far, Filanovsky has demonstrated an unusually high flow rate, some eighty times the average Russian well flow rate. Reserves of both oil and gas in the Russian Caspian sector are enormous. An estimated 75% of LUKoil’s Caspian reserves will be lifted as crude oil; the remainder as gas. The Russian oil output will be much larger than the Caspian fields opened by Azerbaijan – so large that they are expected to revive and transform the century-old oilfield sector of the Volga River delta.

The crude is expected to be loaded on shallow-draught Caspian tankers, and delivered to northern Iranian ports, where it will be swapped for export cargoes traded out of the Persian Gulf. The new crude will also be shuttle-tankered to Makhachkala, and then transported by Transneft pipeline across the Russian Caucasus to Novorossiysk port. From there the Russian crude will be taken by a second tanker shuttle westwards across the Black Sea to Burgas, Bulgaria, avoiding Turkey and the Bosphorus Straits. Part of the crude will be refined at LUKoil’s refinery at Burgas; most will pumped by the new pipeline to the Greek tanker terminal of Alexandropouli.

by John Helmer - Sunday, May 17th, 2009
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By John Helmer

The world of manganese mining is so small, concentrated, and dependent on China, as both producer and consumer, that if there are shenanigans, the reputation of the trade can be swiftly and seriously threatened, especially in China.

For the biggest of the producers, the Australians and South Africans, manganese is a sideline. Samancor is the largest manganese producer in the world, with peak production capacity of 7 million tonnes per annum; currently, this has been cut to 5.5 million tonnes. But Samancor is not separately listed; it is 60% owned by BHP Billiton, and 40% by Anglo American Corporation, whose consolidated earnings dwarf the contribution from manganese. Eramet, the French mining company, ranks second globally in manganese output, with 3.3 million tonnes produced from its Moanda mine in Gabon. It has cut back on production by 60%. Last year, when manganese was booming on the back of steel, manganese contributed 50% of the Eramet group’s revenues; this past quarter, the proportion dropped to 43%.

Assmang, the second South African producer owned by the Sacco family through Assore Ltd., and by African Rainbow Minerals, has peak production capacity of 2.5 million tonnes. At peak last year, manganese generated 64% of Assore’s revenue; 74% of its earnings. Vale of Brazil has a 2-million tonne capacity, but in the first quarter of this year has announced a mining cutback of 77%; manganese forms a small part of Vale’s multimineral output, which is led by iron ore, bauxite, and coal. The Australian producer, Consolidated Minerals (Consmin), was producing at peak last year of almost 1 million tonnes; its Woodie Woodie mine has capacity for 1.1 million tonnes. It was followed by the Australian-listed OM Holdings, whose Bootu Creek mine in northern Australia, reached peak capacity of 690,000 tonnes (currently at 500,000 tonnes).

The last two, Consmin and OM, are manganese specialists; production and sales of the ore constitute 74% of Consmin’s annual revenue; 100% of OM’s. Until January last year, Consmin’s shares had been publicly listed on the Australian Stock Exchange. The Ukrainian entrepreneur Gennadiy Bogolyubov took over after a fierce takeover contest with Brian Gilbertson’s Pallinghurst Resources. Bogolyubov already had manganese mining and refining interests in the Ukraine, as well as in Ghana. His was the second last great battle for shareholder valuation in the manganese sector. At Bogolyubov’s buy-in and subsequent delisting, Consmin was valued at A$1.3 billion.
(more…)

by John Helmer - Sunday, May 17th, 2009
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By John Helmer in Moscow

The last time Russia took fighting pirates seriously was two centuries ago, when the Empress Catherine the Great, followed byher short-lived successor Tsar Paul I, backed the Knights of Malta, who in turn fought naval engagements with the pirates of Barbary — as the Arab statelets and fortress towns of the North African coast were collectively called.

Ransoming rich European hostages was a high-margin line of business for the corsairs;European hostages too poor to buy their freedom were put to work as slaves on shore, or as oarsmen for the pirate vessels. Individually, they didn’t last long, but that wasn’t the point from a naval point of view. The pirate vessels demonstrated much more manoeuverability in combat than the European navies could muster. When one oarsman died, the pirates simply grabbed another.

For a while, Russia had a pirate of her own. That was the legendary Maxim Vasilii, who learned his seamanship from the Barbary corsairs; adapted their tactics to stealhis own ship, the Thermopolae, from a Greek port; managed to circumnavigate the world in the mid-17th century; and was an advisor to Tsar Peter the Great on the creation of the first Russian naval fleet.

Later, and for a very brief time — after Napoleon took Malta for France in 1805 — Tsar Paul became the principal host of the Knights of Malta and their commander in St. Petersburg.At that distance from the Mediterranean, this naturally made not a whit of difference to the pirates.
(more…)

by John Helmer - Sunday, May 10th, 2009
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May 8-July 3, 2009

Adam Waldman of The Endeavor Group, Washington, DC, for “correction” of media publications reporting that he is Oleg Deripaska’s lobbyist to recover Deripaska’s US visa, revoked by the US State Department in 2006

Registration with the US Department of Justice by Adam Waldman for The Endeavour Group, pursuant to the Foreign Agents Registratrion Act, May 8, 2009:
http://www.fara.gov/docs/5934-Exhibit-AB-20090508-1.pdf

Reports and correspondence

http://www.intelligenceonline.com/Identification/p_identification.asp?rub=login&lang=ANG&service=ART&context=BOI&doc_i_id=63906361
CORPORATE INTELLIGENCE
Deripaska in Frantic Bid for Visa
354 words
18 June 2009
Intelligence Online
INTON
596
English
Copyright 2009 Indigo Publications All Rights Reserved

Close to Hillary Clinton, the Endeavour company has been hired to obtain a visa for Oleg Deripaska.
Since July, 2006, the chairman of the aluminum giant Rusal, Oleg Deripaska, has lacked a visa for the United States: the State Department cancelled the former visa without explanation two years after issuing it. The travel ban could play havoc with the oligarch’s finances at a moment when he needs the most help. Rusal is currently negotiating for fresh terms with its creditors who are owed USD 7.4 billion. The talks with banks were almost completed as Intelligence Online went to press.
To help persuade the State Department to give him a new visa, Deripaska retained the services of a small lobbying concern, Endeavour Group, at the end of May. Run by Adam Waldman and Ashley Allen, Endeavor specializes in providing services to billionaire and show business personalities. It is particularly known for mounting philanthropic projects on behalf of its clients but it equally acts to resolve delicate private matters.
Deripaska’s choice of Endeavor to land him a visa was dictated by the fact the firm is close to secretary of state Hillary Clinton. One of the partners of Endeavor, Lorrie McHugh-Wytkind, was Clinton’s head of communications when she was a senator for New York state.
Some of the firm’s advisers are also close to the Clinton couple, including Bill Clinton’s former secretary of the interior, Bruce Babbitt. And financier Richard Blum, husband of the influential Democrat from California, Diane Feinstein, is also a consultant of Endeavor, as is Ed Mathias, one of the founders of the Carlyle equity fund. Mathias is also an adviser to the business intelligence concern Diligence, who worked for Deripaska for years.
Before taking his business to Endeavor, Deripaska had other firms working on his visa problem. One who banged on the State Department’s door on behalf of the oligarch was Bob Dole, former Republican senator and presidential candidate. Dole works as a lobbyist for the law firm Alston & Bird.

http://www.intelligenceonline.com/Identification/p_identification.asp?rub=login&lang=ANG&service=BRE&context=BOI&doc_i_id=64767470
CORPORATE INTELLIGENCE

02/07/2009 UNITED STATES
Clarification
Following publication of our article “Deripaska in Frantic Bid for Visa” in our last issue, the oligarch’s public relations firm in Washington, Endeavour, contacted Intelligence Online to specify that Lorrie McHugh-Wytkind, former head of communications for Hillary Clinton and a partner in Endeavour, was not involved in the firm’s work on behalf of Deripaska . The latter’s visa was withdrawn by the State Department in July, 2006 without explanation and he has been trying ever since to have a new one issued. Elsewhere, Endeavour said that Bill Clinton’s former interior secretary, Bruce Babbit, who sits on the company’s informal advisory board, has no contact with its customers. Endeavour also pointed out that it was not a lobbying concern, as Intelligence Online stated.

—– Original Message —–
To: jcooke@blumcapital.com
Sent: Thursday, July 02, 2009 11:31 PM
Subject: From Moscow — re Oleg Deripaska visa representation

FROM JOHN HELMER
MOSCOW BUREAU

President, Endeavour Group
2001 K Street, NW,
Washington, DC 20006
USA

Dear Mr Waldman:

I am the longest serving American correspondent in Russia. You may find background and samples of my coverage, which is published around the world, if you will go to the website address indicated in the header. My questions relate to the report of your firm’s engagement by Oleg Deripaska.

I am grateful to Ms Cooke for agreeing to convey to you, and the other appropriate members of your firm, my request for clarification of the matters arising from the recent reports by Intelligence Online
(www.intelligenceonline.com).

Regarding the June 18, 2009, report, and the July 2 “clarification”, would be kind enough to say:

1. Has your firm been engaged by Mr Deripaska? If so, when?

2. Is the purpose of the engagement to assist Mr Deripaska in securing State Department and other US Government endorsement for the issuance of a visa permitting him to enter the US?

3. Has your firm registered pursuant to the Foreign Agents Registration Act? If so, when?

4. What members of your firm have been designated to work on this engagement for Mr Deripaska?

5. Are you aware of, and do you believe to be true, US reports that in relation to the US visa matter, and other issues, Mr Deripaska met together with the Republican presidential and vice presidential candidates, prior to Election Day last year, on board a yacht outside the territorial limits of the US, in Canadian waters?

6. According to your website, Edward Mathias is listed as an advisor to your group. According to Intelligence Online, Mr Mathias is “also an advisor to the intelligence firm Diligence”. Are you aware, and has Mr Mathias made you aware, that Mr Deripaska is one of the proprietors of the Diligence firm?

I shall be obliged if you would respond by email, or by telephone, as soon as possible.

Should you decline to respond, you and your firm may be reported as refusing to respond.

With my thanks,

John Helmer
Moscow Correspondent

—– Original Message —–
From: Adam Waldman
Sent: Friday, July 03, 2009 12:58 AM
Subject: Your July 2 Fax

Dear Mr. Helmer:

I just received a copy of your fax (and have long been a follower of your fine coverage).

I would like very much to respond to your questions, and have requested permission from my client to do so. Mindful of the time difference, what is your deadline?

Kind regards,
Adam Waldman

Sent: Thursday, July 02, 2009 7:54 PM
To: Adam Waldman
Subject: Re: Your July 2 Fax

Dear Mr Waldman:

Thank you for your prompt response. I’d like to offer you as much time as you think reasonable with respect to those questions your client may oblige you to obtain his permission to answer, subject to the confidentiality provisions that prevail. I take it you have been in discussion with your client on this point for at least two weeks — since June 18, the publication date of the first report by Intelligence Online.

Your second sentence, and also the July 2 response to Intelligence Online, appear to answer Q1. With respect to Q3, I suppose it is to the US statute, not to Mr Deripaska’s permission, that your duty is owed.

Qs 5 and 6 relate to matters of fact occurring before the engagement; and so I have difficulty in seeing how your knowledge, or non-knowledge, of them can be subject to non-disclosure or withholding retrospectively.

With my thanks,

John Helmer

—– Original Message —–
From: Adam Waldman
Sent: Friday, July 03, 2009 6:49 PM
Subject: RE: Your July 2 Fax

Dear Mr. Helmer:

As a general matter, the Intelligence Online piece you inquired about did not make any attempt to contact my firm Endeavor or me before running its piece; I immediately sent Intelligence Online a correction of factual inaccuracies which they agreed to run. I am not a subscriber to their service but assume they have done so at this point. I sent a similar note to Harper’s, which cited the Intelligence Online piece, and they also agreed, and did indeed, print a correction.

I do appreciate, in contrast, your request for accurate information in advance of running a piece. The following are responses to your questions in the order you presented them:

1. Although Endeavor rarely comments publicly about any aspects of its engagement with clients, it is a matter of public record that we work with Mr. Deripaska.

2. The purpose of the engagement is to advise Mr. Deripaska and entities controlled by him on a range of commercial, regulatory and philanthropic matters. We have not had any engagement with the US government about any visa matters on his behalf. Our web site is www.theendeavorgroup.com – this will provide you some feel for our work.

3. Yes, and it is a publicly available filing.

4. The answer to your question is contained in the filing; but for your convenience my colleague Carolyn Mansfield and I work with Mr. Deripaska.

5. No such meeting has ever taken place and, consequently, no such discussion of visa or other issues ever happened.

6. Mr. Deripaska is not a proprietor of Diligence, or of any other intelligence firm.

I hope these factual clarifications are helpful to you.

Kind regards,
Adam Waldman

—– Original Message —–
To: Adam Waldman
Sent: Saturday, July 04, 2009 11:20 AM
Subject: Reply and follow-up questions

Dear Mr Waldman:

Thank you for taking time out of your holiday to respond, and for writing so painstakingly. At risk and with regret of interrupting your fireworks celebration, may I point out some problems that remain with your response:

Attached below is the full text of the “Clarification” published by Intelligence Online. There appears to be no “correction”, as you use the term or as you mean readers to understand it. The reference relating to Ms McHugh-Wytkind from your side clarifies what the original publication sourced to someone referring to Mr Deripaska’s intention in engaing your firm, not to what you say is your current or future “work”. I am persuaded that you are not denying the original report at all, or the implication that your firm was sought out for influence-peddling. Whether you wish to acknowledge that you accept Mr Deripaska’s idea of you (including Carolyn Mansfield) as an influence-peddler is a judgement that reasonable people are bound to be able to make if they have access to the full record.

Your two other clarifications in the Intelligence Online note — one related to Mr Babbit and one to the interpretation of the term lobbying — suggest the follow-up:

(1) Are you saying that you and Mr Babbit have gone through your list of assignments, clients, and “customers”, and have determined that Mr Babbit has had “no contact” with any of them?

(2) Are you saying that in relation to your engagement by Mr Deripaska, you and Ms Mansfield have made, and will make, no contact of any kind whatsoever with any US government official, any member of the US Congress, or anyone else connected such officials?

(3) Please clarify for me what is Ms McHugh-Wytkind’s association with your firm, and what contacts with what US Government officials she has made since she commenced with your firm, and in particular since May 8.

In relation to the wording of Question/Answer 2, you state: “The purpose of the engagement is to advise Mr. Deripaska and entities controlled by him on a range of commercial, regulatory and philanthropic matters. We have not had any engagement with the US government about any visa matters on his behalf.”

In the filing to the US Department of Justice which you signed on May 8, Registration Number 5394, at
http://www.fara.gov/docs/5934-Exhibit-AB-20090508-1.pdf

you state: “the agreement or understanding between the registrant and the foreign principal is the result of neither a formal written contract nor an exchange of correspondence between the parties”. Please explain how you reached your understanding with Mr Deripaska, and through what persons acting for him, and what persons acting for you?

You also state: “Endeavour Group is engaged at will by Mr Deripaska to provide general legal advice on issues involving his US visa as well as commercial transactions.” You repeat this point at Box 7 of the registration form: “”Endeavour Group provides legal and advisory services to the principal Mr Deripaska around US visa issues and commercial transactions.”
At Box 8, your work on the US visa issue is explained in greater detail: “Endeavor Group assists the principal Mr Deripaska in the preparation of a US visa application and advocates for US approval of such application”.

At Box 9, you state: “Endeavour Group expects to engage with the U.S. Government regarding the status of the foreign principal’s visa application”.

If all true, please explain:

(4) How your admissions to the US Government do not belie your claim to me: “We have not had any engagement with the US government about any visa matters on his behalf”?

(5) How your “advocacy” is not “lobbying” as this term is understood in the US Code?

(6) To which officials, by name, at what US Government agencies, have you or your Firm or any person in any way connected with you and your firm made contact in relation to Mr Deripaska’s visa issue?

(7) In your registration, you state you are being paid $40,000 per month, plus expenses, by Mr Deripaska. Since Mr Deripaska as chief executive and stakeholder of Rusal, and as controlling shareholder of other companies in the Rusal and Basic Element groups, is currently the object of government supervision, bank investigation, court claims for insolvency, and public protest as a payment defaulter; and since he and his group have unpaid obligations estimated to be about $17 billion, will you please state whether you are being paid monthly in advance; monthly in arrears; or by another sum paid in advance?

(8) Do you believe it to be lawful for your firm to be representing entities that may be trading as insolvents in one or another foreign country, and lobbying for their financial interests before the US Government?

(9) In the registration, at Q8 (b), you have marked the “No” boxes to the following questions: “Is this foreign principal “supervised by a foreign government”, and “financed by a foreign government”. Do you claim to be unaware of Mr Deripaska’s obligations to the Russian state banks, including for $4.5 billion to Vnesheconombank (VEB), chaired by Prime Minister Vladimir Putin; of the state Accounting Chamber’s investigations and supervision of Rusal accounts and payment compliance: and of the intervention, supervision, and investigation by Russian state bodies, including the Prime Mibistry and the Arbitrazh courts, of Mr Deripaska’s indebtedness and lack of financial means? Do you wish to amend the meaning of your registration and file “Yes” to these questions?

(10) With respect to the lobbying assignments you have registered you and your firm as performing for Mr Deripaska relating to aluminium and “General Motor’s [sic] European operations”, what claims have you made regarding your client’s means to make good on payment commitments?

(11) With respect to the claims and evidence currently before the US courts in the Norden case — http://johnhelmer.net/wp-content/uploads/2009/03/norden-cmplnt1.pdf — please tell me what you advocate before the US Government regarding the value of Mr Deripaska’s contract coomitments?

(12) You refer in your Question/Answer 2 to “philanthropic matters” on behalf of Mr Deripaska. What amounts of money and for what “philanthropic” purposes is Mr Deripaska and his group giving away, subject to your expertise and advice?

Finally, and do pardon me for the detail of this follow-up, occasioned by the nature of your reply,

(13) Please explain why you think your reference in your last line to “factual clarifications” might be “helpful”, if the facts in the public record appear to be at considerable variance with your claims? And if that is so with regard to your claims regarding the US visa issue, will you reconsider and reword your claims with respect to Questions/Answers 5 and 6, relating to the meetings on board Mr. Kerimov’s boat, and with respect to direct and indirect forms of ownership and control of Dilgence? Or are you now saying you and your firm do not know, and have not investigated directly and independently, whether what you have been told of these matters is true or false.

With my thanks,

John Helmer

by John Helmer - Friday, May 8th, 2009
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