- Dances With Bears - https://johnhelmer.net -


by John Helmer, Moscow 
  @bears_with [1]

It was the 412th of Francois de la Rochefoucauld’s maxims that doesn’t stand the test of either time or money. “Whatever degree of disgrace we may have brought upon ourselves,” he said, “it is always within our power to re-establish our reputation.”

For years Mikhail Fridman and Pyotr Aven, the controllers of Alfa Bank of Moscow and  LetterOne Holding in London, have been trying but not succeeding. This week they scored a success, but not quite of the kind they, or La Rochefoucauld, meant.

High Court judge Sir Mark Warby ruled that claims made about their corrupt closeness to President Vladimir Putin, prepared by Christopher Steele for use by the Democratic National Committee against the presidential campaign of Donald Trump, had been “hearsay, some of it opinion, and much of it based on unverifiable information from unidentified sources”; “data [which] are inaccurate or misleading as a matter of fact”. When fabricating his claims Steele  “evidently did not ask for any details of the hearsay information”. Later, when under cross-examination in court, Steele admitted that “a key element of [his] allegation was contradicted by information readily available on the internet.”

Most of Steele’s shoddy fabrications were acceptable in British law. This, Justice Warby ruled, was because they were provided through the Secret Intelligence Service (MI6) to an unnamed “senior UK government national security official”, and to the FBI for “the purpose of safeguarding national security”; and because the “US and UK are the world’s leading English-speaking democracies, with a wealth of closely integrated interests… co-operation between the US and UK on matters of security is a vital part of our nation’s security arrangements.”

Complaining that Steele had changed his story from his initial witness statement to his second witness statement, and then in the witness box, Warby concluded that he preferred Fridman for truthfulness. “There is nothing that casts doubt on Mr Fridman’s evidence on this issue.” That  was the allegation the Alfa group had traded favours with President Putin, and that they had bribed him with “large amounts of illicit cash…in the 1990s when he was Deputy Mayor of St Petersburg.” This, the judge ruled, was not only a fabrication but was also unlawful.

In compensation, Warby awarded £18,000 each to Fridman and Aven, for a total of £36,000.

“I accept,” the judge qualified his award, “that the claimants have suffered distress as a result of the disclosures complained of, though the majority of the distress they have been caused will inevitably have flowed from media publications for which Orbis is not responsible in law: the Buzzfeed Article and others. My assessment is that each of the claimants is a robust character, not given to undue self-pity. Mr Tomlinson [barrister for Fridman and Aven] was right to ask for only ‘modest’ damages for distress.”

Modest for Fridman; ruinous for Steele. High Court experts estimate the combination of fees and costs for the barristers and solicitors required for the court claim by the Alfa group would have come to between £500,000 and £600,000; that’s roughly sixteen times the compensation awarded. The penalty is concomitantly higher for Steele and his Orbis Business Intelligence Ltd., the firm he has run since his official espionage employment ended at MI6. According to the company’s last financial account, [2] there isn’t enough money to pay the legal bills. Steele’s business is bust.  

The lawsuit against Steele began two years ago, on May 4, 2018. After six days of hearings in February and March of this year, Warby’s judgement was issued on July 8; read it in full [3].   Two preliminary decisions were issued on February 27 [4]  and on March 17 [5].   

Left to right: Sir Mark Warby; Mikhail Fridman; Pyotr Aven; Christopher Steele.

The new London case was not a libel lawsuit. The reason is that, although Steele’s allegations had been published in the media, he had made his claims against Fridman, Aven and Alfa in a confidential, unpublished memorandum. His liability for that, the Alfa lawyers argued, was that he had violated the UK Data Protection Act (DPA [6]) of 1998. What Steele had done when he had gathered information on his Alfa targets and then reported it to his clients, comprised “personal data relating to the claimants, some of it sensitive personal data, which are inaccurate, contrary to the Fourth Data Protection Principle [accuracy], and which have been processed by Orbis in ways that are unfair, unlawful or otherwise non-compliant with the First Data Protection Principle [fairness].”

The faking of sources and allegations in the memoranda of Steele’s Golden Showers dossier was obvious from the very beginning. 

Source:  http://johnhelmer.net/ [7]-- January 18, 2017. 

But Fridman, who was trying [8]to sell Alfa Bank at the time,  has been unable to win a libel action against Steele’s fabrications in the US courts.

The September 2005 [9] ruling of Judge John Bates of the federal US court in Washington, DC,  had decided that so much notoriety in their business practices had been reported about Fridman and his partners that they qualified as “public figures” in US law;  and that accordingly,  media reporting about them was protected by the free-speech provisions of the US Constitution — whether the facts were true or false [10].

The Bates judgement was rubbed in by Judge Anthony Epstein of a lower court in Washington in August 2018 [11].  Dismissing the Alfa libel claim against Steele before trial, Epstein was caustic in his criticism of Fridman and his partners. “It is ironic that Plaintiffs, who are non-resident aliens with Russian and/or Israeli citizenship [Fridman]…argue that non-resident aliens [the defendants Steele and Orbis] do not have rights that the First Amendment [of the US Constitution] requires a US court to respect – while petitioning a US court for a redress of their grievances…Plaintiffs do not explain why non-resident aliens have the same rights as US citizens to bring defamation actions but non-resident aliens do not have the same rights as US citizens to defend themselves.” Epstein repeated the Bates doctrine – fake news reporting in the US about Russian oligarchs is privileged and protected.  

In the High Court this week, Warby turned the tables, ruling that truth is an enforceable standard, and that Fridman and Aven had proved Steele was a liar. “The personal data of which complaint is made are all factual, and not matters of opinion. The claimants have discharged the burden of proving that the data are inaccurate or misleading as a matter of fact.”

According to Warby, as the evidence mounted that Steele could find no source or corroboration of his allegations, he had tried to change his defence in the days before he was due to testify in court.  “This is a big change of story,” Warby reports, “and that obviously casts doubt on the revised account.”

In the courtroom Steele’s lawyers argued that even if he couldn’t substantiate what he had reported, he was exempt from liability because the Data Protection Act allowed fabrications if they were created as part of a legal proceeding or an intelligence operation for national security. Warby found that Steele’s claims had been passed to the FBI; Victoria Nuland and other officials at the State Department; MI6 in London; and “a senior UK government national security official” at Whitehall.  “Judgments [of the truth or falsity] should be left to the recipients responsible for safeguarding national security,” Warby decided.  He records, however, that the FBI “did not regard the contents of Memorandum 112 as of high importance”. But that wasn’t the assessment at the time of the Clinton campaign staff, according to the court evidence – “Mrs Clinton herself was aware of what Orbis had been commissioned to do”, Warby has noted.

“Mr Fridman is a businessman who has never met Mr Putin on a one-to-one basis,” the judge ruled, dismissing Steele’s claims in his dossier that Fridman had been close to Putin and had given him policy advice.

Warby also disputed that a lobbying move which Aven had made in Washington with Richard Burt (right), then a member of the Trump transition team, involved the Kremlin. Burt, a Reagan Administration official and unsuccessful Trump job-seeker,  has been employed [12]by the Alfa group for several purposes. Burt is still Fridman’s and Aven’s employee [13].

“Mr Aven was cross-examined about his dealings with Richard Burt,” the judge has reported. “He agreed that he had used Mr Burt to try to make contact with the Trump Transition Team. His explanation was that they spoke about the possibility of sanctions on Alfa. Mr Putin had expressed concern about this, of which there had been rumours. The President had suggested that the Bank would need contacts with the new US administration. Hence Mr Aven’s wish to contact the Transition Team. He raised another matter with Mr Burt, to do with unpaid debts to the Bank, which had nothing to do with Mr Putin.  Mr Aven denies knowing at the time of a number of matters set out as fact in the Mueller report, including the role allegedly played by Mr [Dimitri] Simes of CNI [Centre for the National Interest [14]] in lobbying for Mr Burt to be the new ambassador to Russia. Asked about a suggestion from Mr Burt that Mr Aven’s approach to him was made on behalf of the Russian government, Mr Aven says that was a misunderstanding, compounded he suggests by his poor English and heavy accent.”

In July 2017 Aven (left) displayed his art collection at his English home to the Financial Times;  source: https://www.ft.com/ [15]  No press interviewer or bank colleague has ever reported difficulty understanding Aven’s diction in English;  check Aven’s English [16] three years before the conversations with Burt.

“My findings are analogous to a finding of liability for libel,” Justice Warby concluded. “But this is not a libel action. Anyway, English law and procedure do not permit the court to make a declaration of falsity at the end of a libel action… I accept that the claimants have suffered distress as a result of the disclosures complained of, though the majority of the distress they have been caused will inevitably have flowed from media publications for which Orbis is not responsible in law: the Buzzfeed Article and others.”

“To treat hearsay reports as established fact,” Warby concluded about Steele, “is an unsatisfactory approach.”