December 2, 2022

RUSSIA REDUX: Oligarch-owned co. that funnels money to GOP gets wrist slap by FEC

RUSSIA REDUX: Oligarch-owned co. that funnels money to GOP gets wrist slap by FEC

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Turns out, “American Ethane” isn’t so American. The company, which donated to GOP election campaigns, is actually owned and controlled by Russian oligarchs, yet the Federal Election Commission (FEC) gave the company a mere slap on the wrist for its illegal donations.

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In a letter published Friday, two FEC commissioners, Democrats Shana M. Broussard and Ellen L. Weintraub, lambasted their Republican colleagues for not following US law and hitting a company almost entirely owned and operated by Russian oligarchs with anything more than a $9,500 civil penalty for donating to GOP candidates in Louisiana.

As initially reported by Dan Friedman of Mother Jones, the company, American Ethane, was founded by oligarch Roman Abramovich (though he left it in 2015). By the time of the contributions, AE was predominantly owned by three Russian nationals – Konstantin Nikolaev, a billionaire who was funding spy Maria Butina’s efforts to infiltrate the NRA; Mikhail Yuriev, now deceased (somewhat mysteriously); and Andrey Kunatbaev, a wealthy businessman who made his fortune in TV sales.

Yuriev (sometimes spelled Yuryev) published a novel in 2006 entitled The Third Empire: Russia as It Ought to Be, which seemed to spell out exactly how Russia would proceed to reestablish itself as a massive power on the world stage, from its war in Georgia in 2008 to the annexation of Crimea to attacks on Donetsk and Luhansk and the war in Ukraine. The Atlantic cited a Russian publication that refers to it as “the Kremlin’s favorite book.”

Also behind American Ethane was Alexander Voloshin, a former chief of staff for Putin who maintains very close ties with the Russian dictator. As originally reported by Luke Harding of the Guardian, Voloshin was given a 2.5% stake in the company for a $1.25 million investment. That investment is now estimated to be worth tens of millions of dollars.

Broussard and Weintraub noted this fact in their letter, pointing out that a review by the Office of General Counsel of the FEC had found clearly inappropriate conduct. The Dem commissioners also noted that the Supreme Court has long upheld laws that prohibit foreign money from influencing federal elections.

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“Ignoring those longstanding precedents,” the letter reads, “three of the Commission’s current members blocked the Commission from holding American Ethane accountable for injecting foreign funds into U.S. elections.”

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Washington Press reached out to FEC Chair Allen Dickerson to inquire into the reasoning behind only levying a small civil penalty on American Ethane. He directed us to a response letter the three GOP members of the Commission had issued to Broussard and Weintraub’s allegations.

Remarkably (and somewhat ludicrously), that statement argues that “the evidence shows that American Ethane is a wholly domestic corporation headed by an American CEO with a principal place of business in the United States,” despite the fact that it is over 90% Russian-owned, with several of the principals having direct connections to Vladimir Putin.

The main argument from Dickerson and his Republican colleagues seems to be that, if a company has a location in the US, is taxed by the US (though how much AE pays in taxes is questionable, since, by its own admission, it does not earn a profit), and has an American head of operations, it is, therefore, an American company entitled to “raise capital internationally.”

Ethane is primarily used in the production of plastics. During the Trump presidency, AE signed a deal with a Chinese conglomerate that was said to be worth $26 billion. In the video below, you can see Trump applauding that deal (among others) at a conference with Xi Jinping.

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Trump himself, of course, is no stranger to Russian influence: it’s well-known that Trump properties in Panama and Florida (often called “Little Moscow”) are rumored to be Russian money laundering sites.

His former campaign manager, Paul Manafort, also had close ties with Russia and received millions from his clients there. Roger Stone, perennial Republican villain, and strong Trump ally and advisor, similarly works closely with the Russians and may have sought Russian help during the 2016 election.

The FEC’s failure to severely penalize American Ethane could spell out a strategy for Russian influence in our elections: simply use American rubes to funnel Russian rubles. By Dickerson and his colleagues’ reasoning, as long as the company sets up here and has an American head, Russian seed money can flow right in. As Broussard and Weintraub seem to be saying, this is an extremely, extremely bad precedent.

Putin and Trump must hate Ross. But you should like him! – on Twitter: @RossRosenfeld

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