31.10.2018 Author: Henry Kamens

Case of Badri Patarkatsishvili “Heating Up” into History of Money Laundering


In many cases a second tier story is the one that should be getting the press, as breaking news but doesn’t because it is not the one closer to the West – the same West which until recently always maintain that Saudi Arabia and its Royal Family can do no evil, or at least as long as US arms sales are involved. Saudi crown prince Mohammed ben Salman has suddenly remembered that the dissident journalist Jamal Khashoggi was actually murdered inside the Saudi consulate in Istanbul, but this story is treated as just that, a casual incident anyone might have forgotten about, rather than the incitement to regime change it would have been in Iraq or Syria.

There are many such examples in the sordid history and politicians of the country of Georgia, the prime one being the death of millionaire Badri Patarkatsishvili at his home in Surrey back in February 2008. However this may ultimately turn out to be more of a story than the death of the Washington Post journalist, who was trying to have it all ways, as we may never know who else he was working for.

The Patarkatsishvili story has been deflected by recent recordings and arrests of high level political murder suspects in Georgia, which, coincidence or not, have been made public just before the Georgian presidential elections on October 28. There are also new allegations of plans for subsequent political murders, as tapes released in recent days imply.

The Georgian Chief Prosecutor’s Office has confirmed that it has various recordings which prove that senior figures in the United National Movement of former president Mikhel Saakashvili had plotted to kill Patarkatsishvili, who was found dead at his mansion in England on 12 February 2008. The British authorities ruled this death as being from natural causes. The Georgian media is reporting that he was probably poisoned on the order of Saakashvili, who is now on the run.

Popping up everywhere

The story of the death of Badri and how he made it so rich is just as interesting as the nexus between high level political schemes, murder plots, international money laundering activities, etc. It involves the kind of intrigues and payoff that the Italian mafia could only dream of.

It begins with a reform-minded young president, Saakashvili, the darling of the West, who wanted to turn Georgia into a modern state, who proved not only to be supported by the West but by the deep pocketsof wheeler dealer “operatorBadri Patarkatsishvili.

One version is that when enough was enough, and the charity “protection scheme” was on the verge of drying up, Badri ended up dead. He did not help that he decided to run for the office of Georgian president and put out of business Saakashvili and all his corrupted minions.

Despite being wanted by Russian authorities for financial fraud and racketeering, Patarkatsishvili was named businessman of the year in Georgia. During his televised acceptance speech on Rustavi 2, Badri said that he was yet to start business in Georgia, and that he had only been involved in charitable activities thus far, but – only now real business was possible.

At some point, Giorgi Bedineishvili, once his financial advisor, ended up becoming financial advisor to Saakashvii. By sheer coincidence Bedineishvili was also the director of Salford Georgia, Patarkatsishvili’s holding company, and based on an unpublished UK investigative report this is tied into key Russian banks and offshore companies which were established for the purpose of laundering stolen IMF money and proceeds from Russian mafia structures.

Any investigation the Georgian government undertakes, if allowed by their American friends, should be into the activities of Salford Capital Partners and its associates.

Going down everywhere

One of the better known figures with connections with Salford is Ruslan Fomichev. Back in 2001 he was described by Salford Capital Partners as a “former banker and advisor to Boris Berezovsky”. Fomichev is a former director of a Russian TV station TV6, which was owned by Berezovsky.

Badri Patarkatsishvili was also a director of TV6. Fomichev is based in London, and is also a former chairman of the Russian Obiedynenny Bank. It is reported that Swiss investigators, hunting $4.8 billion of missing IMF aid money to Russia, suspect that $1.4 billion of it was credited to a correspondence account for Obiedynenny Bank at a bank in Geneva.

The Swiss believe that a company called Runicom SA controlled this account. Roman Abramovich has been identified as the owner of Runicom SA and joint controller of Obiedynenny Bank. Ambramovich was, of course, a former close associate of Boris Berezovsky.

Fomichev works so closely with Salford that they share the same London address. That address is also used by Eugene Jaffe, Salford’s CEO.

Salford is registered in the British Virgin Islands, but has been particularly active in SerbiaIt has been involved in a public scandal in Serbia concerning the Apatin Brewery.

Salford once stated that it managed a fund called the ‘New World Value Fund’. Various extracts from Salford’s website read, before it was taken down:

“Salford is an independent equity asset management company that manages a fund called the “New World Value Fund……..The company has contracts with several investment funds for governing their investments in Europe and especially eastern Europe…the largest [Fund] being the New World Value Fund.”

It comes as no surprise to any investigative journalist that a significant majority of the investment capital committed to this Fund comes from Middle Eastern and West European investors.

Sheikh Sultan bin Khalifa al Nahyan, the President of the United Arab Emirates, is one of those investors, and was represented on the Advisory Board of the New World Value Fund. The Georgian authorities should be especially interested in any information on him, though his dealings with bodies such as RAK, known in Georgia for its grandiose projects which only make sense if they are for money laundering purposes, are well known,

Salford had very close business dealings with Boris Berezovsky.

At this time, Berezovsky was represented by a lawyer named Stephen Curtis, owner of the London-based legal firm Curtis & Co. This firm was employed by Salford to advise him on various legal matters, and Curtis himself was formerly a director of Salford. Following the arrest of Mikhail Khodorkovsky in Russia, Curtis was appointed Managing Director of Yukos.

Curtis was killed in a helicopter crash in March 2004. It is reported that, shortly before his death, Curtis was working with British intelligence on exposing the illicit business dealings of Russian nationals in the UK. Over a period of few days 41 people were arrested in Spain on allegations of laundering 250 million euros “siphoned from” Yukos. The arrests covered southern Spain, particularly the area around Gibraltar, where Curtis had an office.

Charity scheme or shakedown racket?

The “charitable activities” Badri conducted in Georgia, for which he won the businessman of the year award when he didn’t have a business there, were not charity as most people understand the term. They were private subsidies to the government, used to pay high salaries and provide other fringe benefits to public servants, which the government could not pay itself.

In most countries such subsidies are not described as “charity”. They are called “corruption”, as there is always a favour that can be called in by the donors. Each country has seen such corruption scandals, in which far more innocent deals than these have taken place.

On January 14, 2004 the parliament of Georgia adopted legislation for the establishment of the Fund of Development and Reforms of Juridical Person of Public Justice. The logic behind this was sound: if a person is paid a normal salary they are less likely to turn to corrupt activities to make ends meet.

It became known that George Soros was one of the donors, and this suggested that Georgian public employees were effectively working for him. However, only one million dollars of money was transferred to this fund from the Soros Foundation. 16 million was provided by other contributors.

Appropriate Name for Protection Racket

The Charitable Organisation GOLDEN FLEECE donated 10,496,245 US Dollars over eight months in 2004. This But there was no official information readily available about this fund.

Kote Kublashvili, Head of the Fund of Development and Reforms, stated that it was chartered in an offshore zone, specically in Cyprus, by some Georgian person, whose identity was still not officially known.

There is no mechanism of financial monitoring in offshore zones, and especially those in Cyprus, which is considered a safe area for such operations. However we do know the names of two businessmen connected with offshore funds in Cyprus – Badri Patarkatsishvili and Boris Berezovsky, both of whom ended up dead.

Badri was the financial brain and best friend of Boris Berezovsky, and also maintained friendships with Georgian President Eduard Shevarnadze and later Mikhel Saakashvili, at least in the beginning.

Badri was already notorious in Russia, but found it easy at first to hide out in his native Georgia when things got tough. In 1994 he and Berezovsky established the association of automobile dealers.

Berezovsky announced at the time that this association was needed to combat the “Grey” import market, attracting Westerners to invest at an opportune time. Berezovsky was able to access much Western money, and shortly thereafter strengthened his relations with AvtoVaz.

Then the Russian media company ORT was created. A substantial amount of money was collected from Russian banks to buy ORT. Berezovsky obtained most of the shares and Patarkatsishvili became his key financial manager, and subsequently the major representative of the general director of ORTV and the ORT commercial and financial director.

After the murder of Vladislav Listiev, a Russian journalist, Badri was “captured and interrogated”. But six months later he controlled not only all the financial affairs of ORT but its advertising agency, which became a major source of personal funds.

Being denied everywhere

The one question nobody is asking is whether there were significant links between Patarkatsishvili and Bidzina Ivanishvili, who came riding in to sweep away the Saakashvili era. If there were, this would explain why the government suddenly wants to put Patarkatsishvili on their side, as the good guy, and Saakashvili on the other.

But things have never been as simple as that, and the Georgian government knows it. The story from this point on is not going to be what the investigators find, but what they don’t find, or what they explicitly deny.

Most countries have seen legal cases in which the wrong person was convicted of a crime they did not commit. When the original conviction takes place, the history of that individual is presented and the conviction seems obvious.

If that conviction is then overturned, that reasoning must be wrong. Yet few such cases are reinvestigated. This demonstrates that the original reasoning behind the conviction was concocted to detract attention from the real perpetrators, who are being protected.

All we know here is that Patarkatsishvili was on both sides at once. Any number could have wanted him dead, but he also had any number of protectors. Whatever the facts, only the blame will matter, and even if Saakashvili is guilty, saying so will equally prove the opposite.

Henry Kamens, columnist, expert on Central Asia and Caucasus, exclusively for the online magazine “New Eastern Outlook”.