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Pegasus. The NYT reports on an interesting trail connecting McCain and his campaign manager Rick Davis to a Russian aluminum oligarch banned from the US for alleged organized crime ties and the pro-Kremlin side of Ukraine's Orange Revolution, through a Connecticut investment firm called Pegasus. (A bit of preliminary digging suggests Pegasus was started by a former Michael Milken associate, Drexel Burnham Lambert's Craig Cohut. Indeed, Cohut reportedly was Milkens' firm's lawyer for a time. In 2002, Cohut was among French-backed investors sued by the California attorney general for "international conspiracy" to raid a California insurer).
Many layers here and at one level this is a story about vehicles for unregistered foreign lobbying in Washington, such as the expert consulting for investment houses and law firms provided by Davis and some prominent think tank hands whose professed ideology is not always consistent with their de facto and more discreet foreign client representation. In turn for their advice to Pegasus on governmental and other matters, the article explains, Davis and his partner Paul Manafort were given inside opportunities to invest in Pegasus' investments, without disclosing the financial arrangements, as well as thrown some lobbying contracts for Pegasus' clients. Davis also arranged social events at which McCain met Putin-pal, the Russia metals magnate Oleg Deripaska, who had his US visa yanked for alleged crime ties. Deripaska wrote a letter to Davis after one such meeting with Davis and McCain in Davos offering to help a metals trading firm that Davis had been offered the opportunity to invest in through Pegasus.
But some interesting links are not fully spelled out in this piece. For instance, the Israeli satellite company ImageSat that is reported here to have hired McCain campaign manager Davis as a lobbyist at the recommendation of Pegasus, counts among its founding partners American financier Morris Talansky, who is currently much in the news for allegedly possibly bribing Israeli prime minister Ehud Olmert in a case that may take down the Israeli prime minister. See this for background:
Back to the NYT story on McCain's campaign manager Davis:Investors in an Israeli satellite company are asking an American judge to punish the company for refusing to provide access to the spacecraft and their sensitive imagery to the Venezuelan strongman, Hugo Chavez, who is an ally of Israel's enemy Iran. [...] The suit also claims that the venture canceled a contract with Angola so that it could sell to South Africa... Politics got in the way of business with Russia and Taiwan as well, the suit claims.
As the suit moves forward, it could disclose back-channel communications between Israel and America.
The nine investors who brought the suit are mostly American and Israeli, and many of them were founding partners of ImageSat. The Americans are Stephen M. Wilson, Michael Morris, Joel Levine, Morris Talansky and Abraham Moshel. The Israeli investors are Moshe Bar-Lev, Patrick Rosenbaum and Haim Yifrah. A Canadian, Albert Reichmann, is another investor listed.
They are suing for more than $6 billion in the U.S. District Court in Manhattan before Judge Laura Taylor Swain.
That's interesting, because as National Journal's Bara Vaida points out in a new piece (sub. only), it was Davis himself who reportedly instituted the McCain campaign's tough new "conflict of interest" policy which has caused five McCain advisors to recently resign. NJ: "Earlier this month, campaign manager Rick Davis (himself a former lobbyist with the firm Davis Manafort) implemented a conflict-of-interest policy requiring staff to stop representing their lobbying clients. In addition, volunteers must identify their clients to the campaign, and they may not participate in any policy discussions that would affect their clients." So Davis won't disclose what his investments are and whether they pose any conflict of interest as this article strongly suggests they might? Did as Deripaska's letter suggest he try to help out Traxys? And did Davis offer help in return? Perhaps help getting Deripaska's US visa problems sorted out, as well as some face time with the Republican presidential candidate.... Back in early 2004, Mr. Davis and Mr. Manafort started discussing becoming consultants with Pegasus Capital, based in Cos Cob, Conn. Not long afterward, the two men were providing advice to Pegasus about governmental matters that might affect companies in which the firm had invested and also suggested investment targets. The firm has never retained Davis Manafort as a lobbyist.
In late 2004, however, Mr. Davis became a registered lobbyist for Imagesat. He gained the account through a recommendation from Pegasus, which holds a stake in the company, said a person knowledgeable about the investment firm who spoke on the condition of anonymity. Mr. Davis said he found the firm without Pegasus’s help.
Davis Manafort received $120,000 from late 2004 to mid-2005 to lobby for Imagesat on both defense and domestic security issues. Mr. Davis and Christian Ferry, now Mr. McCain’s deputy campaign manager, were the two lobbyists on the project, the records show.
Early in 2005, Mr. Davis tried to develop another relationship with Pegasus when he and two other men suggested that it help bankroll a proposed new private equity firm. That firm was to focus on investments in domestic security companies, including those that vied for federal contracts, the person knowledgeable about Pegasus said. [...]
The proposed firm never took off. But Pegasus also offered another opportunity to advisers, like Mr. Davis and Mr. Manafort, who worked with it — the chance to get in on some of its investments. In November 2005, Pegasus bought a stake in a company called Traxys, which trades in industrial metals.
In January 2006, just two months later, the subject of metals trading came up in association with a social meeting Mr. Davis helped arrange near Davos, Switzerland. At that meeting, first reported by The Washington Post, Mr. McCain met the Russian aluminum magnate, Oleg Deripaska, who has been barred from entering the United States apparently because of alleged criminal ties.
After the event, Mr. Deripaska sent a brief thank-you note to Mr. Davis and Mr. Manafort. In it, he said, “Please will you send me the information on the metals trading company we discussed and would be happy to see if I can do anything to help.”
In written responses to questions, Tucker Bounds, a spokesman for the McCain campaign, said that “Mr. Davis did not approach Mr. Deripaska” about any metals trading company. Mr. Bounds said Mr. Davis retained investments he made during the time he advised Pegasus, a relationship that ended in 2006. He said Mr. Davis declined to disclose whether Traxys was one of them because he considered the investments a private matter.
As for Davis' acknowledged former client ImageSat, one wonders what ImageSat hired Davis Manafort to lobby for. One theory is that the firm was hired to lobby to ease US pressure on the Israeli Defense Ministry-connected firm to steer clear of selling sensitive satellite imagery to certain countries. It would make sense that US pressure on Israel contributed to those ImageSat deals in Venezuela, China, etc. being shut down in the first place by the Israeli Ministry of Defense. 2004, the year ImageSat hired Davis Manafort, was the time period Feith's Pentagon was coming down hard on Israel's Ministry of Defense for Harpy drone sales to China, for instance, to the degree that the US suspended cooperation with Israel on some sensitive technology arrangements for a time.
More from: the original Post piece as well about a second meeting of Davis, McCain and Russian metals magnate Deripaska on a yacht in Montenegro, that McCain and Davis claim to hardly remember.
--Ken Silverstein on the Orwellian spectacle of Davis heading McCain's anti special interest "Reform Institute."
--And from a previous WSJ story about Davis' lobbying partner and McCain advisor Paul Manafort lobbying (unregistered) for the candidate on the wrong side of the Orange Revolution, Viktor Yanukovich (the one who didn't get poisoned by the KGB). So too shilled for the pro Kremlin Yanukovich did Bruce Jackson, the partner of McCain's chief foreign policy advisor Randy Scheunemann in the Committee for the Liberation of Iraq and other endeavors. Jackson received $300k for his pet charity from a Ukrainian, Rinat Akhmetov, who is the chief financier of the same pro Kremlin Ukrainian pol. "A company controlled by Mr. Akhmetov donated $300,000 in 2005 to a human-rights charity run by Mr. Jackson and his wife, an Internal Revenue Service document reviewed by The Wall Street Journal shows. Mr. Jackson said he was grateful for the support. Mr. Manafort, who isn’t registered as a consultant to the Ukrainian leader, didn’t respond to requests for comment." It's hard to imagine McCain and Davis picking an issue that more highlights a gap between what McCain says he's about and the reality in terms of whom he chooses to surround himself with and who runs his campaign.
Photo: McCain campaign manager Rick Davis' business partner Paul Manafort and chief Yanukovich financier Rinat Akhmetov in Davos (Photo credit: Ukrayinska Pravda).