Loup-Garou in Congress
// US congressman charged with non-parliamentary ties to Russian business
FBI agents searched the office of Curt Weldon, Republican congressman of Pennsylvania, on Monday. Weldon is suspected of using his official position to help his daughter’s PR agency. The congressman is charged with lobbying the interests of Russian companies—Saratov Aviation Factory and Itera. According to Kommersant’s information, documents were seized from Itera’s US headquarters. The scandal might gravely damage the Republican party’s image on the eve of the elections to US Congress. It might also damage the reputation of Russian business.
Curt Weldon got in trouble a long time ago--in February 2004. Back then, Los Angeles Times published news that Weldon was helping his daughter Karen Weldon’s business and her PR agency Solutions North America (SNA). The newspaper claimed that SNA, having no experience in international PR, managed to sign serious lucrative contracts right away. Ethics Committee of US Congress investigated the charges against Weldon in spring 2004, on his own request. However, it did not publish any results of the probe.
US Justice Department began investigating the “Weldon case” only a few months ago. According to Kommersant’s information, the congressman knew nothing of the probe. One of Kommersant’s sources said that “Weldon’s staff did not take those gossips seriously”. Meanwhile, Russian oil and natural gas company Itera was SNA’s first client. Curt Weldon headed the delegation of US Congress during the visit to Moscow in May 2002. Soon after this, Itera’s CEOs contacted Karen Weldon and offered a deal of $500,000 annually, which was signed on September 30. Six days before, congressman Weldon had introduced a draft resolution “About establishing relations with Russia in the sphere of energy development” to the US House of Representatives. That same day, in the evening, Weldon gave dinner in honor of Itera’s chairman of board Igor Makarov in the Library of Congress, inviting 48 members of US Congress and Russian State Duma. Afterwards, Itera sponsored Weldon father and daughter’s trip to Russia and East European countries.
Another Russian company became the second client of the Weldons. This time, it was Saratov Aviation Factory (SAZ). The Weldons traveled to Saratov and learned about SAZ’s advanced developments in January 2003. Soon after that, SAZ signed a contract with SNA, according to which Karen Weldon’s agency was to promote SAZ’s interests in the U.S. for $20,000 monthly plus 10 percent of the value of future deals. Congressman Weldon visited SAZ after it signed documents with SNA. To help his daughter’s business, he contacted top executives of Naval Air Systems Command (Navair) several times, trying to sell SAZ’s developments to Navair. Finally, Navair and SAZ signed a protocol of intent, according to which US side agreed to look for funds to finance SAZ developments. Another consequence of Weldon’s assistance was that Navair head John Fisher visited Saratov in 2003. SAZ began paying the promised $20,000 monthly to another company of Karen Weldon—Solutions Worldwide—in December 2003. At the same time, Navair spokesman Rob Koon stated in his interview to McClatchy Newspapers that “the talks [with SAZ.—Kommersant] ended without result in late October 2003.
However, it was Itera company that attracted special attention of FBI during the current probe. According to Kommersant’s information, FBI agents raided offices and homes of people directly connected to Karen Weldon’s PR agency, as well as Itera’s US headquarters in Florida, seizing various financial documents.
“I have never in my life helped my daughter to develop her business. She is doing well on her own,” said Curt Weldon after the search. The Republican congressman was first elected as representative of one of districts near Philadelphia back in 1984, and was constantly re-elected since then. Weldon is now the vice-chair of the Armed Services Committee.
Joseph Fioravanti, the attorney of SNA co-owner Charles Sexton and previously of Karen Weldon, told Kommersant that he “cannot estimate the whole weight of charges against his client, because he does not know their essence”. Curt Weldon said “the probe has a political motivation”. He believes he is being persecuted by justice due to the upcoming (November 7) elections to Congress, where Weldon is to run against Democrat Joseph Sestak, admiral and national security advisor during Bill Clinton’s presidential term. “The most funny thing is that searches begin 3 weeks before elections, although the probe has been going on for a few months already,” complained the congressman. By the way, Sestak’s pre-election staff office has already begun spreading leaflets about Weldon family’s illegal activities over Philadelphia.
Kommersant’s sources believe the probe might bring trouble to many people in Moscow which Weldon visited “no less than 30 times”. The sources claim that “the congressman’s main contacts in Moscow were high-ranking law enforcement officials from Russia’s Defense Ministry and Federal Security Service, and deputies of the State Duma.”
This might be confirmed by the fact that Curt Weldon is the founder of the International Exchange Group (IEG) non-governmental organization. In 2005, IEG offered the project to guard six Russian sites for production and storage of biological weapons to the Pentagon. Together with Weldon, Alexander Kotenkov, Russian president’s representative in the Federation Council, heads the political council of IEG. The NGO’s trustees are the representatives of Russian State Duma committees on defense and security Viktor Zavarzin and Vladimir Vasilyev, Vice-Chair of the Federation Council committee on defense and security Alexey Alexandrov, Deputy Director of the Federal Security Service (FSB) Alexey Bortnikov, Russian General Staff Commander Yuri Baluyevsky, and Duma’s First Vice-Speaker Lyubov Sliska.
The scandal might damage the reputation of Russian business, Itera’s reputation first of all. Itera’s office in Moscow told Kommersant yesterday that the company’s activities do not violate US laws. Itera’s press service refrained from further comments.
Steven Koegler, Itera International Energy’s vice-president for legal issues, told Kommersant that US government asked the company to provide all documents concerning its cooperation with SNA. Koegler did not give more comments, underlining that it is all he can say for now. He only added that his company is fully cooperating with investigators.
US-based Itera International Energy Llc has several subsidiaries. One of them, Duna Energy, extracts natural gas in Texas, and its shares are listed at New York stock exchange. The second subsidiary extracts natural gas from worked-out coal mines in Illinois and produces electric energy there. Due to high prices on electric energy in the U.S., this project is quite profitable. Besides, the company’s branches work at real estate market and produce Ivanovich vodka.
Itera’s president Igor Makarov had told Kommersant that the company plans to supply liquefied natural gas from Cameroon to the U.S. in 2007. To carry this project out, Suntera company (50 percent belongs to Itera Group) acquired a regasification terminal in New Scotland (Canada) located near gas pipelines leading to Boston and New York. Makarov said that US citizens own not more than 7 percent of Itera Group (as of July 2006). Other foreign shareholders of Itera Group, Galina Weber for instance, sue against the company’s management in the arbitrary court of Larnaka (Cyprus) for dilution of their shareholding in the course of the additional issue of shares. The results of the trial are unknown yet.
Dmitry Sidorov, Washington; Alexander Gabuev, Natalia Grib
All the Article in Russian as of Oct. 18, 2006
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