SECSTATE TILLERSON’S CHIEF OF STAFF MARGARET PETERLIN HAS BEEN MANAGING US CYBER WARFARE OPERATIONS AGAINST RUSSIA FOR YEARS

By John Helmer, Moscow

When US Secretary of State Rex Tillerson was telling the Russians and the US state press yesterday to stop hacking into American politics, sitting beside him was a former US Navy signals officer and  lawyer named Margaret Peterlin (lead image, red circle). Peterlin’s job for the last two years was managing a Boston company specializing in cyber warfare weapons, including the latest in US computer programmes to mimic foreign hackers and convince US  targets they have been hacked by Russians. Peterlin was also an advisor to Donald Trump during the presidential transition. Her targets then included Hillary Clinton and her campaign organization. (more…)

MR HICCUP — MIKHAIL FRIDMAN’S LUNCH WITH FT PRODUCES INDIGESTION IN THE MARKET

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By John Helmer, Moscow

Mr Hiccup (left) was the lead character of an Italian-Swiss cartoon of thirty years ago. His chronic hiccups persisted for years, inflicting cost, pain and misfortune on almost everyone unlucky enough to meet him. In each of 39 episodes Mr Hiccup tried a new remedy, but he always failed. Others paid the price. And so it’s been for Mikhail Fridman (right), the Russian oligarch, who had lunch with the Financial Times last month. That’s when Fridman revealed he’s Mr Hiccup.
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WHEN THE FINANCIAL TIMES TAKES MIKHAIL FRIDMAN TO LUNCH, OCTOPUS IS FOR ENTRÉE, THE MAIN COURSE IS ANOTHER SUCKER

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By John Helmer, Moscow

Mikhail Fridman, the control shareholder of a large Russian banking, telecommunications, grocery, and oil and gas group, has held another lunch with the Financial Times to demonstrate that he doesn’t want to answer questions about the risks to his assets in the Ukraine, where he was born and where he remains the largest individual Russian investor; in the United States, where his Vimpelcom company is listed on the NASDAQ exchange and recently pleaded guilty to corruption charges; in London, where his asset holding LetterOne is now based; or in Russia which has issued his passport. At a London restaurant interview published on April 2, Fridman has also lunched to demonstrate what the Financial Times (FT) reported at its first lunch with him, on March 15, 2003, as “ our newspaper’s reputation for independence…supported by a strict separation of editorial from advertising.”

“The only separation the FT makes is between money and power”, responds a Moscow publisher. “The FT hates Russian power, but loves Russian money. Without inhibition, it advertises both, and calls the product a newspaper.”
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NEW DECLARATION OF SANCTIONS WAR BY US DEPARTMENT OF JUSTICE – MTS AND VIMPELCOM CHARGED WITH BRIBING [NAME CONCEALED] – US BANKS NAMED IN THE CONSPIRACY ARE IN THE CLEAR

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By John Helmer, Moscow

Last Friday a US federal court judge named Andrew L.Carter Junior issued a warrant for the US Government to seize $300 million in bank cash and investment accounts in Belgium, Ireland and Luxembourg. The proceeding conceals the name of the owner of the targeted bank accounts, and of the mastermind in what court documents call “an international conspiracy to launder corrupt payments made to GOVERNMENT OFFICIAL A, a relative of the President of Uzbekistan and a government official at all times relevant to the facts alleged.”

The court claim by the US Department of Justice names Russian telecommunications companies MTS and Vimpelcom for having “made more than $500 million in corrupt payments”. But the US Government court papers are selective. The Russian companies weren’t the only ones in the alleged conspiracy between 2004 and 2011, Justice acknowledged in court. The other telecommunication company names concealed in the court papers included TeliaSonera, owned by the Swedish and Finnish governments, and the International Communications Group (ICG), which is given the protective code “U.S.Company-1”, and whose method of buying its entry into Uzbekistan was unrecorded.
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TRYING TO FOLLOW THE BEACH BOYS – MIKHAIL FRIDMAN AND ALEXEI REZNIKOVICH MEET GREGORY SHENKMAN FOR CALIFORNIA DREAMING, OR IS THIS WIPEOUT?

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By John Helmer, Moscow

Mikhail Fridman (lead image, centre) and Alexei Reznikovich (left) have a telephone problem, and it’s got a name, Gregory Shenkman (right).

It’s not that Vimpelcom, the global mobile telephone company they control through LetterOne (L1), Fridman’s offshore holding, isn’t a lucrative business. In market capitalization Vimpelcom is currently worth $8.7 billion; it dropped from $18 billion in 2010 to $3 billion at the start of this year, and is now up almost threefold. Volatility like this indicates the market sentiment that conventional telephone companies have hit the limit of their value. To grow richer, the telephone companies must do new things. And for the technology to do that, Fridman and Reznikovich admit they must find assets which Russia isn’t producing at present.

For Russian nationals, that’s easier said than done right now. For Vimpelcom to grow, LetterOne is thinking of buying the wherewithal in Silicon Valley, California. That may be the heartland of the technology Fridman and Reznikovich want. It’s also the belly of the beast, so far as the Kremlin and Russian security forces believe, because of the Ukraine sanctions campaign; NATO’s military reinforcements along Russia’s frontiers, and the US Government’s effort to force regime change in Moscow. Trading with the American enemy is an increasing concern at Vimpelcom, because the Kremlin insists; and because the US Government is preparing to strike at Vimpelcom for alleged bribery in pursuit of its international business. So what have Fridman and Reznikovich engaged Shenkman for?
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NO JOKE — WHY FAKING IS FAILING IN THE RUSSIAN ART MARKET

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By John Helmer, Moscow

Forgery in the Russian art market is diminishing. “The situation is becoming much better. There are now very few fakes,” reports James Butterwick, a London-based dealer and specialist in Russian art. “This has nothing to do with the experts. The market is the expert now, and it’s become very difficult to buy a picture of dubious authenticity. Save us from the academics and the connoisseurs.”
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A CERTAIN LACK OF POLISH – INSIDER REVEALS VLADIMIR YEVTUSHENKOV’S PREDICAMENT

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By John Helmer, Moscow

Following the publication of yesterday’s report on the case of Vladimir Yevtushenkov, an insider from the Russian oil industry has communicated this analysis of what provoked Yevtushenkov’s arrest, and what will happen next. The insider has had more than 15 years of experience working with Igor Sechin, now chief executive of Rosneft.

“The problem of Yevtushenkov is in his misunderstanding of what it means to own an oil company. He was given a right just to touch the object [Bashneft]; to clean and polish it; and then to hand it over to Sechin [Rosneft]. But Yevtushenkov decided that he was the real owner, and he started disputing with Sechin over the price of the asset. That’s something that is totally indisputable.The Ukrainian theory [of the case] is just camouflage.”
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VLADIMIR YEVTUSHENKOV RUNS THE GAUNTLET – WHY NOW, WHY NOT?

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By John Helmer, Moscow

Conspiracy or screw-up — there is no shortage of complicated theories in Russia to explain why an oligarch of Vladimir Yevtushenkov’s (image, left) size is being made to run the gauntlet, quite apart from the fact that he’s probably guilty of the crimes alleged against him. What is missing is the Russian equivalent of screw-up. That’s to say, who screwed up – if this is what is happening.
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VICTOR PINCHUK THROWS A WAR PARTY IN KIEV — GEORGE SOROS AND MIKHAIL FRIDMAN PAY FOR COCKTAILS, DMITRY MEDVEDEV SENDS SINGERS TO JOIN PRAVY SEKTOR, DNIEPR BATTALION IN CHORUS

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By John Helmer, Moscow

Petro Poroshenko disappointed most of the audience at Victor Pinchuk’s Kiev party on Friday and Saturday by suggesting that he is ready to trim the terms of Ukraine’s partnership agreement with the European Union in order to meet President Vladimir Putin’s demands. But that’s exactly what Pinchuk (front row, 6th left) needs if Interpipe, his steel and pipemaking group in Dniepropetrovsk region, is to trade its way out of bank default and insolvency.

According to Poroshenko, “We have to be the most flexible concerning the [EU] Agreement on association and do everything possible to keep those opportunities which we will have within association, and at the same time to make it comfortable for Russia. I will personally use my best efforts for this purpose.”
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LORDS ON BOARDS: WILL THE BRITISH DIRECTORS KEEP THEIR RUSSIAN SEATS? THE AMERICANS TOO?

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By John Helmer, Moscow

The sanctions programme adopted against Russia to date aims, according to this week’s declaration by US President Barack Obama, at curtailing the capabilities of the Russian government to field men and arms on or across Russian borders; and to penalize individuals and corporations for sustaining the Russian economy while the war in eastern Ukraine continues.

For the first time, US officials have declared that every sector of the Russian economy, including investment and financing for industry, urban development, farm production and food supply, are targets.
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THE VERY LITTLE RED BOOK OF RUSSIAN OLIGARCH SAYINGS ON THE UKRAINE CONFLICT

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By John Helmer, Moscow

When Alexander Shokhin was a junior official in the international economic department of the Soviet Ministry of Foreign Affairs in the 1980s, it was plain he was short-sighted. That was because of the glasses he wore – the old Soviet type, super-thick. He’s come a long way since then, and so has sight-correction technology. When Shokhin met President Vladimir Putin at the Kremlin on February 14, his eyewear was much improved. His short-sightedness wasn’t.

Now president of the Russian Union of Industrialists and Entrepreneurs (RUIE), the principal business lobby in Moscow, Shokhin tried telling Putin his clients would agree to paying more Russian tax on their corporate, and maybe personal incomes, if Putin agreed to let them keep legal title of their assets abroad, under the jurisdiction of foreign courts, not Russian. Putin rejected the offer. It was one week before the Ukrainian President Victor Yanukovich was ousted from office in Kiev, and the international position of Russian capital was to be exposed to unprecedented restrictions and risks – from a US Government attack on offshorization, not from the Kremlin’s.
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ROBBING PYOTR TO PAY PAVEL — THE VULNERABILITY OF RUSSIAN ASSETS IN UKRAINE

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By John Helmer, Moscow

A new type of warfare is being tested in Ukraine. The strategem was first publicly disclosed on February 23, when Zbigniew Brzezinski — the wannabe Secretary of State if the Democratic Party wins the 2016 presidential election — proposed a billion-dollar levy on each of ten Ukrainian oligarchs. Brzezinski didn’t identify them by name, but suggested they were “principal beneficiaries of the country’s stunningly widespread corruption”. Another $10 billion, according to Brzezinski’s scheme, should be “matched” by the deposed president, Viktor Yanukovich, and his family.

Swiss sources reveal that the Swiss government and banks are under pressure right now to extend their freeze of the Yanukovich bank accounts to other Ukrainians on a US Government target list. Brzezinski’s proposal used the term “persuade” for his billion-dollar levy. The US Treasury has conveyed to the Swiss, as well as to banks of the European Union (EU), the targeting of as many Ukrainians as the new government in Kiev wants to threaten, especially if their business is concentrated in the eastern half of the country.
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THE SWEDISH APPROACH TO MONEY-LAUNDERING — SACK THE LAUNDRY MAIDS, KEEP THE LAUNDRY

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By John Helmer, Moscow

Following a fresh investigation of its business practices in the former Soviet Union, TeliaSonera, the Stockholm-based telecommunications company, reported Friday that it has dismissed four senior executives, including the chief financial officer and the head of its mobile telephone division. A company statement claims that the objective of the investigation was “a risk assessment from a business ethics perspective”. The spokesman of the company, Salomon Bekele, says the targets were geographically limited to its “Eurasia division”, and that TeliaSonera’s business in Uzbekistan and Russia were “excepted”.

According to TeliaSonera’s financial report for the first nine months of the year, issued on October 17, Sweden currently accounts for about 36% of the company’s sales, Eurasia about 22%. But the Eurasia division is the group’s main source of growth, generating SEK5.3 billion ($807.6 million), 11.1% more in sales revenues compared to last year counted in local currencies; in Swedish kronor the growth rate was 3.1%. Earnings (Ebitda) from the Eurasian division jumped 9.5% to SEK8 billion ($1.2 billion). By comparison, the company’s consolidated revenues fell by 1.8%, earnings rose by 1.5%.
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NO WINGS TO FLY — QIWI CALLS TIME, OR IS IT A CUCKOO?

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By John Helmer, Moscow

If QIWI, the Russian electronic payments operator, is such a good thing, why did the market cut the stock price the minute QIWI announced this week that it’s planning to sell off more of the control shareholders’ shares?

QIWI was co-founded by Alisher Usmanov’s internet portal company, Mail.ru, and Usmanov continues to be one of QIWI’s biggest clients and sources of cashflow. In May, QIWI launched an initial public offering (IPO) of 12.5 million shares on the US Nasdaq exchange. Usmanov was the biggest seller at the time. Through Mail.ru, he started with 21.4% of the issued share capital, and ended up with 19.4% of the voting shares. He was followed by Andrei Romanenko, QIWI’s board chairman and one of the co-founders, who started with 12.7%, and ended with 8.6%. For the May 3, 2013, prospectus, read this.
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GULNARA KARIMOVA’S GAME PLAYS IN FRANCE

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By John Helmer, Moscow

Swiss and French financial police have searched offices or homes in France as part of what the spokesman for the Swiss Attorney-General calls “our Uzbek case”. According to Jeannette Balmer, “perquisitions [searches] have been made in France on our request.” She declines to say when the searches were conducted, the addresses of the premises searched, or the names of the Uzbek targets. A report by Ola Westerberg of the Swedish news agency Tidningarnas Telegrambyra first revealed the French operation on July 2.

According to Westerberg, searches by the Brigade de Recherche et d’Investigation Financière were conducted simultaneously at different French addresses on June 18. The targets, according to Westerberg, were all connected to Takilant, a Gibraltar front company allegedly used to take bribes from TeliaSonera, the Swedish telecommunications group, in return for operating concessions and mobile telephone licences in Uzbekistan. Behind Takilant is alleged to be Gulnara Karimova, the front-running candidate to succeed the current President of Uzbekistan, Islam Karimov, her father. For the runup to the June 18 operation in France, read the archive here.
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NEW YORK PUNT — LUXOFT ASKS $84 MILLION FOR A BET ON THE PERSONAL QUALITIES OF ANATOLY KARACHINSKY

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By John Helmer, Moscow

You could pack your bathing togs, sunglasses and sailing cap, and thus attired pay a call at 24 De Castro Street, in Tortola, British Virgin Islands, to drop your eighteen dollars off personally. This would be more fun than calling your stockbroker to put the money on buying a share in Luxoft in its initial public offering (IPO) on the New York Stock Exchange this week. The BVI address is where Luxoft, a Russian computer programmer and software developer, is registered. The sailing weather is milder than the Isle of Man, in the English Channel, where Luxoft’s controlling shareholder, the IBS group, is based.

IBS and Luxoft are hoping to collect as much as $84 million on the share punt. Punt is the word for the IPO, which beats all previous Russian IPOs in leaving the control shareholders and Russia’s state bank VTB with 98.5% of the voting shares of the newly listed company. The tiny 1.5% of voting shares being sold for $84 million also come with the proviso that the payoff for the control shareholders is entirely up front. This, the prospectus explains, is because no future dividend will be paid to the new shareholders. The only gain they can bet on is capital gain on the share price. But that depends on Anatoly Karachinsky (image right), the control shareholder behind both Luxoft and IBS, earning a future profit which he doesn’t plan to share.
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LUXOFT, OR LUCK’S OFF – WHAT THE DASHBOARD SAYS ABOUT THE RISK OF INVESTING IN THIS LOW-WAGE RUSSIAN OUTSOURCE?

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By John Helmer, Moscow

If the Union de Banques Suisses (UBS), Credit Suisse and Deutsche Bank decided to put their employees in uniform; contracted with a factory in Bangladesh to make the costumes as cheaply as possible; and then floated shares of the Bangladesh Uniform Company (BUC) on an international stock market, taking underwriting fees, capital gains, and dividends as large BUC’s annual profit, would that be a clever line of business? What independent investor would want to buy into such a scheme?

The question arises as a group of Russians spin out of their holding, an Isle of Man entity called IBS, their British Virgin Islands subsidiary called Luxoft, and sell brand new shares of the latter on the New York Stock Exchange at a valuation of between $500 million and $1 billion; and with better than 50% capital gain forecast in just six months. If IBS, with a market capitalization on the Frankfurt Stock Exchange of €419 million ($549 million) can double its money by getting UBS to flog off an outsource department, isn’t a share-buyer guaranteed his return so long as the banks renew their outsourcing contracts? Will they do that, though, if the graduate-degree Russians who do the work insist that Luxoft pay them better than grade-school wages?
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VLADIMIR YEVTUSHENKOV HIRES LORD MANDELSON FOR SISTEMA BOARD, SENDS SOS

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By John Helmer, Moscow

What can have motivated Vladimir Yevtushenkov (image right) of the Sistema conglomerate of Moscow to hire for his board of directors last week a man who is a magnet for negative British press coverage, and who was judged last year by the UK High Court for an action brought, and lost, by his friend, Nathaniel Rothschild?

The announcement of Lord Peter Mandelson’s (top left) appointment to the Sistema board, replacing Yevgeny Novitsky, was issued last Thursday. The announcement doesn’t explain what was wrong or obsolete with Novitsky’s talents or connexions, about which the Russian press have printed many allegations. Mandelson, on the other hand, is the owner of a small public relations company tied to WPP, an international conglomerate of PR firms controlled by Philip Lader, who sits on Oleg Deripaska’s Rusal board. Lader’s relationship with Mandelson has been described in a WPP press release as “provid[ing] seed capital along with additional benefits in kind including office accommodation”.
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ALISHER USMANOV EMBRACES GULNARA KARIMOVA IN A BAD-NEWS FILM FROM STOCKHOLM

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By John Helmer, Moscow

According to Russian-language records and a Tashkent party film published by Stockholm television last week, Alisher Usmanov held the hand of Gulnara Karimova and whispered intimately to her just days after the latter had been making plans to collect millions of dollars in payments from Swedish telephone company, TeliaSonera. Karimova is one of two daughters of the President of Uzbekistan, Islam Karimov; she is a leading candidate to replace him if he falls ill, or to succeed him at the presidential election due in March 2015. Karimova is also one of several targets of official investigations underway in Sweden and Switzerland, alleged to have been behind a corrupt payment system through which TeliaSonera obtained and operated its mobile telephone concession in Uzbekistan, and through which the Russian rival, Mobile Telesystems (MTS), owned by Vladimir Yevtushenkov, lost its concession and was forced out of Uzbekistan last year. The tale of that billion-dollar expropriation can be read here.

Usmanov, who is Uzbek by origin, is TeliaSonera’s shareholding partner in Megafon, the London-listed mobile telephone operator and rival of Yevtushenkov in the Russian telecommunication market. Usmanov is also on the top of Rich Lists in Russia and the UK, based on estimates of his asset value in Russian telephony, iron-ore mines, steelmills, print and internet media, not counting his debts and obligations. He has been one of the more nervous of the oligarchs, ready to put up his hand to volunteer, and quick to implement the Kremlin’s marching orders.
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THE MAN WHO WASN’T THERE – PRESIDENT PUTIN HAS NOT MET ALISHER USMANOV, EVER

By John Helmer, Moscow

In the research for its profile on Alisher Usmanov, BBC Radio-4 was told by its sources in Russia that claims Usmanov is close to the Kremlin have been invented; and that Usmanov has never been granted a personal audience with President (Prime Minister) Vladimir Putin.

The BBC programme was broadcast on April 28. For the story and the soundtrack, click here.

The BBC researchers were unable in time to verify that Usmanov has never met Putin in a one-on-one session. So that part of the interview material was omitted from the broadcast. The day after, Usmanov’s spokesman Yulia Mazanova has responded: “Regarding meetings of AB Usmanov with Russian President Vladimir Putin, I can report that Mr Usmanov as a member of the Board of RSPP [Russian Union of Entrepreneurs and Industrialists] regularly participates in the meetings of the President of Russia Mr. Putin and the Russian business community.”
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BBC PROFILE OF ALISHER USMANOV – LORD MYNERS LETS THE BANK OUT OF THE BAG

By John Helmer, Moscow

Alisher Usmanov’s fortune began with a business of making plastic bags when they were in short supply in Moscow in the last days of the USSR. At least, that’s the asset in the self-start, self-made fortune story which reporters for global rich lists have been persuaded to believe about Usmanov. How much capital he accumulated in plastic bags and how this recommended him as a debt collector for Rem Vyakhirev and others in the early Gazprom leadership – Usmanov’s next step up the fortune ladder — have yet to be clarified.

Last autumn there was also much the UK Financial Services Authority (now renamed Financial Conduct Authority) and the UK Listing Authority wanted to be clarified, because the UK regulators refused to allow Usmanov’s telecommunications company Megafon to make its initial public offering (IPO) on the London Stock Exchange. Earlier UK refusals to allow Usmanov to sell shares in his iron-ore mines and steelmills through the Metalloinvest holding weighed on that judgement. The story of how the “clarifications” were added to the prospectus, and the Megafon share sale allowed, has been told here and here.
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GULNARA KARIMOVA IN TALK-BACK – ACCUSES VLADIMIR YEVTUSHENKOV OF “COMMERCIAL WAR”, ATTACKS RUSSIA FOR SHIELDING BEKHZOD AKHMETOV, ANNOUNCES HER RUN FOR PRESIDENT OF UZBEKISTAN

By John Helmer, Moscow

From small seeds, big truths can be cultivated, pressed, packaged, and retailed profitably. Lies, too.

The elder daughter of Uzbekistan’s president, Islam Karimov, Gulnara Karimova, was so named because in the Uzbek language Gulnara signifies the flower of the pomegranate. The Persians say the same thing.

Last week, after months of negotiation with newspapers worldwide, Karimova issued two press interviews in Switzerland, where she is Uzbekistan’s representative to the Geneva branch of the United Nations. Her effort has been arranged before prosecutors in Switzerland and Sweden file public indictments against Uzbek, Swiss and Swedish company officials for corruption offences, including bribery and money-laundering. They acknowledge they are cooperating with each other; they may be cooperating secretly with the Prosecutor-General of Russia. The deadline for the opening of the Swedish criminal dossier in the Stockholm District Court is July 25.
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NEW CONNEXION FOR RUSSIA’S TRUNK LINE TO TASHKENT — THE CASE OF BEKHZOD AKHMEDOV

By John Helmer, Moscow

Interpol publishes the names of less than a third of the people identified by Red Notices as wanted for arrest. That’s so fugitives can’t know the risks of apprehension they run when they try crossing international borders. The Red Notice for Bekhzod Akhmedov has been published because the authorities in Tashkent, Uzbekistan, want it to appear that Akhmedov is still on the run – that is to say, alive and well, and not in Uzbekistan. If after arguing with Gulnara Karimova last May or June he never made it out of the country, if he has been dead since then, Interpol is helping to cover up the crime of how he died, and who killed him.

Karimova is the senior daughter of Islam Karimov, the President of Uzbekistan since the end of the Soviet Union in 1990. Karimova is the dominant business figure in the country. Her father, just turned 75, is serving out the last of the terms allowed by the Uzbek constitution. The next presidential election, due in December 2014, has been postponed to March 2015. That allows just two years to fix the succession on terms that will suit the Karimov family, but powerful enough to keep a lid on every variety of dissent which has been repressed in the country to date. That’s a tall order – expensive too.
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GULNARA KARIMOVA, ALISHER USMANOV, MIKHAIL FRIDMAN AND TELIA SONERA MAKE MONEY ON THE OUSTER OF VLADIMIR YEVTUSHENKOV FROM UZBEKISTAN – THE SWEDES TRY HOLIER THAN THOU

By John Helmer, Moscow

Lars Nyberg (right), chief executive until Friday afternoon of TeliaSonera, the Swedish and Finnish telecommunications group, is something of an expert on the blowback effect. Firearms and forensics experts understand that blowback is what happens after a gunshot, when the vacuum inside the gun barrel draws in blood and tissue from the person who’s just been shot. Even if the corpse cannot be found, the blowback evidence can convict the shooter whose prints are on the gun, of murder. The typical defence in situations like that is no corpus delicti, no evidence of crime.

In the case of TeliaSonera’s payment of more (much more) than $320 million to a one-person company registered in Gibraltar allegedly having nothing to do with Gulnara Karimova (centre), Nyberg claims he is innocent of intending corruptly to advance TeliaSonera’s profits in its Uzbek mobile telephone concession. Karimova is the senior daughter of Uzbekistan’s president, Islam Karimov, and the dominant business figure in the country.
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THE GREAT EXAGGERATOR – CAN ZIYAVUDIN MAGOMEDOV DELIVER THE CRUDE OIL HE HAS PROMISED FOR HIS NEW ROTTERDAM PORT TERMINAL? IF HE CAN’T, WILL PRIME MINISTER MEDVEDEV ORDER IT?

By John Helmer, Moscow

You don’t have to be a commercial rival of Ziyavudin Magomedov to notice that the billion-dollar business ventures he promises to deliver often fail to materialize. There was his claim, for example, that with his control stake of the United Grain Company (OZK is the Russian acronym), he intended to bid for control of an Australian grain company GrainCorp. There was the promise of coal and grain terminals on Russia’s fareastern coast. Then there was the fleet of tankers to carry oil between Russia’s northern ports and Rotterdam, powered by the latest liquefied natural gas technology. Not one of those claims has materialized.

What then of Magomedov’s promise to the Rotterdam port authority, reported by Dutch sources, that if he was granted permission to build a new oil terminal, he would fill it with an extra 30,000 tonnes per year (600,000 barrels per day)? The port authority has done what it said it would do – Magomedov has his terminal permit and a deadline of two years in which to start stocking and transhipping oil. But can he deliver? Where will the extra Russian crude supplies come from, especially since the Russian oil majors, like Rosneft, LUKoil, Surgutneftegaz, Gazpromneft, and Bashneft, have their own Rotterdam plans, and no interest in sharing their profit with Magomedov? A leading European oil shipment expert says: “In my understanding, Mr Magomedov is a bubble blower.”
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THE NEW OLIGARCH PLAYPEN — ISKANDER MAKHMUDOV BUILDS A NEW MONOPOLY, THIS TIME OF MOSCOW PASSENGER RAIL TRANSPORTATION

By John Helmer, Moscow

The old oligarchs, and several new aspirants, have a new playground in the Russian transportation sector, where their profits are guaranteed by the state budget. Carrying cargo from mine and wellhead to plant and port, and back again from port to market, is already profitable in conventional terms, and so the state assets, once part of the state railways monopoly, are the target of active lobbying for special favour. Carrying passengers around the biggest conurbation in the country – Moscow – is another target. But because passenger fares are regulated and subsidized by the state, the profitability of transporting them is more restricted than cargo transportation. It is also better hidden. Still, the game rules for privatization are the same as they were in the natural resource, energy and mining sectors – buy cheap (corruptly), sell dear (offshore).

In general, purchasing assets from the state on the cheap means the acquiescence of state officials in low-ball privatizations, or non-competitive “strategic placements”, paid with state bank loans on soft securization terms, subsidized interest rates, non-market repayment guarantees: everyone knows these are administrative measures requiring extras.
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ALEXEI MORDASHOV TAKES HIGH RIVER GOLD BECAUSE THE ODOUR OF MONEY IS SWEETER THAN NORD GOLD SHARES

By John Helmer, Moscow

It has taken Alexei Mordashov (image lower right) three and a half years to persuade shareholders of Toronto-listed High River Gold (HRG) to accept his takeover of the company. That’s the longest foreign defence against a Russian takeover in the oligarch record-book. But when the count was completed on December 11, Mordashov’s victory was still a close-run thing. What has happened is that most of the holdout shareholders opted to take cash for their shares, and abandon the business, rather than accept a swap of their HRG shares for shares of Mordashov’s larger goldmine holding, London-listed Nord Gold.

Mordashov has the company he wanted, but not with a vote of confidence in his or his goldmining future. In the process, not a single Canadian court, Canadian stock market regulator, nor even a Canadian newspaper reporter took the side of the minority shareholders. They have included Sprott Asset Management, one of Canada’s leading independent fund managers; according to its latest performance sheet, its investments in gold and precious metals stocks have been bleeding red for the year to date, the full year, and indeed for the past three years.
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SPINACH FOR FLOTATION — TO SAVE THE SHIP, MEGAFON IPO FINDS ANCHOR INVESTORS

By John Helmer, Moscow

Not even the two people usually familiar with the matter were able to convince Bloomberg that there has been genuine demand in the London market for Megafon shares at Alisher Usmanov’s asking price. Instead, as the company and its underwriters tried to sign buyers before the subscription book closed this afternoon, brokerage sources claimed the initial public offering (IPO) was anchored by an order for $170 million. That’s 10% of the shares on offer – if the company is following its undertaking to sell 15% at a base valuation of $11 billion.

While speculation of the identity of the “anchor investor” focused on major investment funds, a source really familiar with the matter claimed that she “wouldn’t be surprised if it is ‘friends and family’. That seems to be the tactic these days.”
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ALISHER USMANOV’S MEGAFON SHARES REMAINDERED TO CLEAR – THE SWEDES AGREE TO HOLD THEIR SHARES FOR SIX MONTHS

By John Helmer, Moscow

The November 15 announcement by Megafon, the telephone property of Alisher Usmanov and Andrei Skoch, reveals a discount on last month’s valuation targets of up to 20%, depending on how the assets for sale are counted. To attract buyers for shares at bargain-basement prices, the company is promising to pay out more than 50% of its net profit in dividends, a temptation which wasn’t enough in last month’s offer to convince investors to buy into Megafon at the bottom of the valuation range of $11 billion. So uncertain is the future that the minority Swedish shareholder, TeliaSonera, confirms that it has agreed to retain its Megafon shares for no longer than next May, and may then sell out entirely.

Megafon says it has commenced a roadshow of presentations to investors today, and plans to start selling shares and General Depositary Receipts (GDRs) on the London Stock Exchange on November 28. The company has issued an Intention to List (ITL) document, but it is refusing to release the prospectus, or provide details of what it claims in that document about the risks the company faces, and what it reveals of the business practices and litigation record of Usmanov and Skoch.
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WE’RE SORRY, YOUR CALL CANNOT BE COMPLETED AS DIALLED — ALISHER USMANOV CANNOT SELL MEGAFON FOR THE TIME BEING

By John Helmer, Moscow

When it comes to interior decoration, no one does gilding better than Alisher Usmanov. And when it comes to serving delicacies to journalists, none cooks up the hors d’oeuvres better than he does. In the international stock markets, however, these qualities don’t quite cut the mustard. In consequence, in London this week Usmanov has set the Russian record for the number of attempts at initial public offerings (IPOs) or strategic share sales which have failed for buyers or price, or which he has withdrawn for related, if undisclosed reasons.

In between February and October 2008, there were at least two direct IPO tries for Usmanov’s Metalloinvest holding of iron-ore mines and steelmills, and one reverse listing attempt with Kazakhmys. In 2010 there was an attempt at selling a stake to Mitsui, and then a reverse listing negotiation with Nathaniel Rothschild’s ill-fated Vallar; both misfired. Between 2010 and 2011 another London Stock Exchange (LSE) bid was tried. Add to this reckoning the 2003-2004 negotiation with the Anglo-Dutch steelmaker Corus; abortive schemes to add Ukrainian and Kazakh iron-ore assets to his Mikhailovsky and Lebedinsky mines; and a national metals champion plan to merge with Norilsk Nickel and Rusal in 2009.
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RED HAS TURNED YELLOW – THE GREEK AND CYPRIOT COMMUNISTS ARE FLYING A DIFFERENT FLAG IN THE UKRAINE WAR



By John Helmer, Moscow
  @bears_with

The Ukraine war is splitting the communist parties of Europe between those taking the US side, and those on the Russian side.

In an unusual public criticism of the Greek Communist Party (KKE) and of smaller communist parties in Europe which have endorsed the Greek criticism of Russia for waging an “imperialist” war against the Ukraine, the Russian Communist Party (KPRF) has responded this week with a 3,300-word declaration:  “The military conflict in Ukraine,” the party said, “cannot be described as an imperialist war, as our comrades would argue. It is essentially a national liberation war of the people of Donbass. From Russia’s point of view it is a struggle against an external threat to national security and against Fascism.”

By contrast, the Russian communists have not bothered to send advice, or air public criticism of the Cypriot communists and their party, the Progressive Party of Working People (AKEL). On March 2, AKEL issued a communiqué “condemn[ing] Russia’s invasion of Ukraine and calls for an immediate ceasefire and the withdrawal of the Russian troops from Ukrainian territories….[and] stresses that the Russian Federation’s action in recognising the Donetsk and Luhansk regions constitutes a violation of the principle of the territorial integrity of states.”

 To the KPRF in Moscow the Cypriots are below contempt; the Greeks are a fraction above it.

A Greek-Cypriot veteran of Cypriot politics and unaffiliated academic explains: “The Cypriot communists do not allow themselves to suffer for what they profess to believe. Actually, they are a misnomer. They are the American party of the left in Cyprus, just as [President Nikos] Anastasiades is the American party of the right.” As for the Greek left, Alexis Tsipras of Syriza – with 85 seats of the Greek parliament’s 300, the leading party of the opposition – the KKE (with 15 seats), and Yanis Varoufakis of MeRA25 (9 seats), the source adds: “The communists are irrelevant in Europe and in the US, except in the very narrow context of Greek party politics.”

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IF IT SMELLS ALLURING, IT’S RUSSIAN – IN WARTIME L’ORÉAL (FRANCE) AND ESTÉE LAUDER (US) MAKE A BAD SMELL



By John Helmer, Moscow
  @bears_with

The war plan of the US and the European allies is destroying the Russian market for traditional French perfumes, the profits of the French and American conglomerates which own the best-known brands, the bonuses of their managers, and the dividends of their shareholders. The odour  of these losses is too strong for artificial fresheners.

Givaudan, the Swiss-based world leader in production and supply of fragrances, oils and other beauty product ingredients, has long regarded the Russian market as potentially its largest in Europe; it is one of the fastest growing contributors to Givaudan’s profit worldwide. In the recovery from the pandemic of Givaudan’s Fragrance and Beauty division – it accounts for almost half the company’s total sales — the group reported “excellent double-digit growth in 2021, demonstrating strong consumer demand for these product categories.”    Until this year, Givaudan reveals in its latest financial report, the growth rate for Russian demand was double-digit – much faster than the  6.3% sales growth in Europe overall; faster growth than in Germany, Belgium and Spain.    

Between February 2014, when the coup in Kiev started the US war against Russia, and last December, when the Russian non-aggression treaties with the US and NATO were rejected,   Givaudan’s share price jumped three and a half times – from 1,380 Swiss francs to 4,792 francs; from a company with a market capitalisation of 12.7 billion francs ($12.7 billion) to a value of 44.2 billion francs ($44.2 billion). Since the fighting began in eastern Ukraine this year until now, Givaudan has lost 24% of that value – that’s $10 billion.  

The largest of Givaudan’s shareholders is Bill Gates. With his 14%, plus the 10% controlled by Black Rock of New York and MFS of Boston, the US has effective control over the company.

Now, according to the US war sanctions, trade with Russia and the required payment systems have been closed down, alongside the bans on the importation of the leading European perfumes. So in place of the French perfumers, instead of Givaudan, the Russian industry is reorganizing for its future growth with its own perfume brands manufactured from raw materials produced in Crimea and other regions, or supplied by India and China. Givaudan, L’Oréal (Lancome, Yves Saint Laurent), Kering (Balenciaga, Gucci), LVMH (Dior, Guerlain, Givenchy), Chanel, Estée Lauder, Clarins – they have all cut off their noses to spite the Russian face.

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THE WAR AGAINST FOOD – WHO IS TO BLAME



By Nikolai Storozhenko, introduced and translated by John Helmer, Moscow
  @bears_with

This week President Joseph Biden stopped at an Illinois farm to say he’s going to help the  Ukraine ship 20 million tonnes of wheat and corn out of storage into export, thereby relieving  grain shortages in the international markets and lowering bread prices around the world.  Biden was trying to play a hand in which his cards have already been clipped. By Biden.  

The first Washington-Kiev war plan for eastern Ukraine has already lost about 40% of the Ukrainian wheat fields, 50% of the barley, and all of the grain export ports. Their second war plan to hold the western region defence lines with mobile armour, tanks, and artillery  now risks the loss of the corn and rapeseed crop as well as the export route for trucks to Romania and Moldova. What will be saved in western Ukraine will be unable to grow enough to feed its own people. They will be forced to import US wheat, as well as US guns and the money to pay for both.

Biden told his audience that on the Delaware farms he used to represent in the US Senate “there are more chickens than there are Americans.”  Blaming the Russians is the other card Biden has left.  

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EXILE



By John Helmer, Moscow
  @bears_with

The problem with living in exile is the meaning of the word. If you’re in exile, you mean you are forever looking backwards, in geography as well as in time. You’re not only out of place; you’re out of time — yesterday’s man.

Ovid, the Roman poet who was sent into exile from Rome by Caesar Augustus, for offences neither Augustus nor Ovid revealed, never stopped looking back to Rome. His exile, as Ovid described it, was “a barbarous coast, inured to rapine/stalked ever by bloodshed, murder, war.” In such a place or state, he said, “writing a poem you can read to no one is like dancing in the dark.”

The word itself, exsilium in Roman law, was the sentence of loss of citizenship as an alternative to loss of life, capital punishment. It meant being compelled to live outside Rome at a location decided by the emperor. The penalty took several degrees of isolation and severity. In Ovid’s case, he was ordered by Augustus to be shipped to the northeastern limit of the Roman empire,  the Black Sea town called Tomis; it is now Constanta, Romania. Ovid’s last books, Tristia (“Sorrows”) and Epistulae ex Ponto (“Black Sea Letters”), were written from this exile, which began when he was 50 years old, in 8 AD, and ended when he died in Tomis nine years year later, in 17 AD.  

In my case I’ve been driven into exile more than once. The current one is lasting the longest. This is the one from Moscow, which began with my expulsion by the Foreign Ministry on September 28, 2010.  The official sentence is Article 27(1) of the law No. 114-FZ — “necessary for the purposes of defence capability or security of the state, or public order, or protection of health of the population.” The reason, a foreign ministry official told an immigration service official when they didn’t know they were being overheard, was: “Helmer writes bad things about Russia.”

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IN THE FOG OF WAR THERE’S THE GUTERRES CERTAINTY AND THE CADIEU CERTAINTY – GORILLA RADIO SEES THROUGH THE COVER-UP



By John Helmer, Moscow
  @bears_with

Antonio Guterres is the Secretary-General of the United Nations (UN), who attempted last month  to arrange the escape from Russian capture of Ukrainian soldiers and NATO commanders,  knowing they had committed war crimes. He was asked to explain; he refuses.   

Trevor Cadieu is a Canadian lieutenant-general who was appointed the chief of staff and head of the Canadian Armed Forces last August; was stopped in September; retired from the Army this past April, and went to the Ukraine, where he is in hiding. From whom he is hiding – Canadians or Russians – where he is hiding, and what he will say to explain are questions Cadieu isn’t answering, yet.

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DID UN SECRETARY-GENERAL GUTERRES COMMIT A WAR CRIME AT AZOVSTAL?

By John Helmer, Moscow
  @bears_with

Antonio Guterres, the United Nations Secretary-General, is refusing this week to answer questions on the role he played in the recent attempt by US, British, Canadian and other foreign combatants to escape the bunkers under the Azovstal plant, using the human shield of civilians trying to evacuate.

In Guterres’s meeting with President Vladimir Putin at the Kremlin on April 26 (lead image), Putin warned Guterres he had been “misled” in his efforts. “The simplest thing”, Putin told Guterres in the recorded part of their meeting, “for military personnel or members of the nationalist battalions is to release the civilians. It is a crime to keep civilians, if there are any there, as human shields.”  

This war crime has been recognized since 1977 by the UN in Protocol 1 of the Geneva Convention.  In US law for US soldiers and state officials, planning to employ or actually using human shields is a war crime to be prosecuted under 10 US Code Section 950t.  

Instead, Guterres ignored the Kremlin warning and the war crime law, and authorized UN officials, together with Red Cross officials,  to conceal what Guterres himself knew of the foreign military group trying to escape. Overnight from New York, Guterres has refused to say what he knew of the military escape operation, and what he had done to distinguish, or conceal the differences between the civilians and combatants in the evacuation plan over the weekend of April 30-May 1.May.

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THE LAST DITCH IS POLAND – RUSSIA’S PHASE-3 PLAN FOR WESTERN UKRAINE



By Vlad Shlepchenko, introduced & translated by John Helmer, Moscow
  @bears_with

The more western politicians announce pledges of fresh weapons for the Ukraine, the more Russian military analysts explain what options their official sources are considering to destroy the arms before they reach the eastern front, and to neutralize Poland’s role as the NATO  hub for resupply and reinforcement of the last-ditch holdout of western Ukraine.

“I would like to note,” Defense Minister Sergei Shoigu, repeated yesterday, “that any transport of the North Atlantic Alliance that arrived on the territory of the country with weapons or material means for the needs of the Ukrainian armed forces is considered by us as a legitimate target for destruction”.  He means the Ukraine border is the red line.

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THE MATLIN PLOT, THE BROWDER PLOT AND THE NEW YORK TIMES PLOT



By Lucy Komisar,  New York*
  @bears_with

Here’s a story the New York Times has just missed.

US politicians and media pundits are promoting the targeting of “enablers” of Russian oligarchs who stash their money in offshore accounts. A Times article of March 11   highlighted Michael Matlin, CEO of Concord Management as such an “enabler.” But the newspaper missed serious corruption Matlin was involved in. Maybe that’s because Matlin cheated Russia, and also because the Matlin story exposes the William Browder/Sergei Magnitsky hoax aimed at Russia.

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YELLOW COAL, THE FUEL MADE OUT OF RACE HATRED — MAY DAY MESSAGE FROM SIGIZMUND KRZHIZHANOVSKY, 1939



By John Helmer, Moscow
  @bears_with

In 1939 a little known writer in Moscow named Sigizmund Khrzhizhanovsky published his idea that the Americans, then the Germans would convert human hatred into a new source of energy powering everything which had been dependent until then on coal, gas, and oil.

Called yellow coal, this invention originated with Professor Leker at Harvard University. It was applied, first to running municipal trams, then to army weapons, and finally to cheap electrification of everything from domestic homes and office buildings to factory production lines. In Russian leker means a quack doctor.

The Harvard professor’s idea was to concentrate the neuro-muscular energy people produce when they hate each other.  Generated as bile (yellow), accumulated and concentrated into kinetic spite in machines called myeloabsorberators, Krzhizhanovsky called this globalization process the bilification of society.

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IS CAESARISM THE PROBLEM, THE SOLUTION, A FANCY DRESS COSTUME, OR A PROPAGANDA CARTOON?



By John Helmer, Moscow
  @bears_with

In imperial history there is nothing new in cases of dementia in rulers attracting homicidal psychopaths to replace them.  It’s as natural as honey attracts bees.

When US President Woodrow Wilson was incapacitated by a stroke on October 19, 1919, he was partially paralysed and blinded, and was no longer able to feed himself, sign his name, or speak normally; he was not demented.

While his wife and the Navy officer  who was his personal physician concealed his condition, there is no evidence that either Edith Wilson or Admiral Cary Grayson were themselves clinical cases of disability, delusion,  or derangement. They were simply liars driven by the ambition to hold on to the power of the president’s office and deceive everyone who got in their way.  

The White House is always full of people like that. The 25th Amendment to the US Constitution is meant to put a damper on their homicidal tendencies.

What is unusual, probably exceptional in the current case of President Joseph Biden, not to mention the history of the United States,  is the extent of the president’s personal incapacitation; combined with the clinical evidence of psychopathology in his Secretary of State Antony Blinken;  and the delusional condition of the rivals to replace Biden, including Donald Trump and Hillary Clinton.

Like Rome during the first century AD, Washington is now in the ailing emperor-homicidal legionary phase.  But give it another century or two, and the madness, bloodshed, and lies of the characters of the moment won’t matter quite as much as their images on display in the museums of their successors craving legitimacy, or of successor powers celebrating their superiority.  

Exactly this has happened to the original Caesars, as a new book by Mary Beard, a Cambridge University professor of classics, explains. The biggest point of her book, she says, is “dynastic succession” – not only of the original Romans but of those modern rulers who acquired the Roman portraits in marble and later copies in paint, and the copies of those copies, with the idea of communicating “the idea of the direct transfer of power from ancient Romans to Franks and on to later German rulers.”

In the case she narrates of the most famous English owner of a series of the “Twelve Caesars”, King Charles I — instigator of the civil war of 1642-51 and the loser of both the war and his head – the display of his Caesars was intended to demonstrate the king’s self-serving “missing link” between his one-man rule and the ancient Romans who murdered their way to rule, and then apotheosized into immortal gods in what they hoped would be a natural death on a comfortable bed.

With the American and Russian successions due to take place in Washington and Moscow in two years’ time, Beard’s “Twelve Caesars, Images of Power from the Ancient World to the Modern”,  is just the ticket from now to then.

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