Russian bank accused of being ‘den of spies’ relocates to NATO member Hungary

Nikolai KosovA Russian-backed development bank, which is accused by its critics of being an intelligence front for Moscow, has relocated to Hungary, a member of the European Union (EU) and the North Atlantic Treaty Organization (NATO). The International Investment Bank (IIB) was founded in 1970 by the Soviet Union as a multilateral development banking institution. Its purpose was to assist in the economic development of the Soviet Union’s allies under the umbrella of the Soviet-led Council for Mutual Economic Assistance (COMECON). Like other Soviet financial institutions with foreign branches, it was suspected by Western spy agencies of being used by Moscow to station intelligence personnel under non-official cover.

In 1991, following the disintegration of the Soviet Union and the Eastern Bloc, the IIB entered a period of stagnation, as did many Soviet institutions of the Cold War period. But in 2002 Russian President Vladimir Putin spearheaded a government-led effort to revive the bank. Today the Russian government has a 47 percent stake in the IIB, with the remaining 53 percent owned by its other member-countries. These are all communist of former communist states: Cuba, Vietnam, Cuba, Bulgaria, Romania, Slovakia, the Czech Republic, and Hungary. Each of these member states is represented on the IIB with an official who speaks for his or her government.

Some critics express concerns that the IIB continues to serve as a front company for Russian intelligence. Some point to the IIB’s director, Nikolai Kosov, whose parents were officers in the KGB and served in several European countries, including Hungary, during the Cold War. Such criticisms resurfaced earlier this year, when it was announced that the IIB would move its headquarters to Budapest. The Hungarian government said it would host IIB’s 100 personnel and granted the IIB building privileges that are usually extended to diplomatic facilities. For instance, Hungarian authorities will not be able to enter the IIB premises without prior authorization by the bank.

The Hungarian government of Prime Minister Viktor Orban has said that the IIB’s relocation to Budapest will further-strengthen Hungary’s relations with Russia and help promote the former Soviet ally as a growing financial hub in Europe. But one critic told the Al Jazeera news network that the IIB “is more likely to make Budapest a Russian intelligence center than a financial hub”. Another critic, referred to by Al Jazeera as a “diplomatic source”, said that NATO has limited its sharing of classified information with Hungary “due to fears it leaves the door open to Russia”.

Author: Joseph Fitsanakis | Date: 03 September 2019 | Permalink

Russian aid center in Serbia rejects claims that it is an intelligence base

Russian-Serbian Humanitarian CenterStaff at a Russian disaster relief center in southern Serbia have rejected claims by American officials that the facility operates as an espionage arm of Moscow’s foreign policy in the Balkans. The Russian-Serbian Humanitarian Center was built in 2012, at a cost of nearly $40 million, following an agreement between Belgrade and Moscow. Its stated mission is to “provide humanitarian emergency response in Serbia and other Balkan states” through the provision of humanitarian assistance to those in need and training local emergency response crews. The center is located in the outskirts of Serbia’s fourth largest city of Niš, not far from the country’s border with Kosovo, a former Serbian province that unilaterally declared independence in 2008. Serbia refuses to recognize Kosovo’s independence, a decision that is strongly backed by Russia. It is also close to the headquarters of the North Atlantic Treaty Organization’s peacekeeping force stationed in Kosovo, which houses 4,000 international troops, including 600 Americans.

Western officials have raised concerns that the disaster relief center is in reality an intelligence base, from which Russia conducts some of its espionage operations in the Western Balkans. It has also been suggested that the center could operate as a military base in a potential Russian military operation in the former communist state. In June, the United States Deputy Assistant Secretary of State for European and Eurasian Affairs, Hoyt Brian Yee, publicly described the compound as “the so-called humanitarian center” in Serbia. Speaking during a US Senate hearing on southeastern European politics, Yee said the Department of State was concerned about the center’s unofficial use. He also expressed reservations about Moscow’s request that the Serbian government grants the center diplomatic immunity, similar to that which covers the activities of the Russian embassy in Belgrade.

Moscow responded to American allegations of espionage by inviting local and international media representatives to the center on Wednesday. The center’s co-director, Viacheslav Vlasenko, told reporters that the center was “very open”, adding that its staff consisted of 15 Serbs and five Russians who were dispatched to Serbia from Russia’s Ministry of Emergency Situations, known as EMERCOM. Vlasenko said that Moscow’s request for diplomatic immunity for the center was solely aimed at reducing the annual taxes that the facility had to pay.

Regular readers of intelNews will recall allegations made last October by authorities in Serbia’s neighboring state of Montenegro —later repeated by Britain— that nationalists from Russia and Serbia were behind a failed plot to kill the country’s then-Prime Minister Milo Dukanović and spark a pro-Russian coup in the country. The allegations surfaced after 20 Serbians and Montenegrins were arrested by police in Montenegro on election day, October 16, as Montenegrins were voting across the Balkan country of 650,000 people. In response to allegations that the coup had been hatched in neighboring Serbia, Serbian Prime Minister Aleksandar Vučić said that he would not allow Serbia to “act as the puppet of world powers”, a comment that was clearly directed at Moscow. Russia has vehemently denied the allegations.

Author: Joseph Fitsanakis | Date: 13 July 2017 | Permalink

Malaysia assassination highlights North Korea’s network of front companies

North KoreaThe sensational assassination of Kim Jong-nam, half-brother of North Korea’s Supreme Leader Kim Jong-un, on February 13, revealed much about the current operational mindset of Pyongyang. But it also brought to light the shady network of front companies set up by the North Korean regime to facilitate the country’s illicit financial activities around the world. This extensive network permits Pyongyang to evade international sanctions against it, and to coordinate the activities of hundreds of clandestine operatives around the world. Through these activities, the reclusive country has been able to develop its weapons of mass destruction program unabated, despite concerted efforts by the United Nations to prevent it from doing so.

Writing for Forbes, Scott Snyder, senior fellow for Korea Studies and director of the program on US-Korea Policy at the Council on Foreign Relations, notes that the UN has for many years employed sanctions to “block international financial and material support for North Korean nuclear and missile development efforts”. But now the UN’s own experts have concluded that Pyongyang has been able to evade these sanctions so skillfully that it has “largely eviscerated the intent and impact of UN sanctions resolutions”. How has it done so? Mostly through a network of countries that routinely turn a blind eye to North Korea’s illicit activities. These include several countries in the Middle East, as well as Singapore, China, Indonesia, and Malaysia. Pyongyang maintains an extensive network of front companies in these countries, says Snyder, with the main purpose of enabling it to evade international sanctions against it.

Malaysia has been a primary hub of North Korean illicit activity. In that, Pyongyang has been crucially assisted by the fact that —until last week— North Korean citizens could travel to Malaysia without entry visas. Malaysia thus provides a useful base for dozens of North Korean front companies, such as Glocom, which ostensibly markets radio communications equipment, or Pan Systems Pyongyang, which just happens to trade in exactly the kind of commercial items that could be described as “dual-use goods” in UN sanctions resolutions. Pan Systems is connected to several Malaysian-based subsidiaries, including International Global Systems and International Golden Services, which, according to investigators, are operated by North Korean intelligence.

Many of these companies also serve as exporting and importing hubs for Pyongyang. In the last five years, several ships have been intercepted while carrying illicit cargo dispatched from North Korea or destined for the reclusive state. In one such instance in 2013, the Jie Shun, a Cambodian-registered ship with a North Korean crew, was found to be carrying over 30,000 rocket propelled grenades hidden under thousands of tons of iron ore. The shipment was intended for an “undisclosed Middle Eastern destination”, says Snyder and was traced to a firm called “Dalian Haoda Petroleum Chemical Company Ltd.”. Many of these mysterious firms are headquartered in China, registered in Hong Kong, but actually work on behalf of North Korea, often using banking facilities in Europe and the United States to conduct financial transactions.

Author: Joseph Fitsanakis | Date: 07 March 2017 | Permalink

US created fake social network firm to foster dissent in Cuba

Cell phone user in CubaBy JOSEPH FITSANAKIS | intelNews.org
A United States government agency secretly created a bogus social networking platform in order to foment political unrest in Cuba, according to a report by the Associated Press. Over 40,000 subscribers regularly used the ZunZuneo social networking service that began operating in the communist Caribbean island in 2009. The service, dubbed “Cuba’s Twitter” was based on SMS messages sent via mobile telephone subscribers. Its rapid success was attributed to the strict controls over Internet usage that are in place in Cuba, as well as the population’s relative lack of access to networked computers. But The Associated Press revealed on Thursday that ZunZuneo was in fact a secret program devised by the US Agency for International Development (USAID), which is a federal body operating under the Department of State. The news agency reported that the US government was able to conceal its role in building and sustaining the network by operating through a complex system of front companies set up in the Cayman Islands and in Spain. The latter were used to register ZunZuneo’s parent company and to pay the company’s bills, as well as to route millions of subscribers’ text messages without the involvement of servers based on US soil. The report stated that ZunZuneo’s corporate website even carried “bogus advertisements” strategically placed to give the site a realistic corporate look. It is worth noting that the social networking service suddenly stopped working in 2012, without providing a warning or an explanation to its tens of thousands of subscribers. But the Associated Press said the reason the service was terminated was that the US taxpayer’s money used to sustain the program simply run out. The news agency argued in its report that the program was covert in nature and should have been subjected to Presidential authorization and Congressional scrutiny. Read more of this post

Russian court upholds 15-year prison sentence for alleged CIA spy

Igor SutyaginBy JOSEPH FITSANAKIS | intelNews.org |
Russia’s highest court has upheld a lengthy prison sentence given to a Russian arms control and nuclear weapons expert, who Moscow alleges was a spy for the United States. The Russian government accuses Igor Sutyagin of collaborating with Alternative Futures, a British-registered consulting company alleged by Moscow to be a front for the United States Central Intelligence Agency. Before his 1999 arrest, Sutyagin was Division Chairman on the Russian Academy of Sciences’ USA and Canada Institute. His indictment, prepared by the Russian Federal Security Service, said that he shared with the CIA “classified technical information” about nuclear submarine technology. Sutyagin maintained his innocence throughout his trial, and Human Rights Watch as well as Amnesty International classified him as a political prisoner. The two groups brought the accused spy’s case before the European Court of Human Rights, which ruled that Russian government prosecutors had violated Sutyagin’s right to a fair trial. Moreover, the Court ruled that Sutyagin’s pre-trial detention, which lasted five years, was illegal. Eventually, Moscow complied with the Court’s ruling and a retrial was ordered, to the delight of Sutyagin’s family. In the retrial, which ended last week, Russia’s Supreme Court agreed with the European Court of Human Rights that Sutyagin’s pre-trial detention had been unlawful; but the court upheld Sutyagin’s 15-yeard sentenced as “entirely legitimate”. Sutyagin was tried in absentia, however, because in the summer of 2010 he was released and fled to the West, as part of the largest postwar spy-exchange between Russia and United States. Sutyagin was one of four men behind bars in Russia, who were swapped for 10 Russian non-official-cover intelligence operatives that had been arrested in a sting operation by the Federal Bureau of Investigation. Read more of this post

Why is Germany protecting Iraqi informant who lied about WMDs?

Rafid Ahmed Alwan

Alwan al-Janabi

By JOSEPH FITSANAKIS | intelNews.org |
German politicians in the state of Baden-Württemberg are questioning the protection given by German intelligence services to a notorious Iraqi informant, who lied about Iraq’s weapons program. Rafid Ahmed Alwan al-Janabi, known in intelligence circles as “Curveball”, arrived in Germany in 1999, where he applied for political asylum, saying he had been employed as a senior scientist in Iraq’s biological weapons program. Despite serious doubts expressed at the time by officials in Germany’s Federal Intelligence Service, the BND, and by some of their CIA colleagues, al-Janabi was given asylum in Germany. Moreover, information gathered from his testimony became a major source of the Bush Administration’s argument in favor of going to war in Iraq in 2003. Less than a year later, both the BND and the CIA concluded that al-Janabi had been lying about his alleged biological weapons role, and that he was in reality a taxi driver from Baghdad, who had used his undergraduate knowledge of engineering to fool Western intelligence. Read more of this post

Israel silent on alleged Mossad spy ring uncovered in Egypt [updated]

Mossad seal

Mossad seal

By IAN ALLEN | intelNews.org |
Israeli government officials have refused comment on charges announced yesterday against an alleged Mossad spy ring in neighboring Egypt. Less than a week after the discovery of what appear to be Israeli surveillance devices hidden in the mountains around Lebanese capital Beirut, two Israelis have been charged with espionage by the Egyptian government and are reportedly on the run. (Update: the names of the two Israelis, as reported on their arrest warrants, are Joseph Daymour and Idid Moushay). A third member of the alleged ring, Egyptian businessman Tareq Abdel Razeq Hussein Hassan, 37, will be facing similar charges in court soon, according to Egypt’s State Prosecutor Hisham Badawi. According to Badawi, Hassan set up an import-export business in Egypt to act as a front company, under instructions by Israeli intelligence agency Mossad, after he met with Mossad officers in Thailand in 2007. He then allegedly used his company regional business activities as an alibi in order to travel to Syria and Lebanon and establish close contacts with telecommunications personnel throughout the region, in exchange for money from the Israelis. Read more of this post