UPDATED: General Flynn’s Russian Payments: The Real Question That Wasn’t Asked

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Today US Congress Oversight Committee published a document outlining the sources and amounts of payments from Russian entities received by Gen. Michael Flynn in the period immediately preceding and in the course of the presidential campaign.  Most media coverage focused  on the amount paid by Kremlin’s so-called news TV channel, RussiaToday (RT), for Flynn to fly to Moscow in December 2015 and sit next to President Putin at the TV stations’ anniversary gala. And that’s understandable, given the unsavory optics of Flynn’s decision to, essentially, sell his body to Kremlin’s propaganda arm for 2 evenings and charge 55 k for it.

Lesser media attention was paid, however, to something potentially much more sinister. The Committee’s findings also disclose a payment of approx 11k from Volga Dnepr, a Russian aviation transportation company which has been a long-time market leader in delivering military equipment to hard-to-reach or highly dangerous locations; primarily thanks to its fleet of Antonov 124 large and sturdy planes. Volga Dnepr has for years been a logistics partner for the peace-keeping units of United Nations, and for the armies of European countries and the Pentagon. Or at least, it had been a partner until recently. We will come to that in a minute.

The Oversight Committee takes a jab at Volga Dnepr, implying poor judgement by Flynn in taking money from a company that was linked to a UN corruptoin scandal in 2007.

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However, this incident predates Flynn’s possible engagement by nearly a decade and can  only imply poor judgement and a broken moral compass. But for this we already have the RT trip.

What could potentially be more meaningful is that around the time of the services for which Flynn charged $11,250, Volga-Dnepr was in serious trouble with the Pentagon, and was in dire need of help, legal and otherwise. Shockingly, the House Oversight Committee seems completely unaware of this.

Between 2002 and 2014 USTRANSCOM, Pentagon’s transportation procurement arm, had used Volga Dnepr as a subcontractor in approximately 13,000 missions  transporting military cargo to U.S. and its allies. Suddenly, on February 9, 2015, USTRANSCOM abruptly terminated its relationship with Volga Dnepr and informed it – and all Pentagon subcontractors by email – that it shall not be used for further military operations abroad.

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In two subsequent prohibition circulars from March 2014 (see second one below), USTRANSCOM stated that Volga Dnepr was “unsuitable” for sub-contracting by the Pentagon.

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USTRANSCOM provided no further information despite Volga Dnepr’s requests for clarificaiton of the reasons for termination. An email from AtlasAir, one of the Pentagon’s direct contractors previously sub-contracting Volga-Dnepr’s, to US CEO Sergey Reznikov from February 24 2015 made it clear that Volga’s blacklisting is not a “lightly made decision” and is not simply the result of the “political environment”. AtlasAir recommends Volga-Dnepr to go via the Russian Embassy in D.C. to check what, if anything, can be done to reverse the Pentagon’s decision.

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On July 27 2015, the USTRANSCOM informed Volga Dnepr that it cannot share the motivation for its blacklisting decision, citing the sensitive, classified  nature of the data.

 

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As Volga-Dnepra states in its pleading notes to a court filing at the US District Court in Columbia, in the year years following the termination notice in February 2014,

“Volga Dnepr made many efforts to learn why USTRANSCOM banned it from USTRANSCOM contracts and tenders”

but it was not able to get direct feedback from the Pentagon. Then, on May 11, 2015, Volga Dnepr filed a Freedon of Information Act (FOIA) request to the Pentagon, hoping to receive the requested information. To this end it hired Squire Patton Boggs, the US law and lobbying firm that represents other Russian companies, such as  Gazprombank, in their quest to get past the US sanctions.

The Pentagon was in a pickle: under US FOIA law, it had to provide information in its reasoning and decision-making process in dismissing a procurement relationship; yet this was not an ordinary supplier, but a Russian arms speditioner that works closely with the Russian government. Any information about specific reasons for terminating the agreements would likely provide information to Moscow about what the US knew about Moscow. And it’s likely that that in itself was a key motive for the FOIA request.

On December 15, 2015, 230 days after Volga Dnepr’s First FOIA Request, USTRANSCOM released a 41-page response to Volga Dnepr, of which 37 pages were redacted in part or in full. The statement referred to multiple examples of Volga-Dnepr breaching US laws and nationa-interest doctrine, but the examples themselves were fully redacted (except one). The headings above each example, however, were telling: Subcontractor activities Counter to US Interests, Support to anti-US Regimes, Weapons proliferation, Vulnerability to Exploitation, etc.

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The only unredacted example listed in the statement was the delivery of 2 SU-30MK fighters to Vietnam in December 2014 on account of Rosoboronexport, a sanctioned Russian state arms-export company, transacting with with which makes any US counterpart ineligible for business.

Volga Dnepr appealed this redacted response and took the case to court in October 2016, after failing to receive a reaction from the Pentagon.

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So it appears that four months after Volga-Dnepr’s contract with the Pentagon was terminated due to “unsuitability for transacting” with the the Pentagon, and after – in the company’s own words –  it  began to “make many efforts to learn why USTRANSCOM banned it from USTRANSCOM contracts and tenders”,   the Russian company made a payment of $ 11.250 to General Flyn.

General Flynn, as we know, was Donald Trump’s short-lived National Security Advisor with ephemeral but full access to all state secrets, Pentagon or otherwise.  But this was not the first time he got such access. At the time he provided the unspecified service to the Russian company, he had been fired from his DIA job for a year but still had top-security clearance. This would suggest that Flynn would have been uniquely useful to Volga-Dnepr in their search to identify what the Pentagon knew or didn’t know about the company’s disqualifying projects.

 What is clear is that Flynn provided a service to a Russian company formally blacklisted by the Pentagon for  activities contrary to US Interests.  What is also beyond doubt is that at that very time, that company was searching for data that the Pentagon refused to share, because -as it would later argue in defending its FOIA redactions – the sources for such information was highly sensitive and its disclosure would affect US’s national security.

Yet, Flynn had access to such data due to his residual security clearance.

Based on Flynn’s security clearance level, he would have had access to the USTRANSCOM’s unredacted assessment dated February 18th 2015, which motivated the Pentagon’s conclusion that Volga-Dnepr was acting against US interests, was promoting weapons proliferation and was assisting regimes hostile to the US. He would have had ample opportunity to recuse himself from the engagement with Volga-Dnepr after such discovery. He did not, and proceeded to receive payment from Volga-Dnepr in August 2015.

I cannot be certain that Flynn was engaged and received payment for providing (or attempting to supply) confidential, classified data to a company blacklisted by the Pentagon. However the timing, as well as Flynn’s unique qualifications, at least suggest that the payment was likely to be linked to Volga-Dnepr’s struggle to obtain information that the Pentagon was refusing to share out of security concerns.

Neither Flynn nor Volga-Dnepr have responded to media requests for comments on the nature of the service relationship.

If my hypotethesis turns out to be true,  Flynn’s Moscow shopping trip may be the least of his problems. The scariest part is that none of this is in the Congress Committee’s report.

UPDATE ON 3/17/2017 at 10 pm:

Volga-Dnepr have published a statement that the $11,250 paid to General Flynn was for a speech Flynn made at a Middle East & African Spedition & Security conference in Washington, D.C . that was sponsored by Volga-Dnepr’s subsidiary Volga Dnepr Unique Air Cargo. Volga Dnepr, somewhat quizzically, says there is no connection between the selection of Flynn as speaker and his future appointment as national security adviser to Donald Trump.

At the time of the conference, Volga-Dnepr Unique Air was suffering significant loss of clients due to its reputatiin damage following its being blacklisted by the Pentagon, as can be seen in this letter by the company to USTRANSCOM from Feb 24 2015:

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Therefore, the idea that Unique Air would pay General Flynn, the former DIA chief, to speak at an international arms conference, at its invitation and on its behalf, would not be out of the question.

If this was the sole relationship between Flynn and Volga Dnepr, the only question that remains is that of the moral and political choice by Flynn to speak on behalf of a company of which he had knowledge to have been blacklisted by the Pengagon, over issues at serious odds with US law and national security interest.

 

 

 

 

 

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