ALIŠER USMANOV: AN OLIGARCH’S PRYING EYES ON THE WORLD

On 15 July 2021 / Dossier Deep Sea Mining, Dossier The Truly Powerful, IBI World Russia, Science & Technology / Leave a comment

In life, once you have achieved wealth, you have several choices available to you, of which the generally preferred one is to enjoy the money while the money works for its master. Apparently, one of the Russian oligarchs, Ališer Usmanov, made the same choice. Until you start digging into the complex activities of his companies and discover that, behind the scenes, he has been investing for years in a series of high-tech military projects which, in the last three years, have started to produce head-turning results – and which affect the US military’s defence systems, especially those covered by a high degree of confidentiality.

Thanks to the rapid technological development of the semiconductor industry, companies connected to this oligarch are studying the placement of hundreds of micro-satellites in orbit and hundreds more in the depths of the sea, preparing for the possibility of moving mining production sites to the moon and the oceans. This sounds like conspiracy nonsense or a science-fiction fairy tale, but it is all industrial news, all out in the open (as it should be) and without any people or governments feeling threatened by this development.

It is therefore up to us not to pass judgement, but to explain, as easily as possible, what is happening, who the people and companies involved in this project are, and what political and military protection makes this project possible, even in a world like ours, in which local wars and hotbeds of religious, social and economic tension keep everyone on tenterhooks, just a few centimetres away from a possible world war or environmental disaster.

Scenes from the career of a Soviet manager

Ališer Usmanov with his wife, Irina Viner[1]

Yet Usmanov, so interested in total control over the planet, is not so transparent in his daily life. According to Bloomberg, his fortune amounts to $22.6 billion[2], while Forbes is more cautious, giving him assets of $16.1 billion from the proceeds of his industrial groups, USM Holdings and steel giant Metalloinvest, as well as various stakes in Xiaomi and other telecommunications, mining and media companies – minus money given to art and charity, with his Art, Science and Sport Charity Foundation, which reportedly spends $2.6 billion on causes such as health and education[3].

He was born on 9 September 1953 in Chust, a small town in what is now Uzbekistan, and spent his childhood in the capital, Tashkent, where his father was a State Prosecutor. He attended the best schools in the country and became an expert in fencing – a sport through which he met his wife, Irina Viner[4] (the greatest rhythmic gymnastics coach in history[5]), and two of his greatest friends, Vladimir Putin and Piotr Jastrzebski, the latter for years head of the other’s secretariat[6]. In 1976, he graduated in International Law from the State Institute of International Relations in Moscow, one of the most prestigious universities in the USSR. He then did a Master’s degree in banking techniques at the Academy of Finance, and soon afterwards became a contact person for the Central Committee of the Young Communist League (Komsomol) of Uzbekistan. After some time, Usmanov became the head of the Foreign Economic Association of the Soviet Peace Committee[7].

After the Cold War, the first to leave was his stepson Anton Viner, an architect in his early twenties, who moved to Germany, doing the most modest jobs, saving every penny to pay for his studies in London and then at the Moscow Academy of Finance. There, eight years later, he founded the first Russian chain of solariums, and with his first (good) earnings he invested in ethnic restaurants (Uryuk and Tel-Aviv), and finally created a holding company, the Khimski Group, to coordinate all his commercial activities and launch himself into real estate[8].

He built houses for the rich and artists, and won a prize for the Olympic Village Novogorsk, dedicated to his mother, as the most beautiful sports facility in the Russian Federation[9]. All very nice, except for the fact that, in reality, Viner’s career has been built on usury and the services of a recidivist criminal, Dmitry Smychkovsky, who, through flattery, threats and who knows what else, has always removed the obstacles encountered by Viner in his march of expansion[10]. Viner escaped arrest and started again with new partners, Pavel Rodin and Denis Borodakiy, founding the Rodina Group. But this time his stepfather doesn’t trust him: ‘I have nothing to do with them, I have no intention of investing in them’[11].

Ališer Usmanov made his money even before the end of the Soviet Union, thanks to his ties with the Karimov family, which still leads Uzbekistan in a dictatorship disguised as democratic elections. He does this by embezzling money from the Industrial Plans, which is why, in 1980, he was sentenced to six years in prison, at the end of which the Karimov family took him under its wing[12]. The reason for the conviction (and also for the rehabilitation) is a series of frauds on cotton, which is the enormous wealth of Uzbekistan, on which, in 1976, the then head of the region, Sharaf Rashidov, speculated, promising the Kremlin five and a half million tons, when the nation produced barely four[13].

This claim has three harmful effects: on the one hand, the Uzbek administration falsifies the data on cotton production, on the other hand, the cotton pickers are put in a condition of exploitation, or forced labour, so that they can create a sum of money to be invested at the end of the year in order to be able to buy smuggled foreign cotton and rebalance the promised quotas, and finally, the reckless use of chemical fertilisers and defoliants has poisoned the water and soil, and the accelerated drainage of the Amu Darya and Syr Darya rivers has caused the drying up of the Aral Sea, the surface area of which has shrunk by 50% since 1970, destroying local fisheries[14]. Usmanov’s role is to buy smuggled cotton abroad to replenish Uzbek production – a role that makes him indispensable to Islam Karimov[15].

Uzbek power ties and international sanctions

Ališer Usmanov (left) shakes the hand of Islam Karimov (centre) and Vladimir Putin at an official reception in Tashkent in 2006[16]

Usmanov was sentenced on 19 August 1980 to eight years in the gulag by the Turkestan military court ‘for helping an official accept bribes, and for fraud’[17]. Usmanov, together with his friend Bakhadyr Nasimov, a KGB agent, and the son of the Minister of Agriculture, Ilham Shaikov, extorted 30,000 roubles from a Soviet official, Andrei Mayorov, in exchange for his silence about his misdeeds[18]. On 26 March 1986, Usmanov was released on the grounds of his ‘sincere remorse’ and ‘good behaviour’. In 2000 he was officially rehabilitated by the Supreme Court of Uzbekistan[19]. But in the meantime the Uzbek oligarch had returned to the top of power, supporting Islam Karimov, but also the career of Vladimir Putin.

A situation that was exacerbated when, in 2016, Islam Karimov died and his former assistant Shavkat Miromonovich Mirziyoyev, who has been Prime Minister of Uzbekistan since December 2013, came to power[20] – a man with whom Usmanov has strong friendly relations and to whom he is even distantly related[21] . What used to be run by the Soviet Communist Party is now run privately by the Usmanov family and the Karimov family.

The careers of the two families have advanced in parallel. Starting in 2000, Ališer Usmanov was appointed general manager of Gazprom, the Russian oil giant, and thus became one of the five most powerful men in Russia[22]. He started to have money in hand to invest, starting with TeliaSonera, the leading mobile phone operator in Sweden and Finland, which was formed by the merger (2003) between Swedish Telia and Finnish Sonera[23]: Over the years the company has been renamed Telia Company and is owned by the Swedish state (39.5%), the Finnish state (4.9%) and a host of stock market investors[24].

Telia came to prominence when it obtained a licence for Uzbekistan in 2012: a licence paid $30 million to a brokerage firm, Takilant Llc Gibraltar, owned by Mrs Gayane Avakyan, a close friend of the daughter of the Uzbek president, Gulnara Karimova[25] . At the same time, Uzbekistan cancelled the licences of Russian competitor MTS Mobile Telesystems, owned by Vladimir Yevtushenkov – which had an ongoing commercial war with Megafon, a company controlled by Ališer Usmanov and Telia[26] .

At the end of this battle, won by Usmanov, which forced Yevtushenkov to sell some of his industrial assets, it emerged that Gulnara Karimova had pocketed some USD 1 billion by guaranteeing (through Takilant) telephone licences in Uzbekistan to Telia, MTS and VimpelCom[27]. Mrs Karimova, at the suggestion of her good old friend Usmanov, took other decisions, which were then turned into law by her father: (a) closing the US air base in Karshi-Khanabad (2005), which was bringing in a large amount of rent to the exchequer; (b) awarding all Uzbek gas extraction licences to Gazprom (2004) on payment of an $88 million bribe to Gulnara Karimova; c) the murder of the journalist Ivan Safronov, who was investigating the converging economic and political interests of Usmanov, Karimov and Putin, at a time when they controlled the ownership of Russia’s largest financial newspaper, the Kommersant[28].

May 2017: Russian opposition leader Alexei Navalny on his way out of court where he was sentenced to a light fine for slandering Ališer Usmanov[29]

And they control him because, on 12 December 2011, following the fraud in the parliamentary elections, the weekly Kommersant Vlast published an unflattering article about Vladimir Putin[30]. Usmanov fired editor-in-chief Maxim Kovalsky and editor-in-chief Andrei Galiyev, claiming that the article was an “ethical violation” that “borders on petty hooliganism”[31]. Nadezhda Azhgihina, executive secretary of the Russian Union of Journalists, called the incident “a clear example of censorship by the owner”.

Usmanov says he understands journalists but that “Kommersant is a respectable and independent editorial group”, and rejects the offer of opposition leader Mikhail Prokhorov to buy the group[32] . None of these facts are covered by oblivion, so Usmanov has continued his career without public sympathy – as when, in 2007, he became a shareholder in the historic London football club Arsenal, and the fans were burning for him to sell his shares as soon as possible[33].

On 17 January 2021, Russian opposition leader Alexei Navalny, who had already been poisoned and risked death, was arrested in Moscow[34]. His story shook the conscience of the Western world, and there were calls from various quarters to put pressure on the Kremlin by embargoing some of its leading oligarchs – starting with Ališer Usmanov himself[35].

The first to react are the British and EU governments[36]. The United States had already decreed sanctions against Metalloinvest and USM Holdings in January 2018 because of one of Usmanov’s associates, former Duma MP Andrei Skoch[37] . In that same month, some members of the Federal Senate had called for the extension of sanctions also to Usmanov and all the companies controlled by him for bribing politicians in several countries around the world[38] .

The activities of USM Holdings Group

An image of OEMK’s massive, almost 10km-long production facilities at Stary Oskol, the world’s largest steel mill, less than 100km east of the Ukrainian border[39]

Moreover, all these businesses are side effects of the development of the main branch of the company, which is the Metalloinvest group[40], i.e. the sum of many Soviet iron and metallurgical industries, brought together since 2006, when Usmanov bought and merged Mikhailovsky GOK, Ural Steel, Lebedinsky GOK and OEMK (the last two sold to him for a ridiculous sum by Gazprom) into a single industrial group[41] generating $6.4 billion a year[42]. Metalloinvest was born in those years when Usmanov was officially ‘only’ the general director of Gazprom and, for personal business, had founded USM Holdings[43].

With the profits generated by Metalloinvest, Usmanov created the Mail.ru group – Russia’s largest Internet company, which has a turnover of 300 billion roubles (4 billion dollars)[44] and reaches over 90% of the country’s Internet users: thanks also to two social networking platforms, VKontakte and Odnoklassniki, Mail.ru is used by 78% of the world’s Russian-language users, and its 97 million monthly visitors send around 10 billion messages plus 1 billion ‘likes’ a day[45].

Odnoklassniki is also a leader in the Russian online video market, with a peak of 1 billion daily views and a monthly audience of 71 million. In addition to this, Mail.ru is the largest email service for Russian-speaking users, with over 100 million active accounts, and leads the revenue charts for internet gaming, home food delivery applications and crowd-funding[46].

Apparently, there is not much common ground between the steel industry and the web – but Usmanov has managed to build one of the most daring and complex projects in industrial history, which is why the Uzbek oligarch is different from all his peers. In 2007, just as Metalloinvest was being set up and Usmanov was joining the elite of the oligarchs, USM Holdings took part in the foundation, in the territorial waters of the Tonga Islands, of a Canadian multinational group, Nautilus Minerals, which obtained a licence to mine the seabed[47].

At the helm of the company is an Australian publicist, Gerard Robert Barron, who has no experience in the mining sector[48], who leads the company on a series of explorations on the Pacific Ocean seabed until, in 2012, one of the business partners sues for $12.5 million that apparently disappeared[49]. Like a house of cards, the group built by Nautilus Minerals collapses, 55.02% of its shares are taken over by DSMF Deep Sea Mining Finance Ltd. Douglas (Isle of Man)[50] , which in that way, in August 2019, took over the exploitation rights of Nautilus for just $20 million.

The secret financial structure behind USM Holding OOO Moscow[51]

This company, in turn, sold part of the group to a new Canadian company, DeepGreen Metals, whose chairman of the board is the usual Gerard Barron, who also holds the same position at DSMF[52]. DeepGreen Metals has since continued its ocean floor mining project[53], while DSMF retains control over some of Nautilus Minerals’ subsidiaries, which therefore apparently no longer need to exist[54].

The creation of DSMF, according to creditors[55], is a trick used by Nautilus Minerals’ founders to keep the licence and not pay debts, as the old and new companies have the same symbol[56] and shareholders[57]: USM Finance Ltd. Tortola (BVI), which belongs to USM Holdings Ltd. Limassol (Cyprus) which, in turn, through OOO USM Holdings Moscow, belongs to Ališer Usmanov and some of his business partners[58]. One of them is the Russian company Epion Holding[59]s: between 2006 and 2008, this company, 100% controlled by Usmanov, paid 6 million dollars (as a thank-you)[60] to Tatyana Dyachenko (daughter of former Russian president Boris Yeltsin) and her husband, Valentin Yumashev, who is Vladimir Putin’s advisor for all matters concerning mining and nuclear supplies[61].

The challenge for planetary control

One of the teletypewriters connected to the more than 300 Flock3p-PSLVC40 satellites, launched by the DST into orbit, which develop dynamic maps of the earth’s surface and everything that moves on it[62]

During the months in which Usmanov founded the USM Group, another Russian oligarch, Yuri Milner, founded a financial company, DST Digital Sky Technologies Ltd. Hong Kong, which buys 1.96% of Facebook[63] thanks to financing from the Goldman Sachs bank of $290 million, guaranteed by a Bermuda company, Appleby Ltd. Hamilton[64], which turns out to be a 100% subsidiary of Gazprom Holdings – chaired by Ališer Usmanov[65] .

At the same time, Usmanov bought a third of DST through Mail.ru and then persuaded Milner to become a co-owner of the latter company, so that today DST has become a branch of Mail.ru. Usmanov and Milner each control 17.9% of the shares but, thanks to a contract with all the other shareholders, they hold 58.1% of the votes at the meeting[66].

Initially, DST invests in social networking platforms, with the obvious aim of making a financial profit, as one might expect, but then, in 2015, Yuri Milner and Ališer Usmanov meet, at an international conference organised in Moscow by the Russian government, the famous scientist Stephen Hawking and a number of astrophysicists, astro-nominees and senior US military officers, including Pete Worden. Hawking convinces those present that it is the duty of humanity’s richest tycoons to believe in the existence of extra-terrestrials and that it is necessary to be prepared to meet them and, if necessary, defend themselves against them[67].

Hawking’s project, called “Breakthrough Listen”, is being directed by Yuri Milner and Marc Zuckerberg[68], is being coordinated by NASA and NOAA (the US military’s space and ocean agency), and during the conference obtained donations, from Usmanov and Milner[69], of over 100 million dollars[70]. In December 2020, the first possible successes were announced: a series of radio waves from Proxima Centauri, the closest known star to the sun, only 4.2 light-years from Earth[71]. To follow these waves, NASA and NOAA installed hundreds of satellites and underwater receivers, in coordination with the Foundation created by Hawking and now run by Milner, Zuckerberg[72] and, as general manager, Pete Worden[73].

This project contributes to an impressive series of consequences, because it obviously brings with it a further leap forward in space technology. According to a very accurate study by the University of Bologna, published in September 2020, while in 2015 there were just over a hundred satellites in orbit transmitting data to Earth, this number has exceeded 2,000 in 2018, 4,000 in 2020 and should soon reach 8,000[74]. This is made possible by the fact that technological progress, by developing drones, has reached a level where it can send satellites no bigger than a few thousand Euro into orbit[75].

NASA scientists and Planet Labs Inc. founders Will Marshall and Robbie Shingler proudly present a sample of their nano-satellites that, every day, help draw a dynamic map of everything that happens in the sky, on land and in water around our planet[76]

The world leader in the new generation of so-called nano-satellites (no more than 15 cm long) is Planet Labs. Inc. San Francisco, founded in 2013 by three NASA scientists (Will Marshall, Robbie Shingler and Chris Boshuizen)[77] under the suggestion of their NASA division chief, the aforementioned US Air Force Brigadier General Pete Worden[78] . Worden is anything but unknown: when Ronald Reagan was President of the United States, he was one of the leading scientists who designed the military space shield called Star Wars (which never came to fruition)[79] and who designed the very first micro-satellites to monitor the skies[80].

Milner and Usmanov have helped Planet Labs from the outset, brokering private funding of $52 million for the San Francisco-based company’s DOVE model B satellites, and $70 million for the model C[81]. These satellites, which have proved their worth in the space age, have been designed by the San Francisco-based company. These satellites, which have demonstrated great efficiency and have a service life of about a year[82], are now destined to replace the Yamals, produced by ThalesAlenia, which had been in the employ of Gazprom Space Systems (the oil giant’s aerospace agency, of which Usmanov was general director for 15 years)[83] for years.

In addition to waiting for aliens, the DOVEs contribute, in real time, to the mapping of the entire planet and of what in the sky, sea and land moves in its atmosphere[84]. To this end, starting in January 2021, Planet Labs’ new satellites will be taken into orbit by the ISS (International Space Station[85]) and then launched in flocks, dozens at a time[86]. In the meantime, as far as the sea is concerned, the Allseas project is expected to go ahead, linked to that of Nautilus Minerals, for the distribution of very small sensors on the seabed which will contribute, with their signals, to the mapping of the planet[87].

Simplifying: an American company, born as a spin-off of the air force and NASA, financially supported by the Russian oil giant Gazprom (as a client) and run by two oligarchs with a history of controversy, launches into orbit micro-satellites which, officially, serve to make us talk to space, and coordinates the activities of NASA (the American space agency) and NOAA (the American ocean agency) in preparing for the mining of the ocean floor and other planets. Explained in this way, I honestly find it very worrying.

[1] https://quotesgram.com/alisher-usmanov-quotes/

[2] https://www.bloomberg.com/billionaires/profiles/alisher-usmanov/

[3] https://www.forbes.com/profile/alisher-usmanov/?sh=4561ccfc6e73

[4] https://www.ozodlik.org/a/24980131.html

[5] https://mayfairclub.ru/it/irina-viner-biografiya-foto-lichnaya-zhizn-trenera-biografiya-iriny/ ; https://olivia2010kroth.wordpress.com/2015/05/28/olivia-kroth-russia-on-top-in-rhythmic-gymnastics-with-legendary-coach-irina-viner-usmanova/ ;

[6] https://www.craigmurray.org.uk/archives/2007/10/back_and_unbowe/

[7] https://ladysk.ru/en/sudimost-alishera-usmanova-iznasilovanie-vymogatelstvo-hishchenie.html ; https://web.archive.org/web/20130620040209if_/http://metalloinvest.com/en/about/guide/founder/

[8] http://himkigroup.ru/project/

[9] https://www.themoscowtimes.com/2013/02/28/qa-developer-anton-viner-balancing-quality-and-affordability-a21959 ; https://ita.culturell.com/deti-alishera-usmanova-foto-news-638071 ; http://himkigroup.ru/about-company

[10] http://rusmafiozi-eng.blogspot.com/2018/10/reshalschik-for-alisher-usmanov.html?m=1

[11] https://www.forbes.ru/profile/alisher-usmanov

[12] https://www.theguardian.com/world/2007/nov/19/russia.football