Here's Why The FBI And Mueller Are Investigating "Suspicious" Transactions By Russian Diplomats
The former Russian ambassador received a salary payment twice as large as past years, and bankers blocked a $150,000 withdrawal.
When BuzzFeed News reported earlier this year on dozens of suspicious financial transactions by Russian diplomats living in Washington, Kremlin officials objected with ferocity. A Russian foreign ministry spokesperson denounced the news organization as a “tool of the American intelligence services” and insisted the transactions were purely run of the mill.
But new documents show that American bank examiners delved deeper into the embassy's financial activity than was previously known — and reveal why they flagged two of the transactions as suspicious.
The first, made just 10 days after the US presidential election in 2016, was a $120,000 lump-sum check to then-ambassador Sergey Kislyak that was twice as large as any payment he’d received in the previous two years.
The second, just five days after President Donald Trump’s inauguration, was a blocked attempt to withdraw $150,000 in cash that a bank official feared was meant for Russians the US had just expelled from the country.
In their investigations into 2016 election interference, special counsel Robert Mueller and the FBI are scrutinizing the financial activity by the Russian embassy, according to three federal law enforcement sources with direct knowledge of the matter. Last November, BuzzFeed News began revealing suspicious embassy transactions, including a $29,000 wire transfer to the embassy's US bank account to “finance election campaign of 2016”; $325,000 in payments to the Russian Cultural Centre in Washington; and $2.4 million paid to small home-improvement companies controlled by a Russian immigrant living in Virginia.
But former ambassador Kislyak looms over the Trump-Russia investigation. After failing to disclose during his confirmation hearings a meeting with Kislyak, Attorney General Jeff Sessions recused himself from the Russia investigation. Jared Kushner, the president’s son-in-law, discussed with Kislyak setting up a line of communication at the Russian Embassy. And Michael Flynn, the former national security adviser, pleaded guilty last year to lying to the FBI about multiple calls to Kislyak during the transition.
In mid-2017, as US law enforcement stepped up its investigation of Russian interference, agents turned for help to Citibank, where the embassy was a customer. As bankers trawled through the embassy’s account and those of its diplomats, they hit upon a payment to Kislyak they found suspicious.
Ten days after the election, the embassy cut a check to the former ambassador for $120,000. The check was marked “payroll.” Kislyak deposited the money in his Citibank checking account, then wired the funds to his account in Russia in two $60,000 installments.
Now, new documents show that the $120,000 payment, purportedly his 2016 salary in a lump sum, was more than twice as large as any the embassy had given Kislyak in the past two years. In 2014, the embassy provided Kislyak a payment of $53,538, and in 2015 it gave him $50,000. Bankers were unable to determine what those funds were for, but Kislyak deposited both payments into his personal checking account in the US, then wired it to his accounts in Russia. A manager at the branch where Kislyak banks said that the former ambassador did not regularly deposit his salary into his personal account but rather allowed his pay to accumulate in the embassy’s account until it reached a large sum.
When bank officials asked about the much larger $120,000 lump-sum payment in November 2016, neither the embassy nor Kislyak responded, the documents show. While a manager at the embassy’s branch said the payment was for Kislyak’s 2016 salary, Citibank’s expert examiners were unable to confirm that the money was indeed his salary.
Kislyak, who has returned to Russia and now serves in the legislature of the Republic of Mordovia, did not return a detailed message seeking comment. A spokesperson for the embassy would not answer questions about the transactions, but sent a statement Tuesday that is identical to the one it sent when BuzzFeed News first began reporting on the matter in November.
“We are not going to comment on any concrete names and figures mentioned in BuzzFeed articles,” wrote Nikolay Lakhonin, the spokesperson. “All the transactions which have been carried out through the American financial system fully comply with the legislation of the United States. We consider the fact of such publications to be a violation of the Vienna Convention on Diplomatic Relations, 1961, which stipulates the basic principles of the receiving state’s commitments towards foreign missions.”
Two days after this story published, Maria Zakharova, a spokesperson for the Russian foreign ministry addressed the findings during a news conference.
"BuzzFeed has indeed published yet another portion of speculations regarding the banking operations of the Russian embassy in the US as well as those of Russian diplomats," Zakharova said. "Like last November and this January, the post is about conspiracy theories surrounding routine salary transfers and money remittances to home-bound employees of our foreign mission. The aim of this stovepiping is clearly to fit it in the context of the campaign about Russia’s alleged interference in the 2016 US elections."
Citibank sent information that it compiled about Kislyak’s and the embassy’s accounts to the US Treasury Department’s financial crimes unit and the FBI in early 2017. As part of the bank’s review, Citibank officials focused on the embassy account used for day-to-day operations such as paying utilities and office expenses.
After Trump was inaugurated, the embassy made an unusual request concerning that account.
On Jan. 25, 2017, less than a week after Trump was sworn in, a Citibank relationship manager was visiting the diplomatic compound for an annual check-in when embassy officials asked to withdraw $150,000 cash. In the past, the embassy had withdrawn about $30,000 in cash each month. Now it was asking to take out five times that amount.
The money, embassy officials told the Citibank manager, was going to be used to pay the salaries of employees who had been transferred out of America in December 2016.
The bank officer was suspicious, because President Obama had recently expelled 35 Russian intelligence operatives in response to interference in the 2016 election. So the Citibank manager pressed the Russians for more information, documents show, asking for the names of the people who would be receiving the $150,000 and why they needed cash in America, given that the workers had already returned to Russia. Embassy officials never responded.
At the meeting, the Citibank account manager verbally rejected the request. The bank made several follow-up queries to learn more about how the embassy intended to spend the cash, according to the documents, but the embassy did not respond. In February 2017, the Russian Embassy pulled the withdrawal request, telling Citibank the matter had been “solved in Russia.”