This is the second part of this story which originally ran on March 28, 2018.

Up to this point, the only person who meaningfully connects the American mafia to the Trump-Russia affair is Donald Trump, himself. Trump’s connections to the New York-based predominately Italian-American mafia are well-documented. On the Ukrainian side, there are rumors of Russian mafia or Bratva (“brotherhood”) connections to the Trump-Russia affair, such as a diplomatic cable that claimed Dmytro Firtash – 45% owner of RosUkrEnergo – was in business with Semyon Mogilevich, one of the FBI’s most wanted crime lords.

Yet there may be another link between the Trump-Russia affair and organized crime that runs straight through Cleveland, Ohio. A high-powered lobbyist named Ed Kutler, who was born in Cleveland and maintains strong ties to his birth city, has been swept up in the Mueller probe. Mercury, the company for which he served as Managing Director for many years, is one of two firms (the other is the Podesta group) that Mueller has accused of lobbying on behalf of the pro-Putin government of Ukraine from 2012-2014 and failing to properly disclose it to the government.

Kutler is related, on both his mother and father’s side of the family, to key players in the pornography empire of Cleveland’s own Reuben Sturman. Sturman and Kutler’s parents grew up together in “the old Kinsman Road” neighborhood, which during their youths had hosted immigrant families from Italy and Eastern Europe, as well as Jewish families from the Russian empire who were fleeing the Tsarist violence. John Scalish, one of Cleveland’s famous mob bosses, also grew up there at the same time. Sturman grew a smalltime business selling comics and dirty books into what was, at its height, the largest pornography empire in the world.

Sturman was successfully tried for tax evasion in the 1990s and died in a Kentucky prison in 1997. After he went to jail, his business was broken up into different regions and sold off to his associates. Sturman’s longtime business partner Melvin Kaminsky purchased the Midwestern operations and continues to run them. His daughter, Rondee Kamins currently serves as the public face of the company. Kaminsky is Kutler’s first cousin (that is, they share maternal grandparents).

On his father’s side, Kutler’s first cousin Michael Kutler (they share paternal grandparents), was prosecuted, fined and jailed for both pornography-related charges and witness tampering in the 1970s. Michael Kutler’s accomplice in that crime, Ted Rothstein, was a known associate of the Gambino crime family. Rothstein was a partner in the pornography company Star Distributing with Robert Di Bernardo.

Sturman not only presided over a global pornography empire, he was an unparalleled expert at money laundering and tax evasion. He maintained multiple Swiss bank accounts in various aliases, used Panama, Liberia, and Lichtenstein as tax havens and nestled shell companies within shell companies. The Panamanian law firm that he used, Alfaro, Ferrer & Ramirez, shows up in the Panama Papers.

Until his death in the 1990s, Sturman was plugged into the global money laundering industry at the highest echelons. It seems clear from the Mueller indictments that Paul Manafort was also plugged into this same elite club of global criminals. Sturman was also an associate of at least three La Cosa Nostra crime families. He invited Robert Di Bernardo (who also worked with Kutler’s paternal cousin), to his annual holiday parties in Cleveland. He was also known to associate with others from the Colombo and De Cavalcante families.

By the early 90’s, Sturman had turned to violence to keep his increasingly diffuse empire intact. When his franchisees balked at paying “consulting fees” which were actually extortion payments, he sent thugs to smash up their stores and was even convicted of attempted murder in a pipe bombing plot gone horribly awry in Detroit. After Sturman passed, a mysterious fire nearly destroyed an adult novelty store that he co-owned in California and a bank in the Cayman Islands where he kept his money was blown up. Basically, the guy was a gangster. Though he claimed to be nearly penniless when he died, some believe that he had socked away millions in offshore accounts and other hard to trace securities.

Pornography, especially the way it was done in Sturman’s era, was an all-cash business and therefore ripe for money laundering and tax evasion. In the 1970s and 1980s, Sturman made most of his money through quarter-operated booths that would show pornographic films on a loop. The mafia was known to get into the vending machine business, precisely for its value as a money laundering tool and Sturman’s racket was quite similar. Another excellent vehicle for money laundering is real estate.

Special Counsel Robert Muller has charged Manafort with using shell companies and offshore accounts to launder his Ukrainian consulting money into the United States without paying taxes on it. He is also accused of conducting fraudulent real estate transactions in New York and Virginia. Kutler’s firm Mercury was hired by Manafort to lobby for the pro-Putin President of Ukraine, Viktor Yanukovych. After Yanukovych jailed his opponent Yulia Tymoshenko on trumped-up corruption charges, one of Kutler’s lobbying objectives was to tone down the bipartisan, American voices calling for her release.

In 2011, Tymoshenko brought a case against Firtash and Manafort in the Southern District of New York, in which she claimed, among other things, that RosUkrEnergo, had “’skimmed’ millions of dollars from natural gas contracts, and laundered them through bogus Manhattan real estate transactions.”  The Federal Judge dismissed her case, charging that Tymoshenko had failed to substantiate her claims that this laundered money was used to finance her imprisonment. But Mueller’s recent indictments have added a lot of credibility to her assertions.

In particular, the February guilty plea of Alex Van Der Zwaan, a Dutch-English lawyer for the global law firm Skadden Arps would seem to go along way toward validating Tymoshenko’s claims. In 2013, the pro-Putin government of Ukraine commissioned a report from the venerable law firm, which largely justified the jailing of Tymoshenko and contradicted the Western consensus view that her prosecution was politically motivated. The firm was paid only $12,000 for the report – a laughably small figure – but was then somehow also sent a million dollar retainer. Mercury and the Podesta Group used this Skadden Arps report in their lobbying efforts to get the US to accept Tymoshenko’s incarceration. Skadden Arps is the same firm that advised both companies not to file a FARA disclosure for their Ukraine work, which in retrospect seems like criminally bad advice.

Mueller’s indictment claims that, contrary to the $12,000 that Skadden Arps publicly disclosed, Manafort and Gates actually funneled closer to $4 million to fund the report. Bloomberg points out that “ it’s unclear whether Skadden — or one of the other lobbying firms involved in publicizing the report — was the recipient of those funds.” According to the Special Counsel’s sentencing memorandum,  released March 27, 2018, Van Der Zwaan worked with a Russian-speaking person (Person A)  the FBI has assessed to have “ties to active Russian intelligence service and had such ties in 2016.” Person A – believed to be Manafort’s business associate, Konstantin Kiliminik — was a former officer with the GRU. In late 2016, Van Der Zwaan recorded a conversation between himself and Person A concerning potential criminal charges arising from how Skadden Arps was compensated for its work. Person A suggested that “there were additional payments” and “that the official contract was only a part of the iceberg.”

Weighing Tymoshenko’s claims together with the evidence that the Mueller probe has brought forward, it seems highly likely that an extraordinary amount of money went to some highly placed people in the interest of producing this report, and that money may have been laundered through Manhattan real estate. It’s hard to imagine such a large scale money laundering operation running out of New York City that wouldn’t have involved La Cosa Nostra in some capacity. While bearing in mind that no known information links Kutler to any of the criminal activity undertaken by Sturman, Melvin Kaminsky or Michael Kutler (who all served time in jail or prison), it is undeniable that he has played an unseemly role in US-Russian relations over the past ten years. For instance, his communications were almost certainly intercepted while Manafort was under a FISA warrant from 2012-14. It also undeniable that his clients over the years: Gazprom, the Yanukovych Government, Donald Trump are corrupt, kleptocratic figures who have much more in common with organized crime than the interest groups and multinational companies lobbyists usually take on.

Kutler served on Kasich’s 2016 Presidential Steering Committee, chaired by Ohio District 12’s own Pat Tiberi, who retired rather suddenly earlier this year.

 

Danielle Harlow is a Social Scientist in Columbus, Ohio, who won a game of Jeopardy!  once. Follow her on twitter at @tiberisdonors.

 

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