Jeans diplomacy! WH releases baffling pic of Obama phone call

http://twitter.com/#!/indiaknight/status/439909019030126592

The Guardian’s Paul Lewis and India Knight of The Sunday Times were both baffled by the White House’s release of a photo of President Obama’s phone call with Vladimir Putin. Why release it? Because, he’s super serious you guys! See, he’s totally on the case, even if only his empty chair attended the national security meeting on Saturday.

But what did the White House neglect to mention?

http://twitter.com/#!/markrboyle/status/439943162656591873

Ha!

Still, he’s super scary and strong, right?

http://twitter.com/#!/Bridget_PJM/status/439899008408883200

Boom. Next up: Sternly worded letter.

http://twitter.com/#!/justin_kanew/status/439902874080784384

Giggles.

Wall Street Journal columnist and AEI fellow Sadanand Dhume  attempted to explain why the photo was released.

http://twitter.com/#!/dhume/status/439924864515059712

Snort. So there’s that. What an accomplishment.

Others noticed something awfully disturbing about the photo.

http://twitter.com/#!/MatinaStevis/status/439903690083008512
http://twitter.com/#!/iuubob/status/439906618000416769
http://twitter.com/#!/hriefs/status/439909982838865921

Jeans diplomacy.

Aside from the jeans and the phone, what else does the president have?

http://twitter.com/#!/whpresscorps/status/439899684270657536

Heh.

Where is it?

http://twitter.com/#!/kris_kinder/status/439920163006054400

And Asian News International editor Smita Prakash ties it all into “House of Cards” for the exit win:

http://twitter.com/#!/smitaprakash/status/439940225230311424

Related:

‘Useless appendage’: First look at upcoming ‘official’ WH pics of Obama at national security meeting?

‘Extraordinary standoff’: Ukraine troops won’t surrender in Crimea [photos]

‘The text does not limit it to Crimea’: Putin reportedly asks parliament to use military in all of Ukraine; Update: Parliament approves

CBS political director/Slate correspondent covers for absentee president

President Empty Chair skips Saturday’s national security meeting?

Is this how we’ll know when President Empty Chair means business with Russia? [pic]

Read more: http://twitchy.com/2014/03/02/brandishes-phone-at-putin-wh-releases-baffling-pic-of-obama-phone-call-most-disturbing-part/

Russia donates puppy to Paris to replace K9 killed in terror raid

MeetDobrynya, an adorable German Sheppard puppy that Russia’s Interior Ministry has donated to France to replace Diesel, the K9 dog killed in an anti-terror raid in Paris on Wednesday.

A kinder, gentler Vladimir Putin on display?

Russia Today reports that Dobrynia “will be sent to France as a sign of solidarity with the French people and police in fight against terrorism.”

Read more: http://twitchy.com/2015/11/20/from-russia-with-puppy-love-russia-donates-adorable-puppy-to-paris-to-replace-k9-killed-in-terror-raid/

AP finds FBI has broken up FOUR ISIS attempts to get nuclear material

The JV team wants nuclear material to make a dirty bomb. And they’re trying to get it from the country led by the “bored kid in the back of the classroom” that’s eating President Obama’s lunch in Syria right now:

Specifically, the Russian sellers want an “Islamic buyer” who’ll bomb the Americans:

Nightmare inducing — and a Hollywood script:

Well, yeah. Call Dick Cheney … because he was right.

More from the AP:

Criminal organizations, some with ties to the Russian KGB’s successor agency, are driving a thriving black market in nuclear materials in the tiny and impoverished Eastern European country of Moldova, investigators say. The successful busts, however, were undercut by striking shortcomings: Kingpins got away, and those arrested evaded long prison sentences, sometimes quickly returning to nuclear smuggling, AP found.

Moldovan police and judicial authorities shared investigative case files with the AP in an effort to spotlight how dangerous the nuclear black market has become. They say the breakdown in cooperation between Russia and the West means that it has become much harder to know whether smugglers are finding ways to move parts of Russia’s vast store of radioactive materials an unknown quantity of which has leached into the black market.

Exit question: If there have been four instances we’ve broken up, how many have we missed?

Read more: http://twitchy.com/2015/10/07/not-a-good-article-to-wake-up-to-ap-finds-fbi-has-broken-up-four-isis-attempts-to-get-nuclear-material/

Ukrainian Women Are Boycotting Sex with Russians As Protest

Obviously someone over in Crimea read our chapter on #8 not having sex with bros because this is truly inspired.

There is a new campaign in Ukraine called “Don't Give It To A Russian” which you can see on the above t-shirts if you can read them, but if not you will have to just trust us that it says that. The campaign is meant in protest of Russian actions in Crimea such as kidnapping, taking away rights, limiting journalism, and other commonplace dictator shit. They believe that by saying nyet to sex that Putin will stop figuratively raping them, but something tells me that this will just cause more actual rape. Until someone finds a way to give blue balls to Putin himself I think we will just have to sit back and watch as he takes all over eastern Europe. Let's just hope Prague's okay because I know some people who want to go abroad there without like, getting annexed. 

Source: NY Post

Read more: http://www.betcheslovethis.com/article/ukrainian-women-are-boycotting-sex-with-russians-as-protest

‘Smart take’! MSNBC resident wit Touré: Putin should be GOP’s 2016 nominee [video]

http://twitter.com/#!/jwtimekeep/status/454710221144072192

And when it comes to idiocy, Touré is in a class by himself. Here’s what our favorite 9/11 truther was up to this afternoon:

http://twitter.com/#!/Toure/status/454709325983129600

It’s even better when you see it on video:

A national treasure, this guy.

http://twitter.com/#!/Hawkstrat/status/454710051974832128
http://twitter.com/#!/BethanyBowra/status/454710343038926848

Nah. On MSNBC, this is news.

http://twitter.com/#!/conkc2/status/454711722142466048
http://twitter.com/#!/Tark31/status/454712634600742912

Don’t ever change, Touré.

http://twitter.com/#!/Sean_for_3/status/454711638588145664

***

Related:

Twitchy coverage of Touré

Read more: http://twitchy.com/2014/04/11/smart-take-msnbc-resident-wit-toure-putin-should-be-gops-2016-nominee-video/

Leo DiCaprio Has His Eye On Playing Russian President Vladimir Putin

Not satisfied with what (surely) will be his first Oscar winning role in The Revenant, Leonardo DiCaprio has set his sights on playing the role of Russian President Vladimir Putin.

Riding high on being nominated for Best actor, the star said in an interview with German magazine, Welt:

“Putin would be very, very, very interesting. I would like to play him,”

DiCaprio – who funds the World Wildlife Fund’s Big Cat Rescue – met Putin back in 2010 when he attended the International Forum on Tiger Conservation in St. Petersburg, and it appears the President has got a bit of a soft spot for big cats:

My fund has several projects aimed at financial support for protecting these wild cats [Siberia tigers]… Putin and me spoke only about these magnificent animals, not about politics.

Forget playing Putin, what about a remake of The Lion King with Leo as Simba and Putin as Scar…

It’s not just Putin the actor is interested in, as he also told the magazine:

I think there should be more films about Russian history because it has many stories worthy of Shakespeare. That is fascinating for an actor… Lenin also would be an interesting role. I would like also to star as Rasputin.”

Coming soon: Leonardo DiCaprio depicting a Russian man, from some point in history, near you.

Read more: http://www.hellou.co.uk/2016/01/leo-dicaprio-has-his-eye-on-playing-russian-president-vladimir-putin-77147/

Cold Weather And Frozen Hopes For Peace In Eastern Ukraine

Moscow must somehow avoid a humiliating climb-down, while anything less than total victory for Ukraine will look like capitulation. But it doesn’t look hopeful. BF_STATIC.timequeue.push(function () { if (BF_STATIC.bf_test_mode) localStorage.setItem(‘posted_date’, 1408467126); }); BF_STATIC.timequeue.push(function () { document.getElementById(“update_posted_time_3421932”).innerHTML = “posted on ” + UI.dateFormat.get_formatted_date(1408467126); });

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Ukrainian citizens stand in a line to cross from Russia into Ukraine at the border in Donetsk. Alexander Demianchuk / Reuters

LYSYCHANSK, Ukraine — Tuesday’s announcement that Vladimir Putin and his Ukrainian counterpart Petro Poroshenko are to meet next week for the first time in two months comes at a crucial point in the Ukrainian crisis, with the country’s eastern provinces still mired in a cycle of destruction and no obvious end in sight.

At least 15 civilians trying to escape the war-ravaged city of Lugansk were killed in an inadvertent rocket attack on Monday, according to the Ukrainian military, adding to a death toll that has doubled to well over 2,000 in the last two weeks. Ukraine says the victims of the latest attack were in the “dozens,” but was unable to find all the bodies before fighting forced investigators to flee.

Yet though a diplomatic settlement seems more urgent than ever, realities on the ground mean the prospect of one is slim at best. Neither side appears to have any incentive to end the conflict on anything but its own terms. Moscow must somehow avoid a humiliating climb-down without going so far as a ground invasion, while anything less than total victory for Ukraine will look like capitulation. “I don’t think there’s any point to what we’re trying to do now,” said Russian foreign minister Sergey Lavrov after five hours of talks with Ukraine, France, and Germany on Sunday produced no progress.

Time, however, is running out. Combat operations will become much more difficult to sustain come fall, when the weather worsens, the school year begins, and locals who had hoped to escape the crisis on holiday run out of money. If the pro-Russia rebels hold out that long, the Ukrainian government in Kiev could be forced to approach them as a force with which not just to be reckoned, but also negotiated. This would strengthen Moscow’s hand in any future settlement.

Ukrainian security officials, in keeping with post-Soviet propagandistic tradition, are keen to deliver a major victory for the independence celebrations on Sunday. They seem closer than ever. Fighting is spilling into the center of the rebels’ two remaining strongholds, Donetsk and Lugansk, both of which are all but surrounded. The self-proclaimed “people’s republics” there, and the hundreds of thousands of people trapped in them, are largely cut off from electricity, water mains, and the outside world — specifically, Russia, to where the civilians attacked by rocket fire were fleeing, and which Ukraine claims provides the bulk of the rebels’ supplies.

Rebels have vowed to fight to the last man, but readily admit that they are doomed unless Moscow intervenes on their side. This again seems unlikely. Fears of invasion provoked by Moscow’s “humanitarian convoy” of 280 trucks, which Kiev suspected was a Trojan horse carrying a “peacekeeping” force, have subsided since the trucks were revealed not to be carrying much at all. Though Moscow awkwardly claimed the mostly empty containers were left under-loaded to stop the trucks breaking down, it now appears their real aim was to stall the conflict by forcing a cease-fire. That would have allowed the rebels to regroup, reinforcing the nascent pseudo-states — indeed, on Monday, the Donetsk People’s Republic published a criminal code legalizing the summary executions that have become its hallmark.

Murky changes in the separatist leadership appear to be counting on that. Several of the best-known commanders have mysteriously resigned or disappeared without explanation, even including Igor Strelkov, the former Russian intelligence operative whose likeness stares down from posters across the region. His allies claim he has gone on a one-month holiday in their hour of need and refuse to discuss the matter further; his former deputy recently suggested that Strelkov may never have existed and that we are all computer programs living inside the Matrix. (“The Donetsk People’s Republic will exist,” though, he clarified.)

Conventional wisdom has it that the sudden removal of several leaders at once is to replace Russians, with whom Kiev cannot be seen to negotiate, with local Ukrainian commanders, making a deal more tenable. But as Russians still take up senior positions — the DPR’s head of security and newly installed foreign minister both came from Moscow — and rebels claim to have received significant reinforcements from over the border, it looks more like a simple shuffling of the deck. Partly, this seems to be because Strelkov in particular had become too much of a loose cannon, if leaked phone conversations between rebels and their Russian handlers are to be believed.

Equally, however, there is a tacit understanding on both sides that any settlement would be untenable to both, and unplayable at home. With key parliamentary elections set for October, the war has turned Ukraine’s famously divided public firmly against the Kremlin. De-escalation for Moscow, meanwhile, would mean a personal defeat for Vladimir Putin, who all but endorsed the separatists in April when he claimed the provinces were a historical part of Novorossiya, or “New Russia.” Ukraine would then be free to pursue the course of heading towards the West and shaking off its role in Putin’s vision of a greater Eurasia. But it was, after all, this very division over Ukraine’s destiny that caused the crisis late last year.

Needless to say, the losers in all this are the largely poor and elderly civilians who remain trapped in the conflict zone. Ukraine’s security council said most of the victims in Monday’s rocket attack were found burned alive in buses, unable to get out in time. Rebels claimed the attack never happened. And so it goes on.

Read more: http://buzzfeed.com/maxseddon/cold-weather-and-frozen-hopes-for-peace-in-eastern-ukraine

What About Larry King?

After the on-air resignation of RT’s Liz Wahl, the question is what the broadcast legend whose shows appear on the Kremlin-funded network will do next.

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CNN

You might not know it, or maybe just forgot, but cable news legend Larry King appears on RT — the Kremlin-funded television network.

After Russian troops entered Ukraine last week, first journalists derided the network’s coverage of those events. Then a spate of very public dissent began at the network. It started with Breaking the Set host Abby Martin’s off-script rant against “Russia’s military occupation of Crimea” and culminated with anchor Liz Wahl’s on-air resignation.

So what does King think? RT America, the network’s U.S. version, carries two of King’s talk shows (a Thursday night talk show, Politicking with Larry King, and Larry King Now, which also airs on Hulu).

BuzzFeed requested comment from King via email regarding the following questions:

What are Mr. King’s thoughts on the situation in Ukraine?

Does he condone Vladimir Putin’s action’s in the Crimea?

What does Mr. King think about the on-air resignation of RT anchor Liz Wahl?

Will Mr. King’s recent interview with the Dalai Lama be aired on RT? If not, is there a reason?

Neither King, nor his representation, has responded.

King told the Daily Beast Thursday that he did not have a problem with his shows appearing on RT.

“I don’t work for RT,” he said. “It’s a deal made between the companies…They just license our shows.”

“If they took something out, I would never do it,” he told the Daily Beast. “It would be bad if they tried to edit out things. I wouldn’t put up with it…As long as they don’t, as long as they’re carrying stuff critical of them, I’ve got no problem with it.” Attempting to distance himself, he added: “You may not like what Russia’s doing now, but I’m really a party removed.”

Although King is not employed by RT, he has an equity stake in Ora.TV, the production company that licenses his shows to RT. King also appears in an ad campaign for RT.

RT has handled its hosts’ dissent differently. Addressing Martin’s rant, the network claimed that “RT journalists and hosts are free to express their own opinions.” The network announced they would send Martin to Crimea to see the situation for herself; Martin declined.

The response to Wahl was much different. “When a journalist disagrees with the editorial position of his or her organization, the usual course of action is to address those grievances with the editor, and, if they cannot be resolved, to quit like a professional,” RT said in a statement.

The 80-year-old King has been working in broadcast journalism since the 1950s. From 1985 to 2010, he hosted Larry King Live on CNN. Piers Morgan took his spot on the network.

Before leaving CNN, the host told the network that he was impressed with Putin’s charisma.

“I had an affinity with [Putin],” he said. “You try to get that with a lot of guests, but I really had it with him…he has qualities that have nothing to do with politics … they change a room.”

“There are certain people that come into your life and you like them,” he added.

CORRECTION (3/7/14): Larry King’s shows are licensed for a fee to RT by the company Ora.TV, in which King holds an equity stake. An earlier version of this post described King’s employment status at RT incorrectly.

3. Update (March 7, 11:58 a.m.): Statement from OraTV to BuzzFeed via email:

“RT is Ora.TV’s licensed cable television distributor for Politicking and Larry King Now. Ora.TV’s producers are solely responsible for the content of our shows, the content and quality of which we believe speaks for itself.”

LINK

Russia Today Anchor Resigns Live On Air

LINK

14 Insane Moments From RT’s Coverage Of The Russian Invasion Of Ukraine

Read more: http://buzzfeed.com/dorsey/what-about-russia-today-host-larry-king

Putin Spokesman Suggests Kremlin Might End Ketchum Contract

“Communication services are mostly useless now.” BF_STATIC.timequeue.push(function () { if (BF_STATIC.bf_test_mode) localStorage.setItem(‘posted_date’, 1409696539); }); BF_STATIC.timequeue.push(function () { document.getElementById(“update_posted_time_3435423”).innerHTML = “posted on ” + UI.dateFormat.get_formatted_date(1409696539); });

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Pool / Reuters

WASHINGTON — Vladimir Putin’s spokesman Dmitry Peskov has suggested that the Kremlin may end its relationship with the U.S. public relations firm Ketchum, according to a report on Forbes’ Russian site.

“Communication services are mostly useless now,” Peskov told Forbes. “When you have unabashed propaganda coming from the U.S. and NATO countries, the usual laws of communication and information do not apply.”

When the Ketchum contract expires, Peskov said, the Kremlin will decide “whether we need to continue our cooperation or take a pause.”

Peskov is also quoted in the piece as saying that Russia tried to hire two other companies other than Ketchum.

Ketchum has represented Russia since 2006, but its relationship with the Kremlin has never been more fraught than now, as Russia’s invasion of Ukraine drives its relationship with the West to crisis. Ketchum has cut back its number of employees on the Russia file from three dozen to 10, the New York Times reported, and has stopped representing Russian energy giant Gazprom because “Gazprom had decided to focus on Europe.”

The Ketchum deal with Russia has proved enormously valuable for the company, which has raked in tens of millions of dollars from the account since 2006. There have been high-profile successes, such as Ketchum’s placement of an op-ed by Vladimir Putin in the New York Times last year. But, according to Forbes Russia, all has not been well: the site reports that Ketchum was not behind Putin being named Time’s person of the year in 2007, which Ketchum claimed it had arranged. Citing a former Ketchum employee, the piece also raises questions about Ketchum’s disclosure of funds it has received from the Kremlin and Gazprom.

“The Forbes piece seems pretty accurate,” said Angus Roxburgh, a former Ketchum consultant who wrote a book about his experiences working for Ketchum.

Kathy Jeavons, a Ketchum partner who is in charge of the account with Russia, declined to comment when reached by phone and hung up on BuzzFeed. Another spokesperson for Ketchum did not respond to requests for comment.

Read more: http://buzzfeed.com/rosiegray/putin-spokesman-suggests-kremlin-might-end-ketchum-contract

Former Cisco Execs Allege Vast Kickback Scheme In Russia

As the U.S. confronts Putin over Crimea, federal investigators probe whether an American company enriched Russian officials.

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BuzzFeed

One day in 2010 a team of Westerners arrived at the Krylatsky Hills industrial park in Moscow, near the old 1980 Olympic bicycle track. It’s a gleaming set of five-story glass and stone buildings, with a modern parking lot that goes on forever. The men headed upstairs, where anxious Russian workers waited in their cubicles because they’d heard that these were former American and British intelligence and law enforcement officials, experts in interrogation. And the men carried themselves with a recognizable sense of authority, that same confidence ex-KGB men had.

But these were not intelligence officials. Instead, according to two people familiar with the matter, they were compliance investigators working on assignment for the headquarters of American technology giant Cisco. The company was auditing itself and the investigators were the corporate version of an internal affairs squad: Were Cisco executives bribing corrupt Russian officials? Was that the secret to the company’s booming business in the region?

The men sat one Russian Cisco executive down in a conference room and shut the door. One investigator opened a dossier and they began asking rapid-fire questions, according to someone who was in the room. Was Cisco paying bribes in Russia? Was money being diverted to government officials?

The Russian Cisco executive just shrugged. In heavily accented English he told the Westerners, “Everyone in Russia takes money and pays money. You can’t have business in Russia without that.” But he knew nothing specific, he insisted.

“It’s like sex,” he told the interviewers. “I know that you have sex. But with whom? How often? In what position? This I don’t know.”

Now, four years later, the iconic American firm is facing a federal investigation for possible bribery violations on a massive scale in Russia. At the heart of the probe by the Department of Justice and the Securities and Exchange Commission, sources tell BuzzFeed, are allegations that for years Cisco, after selling billions of dollars worth of routers, communications equipment, and networks to Russian companies and government entities, routed what may have amounted to tens of millions of dollars to offshore havens including Cyprus, Tortola, and Bermuda.

Cisco disclosed the federal probe in a February SEC filing. The company says it takes the allegations seriously and has hired the white-shoe law firm WilmerHale to conduct an internal investigation that the federal government requested. Cisco declined to comment further.

Attorneys at WilmerHale did not return phone calls seeking comment. The SEC and the Department of Justice also would not discuss the case.

Until now, details of how Cisco allegedly paid bribes in Russia have not been reported. But two former Cisco insiders have described to BuzzFeed what they say was an elaborate kickback scheme that used intermediary companies and went on until 2011. And, they said, Cisco employees deliberately looked the other way.

The case is important not only for one of American’s most prestigious and innovative technology companies, valued at $110 billion. It comes just as the dispute over Ukraine puts the United States and Russia in their gravest military and diplomatic face-off in decades — and as the U.S. tries to strike financially at Russian President Vladimir Putin and the country’s oligarchs. If the allegations against Cisco are true, they would implicate a major American corporation in the corrupt system that the U.S. is now trying to sanction, the system that props up Putin and the confidants he has installed in key Russian ministries and companies.

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Russian President Dmitry Medvedev works on the computer as Cisco Chairman and CEO John Chambers, Jim Grubb, chief demonstration officer, and California Gov. Arnold Schwarzenegger watch at Cisco headquarters June 23, 2010, in San Jose, Calif. David Paul Morris / Getty Images

Cisco entered the Russian market in 1995. In 2007, a top Cisco official told Businessweek that “as we look globally to where the next venture asset class is going to emerge, it is definitely Russia and Central and Eastern Europe.”

The company does not usually make public its sales in Russia, and it declined to provide those figures to BuzzFeed. It says that Russia and some other former Soviet countries make up less then 2% of its revenue, and 2% adds up to a little under $1 billion. But growth seems to have been phenomenal. From 2010 to 2011, sales in Russia rose 63%, according to one rare public revelation in an SEC filing.

In 2010 Russian’s then-President Dimitry Medvedev paid a visit to Cisco’s sprawling San Jose, Calif., headquarters — a virtual town unto itself. During Medvedev’s visit, Cisco CEO John T. Chambers announced that the firm was investing $1 billion in a pet project of Medvedev, a high-tech innovation center that was envisioned as a “Russian Silicon Valley.”

No one is suggesting that Cisco bribed Russia’s top leaders. Instead, the investigation is centered on day-to-day kickbacks to officials who ran or helped run major state agencies or companies. Such kickbacks, according to the allegations, enabled the firm to dominate Russia’s market for IT infrastructure.

The Russian word for kickback is otkat, which translates directly into “roll back” — as in a ball rolling back down a hill. It has been part of Russian culture for generations. Revolutionary poet Vladimir Mayakovsky penned a satirical “Hymn to the Bribe” in 1915, and the writer Erast Pertsoff authored a book in 1830 called the Art of Bribe Taking, in which he called bribes “the road to happiness.”

Otkat is now endemic in Russia, which is listed as one of the most corrupt countries in the world by Transparency International. Indeed, Vladimir Putin’s own campaign chief in 2012 announced, “Today we have returned to ‘normal,’ ‘civilized’ corruption.” (He was trying to emphasize an improvement over the outright thievery of the 1990s.)

But U.S. law bans American companies and citizens from paying off foreign officials to get business. Under the Foreign Corrupt Practices Act, or FCPA, violators can be punished with prison sentences of five years for each bribery count. And even more serious are the penalties for doctoring records to conceal bribes — up to 20 years.

Last year, according to sources close to the investigation, a whistleblower came forward to the SEC, sketching out a vast otkat scheme and providing documents as evidence. In some FCPA cases, whistleblowers are eligible to receive 10 to 30% of fines that companies pay to the government.

Like other companies in technology and software, Cisco often markets its products through a system of resellers and distributors — middlemen. So in Russia, Cisco didn’t sell directly to the Russian government or companies. In its SEC filing disclosing the federal investigation, Cisco stated that the allegations involved “certain resellers of the Company’s products.”

Indeed, it’s in the system of middlemen where kickbacks flourished, according to two former Cisco sales executives who spoke to BuzzFeed. One of the former Cisco employees explained it like this: In the 1990s in Russia, bribery was often simple. “People would bring bags of cash to people’s offices.” But Cisco, he said, “introduced a new way of giving bribes. They were innovative. This system with the resellers and the rebates offered an opportunity of giving money without getting your hands dirty, so you could get money to offshore accounts.” It’s not clear when the alleged scheme started up, but the former executives said it went on for years until 2011, when it stopped.

A kickback usually means giving money back to officials in exchange for steering business your way. And it’s usually complicated, with the money getting passed through different hands to disguise what’s really happening.

The two former Cisco executives laid out for BuzzFeed how the alleged scheme worked:

In Cisco’s Russia operations, funds for kickbacks were built into the large discounts Cisco gave certain middleman distributors that were well-connected in Russia. The size of the discounts are head-turning, usually 35% to 40%, but sometimes as high as 68% percent off the list price.

And there was a catch: Instead of discounting equipment in the normal way, by lowering the price, parts of the discounts were often structured as rebates: Cisco sent money back to the middlemen after a sale. Some intermediaries were so close to the Russian companies and government agencies — Cisco’s end customers — that these intermediaries functioned as their agents.

These middleman companies would direct the rebate money to be sent to bank accounts in offshore havens such as Cyprus, the British Virgin Islands, or Bermuda.

The former Cisco employees said they do not know who owns or controls those offshore accounts — in other words, who ultimately received the rebates. But they said the rebates were actually kickbacks. As one of them put it, “The main logic behind the rebates was to make sure they were able to stimulate, materially stimulate, the officials” who worked for the government entities.

In Russia, Cisco had at least 18 major middleman distributors that it calls “partners,” of which BuzzFeed was able to find contact information for 15. One official of a Cisco distributor called Marvel, Denis Golotcha, laughed and was dismissive of these allegations when reached by BuzzFeed by phone in late March. “I think it is a good first of April joke,” he said. “But it is a little early.”

“I cannot confirm any information about rebates,” he added. He asked for questions in an email, but did not respond to the email. None of the other companies responded to requests for comment.

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The Cisco Engineering Center office building at Skolkovo near Moscow. KOROTAYEV ARTYOM / ITAR-TASS / Landov

There are indications that Cisco received some warnings about its Russian operations. In 2008, for example, according to a draft report marked “CISCO HIGHLY CONFIDENTIAL – CONTROLLED ACCESS” and obtained by BuzzFeed, outside auditors specifically listed a “high” legal risk for Cisco, because of “transactions with entities in ‘tax haven’ countries.” The draft, which a source said was delivered to Cisco, lists one Russian Cisco reseller based in Cyprus and another located in Tortola, the British Virgin Islands.

The Department of Justice has drawn up guidelines to explain the FCPA law so that companies don’t violate it. The guidelines specify signs to watch out for, including “unreasonably large discounts to third-party 
distributors” and cases in which the intermediary “requests payment to offshore bank accounts”

Jessica Tillipman teaches corruption law at George Washington University and is the senior editor of The FCPA Blog. Told of the allegations about Cisco, she said, “It’s full of red flags. It’s got the typical factors you see in FCPA cases: big rebates, offshore payments, government agencies.”

Still, a major challenge for investigators might be connecting the offshore accounts to Russian officials — in other words, determining if the rebates were actually kickbacks.

One of the former Cisco officials said that he and other employees studiously ignored where the money was going. When those issues came up during talks with middlemen and the government, he said, “I left the room. They said, ‘You can stay,’ and I said, ‘I don’t want to.’ Officially we didn’t participate in discussions about payback, otkat.”

The Justice Department, in its 130-page guidelines to the Foreign Corrupt Practices Act, says that the law is meant to punish not just those who know whether bribes are being paid, but also “those who purposefully avoid actual knowledge.” A former Justice Department official, told of the case, said, “The ostrich defense does not work.” The legal standard to prosecute is that “you need to be aware that there is a high probability that a bribe can be paid.”

The two former Cisco sales executives told BuzzFeed they know of at least one case in which Cisco officials participated directly in talks about kickbacks. And the Russian company Cisco was doing business with is one that is ultimately controlled by the powerful oligarch Vladimir Ivanovich Yakunin, who reportedly has had a dacha near Putin’s. After the Crimea crisis broke, the 65-year-old Yakunin was sanctioned by the United States.

Yakunin is the longtime boss of Russian Railways, the national railroad conglomerate. It owns a subsidiary, Transtelecom, or TTK, which provides internet service across the country. The former Cisco executives said some Cisco officials met directly with TTK executives in 2010 at Cisco’s office, where they negotiated the size of the discount and the rebates.

While there was already one intermediary in the deal, TTK allegedly wanted another middleman company to step in, a company that it controlled.

One of the former Cisco employees told BuzzFeed that TTK “created a small company — as a reseller — and insisted that Cisco sign them as a partner. Cisco could sell through the small company. All the otkat, the payback, accumulated through this small company and all this profit accumulated in this small company. And this was a special scheme to send the profit outside of Russia.”

In an email statement to BuzzFeed, TTK spokeswoman Ekaterina Zaytseva wrote that the firm couldn’t comment because “we’ve never heard about this story around Cisco before you contacted us.” All contracting with TTK, she added, is “determined during the open bidding procedures,” as required by Russian law.

Over the last three years, much has changed for Cisco in Russia. In 2011, disgruntled Cisco officials in Russia addressed a letter, obtained by BuzzFeed, to Cisco CEO Chambers. In stilted English, it lays out the otkat allegations: Cisco paid rebates “to offshore companies belonging to owners of Distributors, System Integrators and other Partners working in Russia. We have information that these offshore accounts can be sued to facilitate ‘black money’ to corrupt government officials.”

Around that time, according to the former Cisco executives, the company halted its system of large-scale rebates to offshore accounts, though large discounts continued.

Reporter Aram Roston can be reached at aram.roston@buzzfeed.com.

Read more: http://buzzfeed.com/aramroston/cisco-kickbacks-russia