By Kelly Crow
The Wall Street Journal
July 30, 2020 Anno Domini

Two months after the U.S. imposed sanctions on Russian construction bil- lionaires Arkady and Boris Rotenberg in March 2014, the brothers sent their art adviser on a shopping spree, according to a Senate investigation report released Wednesday. At a Sotheby’s auction that month in New York, the Rotenbergs, who are life-long friends of Russian President Vladimir Putin, paid $6.8 million for 10 works of art, including a cubist still life by Georges Braque and a swirling tableau by Marc Chagall, the report said.

Days later, the Rotenbergs again added to their collection, paying a private U.S. dealer $7.5 million for “Chest,” René Magritte’s 1961 painting of a colorful pile of buildings, according to the report. When Senate investigators later asked the art dealer if she had vetted the buyers’ identities to make sure they weren’t blacklisted, she said she never asked. When it comes to due diligence, the report said, “She relies on her gut.”

Who is buying art these days? Such disclosure details in art deals like these are being scrutinized following a two-year investigation by the Senate Permanent Subcommittee on Investigations, which alleges art is increasingly being used as a tool by blacklisted individuals to evade sanctions. The report directed sharp criticism at auction houses and art dealers for doing little to screen or stop sanctioned people from trading art in the U.S.

Companies based in the U.S. are forbidden by law from having any financial dealings with sanctioned individuals. Americans caught transacting with the Rotenbergs or any sanctioned individual can face steep fines or even jail terms. The seller of a painting isn’t required to ask or know the identity of the buyer to close a deal, though, because blue-chip art isn’t subject to the same anti-money-laundering disclosure laws that govern U.S. banks.

The art world has installed its own disclosure protocols, but has long struggled to enforce them. Collectors prize discretion and don’t always want their identities or income sources shared. Dealers likewise tend to be tight-lipped about their major clients, and no one wants to cede business to rivals willing to ask less and sell more. This helps explain why so many catalogs brim with works whose only ownership clue is “private collection.”

“I know the auction houses and dealers don’t always want to know who they’re selling to because they’re making significant money, but we also have a national-security interest in making sure sanctions work,” said Sen. Rob Portman (R., Ohio) who led the bipartisan report with Tom Carper (D., Del.). “Secrecy is the problem,” Sen. Portman added.

Even after meeting with Senate investigators in 2018, Sotheby’s and Christie’s competed last year for the chance to auction Lyonel Feininger’s “Bridge II,” a painting investigators said the Rotenbergs likely owned. Christie’s said later it didn’t know the work’s true seller at the time. When Sotheby’s won the consignment, it asked the Rotenbergs’ alleged adviser for the work’s owner and was told it belonged to a Marshall Islands company. The house gave the painting a $5 million estimate and included it in its February 2019 London sale. Just before the auction, the house pulled the work; Sotheby’s told investigators the work hadn’t elicited any potential bidders.

Altogether, the report alleges the Rotenbergs used U.S. dollars to spend or move around funds totaling $91 million, including $18.4 million in art and antiques, since sanctions were imposed.

Sen. Portman said he and Sen. Carper launched the investigation two years ago to research the efficacy of U.S. sanctions imposed on members of President Vladimir Putin’s inner circle in March 2014, weeks after Russia annexed the Crimean Peninsula and launched a covert military operation in eastern Ukraine.

Arkaday Rotenberg, a St. Petersberg native and industrialist who befriended Mr. Putin when they joined the same judo club as children, was among those sanctioned. His brother Boris was added shortly thereafter. But after more sanctions were imposed on a wider circle of Russian oligarchs in 2018, Sen. Portman said he and other legislators “wanted to figure out why the sanctions didn’t appear to be working.”

Senate investigators who briefed The Wall Street Journal on the report’s findings said they started looking broadly at blacklisted Russians but soon focused on Arkady Rotenberg’s art-collecting activity. Eventually, they expanded their investigation to art bought by his brother and son, Igor, who is also sanctioned. Investigators said the family offers a case study in how some blacklisted Russians are using the opaque art market to circumvent financial restrictions.

Christie’s, Sotheby’s and the smaller London houses, Phillips and Bonhams, are all named in the report for doing business with the Rotenbergs. Spokespeople for each said they had zero tolerance for evasion of sanctions and were willing to work with the U.S. govern- ment on this issue. The houses also said they didn’t know the Rotenbergs were bidding through an alleged art adviser, Gregory Baltser, until investigators informed them of the connection. All said they stopped allowing him to bid after Senate investigators came asking questions.

“I was shocked when I found out,” Phillips’ Chief Executive Edward Dolman said.

Mr. Baltser, a naturalized U.S. citizen who lives in Russia, confirmed that his company, Baltzer LLP (the misspelling is intentional), has aided Russian collectors in the past but through his lawyer denied that he ever bid on behalf of the Rotenbergs. His lawyer, in a statement, said the investigation has “done substantial collateral damage to Baltzer and its employees, and has forced Baltzer to largely suspend operations.”

A representative for the Rotenbergs called the Senate allegations “totally absurd” and said they never used any tools, including art, to launder money or circumvent sanctions. “All transactions with works of art made by Rotenberg family members or on their behalf were made openly, strictly with lawful personal purposes and always on market terms,” the statement said.

In 2018, the European Union amended its anti-money-laundering regulations to require businesses to verify the identities of sellers and buyers of art valued over €10,000.

The Senate report recommended ways to alter U.S. laws to compel more disclosure in art sales, but so far two bills that could potentially address the issue are stalled.

Arkady Rotenberg, now 68 years old, built a nearly $3 billion fortune, according to Forbes, overseeing infrastructure companies. His brother Boris and son have made fortunes in industries like energy and real estate.

Until now, little was known about the composition or extent of the Rotenberg collection. The brothers have been seen at judo and ice hockey matches in Russia but seldom attend gallery dinners or make buzzy purchases. The report alleged that for at least a decade the brothers have been collecting modern art, particularly surrealists like Salvador Dalí and Giorgio de Chirico.

Unlike the Rotenbergs, Mr. Baltser appeared to seek the art spotlight, opening a Moscow hangout called the Baltzer Club where he invited Russia’s newly wealthy art lovers to watch global auctions and bid, ideally through him. His website offered to help collectors bid with “anonymity,” according to the report.

Investigators tracked payments in Russia to a company incorporated in Belize called Steamort that sent $9,500 monthly payments to Mr. Baltser for years, surpassing $1.1 million. The report said it couldn’t name the owner of this account. Mr. Baltser confirmed he had been paid by the account but said his contract forbade him from disclosing its clients’ identities.

In January, Mr. Baltser wrote a column for Forbes Russia where he said the art market should prepare to divulge more ownership details in art deals. “I would call these changes revolutionary,” he wrote.

By Timothy Fitzpatrick
July 14, 2020 Anno Domini

It appears that China has its own Soviet Trust controlled opposition stable designed to spread disinformation and lure Western conservatives into a trap.

Calling itself a persecuted religious movement, the Chinese Falun Gong movement, also known as Falun Dafa, appears to be luring anti-communists and Western conservatives into its sphere of influence so that it can control dissident narratives and keep tabs on the China Communist Party’s enemies—a model copied directly from the Soviet Union’s Trust scheme.

Author Chistopher Story writes in his book E.U. Collective about China’s hundred-flowers controlled-opposition campaign (he says “thousand”), which bears a striking resemblance to the Soviet Trust model):

While the Gong and its organs, like The Epoch Times, do rightly call out Red China’s many human rights violations (particularly when it supposedly involves Falun Gong practitioners), it seems that the perceived dissident organization is using some fairly mundane critiques of international communism while ignoring the Soviet-Israel elephant in the room (one of Falun’s backers happens to be Michael J. Horowitz of the Hudson Institute, which has had Soviet Jewish oligarch Leonard Blavatnik as a patron sponsor[1]). Not only does the Epoch Times say nothing critical of world Jewry, its articles are written as if China has the only communist system left in the world—completely ignoring the crypto-Soviet “Russian Federation”, whose split with China from 1956-66 appears to have been complete theatre to further the Perestroika deception, as outlined by Soviet defector Anatoliy Golitsyn[2], and blur anti-communists’ vision as to where the bulk of communist power resides.

“…Sino-Soviet differences were intended to conceal a common Sino-Soviet strategy, in other words that the ‘split’ was a joint strategic disinformation operation intended to deceive the West.”

What’s more evidence that the Gong and its Epoch Times are controlled opposition gatekeepers is their staunch support for apparent KGB-Mossad asset Donald Trump and accompanying KGB-run Qanon/deep state-type narratives, whose aim seems to be to keep conservatives distracted and apathetic while asset Trump finishes off America unhindered (the Left doesn’t realize he’s working for their Marxist cause). Incidentally, Trump’s foreign policy seems to parallel The Epoch Times’ narrative of things by focusing squarely on China as the bad guy (all the while making backroom deals with them) and wheeling and dealing with Russian oligarchs and world Jewry. The Epoch Times seems to have been activated as a bit of a partisan sleeper in 2015, around the time Trump announced his run for U.S. president. Prior to that, Epoch tended to avoid partisan politics. As with any good Trump shill, The Epoch Times denies any collusion with Russia—an absurd thing for an anti-communist to say or anyone in possession of the facts.

Falun Gong, founded by Li Hongzhi in the early 1990s and with an apparent headquarters in Deerpark, New York, is a mysterious organization that portrays itself as a Buddhist/Daoist religious group exposing the corrupt Chinese communist authority. How an organization like this—which exposes everything from human organ harvesting to torture—can continue with millions of members seemingly unmolested appears rather miraculous in the most totalitarian, despotic nation on the planet. The worst the CCP seems to have done to Falun as an organization is call it “heretical”, which is ridiculous as far as communist attacks are concerned. It seems more believable that Falun has survived these decades because it’s actually a plant by the Chinese Communist Party itself—setting up its own opposition with which to corral all dissenters, at home and abroad, and thereby diffuse the energy and direction of any real dissident movement. This concept was borrowed from Red China’s greatest comrade, Soviet butcher Vladimir Lenin, who said that the best way to control your opposition is by leading it yourself.

Falun admits, “Although Hong Kong Falun Gong practitioners have been consistently harassed by CCP groups in recent years, generally, in Hong Kong, Falun Gong practitioners can freely practice their faith. They can do meditation in parks, distribute materials about Falun Gong on the streets, talk to people about the CCP’s repression of the Chinese people, and assemble, march, and organize activities, all legally.”[3]

One of my readers has sent me several interesting emails and made comments on this site about how the recent ongoing protests in Hong Kong about China’s overreach could be staged by Red China itself. Falun Gong has a presence in Hong Kong and is likely to be involved in these protests to some degree. If true, it means the people of Hong Kong have no legitimate resistance movement and will inevitably fall under the Iron Fist of the Red terrorists from Beijing.

These Soviet Trust operations seem to be in full operation and more numerous as we inch closer to the anti-Christ world communist endgame, and it seems that the same fate of gatekept Hong Kong awaits America, Britain, and all of the Western world.

Notes:

[1] De Haldevang, Max, Paul Ryan and Nikki Haley will be honored at a gala funded by a Russia-linked oligarch, Quartz, December 3, 2018

[2] Golitsyn, Anatoliy, The Perestroika Deception: the World’s Slide Towards the ‘Second October Revolution’, 1998

[3] Hong Kong Falun Dafa Association Deeply Concerned about the New National Security Law, Persecution in China, Falun Info, 06-12-2020