Antinuclear

Australian news, and some related international items

Australia’s Defence Department silent about its slippery dealings using tax-payers’ money, involving Russian contractors

With very little disclosure, the contract was awarded to Vertical Australia, a company newly minted as the local agent for a Russian company, Air Company Vertical-T. The services would include the use of a Russian Mil Mi-26, the largest and most powerful helicopter ever produced.

And now the Australian partners, Michael West Media and CrikeyINQ have found a disturbing story about the Australian Defence Force and a web of intrigue involving contracts that include Russian contractors and what appears to be money laundering using Australian taxpayers money…………………

Operation Slippery: Russian aviation magnate diverts Australian Defence profits to tax havens,  Michael West Media  By Michael West|, December 4, 2019   Australia’s Department of Defence is keeping silent. Yet it has serious questions to answer over its dealings with an elusive Russian aviation tycoon, an American mercenary outfit and a money trail which winds from Canberra to the Seychelles via Cyprus. Thanks to the #29Leaks data leak unveiled today in a global collaboration of investigative journalists by the Organised Crime and Corruption Reporting ProjectMichael West Media and Crikey INQ raise serious questions about how the Government is spending our taxes. Kim Prince, Suzanne Smith and Michael West report.

In late 2010, a Department of Defence tender was issued for cargo helicopters to support Australia’s war effort in Afghanistan. At the time, Operation Slipper was in full swing, an operation notable for the first deaths of Australian soldiers in battle since the Vietnam War: 41 soldiers died and 261 were wounded fighting jihadist groups during the operation which began in October 2001 and ended in 2014. 

With very little disclosure, the contract was awarded to Vertical Australia, a company newly minted as the local agent for a Russian company, Air Company Vertical-T. The services would include the use of a Russian Mil Mi-26, the largest and most powerful helicopter ever produced.

The businessman behind Vertical Australia was a Russian aviation entrepreneur, Vladimir Skurikhin, who is connected to a slew of companies and partnerships around the world, from Cyprus to the Seychelles to the City of London. His deal with Australia’s Defence Department appears to involve leasing high-tech helicopters replete with pilots and crew.

On the face of it, the defence contract proceeded unremarkably; with the exception of a minor dispute that found its way to the NSW Supreme Court. The dispute was not between the Australian Defence Force (ADF) and its supplier Vertical Australia, but within the supplier’s own payment chain, which included a mysterious entity in Cyprus, a banking haven for Russian oligarchs. 

Vladimir Skurikhin, the General Director of Vertical-T, would later attest that the complex chain was in place due to a mistaken belief that Australian companies were forbidden from making payments directly to Russia.

The upshot of the dispute was twofold. Firstly, Vertical Australia paid more than $2.3 million into the Supreme Court of NSW, leaving the court to decide to whom it should be remitted. Should it be paid directly to the Russian supplier Vertical-T, or to its erstwhile intermediary, Wellman Limited of Cyprus? On this score, the court would ultimately rule in favour of Vladimir Skurikhin’s military contracting company Vertical-T.


The second effect was that DynCorp Australia was appointed as Vertical-T’s new agent, and Vertical Australia folded. DynCorp, part of the controversial US defence contractor DynCorp International, had been trying to get a foothold in Australia for eight years. Its parent, DynCorp International, which is owned by a New York private equity firm Cerberus Capital, has been embroiled in a suite of scandals including corruption allegations over US military contracts in Iraq and sex-trafficking in Bosnia. It has been labelled a “mini-Blackwater”, a reference to its history of providing mercenary services.

All of this was water under the bridge until October this year, when Michael West Media and Crikey INQ were invited to participate in a cross-border investigation. The Sarajevo-based Organised Crime and Corruption Reporting Project (OCCRP) had received a massive leak of data from UK-based Formations House. It would require an international team of investigative journalists to extract maximum advantage from it.

Formations House

Formations House is a company formation agent, sometimes referred to as a shell company factory. They offer a range of services for creating and operating corporate entities in a number of countries including offshore secrecy jurisdictions, aka tax havens, such as the British Virgin Isles and the Seychelles. 

Although legitimate companies use the services of Formations House too, many others enlist  it to hide their murky deals, to avoid tax and inspection from financial regulators. Part of the lure for business people keen to hide things is the prestigious address, — number 29 Harley Street in London. Besides the offer of an upmarket address, Formations House provides a local phone number, a bank account, and preparation of annual accounts and company filings. For those seeking a business façade and a degree of anonymity, this is a one-stop-shop.

Although legitimate companies use the services of Formations House too, many others enlist  it to hide their murky deals, to avoid tax and inspection from financial regulators. Part of the lure for business people keen to hide things is the prestigious address, — number 29 Harley Street in London. Besides the offer of an upmarket address, Formations House provides a local phone number, a bank account, and preparation of annual accounts and company filings. For those seeking a business façade and a degree of anonymity, this is a one-stop-shop……………..

And now the Australian partners, Michael West Media and CrikeyINQ have found a disturbing story about the Australian Defence Force and a web of intrigue involving contracts that include Russian contractors and what appears to be money laundering using Australian taxpayers money…………………

STS Corporation and the MH17 disaster

Deep in the Formations House leak is a UK-based company, STS Corporation. Its bank statements show tranches of cash arriving from various countries including Afghanistan, Russia and Australia.  There are also frequent outbound transfers from STS to entities in tax havens where, in many cases, the real beneficiaries of the money are simply unknowable……………

Defence Department refuses to respond

Questions were put to the Department of Defence about its knowledge of the beneficiaries of the Vertical Australia contract payments and the money trail through tax havens. No answer has been forthcoming, including answers to questions about money-laundering and the flow of Australian taxpayer dollars to Russian interests in tax havens. …………………….

Contacted for this story, Centre Alliance senator Rex Patrick said the intrigue surrounding the Skurikhin transactions reflected the urgent need for greater transparency in Defence and in the way the Federal Government went about its procurement…………….

“I will be making further inquiries in the Parliament in relation to this procurement. Part of the solution to this is my ‘Tax Transparency in Procurement and Grants” bill which requires companies to disclose their structure, particularly in respect of related entities domiciled in tax havens, as they tender for work.”

The Seychelles Connection……………..

The rise of DynCorp 

On the Australian front, the Formations House leak includes an agreement, signed by a former director of DynCorp Australia, in which STS is to act as agent for DynCorp Australia, representing the company in business dealings in Europe and the Middle East. 

On its website, DynCorp says it “…sustains and improves the ADF’s operational capabilities through logistic support, facilities maintenance, and project management services”. So what products or services would this defence contractor, who is presumably entirely dependent on the public purse, have to export via its agent? We attempted to contact the Dyncorp director, and later put this question to an associate, but at the time of publication there had been no response. …………………….

Spectre of money-laundering through Australian courts

So, what are two companies controlled by a Russian tycoon doing soaking up the resources of Australia’s court system in a dispute and why would the payments be described as refunds on legal fees?

Around the time in question, sham litigation had become a popular tool for money launderers. ………………………https://www.michaelwest.com.au/operation-slippery-russian-aviation-magnate-diverts-australian-defence-profits-to-tax-havens/

March 3, 2022 - Posted by | secrets and lies, weapons and war

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