Georgian Political Games More than Slippery Slope, Arrest of Russian Spies in Batumi

Georgian Political Games More than Slippery Slope, Arrest of Russian Spies in Batumi

An investigation worthy of Rustavi2

Joni Simonshvili

How interesting: http://www.civil.ge/eng/article.php?id=22807.

As written a few years ago, as part of an insider investigation of the corruption in the oil testing business in Baku and Batumi, an agent of the USG wrote the following: "thanks for the insight - I guess it all depends on the customer as if it gets tested along the way - the question remains if oil is being intentionally diverted as part of some pipeline wars between Russia and the West."

Ssuch  information has been moot for some years, gathering dust but now the time is right to share it with a larger audience. The inside word is that a Russia KGB general is behind the takeover in Batumi, Tengiz Ashba and he is tied with both old and new governments – and one of his persons on the ground is Aslan Smirba (it is no coincidence who is working as the commercial director, the son of Alex Bakradze, former head of State Security for Aslan Abshadze, little Nurzur - and only for political reason - or utter stupidity would a company such as Intertek Caleb Brett, a compliance company specializing in testing of oil products put such a person in key position.

I understand that he has started his own little investigation these days as to who 'fingered him" for being a drug addict.  BTW, keep up the good work, and keep in mind that his family was also involved in drug processing labs dating back to prior to the downfall of Aslan Abshadze in 2004, so I guess he has some qualifications to test oil products.  In terms of other matters, as to why oil is not making it past BTC pumping station number 2, the official reasons why the Baku-Supsa is shut down is repairs.  But also the tariff on oil shipped via BTC is lower so Baku-Supsa will stay shut down for repairs until BTC is full.  At that point if additional oil is available for shipping then Baku-Supsa will restart. I expect it will restart in late 2008 or 2009.  But certainly the shutdown gives the time to repair and upgrade it for higher volumes also.  Since it only goes to Supsa whereas BTC goes to Ceyhan the economics of shipping will be better using BTC.  Saving the cost of the tanker from Supsa to the Bosphorus is significant-sometimes delays in the Bosphorus can cause a tanker to lose a week.

On the oil testing, keep in mind that when the tankers arrive the oil can be retested.  It is tested at various points along the system.  So even if they did falsify results in Georgia testing it would get picked up later on.  However, that is not necessarily the case when the oil get diverted somewhere between pumping station one, Georgian side, and pumping station two, and then flogged off for a hefty profit.  It should be noted that that it is Azeri light - that which goes via the pipeline as it is also exported via Batumi as well as other grades and origins, and Kazak. The question is why BTC does not keep backup samples - and this may be because some of the oil that is going into the line is a horse of a different color, and there is the nexus to what we understand is going on in Batumi and Baku.

Please don't get me started on AmerCham in Georgia and that barrel of fishhooks, which is the cover for much of the illegal business that transpires in Batumi and Georgia as a whole. I have a complete list of membership and know who is who on that list, and have information on all the networks of patronage.  I know what I am talking about – including money laundering. I can tell you who are the shits and who the assholes in that organization are, (it is common knowledge) and the worst lot among them has floated to the top, including those in now close with the International Chamber of Commerce, need I give names.

Not so SMART pig!!

The allegation at the time, 2008, that someone the intelligent pig was not functioning - not so clever - and that oil has been tapped and diverted between Georgian pumping station one and pumping station two. Moreover, oil is not flowing - and still Baku-Supsa is down for "repairs" and that too is a question. The fact is that not that much oil is available to export and with the prices as high as they are - more money is to be made shipping (smuggling oil out from Batumi), DDU, and this comes from a range of oil origins - and much of it should be flowing via the BTC but that does not help the bottom line of the stakeholders (too much money is being made and lot of the money is trading hands in non-official ways. One must remember where we are and the world is full of backhanders and petty
crooks.

I have all the standards for all crude types being tested in Batumi and Baku - and I am fairly sure that the local business has been taken over by the Russians (Russian and GRU intelligence, from the management down the security guards). I have been involved in an investigation of the oil testing lab that is under the management of to Caleb Brett-Intertek in Batumi.

Nine former employees have spilled their guts. I think I may have another scud to send to the powers to be that is on the level of the one that sent to USAID Afghanistan and that investment funds that was a front for other activities. I tried to help the employees to network with an attorney and I thought would have blown this case open, however, they were too scared. In 2006 there was a bomb explosion in pumping station one and that never was publically reported, now BTC test results are being faked and it is not even possible to take results from pumping station 2 since there was no
oil flowing in late June

Here is some insight you can read between the lines of possible next steps.

1. I am indeed a US licensed attorney.  Because 16 years ago I began my law practice in my hometown of Atlanta, Georgia as a litigator, I am admitted to the US District Court for the Northern District of Georgia (Atlanta). However, I have not myself handled US litigation since approximately 1994.  I have since that time instead done transactional work and international arbitration work, not US court work.

2. Our office located in Tbilisi, Georgia, where I am the managing partner, handles cases in the Georgian (i.e, Sakartvelo) courts.  For litigation in the United States, that would be handled by attorneys in the United States.  We work extensively with a litigation partner in our New York office, Claudia Salomon, who is of course qualified in the US District Courts and would be in a position to bring this matter in the US District Courts in New York City (Southern District of New York (Manhattan) or Eastern District of New York (Brooklyn).

3. We do not normally take cases on a contingency basis; we would charge by the hour for our work and therefore the legal fees could be very high. However, this would be something for you to discuss with Ms. Salomon.

4. Before doing anything we must determine whether there would be any conflicts of interest.  BP is a major client of our law firm.  We have very close relations with BP and we would not take any matter adverse to BP's interests.  Therefore, if you believe your claim is adverse to BP, then we would not act for you.

5. If we were to take your case (even Ms. Salomon in New York), because the case relates to Georgia, and there would be Georgian law and evidence gathering, Georgian attorneys in our Tbilisi office would certainly work on the matter. If that is a problem for you then again, we would not be able to take the case.  However, I will not disclose any information you have provided me, your contact, etc., to any other lawyers in our firm, Georgian or non Georgian, without your permission.

London Decision leads to shakeup in oil testing results

1)    Aslan Abashidze's team takes over oil business in Batumi, lock, stock and testing lab.
2)    Does ExxonMobil, BP run aground over oil test results?

Caleb Brett is the company that tests 50 percent of the oil going by Georgia, including everything that passes out via BTC. It has a lab in  Azerbaijan, Baku and one in Tbilisi - the nexus of this story is that those with close links with Russian intelligence, which involves the Batumi Oil Terminal, links to Moscow, which is basically the Mayor of Moscow and Aslan Abshadze.  They have basically put all their people in the oil testing business that certifies western destined oil passing through the Caucasus. Mostly Azeri nationals from Baku have replaced a handful of employees that were fired by the local enforcers and former locals with 'long hands', and slung lots of mud at them [employees] in the process, with one even dying of a heart attack.

The question is if BP is getting quality lab reports - and there have also been allegations about oil passing by one pumping station and not making it to the second - and where did it go? ExxonMobil is another strategic client and this lab tests most of what is exported by tanker to various end users.

Naturally a company has the right to cut expenses and reorganize to improve the bottom line. However, does that come with threats to employees and emails that would destroy a person's career? As Intertek's Area Manager wrote to one of the fired employees in her detailed list of reasons for employee departures: "I can continue to list all non-conformities in QHSE/Compliance, Georgian Branch to explain the departure of one testing employees who was terminated

NB. It appears in retrospect that she was really terminated when she learned that oil samples were not available because no oil was passing the BTC at the second pumping station in Georgia.

The CB company representative emphasized how the information that she had to share would be a very long message, "I can present it to compliance auditor, newspapers, and magazine if you want. However, this would not be for your benefit. Her bluff was called on this one, and then the regional director.

General Manager FSU, Iain Clark, wrote back in the second email back in 2007, and then an investigative reported became involved.

Dear Khalima Hasanova,

Area Manager Azerbaijan|Turkmenistan|Georgia
Intertek Oil, Chemicals & Agri

I was recently provided with your contact information and some commentary regarding various human resources and their previous involvement working with Intertek in Batumi , Georgia by some of my contacts with Georgian State  TV. I have been working in Georgia for the last year, including for two  weekly  English newspapers, The Georgian Times and Georgia Today, and  have  submitted  work to The National Security News Reporting Agency; Kavkazcenter  and other  media outlets. I also have researched aspects of the BTC oil pipeline as part of my undergraduate studies in environmental sciences.

The various reasons for the list of employees" removal/departure, including  that of the [woman] sound quite interesting, and I was surprised that a decision  was   made to actually release such information. As you mentioned in your   correspondence "I can continue to list all non-conformities in   QHSE/Compliance in Georgia Branch to
explain the reason of your departure   Rusiko but afraid the message can be too long. I can present it to compliance auditor, newspaper, magazine if you want. It definitely will be not for your benefit".

I am interested in working together with you on this matter if you should be further prepared to present such issues to newspapers for publication, and I could facilitate this rather effectively. I imagine the reason was in line with company's policy and that there had been some performance problems in the past. It appears to be a case of a handful of former employees that are angry and disgruntled over their management's
decisions.

My only question now is to whose benefit would publish such information benefit? It appears that there is strong motivation on your behalf and under such circumstances, involving the range and shear amount of removals, I imagine the story would turn a few heads, or at least get a couple of those  disgruntled former employees off your back. Furthermore, energy in the region and throughout the world is a hot topic and could attract a large audience.

I look forward to your reply and collaborating with you on this issue. I could send you my CV if you would like.

This was received  in response on the 30th of July 2007

I am in receipt of your latest message to Khalima Hasanova, copied to me by Edith Aslanyan. I am the General Manager responsible for Intertek's operations in the FSU and as such am replying to you on behalf of the operations in Georgia and Azerbaijan.

Information/correspondence has come into your possession that was never meant for your attention. It was sent to two "former employees" whose employment was terminated by the company, in full accordance with Georgian employment law, for failing to meet the exacting ethical and operational standards required by the company. It was an attempt to answer some of their grievances, maybe naively, but none the less was sent in good faith that it would remain confidential between the parties concerned.

That it has come in to the public domain is something that was not envisaged but
in hind sight should have been foreseen. This also means that you and your colleagues are trying to interpret a situation where you are not in possession of all of the information and, because we consider it to be confidential and potentially detrimental to certain former staff members, never will be from us.

As such there never was any intention to publish anything in the public domain; as this is, and always was, an internal personnel issue between the company and its "now former" staff. Therefore you will not receive a reply to your mail from Khalima Hasanova.

In closing I would like to reiterate that as a company we always strive to operate to the highest possible standards both operationally and ethically.  As such we are carrying out an investigation to ensure that these standards are being met. If, and I stress if, we find anything, we will take the appropriate actions to correct the situation immediately. If anything suspected of being of a criminal nature is unearthed then we will report relevant findings to the appropriate authorities.

I hope that this clarifies the situation."

Commentary

The interesting thing is that this entire situation had to be clarified to Mr. Clark, whose own team subsequently drove fast into damage control mode, later even offered to cooperate in a private investigation into the firings and mysterious employee departures.

There are also allegations that the intelligent pig in the Baku-Tbilisi-Ceyan oil pipeline has been 'dumbed' down (this is the device that run through the pipeline and looks for technical defects, and seeks out any irregularities in oil flows and finds "taps"), which is directly connection with the oil lab when there was no oil to test at collection point, as there was no oil flowing via the BTC.  This was first heard from
workers who claimed that  oil was  not flowing at its normal rate, and later backed up by a couple of BP  workers who were drinking on the streets of Tbilisi. Clients appear to not know what is going on here, connections with the oil lab or clients  not  knowing about this bomb that has already went off (pumping station several years back), - the connections with BTC and oil being actually being  diverted, including
from where, where to and just how.

There is a series of stories that illustrate some of the realities on the ground of the ´new great game´ and energy policy in this part of the world, and this might serve the greater public interests. Regarding this case, I could be a source on the ground that tries to prove or disprove how Russian influence and old players (Aslan Abshadze) in Georgia are still very much in the Game; how their new stances have been in many cases been achieved effortlessly, and there is ample evidence that this is part of a
plan to somehow ruin the reputation of  the  vast Caspian and Central Asian oil resources to discourage western  companies from investing in the region, while Russia gains further and more  long-term strategic control, or at least downgrades the reputation and  'success' of BTC?

Moreover, there are potentially many separate stories or side plots about a greater strategy that involves the on-going takeover of a number of important assets and infrastructure in Georgia, including the recent selling off of a number of major power stations, to Kazak and Czech fronts and other companies such as 'Bouser Ltd'. Sources are all in place in Batumi and throughout Georgia and things are developing on many fronts. This has been by far the largest and most pressing project I have been involved after several years of investigative journalism in Georgia.

BTC

The allegation at the time, 2007 2008, that someone the intelligent pig was not functioning - not so clever - and that oil has been tapped and diverted between Georgian pumping station one and pumping station two. Moreover, oil is not flowing - and still Baku-Supsa is down for "repairs" and that too is a question. The fact is that not that much oil is available to export and with the prices as high as they are - more money is to be made shipping (smuggling oil out from Batumi), and this comes from a range of oils - and much of it should be flowing via the BTC but that does not help the bottom line of the stakeholders (too much money is being made and lot of the money is trading hands in non-official ways. One must remember where we are and the world is full of backhanders and petty crooks.

I have all the standards for all crude types being test in Batumi and Baku - and I am fairly sure that the local business has been taken over by the Russians (Russian and GRU intelligence, from the management down the security guards). I have been involved in an investigation of the oil testing lab that belongs to Caleb Brett-Intertek in Batumi.

Nine former employees have spilled their guts. I think Rustavi2 and Georgian Intelligence should dig a bit deeper into the port of Batumi in dredging up some dirt as the larger network of things and the extent of Russian intelligence involvement in the internal affairs of a fledgling democracy that is misunderstood. Naturally none of this has anything to do with NATO aspirations – only old fashion greed and corruption and new age damage control. The proceeds from the slippery business have been used for
various USG pet projects and there are many financial stakeholders.

In the oil there's money to be made but as all the crude is coming from BP in Azerbaijan right now I don't see how they could make money through testing the pipeline oil.  If you look bit closer at oil product testing than you will see a whole different story.  What type of testing are they involved with?  Is it BTC crude or all types of oil and oil products?  AmCham set up a petroleum products committee earlier and they put out some useful info.  USAID also funded some work on smuggling of oil products to avoid excise taxes that was quite useful.

On the oil testing, keep in mind that when the tankers arrive the oil can be retested.  It is tested at various points along the system.  So even if they did falsify results in Georgia testing it would get picked up later on (at least in theory).  However, that is not necessarily the case when the oil get diverted somewhere between pumping station one, Georgian side, and pumping station two, and then flogged off for a hefty profit.  It
should be noted that that it is Azeri light - that which goes via the pipeline as it is also exported via Batumi as well as other grades and origins, and Kazak. The question is why BTC does not keep backup samples - and this may be because some of the oil that is going into the line is a horse of a different color, and there is the nexus to what we understand is going on in Batumi and Baku.

Please don't get me started on AmerCham, which is the cover for much of the illegal business that transpires in Batumi and Georgia as a whole. I have a complete list of membership and know who is who on that list, and have information on all the networks of patronage.  I know what I am talking about - including money laundering. I can tell you who are the shits and who the assholes in that organization are, (it is common knowledge) and the worst lot among them has floated to the top, including
those in now close with the International Chamber of Commerce, need I give
names.

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