Trump’s Low-Level Russian Connection; The lawyer who met Donald Trump Jr. was no Kremlin power broker.

File Photo of White House with South Lawn and Fountain

(Bloomberg – bloomberg.com – Leonid Bershidsky – July 11, 2017)

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.

In stories about her meeting with Donald Trump Jr., Natalia Veselnitskaya, the unlikely celebrity in the latest installment of the Trump-Russia story, is often described as someone with “connections to the Kremlin.” That’s misleading, although her involvement still says much about how power works in Russia.

The red-brick fortress at the center of Moscow is the wrong architectural landmark in which to look for the ties that made Veselnitskaya a successful lawyer. The right building is a hulking, futuristic glass structure just outside the Moscow city limits, which houses the government of the Moscow region — the constituent part of the Russian Federation which surrounds but doesn’t include the city of Moscow.

The Russian system of power — at least its all-important informal part — has always been all about “levels.” Russian President Vladimir Putin often uses the word to discriminate between matters that are worthy of his attention and those that aren’t. The regional elites are several notches below the Kremlin level, which explains Putin spokesman Dmitri Peskov’s snobbish reaction to news about Veselnitskaya: “No, we don’t know who that is, we cannot follow all the meetings of all the Russian lawyers both inside the country and overseas.”

During Veselnitskaya’s rise, the region, run by Boris Gromov — the general who presided over the Soviet Union’s withdrawal from Afghanistan in 1989 — was a mess of corrupt schemes that ultimately led it to de facto bankruptcy. I know a few things about it because I was the publisher of an investigative book about the period, written by Forbes Russia journalist Anna Sokolova. The book’s print run was seized by police at a warehouse located in the Moscow Region. The publishing company, Eksmo, fought the seizure and successfully sold the book.

During the governor’s 12-year tenure, the region set up a number of quasi state-owned corporations, which issued billions of dollars’ worth of bonds in what later turned out to be Ponzi-like schemes. Alexei Kuznetsov, the regional finance minister who was married to New York socialite Janna Bullock, fled Russia in 2008, after the schemes started coming apart, and was arrested in France in 2013. Extradition proceedings are still under way.

At the same time, the Moscow region was the arena of some of the wildest land shenanigans in Russian history. Land, sometimes enormously valuable because of its proximity to the Soviet elite’s traditional country residences, still used by top government officials, was bought up on the cheap from collective farmers, and then ruthless raiders fought bitterly over it. Their disputes, often involving current and former regional government officials, became Veselnitskaya’s bread and butter.

Originally, she worked at the regional prosecutor’s office. There, she married deputy prosecutor Alexander Mitusov — one of the region’s most influential law enforcement officials — and set up a private practice in the Moscow Region. Her success rate and reputation were soon fearsome; she claimed in a recent U.S. court filing that she had argued and won 300 cases.

After leaving the prosecutor’s office, Mitusov became deputy transport minister under Pyotr Katsyv, Gromov’s deputy and the regional transport minister. The minister ran one of the state companies that ended up insolvent, leaving the regional government on the hook for its debts, but kept his job, leaving the transport ministry only after Gromov was removed by the Kremlin. Katsyv has since worked in top jobs for Russia’s railroad monopoly and a major hydrocarbon transport company.

Veselnitskaya did legal work for the Katsyv family. Among other things, she defended Pyotr in a libel suit against a local activist who accused the regional minister of involvement in shady real estate deals (she won). In the U.S., Veselnitskaya is known for working with the American defense of Denis Katsyv, Pyotr’s son, accused by former Manhattan U.S. Attorney Preet Bharara of laundering money from a Russian tax scam.

That wasn’t just any scam but the Magnitsky affair, made famous by investment fund manager Bill Browder, whose lawyer, Sergei Magnitsky, many believe was tortured and killed in a Russian prison after exposing a massive fraud perpetrated by Russian tax officials and their accomplices. The affair inspired the Magnitsky Act, sanctioning participants in the scheme and any other Russian human rights violators. The Russian parliament retaliated by banning U.S. adoptions of Russian children, and President Vladimir Putin signed the bill, denouncing the Magnitsky Act as a domestically motivated political attack on Russia. (The governments of Canada and the U.K. have both backed Magnitsky-inspired legislation this year.)

Talk of Veselnitskaya’s Kremlin ties comes from her efforts to lobby for the repeal of the Magnitsky Act — which is what Donald Trump, Jr., claims she tried to do when she got her meeting with him, presidential son-in-law Jared Kushner and Trump campaign manager Paul Manafort. She got the meeting through a string of Moscow Region contacts. The introduction was made by Rob Goldstone, the former U.K. tabloid journalist who promoted Russian-Azerbaijani pop singer Emin Agalarov.

Emin is the son and heir of real estate billionaire Aras Agalarov, who is also often described as close to Putin. Like many Russian businessmen who want to stay in the Kremlin’s good graces, Agalarov takes on projects on government orders, even at a loss, such as the construction of a university in the far east and two soccer arenas for the 2018 World Cup. But his real power base is in the Moscow Region. His enormous expo center, concert hall and shopping complex are located right next to the regional government building. Agalarov even built the subway station, Myakinino, that low-ranking regional bureaucrats use to get to work.

It was with the Agalarovs that Trump partnered for the 2013 Miss Universe pageant, held in Moscow. That’s how Goldstone, who arranged the presence of Trump and the contestants in an Emin Agalarov music video, knew Donald Jr. Emin, for his part, knew Veselnitskaya, queen of the regional courtrooms. Before he was elected, Trump’s level of communication in Russia was no higher than that of the Moscow Region’s elite, several notches below the Kremlin. Aras Agalarov said of Trump in a recent interview with the Russian daily Komsomolskaya Pravda:

“It’s one thing when he communicates with me. That’s, like, one level. But it’s a different matter for him to communicate with the president of the Russian Federation.”

It was Rex Tillerson, the current secretary of state, who, as chief executive officer at Exxon Mobil, enjoyed the highest level of access. Trump just wasn’t important enough. It’s entirely possible that a Kremlin effort to help Trump beat Hillary Clinton reached to lower levels because that’s where it was easiest to establish contact with Trump’s family. But it’s more likely that Veselnitskaya, the tenacious and ambitious lawyer who could pull every string in the Moscow Region, did so to get her pet issue — the repeal of the Magnitsky Act, which was getting her major client in trouble — in front of some important Americans. That kind of effort would have been on the right level.

Even if that meeting didn’t help, Veselnitskaya has every reason to be happy Trump won. He fired U.S. Attorney Bharara in March, and in May, the case in which Denis Katsyv was involved ended in a surprise $6 million settlement, agreed by Bharara’s successor Joon Kim. Katsyv escaped with just the payment, without admitting any guilt. No lawyer in Veselnitskaya’s situation could have asked for more.

©2017 Bloomberg L.P. All Rights Reserved. Article also appeared at bloomberg.com/view/articles/2017-07-11/trump-s-low-level-russian-connection