How Le Pen's party brokered Russian loans

A Dambins-linked firm also paid €250,000 to a think tank linked to a Le Pen MEP, according to the investigation by Latvian and French journalists from Re:Baltica and Mediapart.

Dambins met with Jean-Luc Schaffhauser, an MEP in Le Pen’s National Front party, on 17 March 2016 in Geneva, Switzerland.

He also met Wallerand de Saint-Just, the National Front treasurer, in Paris on 4 November 2016 at the Peninsula Paris, a luxury hotel.

Dambins and Schaffhauser talked about getting more loans from Russia after Le Pen’s party borrowed €9.4 million from the Kremlin-linked First Czech Russian Bank (FCRB) in 2014.

De Saint-Just and Dambins declined to say what they talked about, but Schaffhauser was more open.

“Vilis [Dambins] proposed the next banks [at the Geneva meeting]," he told Mediapart. "As we could not get new loans from the most prominent Russian banks after the first deal as it would have been perceived as too political. We were in unknown territory. I did not want to get involved in it myself.”

The original FCRB loan was arranged by Alexander Babakov, a Russian senator whose family own property in France.

He is on an EU visa ban and asset freeze list for supporting Russia’s invasion of Ukraine and cannot visit Europe.

But Schaffhauser said he knew that Dambins worked for Babakov.

“I have an obligation to work with people who represent the public power, and Babakov is a patriot,” the MEP told Mediapart.

Dambins told Re:Baltica by email that he had nothing to do with Babakov.

“I have not acted, either personally or indirectly, as a legal entity, as an intermediary in the transactions you refer to, and in this regard neither have I done so on behalf of Mr Babakov. I would like to add that neither Mr Babakov nor any legal entity of any jurisdiction of which Mr Babakov would be the beneficiary are my clients,” Dambins said.

Contradiction

Schaffhauser’s remark aside, the Latvian’s claim was contradicted by evidence in the Panama Papers - a giant leak of documents about offshore companies from a Panamanian law firm.

The documents showed that Dambins was involved in at least three firms with Russian links which had HQs at his Riga office.

One Dambins-managed firm, V.D. Nominees Limited, which is registered in the Marshall Islands, in turn managed two other firms, AED International and NYX Management, which were registered in the British Virgin Islands.

Babakov used to own AED International but later transferred it to his daughter Olga. NYX Management is co-owned by Evgeny Giner and Mikhail Voevodin, two Russian businessmen.

A second Dambins-managed firm, Financiere Egine, used to be managed by Giner.

A third firm, VS Energy Latvia, holds energy assets in Ukraine. It is believed to be owned by Babakov and Giner and it is managed by Valts Vigants, another Latvian who is Dambins' business partner.

VS Energy Latvia’s owners are hidden behind two Cypriot firms which are registered in the Seychelles.

But Babakov was, until 2005, a board member of a VS Energy Latvia subsidiary called VS Energy International, while Giner is known to have energy assets in Ukraine.

Follow-up

It is unclear what came out of the National Front’s Geneva and Paris trysts.

Schaffhauser said he gave the files on the Geneva meeting to his lawyer and heard no more about it.

Three months after the Geneva meeting, the National Front agreed to borrow €3 million from another Russian lender, Strategy Bank, but De Saint-Just said the loan never came through and the bank lost its licence not long after.

Sources said Le Pen’s party then began talks with NKB, another Russian bank, but this collapsed in December 2016.

The FCRB also lost its licence in July 2016, but this turned out well for Le Pen.

On 18 March 2016, one day after the Geneva meeting, the FCRB sold its National Front debt to Conti, a little-known Russian company.

The Central Bank of Russia then told the National Front it did not have to repay the loan because “the decision to sell the loan was fraudulent”, Schaffhauser said.

The FCRB was de facto-owned by Roman Popov, a Kremlin-friendly oligarch, but most of its capital was owned by Gennadiy Timchenko, another oligarch, via a firm called Stroytransgaz.

Timchenko, who is on a US blacklist, is a confidante of Russian president Vladimir Putin, indicating that the FCRB’s fate was sealed at the highest level in Moscow.

Schaffhauser’s fee

Things also turned out well for Schaffhauser.

He has previously admitted that he received €140,000 for arranging the FCRB loan via a Luxembourg-registered firm that he refused to name.

But this firm might be called East West Communication Group and that fee might have been higher.

Panama Papers showed that Dambins also co-managed a firm called Spencerdale.

Spencerdale paid €250,000 to a Luxembourg-registered firm, the East West Communication Group, in 2014 and 2015.

East West Communication Group then funnelled the money to a French think tank, the Academie Europeenne, which was co-founded by Schaffhauser, Re:Baltica and Medipart have learnt.

Dambins said he had no knowledge of this payment.

School friends

The Latvian entrepreneur set up his Riga consultancy with Vigants, a former school friend.

The pair came to prominence in Latvia in the early 1990s when they became president and vice-president of one of the many Latvian banks, Lainbanka.

They were briefly detained in 1995 on suspicion of fraud, but the case never reached trial.

The scandal proved lethal for Lainbanka which, among other assets, held money from Russia’s defence ministry that was meant to be paid to former Soviet military pensioners in Latvia.

This story was first published by Re:Baltica, an investigative website based in Riga, Latvia. Another version was published by Paris-based investigative website Mediapart.