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April 11, 2010
DDDB PRESS RELEASE: Bombshell Threatens Future of Atlantic Yards
Mikhail Prokhorov's Business Dealings in Zimbabwe Appear to Flout US Sanction Laws
Congressman Calls for Investigation
New York, New York—The New York Post has published a bombshell exclusive which puts the Barclays Center Arena and Atlantic Yards project in jeopardy.
The Post is reporting that Russian billionaire Mikhail Prokhorov, with his extensive business dealings in Zimbabwe, may be violating United States sanctions against Zimbabwe's President Robert Mugabe.
New Jersey Congressman Bill Pascrell is calling for a federal inquiry.
Mikhail Prokhorov is the prospective owner of the New Jersey Nets (having conditionally bought the team from developer Bruce Ratner) and a prospective 45% owner of Ratner's proposed Barclays Center Arena in Brooklyn. The project cannot be built without his infusion of hundreds of millions of dollars.
The Post reports:
Democratic Rep. Bill Pascrell Jr., a member of the powerful Ways and Means Committee, wants to know if companies controlled by Prokhorov in Zimbabwe violate federal rules that forbid American citizens and companies, and subsidiaries set up in the United States, from doing business with brutal strongman Robert Mugabe, his regime or associates.
"This is disgusting," Pascrell said. "Obviously, the Board of Governors of the NBA didn't do their job properly when they vetted this deal."
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"[The arena is] being financed partly by the taxpayer, and the public has a right to know," he said.
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"Looks like sanctions-busting to me," said Usha Haley, an expert on US sanctions at the Economic Policy Institute.
She said companies find administrative loopholes, which include setting up a web of corporations, to get around the sanctions.
"It looks like this company is setting up administrative layers that are obfuscating the effects of the sanctions. It's done all the time," she said.
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"Ratner's project must come to a complete halt until the results of a federal inquiry into potential sanction violations by Mr. Prokhorov are known. We call on Senators Schumer and Gillibrand, Mayor Bloomberg, Governor Paterson, New York's Congressional delegation and all of our elected officials to demand a complete halt of the Atlantic Yards project until the facts can be determined. We demand that New York's Attorney General Andrew Cuomo and the office of US Attorney General Eric Holder begin their own inquiries. We simply cannot be giving city, state and federal tax dollars and breaks to Mr. Prokhorov if he is flouting sanctions imposed by the United States," said Develop Don't Destroy Brooklyn's Daniel Goldstein. "The Barclays Center Arena and Atlantic Yards definitely cannot be built without Mr. Prokhorov's wealth, so the project must not move forward if it turns out it cannot be funded."
"This has been the long-term attitude toward Ratner and his project—the people charged with protecting our interests turn the other way and ignore improprieties to give the developer what he wants. And the NBA is so desperate to bail out Bruce Ratner and to get a wealthy international owner that, despite their claims, they failed to do a proper investigation of Mikhail Prokhorov," said Develop Don't Destroy Brooklyn legal director Candace Carponter. "This should outrage our elected officials, in particular Governor Paterson, Mayor Bloomberg and Senator Schumer, who have all unconditionally supported Atlantic Yards. It appears Prokhorov is being permitted to ride roughshod over sanctions properly imposed for gross human rights abuses, and yet, he is being welcomed with open arms for what? Not for the good of the people, but to build a taxpayer-subsidized, money-losing arena on a foundation of eminent domain abuse. It's just plain wrong."
A US Treasury Department summary of the sanctions includes the following:
PROHIBITED TRANSACTIONS - Executive Order 13391 prohibits U.S. persons, wherever located, or anyone in the United States from engaging in any transactions with any person, entity or organization found to: 1.) be undermining democratic institutions and processes in Zimbabwe; 2.) have materially assisted, sponsored, or provided financial, material, or technological support to these entities; 3.) be or have been an immediate family member of a sanctions target; or 4.) be owned, controlled or acting on behalf of a sanctions target. Persons, entities and organizations referenced in Annex A of the Executive Order are all incorporated into OFAC's list of Specially Designated Nationals (SDNs). Prohibited transactions include, but are not limited to, exports (direct and indirect), imports (direct and indirect), trade brokering, financing and facilitation, as well as most financial transactions.
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Foreign branches and representative offices of U.S. companies, as well as U.S. branches and representative offices of foreign companies are considered U.S. persons for purposes of these prohibitions. (Emphasis added.)
Posted by eric at April 11, 2010 10:17 PM