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April 19, 2010

Pascrell responds to Stern, provides (slightly) more details about Prokhorov in Zimbabwe, raises question of ties to Russian mob

Atlantic Yards Report

Rep. Bill Pascrell, whose allegations about prospective Nets owner Mikhail Prokhorov's business dealing in pariah state Zimbabwe were brushed off by the National Basketball Association, is fighting back, questioning the league's willingness to approve the billionaire.

After being told he'd provided no information "demonstrating or even suggesting" that Prokhorov or his related companies conducts business with those on the sanctions list, Pascrell sent a letter citing "specific examples of Renaissance Capital’s business with individuals and entities that have close ties to the Mugabe regime."

Those examples were hedged as "reportedly" and he carefully asserted that Prokhorov is violating "the spirit" of the sanctions rather than formally violating them.

(I wrote last week how Renaissance Capital, of which Prokhorov owns nearly half, said its CEO specifically avoided an investment summit so as to not violate sanctions, even though a government newspaper said Renaissance Capital had confirmed its participation.)

The Russian mob?

Beyond that, Pascrell asked whether the NBA has have examined documents filed last year in the Southern District of New York alleging Renaissance Capital has had a long-standing relationship with Russian organized crime, notably ties to an alleged scheme to defraud the Russian government of $230 million (as reported by Bloomberg on 7/31/09).

No backup documents were provided regarding Pascrell's charges, though I did find an declaration from a representative of Hermitage Capital Management, which seeks to prove it was a victim of fraud.

It is unclear how seriously the Treasury Department is pursuing Pascrell's initial request that it look into Prokhorov's activities.

Pascrell also provided the NBA's response to his initial letter. Both documents are embedded below.

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Posted by eric at April 19, 2010 10:35 PM