A Kremlin-Linked Firm Invested Millions in Kentucky. Were They After More Than Money?
https://time.com/5651345/rusal-investme ... -kentucky/
Last summer, it looked like things were finally about to change for Ashland, Ky. For two decades, the jobs that once supported this Appalachian outpost of 20,000 people on a bend in the Ohio River have been disappearing: 100 laid off from the freight-rail maintenance shop; dozens pink-slipped at the oil refinery; 1,100 axed at the steel mill that looms over the landscape. Then, on June 1, 2018, standing on a stage flanked by the state’s governor and business leaders, Craig Bouchard, the CEO of Braidy Industries, pointed across a vast green field and described a vision as though he could already see it.
In the little-used park just off I-64, Braidy would build the largest aluminum mill constructed in the U.S. in nearly four decades. The $1.7 billion plant would take aluminum slab and roll it into the material used in everything from cars and planes to soda cans. It would employ 600 full-time workers earning twice the average salary in the region, Bouchard said, and create 18,000 other jobs across the state. Gesturing at the empty space around him, the CEO described an employee health center, a technical lab, a day care and hundreds of employees walking around “carrying iPads.” More than just making aluminum, the plant would help “rebuild northeast Kentucky, and in fact all of Appalachia,” Bouchard told the crowd.
There was just one problem: Bouchard still needed a major investor to make the vision a reality. After months of searching, the only option was problematic. Rusal, the Russian aluminum giant, was tailor-made to join forces on the project. But it was under sanctions imposed by the U.S. Treasury Department. Its billionaire owner, Oleg Deripaska, a close ally of Russian President Vladimir Putin’s, was being investigated by special counsel Robert Mueller for his potential involvement in the effort to swing the 2016 presidential election. The Treasury sanctions—punishment for the Kremlin’s “malign activities” around the world, including “attempting to subvert Western democracies”—made it illegal for Americans to do business with Rusal or its boss.
So Bouchard faced a dilemma. Keeping his promise to bring good new jobs—a project that had already been touted by the White House—would mean partnering with a firm that had deep ties to the Kremlin. Which mattered more, the economic needs of a depressed region, or the national-security concerns raised by the Mueller investigation? Hundreds of miles from the congressional hearings and think-tank debates over Russian influence in Washington, Braidy Industries and the surrounding community had to weigh whether Russia’s 2016 plot had caused enough damage to American security, or American pride, to spurn a chance at an economic miracle.
Bouchard concluded they had no choice. He knew it could be controversial, if not outright illegal, to work on a deal with Rusal while it was still fighting to free itself from U.S. sanctions, he told TIME in an interview. But after a long talk with his lawyers about the risks of even discussing such a partnership, he traveled to Zurich in January 2019 for what he calls a “meet and greet” with a Rusal sales executive. Over dinner at La Rôtisserie, a restaurant with a view of the city’s 12th century cathedral, the executive told Bouchard that the company was ready to do business. “They said, ‘If we get the sanctions off, let’s meet again,’” he recalls. “And I said, ‘Wow, that’s interesting.’”
By mid-April, an exuberant Bouchard was standing at the New York Stock Exchange, announcing that the Russian company had purchased a 40% stake in the Ashland plant for $200 million. Back in Kentucky, the news was met with celebration and relief. “People who were skeptical are seeing that it’s big time,” says Chris Jackson, a 42-year-old former steel-mill worker. When he enrolled in a training program for the Braidy plant, Jackson recalls, many in the community doubted the jobs would ever materialize. “The Rusal agreement just showed everybody this is legit.”
But to some observers, the story of how a Kremlin-linked aluminum giant offered an economic lifeline to Appalachia is an object lesson of the exact opposite. Critics of the deal, both Democrat and Republican, say it gives Moscow political influence that could undermine national security. Pointing to Moscow’s use of economic leverage to sway European politics, they warn the deal is a stalking horse for a new kind of Russian meddling in America, one that exploits the U.S. free-market system instead of its elections. “That’s just what the Russians do,” says veteran diplomat Daniel Fried, who shaped U.S. policy on Eastern Europe at the State Department from the late 1980s until 2017. “They insert themselves into a foreign economy and then start to influence its politics from the inside.”
What worries national-security experts is not that Rusal, Braidy or Deripaska broke any laws in the deal. It’s that they didn’t. A TIME investigation found that Rusal used a broad array of political and economic tools to fight the sanctions, establishing a foothold in U.S. politics in the process. “You cannot go against them in a policy decision, even though it’s in our national interest, when they have infiltrated you economically,” says Heather Conley, who served as a Deputy Assistant Secretary of State under President George W. Bush. “They use our laws, our rules, our banks, our lawyers, our lobbyists—it’s a strategy from within.”
To free itself from sanctions, Rusal fielded a team of high-paid lobbyists for an intense, months-long effort in Washington. One of the targets was Kentucky’s own
Mitch McConnell, the Senate majority leader, who helped thwart a bipartisan push to keep the sanctions in place. Since May, two of McConnell’s former staffers have lobbied Congress on behalf of Braidy, according to filings. Ahead of the 2018 midterm elections, one of Rusal’s longtime major shareholders, Len Blavatnik, contributed more than $1 million through his companies to a GOP campaign fund tied to McConnell.
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https://time.com/5651345/rusal-investme ... -kentucky/