Wednesday, September 30, 2020

98. THE KNIVES COME OUT

 



On Retainer to Prince Albert of Monaco

July 2006


Prince Albert's cousin JL had attended Carteron’s June summit and made an interesting new contact:  

Sergey Pugachev—a wealthy Russian living in nearby Nice who had designs on Monaco.  

Pugachev told JL he was building a “six star” hotel on Moscow’s Red Square and wanted SBM, Monaco’s hotel group, to manage it, even though SBM was not, and never had been, in the business of managing hotels beyond the principality’s borders. 

Pugachev had just purchased a Monaco institution called Sam’s Place—a homey Monte Carlo restaurant—and transformed it into a Moscow-style bar and restaurant called Altovia to give his grown sons—Viktor and Alexandre, Monaco residents both—something useful to do.

LIDDY turned up at M-Base with new documentation he’d promised on Narmino, reflecting a money trail from Saudi Arabia to Germany to Bosna Bank in Sarajevo to Privedna Bank in Zagreb, Croatia, back to Bosna Bank, and onto two numbered bank accounts in San Marino over which Narmino’s wife, Christina Giudici, allegedly maintained beneficial control. The source of these documents, said LIDDY, was a faction of the Serbian intelligence service.

“What is their motivation for providing them?” I asked. 

LIDDY did not know.  They had not asked for money.  

LIDDY confirmed for me that the French DST also possessed these documents.  DST headquarters in Paris, he said, channeled the documents to DST Marseilles for further investigation.  

Furthermore, LIDDY added, the Italian service was onto this (hence the same intelligence coming from POLO, who was not aware of LIDDY’s existence and vice versa), wishing to identify Italian nationals involved in the money laundering process.

I faxed the DST in Paris asking if they were in possession of the original Bosna Bank letter.  I wanted to ensure LIDDY was not misleading me, but I also wanted the DST to know I knew they possessed such a document.  

(A return fax from Pierre de Bousquet’s chief of staff confirmed they indeed possessed a copy.)

SIGER’s chief, Negre, who had been known to talk too much (hence his preclusion from my mission), had been spouting off about a so-called Monegasque establishment plan to “impeach” the Prince—a plan he allegedly supported. 

“We wait two years,” Negre had told Subraud, “then it’s finished for him.”   

It certainly fit with what I’d heard from the Italians—and SPLINTER. 

As SIGER’s political analyst, Yves Subraud was concerned by this, as he believed the Conseil Nationale would use Monaco’s new membership in the Council of Europe as a vehicle for paving the way for the principality to be transformed from absolute monarchy, with power held by the Sovereign and the Palace, into a constitutional monarchy, in which the Sovereign’s role would become largely ceremonial with power wielded by the president of the Conseil Nationale and the minister of state.

When I connected with JLA, I found him demoralized.  

“Proust has screwed the Prince,” he told me. 

Proust

The Prince had apparently swallowed Proust’s playbook hook, line and sinker—a reversal of the plan he’d agreed with JLA two days earlier.  

How and why could this happen?  

The answer is simple:  

Proust had been the last to see the Prince and skillfully walked away with tacit agreement.  

For the Prince, perpetually distracted as he is, tacit agreement is simply the easiest thing for him to do.  

He cannot deal with the issue at hand, so to avoid confrontation he gives in—a bad decision by default, leaving JLA, striving only to implement the Prince’s program, dangling in the wind, weary, depressed and ready to call it a day.

Proust’s plan was this:  Yes, Franck Biancheri would step down as finance minister.  

But that was because he would become chairman of economic development and special advisor to the minister of state.

The campaign to discredit JLA had already begun in earnest.  

And the courtiers around the Prince who wanted to poison him against JLA knew exactly what potion to use.

That afternoon, JLA told the Prince I needed to see him with “urgent information” (the new Narmino documentation).  

The Prince replied, “I just met him.”  


When JLA phoned me that evening and learned the Prince had not just met me; that in fact I had not him since my return from the USA, he was flabbergasted.

I’d left several messages for the Prince and no call back, though we had much to catch up on—serious affairs of state.   

The reorganization of SIGER, although approved by the Prince and ordered by JLA, had still gone nowhere.

 A news story had just broken about a certain Monaco Red Cross scandal.  

Roger-Louis Bianchini, a Nice-based correspondent and Monaco specialist for the Nice-Matin, reported that donations went unrecorded on a regular basis.  Obviously, I wanted to know the source of such accurate information.

It was fortuitous that FLOATER was in town for another round of Operation Hound Dog, the Prince’s favorite.  

FLOATER quickly made contact with Bianchini.  


The French reporter spoke no English, so I assigned one of our support translators to tag along.  

FLOATER’s written report soon followed:


Without question, Roger-Louis Bianchini (RLB) is his own man, and everything about him screams "I work stories my own way." He was the lone occupant of a second floor loft office, and a bright fluorescent lamp illuminated his large metal desk while the remainder of the space, filled with file cabinets and boxes, remained shrouded in darkness. 

He firmly shook my hand and I immediately noticed the grey stubble on his face and a beige sport shirt hanging atop clownish blue-and-white striped trousers.

RLB, a direct man who did not want to waste time, asked if I wanted him to talk about Prince Albert and Monaco or if I wanted to ask him questions.

“Both,” I said.  He talked at his own pace for thirty minutes and I asked questions for thirty minutes.

On Money Laundering:  “The fact of him (Albert) saying he is going to change this is one thing.  Changing it is another.  With money laundering, Monaco has shut its eyes.  I don’t know if things can be changed.”  Why? RLB said any deviation from the way things are done will change the climate for doing business in Monaco and will create dramatic change for local businesses and citizens.  He implied that Monegasques like what they have and will not tolerate dramatic changes in employment or the quality of life.

On Rainier’s Impact on Monaco:  “He went to extremes” to create something that “was just a rock with nothing that grows and nothing that can be made.  He made a safety [deposit] box.  Thirty years ago, Monaco was nothing.”  RLB credited Monaco’s modern-day success to Rainier because he was the first ruler in recent history to “live and rule there.  Albert 1, and others, was never here.  We must never forget this.”

On the ‘Three Poles” of Success that Rainier established: 

Security.  “He created an atmosphere of complete safety for citizens and those doing business here.”  RLB cited unique powers granted to police in Monaco that are nonexistent in other countries, including France.

Media:  “Putting the royal family (hence Monaco) in the press is one of the most effective PR efforts in the world, and it is free.  Costs nothing!  They (the Palace) don’t spend money on this, but sometimes they initiate lawsuits when they don’t like the story.  Through the press, the world’s attention became focused on Monaco and what it offers, including tourism and financial services.”  But the media effort was seriously hampered after Prince Grace’s death because the fairy tale came to a tragic end, said RLB, who added that the Rainier-Grace nuptials—which he described as an “arranged” marriage,” was a “wonderful” event that put Monaco and its princess at the center of the world’s attention.  Since Grace’s death, nothing positive has filled the void.  Caroline is virtually “nonexistent” while Stephanie is “not a glory but everyone sympathizes with her.”  There is still a problem today even with Albert as Sovereign because he has not wed and not “duplicated his parents experience.  His wedding would put Monaco back on the map.”

Banking and Financial System:  Rainier, explained RLB, made it easy to bring and invest money in Monaco, but without security these activities are less effective.  “Today, security is not what it once was.”  He mentioned that more street crime—robberies and burglaries—exists today than during Rainier’s era and cryptically referenced a police scandal about cops on the take.

On the “Yalta Conference of Privatization”:  it took place in the summer of 1991 on a yacht outside of Cannes—and was a meeting of Russians to decide how to funnel money out of Russia.  French intelligence infiltrated the meeting by placing an undercover agent on the crew of the boat.  

On the Difficulty of Stopping Illegal Activities, Especially Money Laundering:  “The chances of doing something about these problems are not great as long as multinationals continue to hide profit from taxation throughout the world.  It is especially difficult, despite the money reforms here, because investment in Monaco is coming via bank notes from London.

On the Italian Mafia:  RLB gave them the highest marks of all the organized crime groups because they don’t like to make waves or be visible outside their own turf.  Consequently, the Italian Mafia partnered with local “teams,” which made them highly effective because they bought into the local Italian infrastructure.  They had ready access to corrupt cops, judges and government officials and easily found local businessmen to serve as fronts for whatever criminal enterprise they wanted to create.

On Russian Influence:  “A lot of money and people have moved into the Cote d’Azur recently,” RLB said.  But he didn’t see them as a big threat because they lacked “local teams” that were used so effectively by the Italian Mafia.

On the Biggest Threat to Monaco:  “Hard to say—but the Italian Mafia is the most intelligent.”

On the Monaco Red Cross Scandal:  “Read my story.”  

I pressed him on Narmino’s involvement. “Yes,” he replied.   

Bianchini steadfastly refused to refer FLOATER to anyone, shrewdly realizing, perhaps, that by doing so he would reveal his sources.  

But we already knew that one of his key sources in Monaco was a Monegasque named Pierre Colombani, who billed himself as a banking and judicial expert; Bianchini was often seen in the principality in the car of his Italian girlfriend, Marina Pascoli.


On the evening of July 7th, JL planned to meet with the newly “promoted” Franck Biancheri at seven o’clock in Monaco’s Yacht Club.  

We agreed on a bold plan:  JL would mention Bosna Bank in an off-handed way and gauge Biancheri’s reaction.  

“Use discretion,” I advised, “and only go for it if it feels right.”

 At 17 minutes past eight, I received this text from JL:  “We need to talk!” 

 We met at Quai des Artistes 90 minutes later; JL recounted as saying to Biancheri, “Glass of champagne to celebrate?”

“Are you kidding?” Biancheri replied.  “There’s nothing to celebrate.  I was running a ministry of 200 people.  Now I have no people, no real portfolio.  The titles mean nothing—they have cast me out.”  

Joined by his wife, Sylvia, the pair spit blood and venom in unison.  Disgusted, Sylvia departed.

“I’d asked you about skeletons,” JL said to Biancheri, referring to a period before JL had met me.  “You told me there were none.”

Biancheri went from glum to nervous, dropping his hands between his knees, avoiding eye contact. “What do you mean?”

“You ever heard of Bosna Bank in Sarajevo?”

 Biancheri hesitated.  “Should I know it?”

“You were the fiance minister,” said JL.  “You should know all the banks everywhere.”

Biancheri blushed, flustered and went silent.


Tuesday, September 29, 2020

97. PORC






On Retainer to Prince Albert of Monaco

June-July 2006


On June 1st I flew from London to Washington D.C. 

CIA said “important things” were happening.

One such important thing:  

President Bush had just fired Porter Goss as CIA director, and my friends, the Goss-lings, were out of power along with him.  

(Jay J was philosophical about it when I met him for lunch at Café Milano.  Not unlike the Prince, it seemed Porter traveled the path of least resistance—a path that always leads to trouble.)

That evening I dined at Morton’s Steakhouse in Bethesda with Clair George, who I enthralled and delighted with tales about Bulgarians in Brussels and Luxembourgers in Luxembourg, and a smoking gun from Bosna Bank. 

“You’re messing with their rice bowls,” he finally said.  

In a scene borrowed from The Godfather, our chairman emeritus foretold the end of my mission in the Prince’s service.  

“This is how it will happen:  A group will go to Albert and demand, ‘Get rid of Robert.’”

 

A few days later, I met with the CIA team in a conference room at the McLean Hilton.  

They reaffirmed seven points, ticking off each, as if all that mattered was that we acknowledged the basis of our relationship; a relationship long disrupted and corrupted by LIPS, their loathsome station chief in Paris.

Phil R was so ill prepared and rambling that, when he left the room, a member of his staff apologized for him.  (“He’s been working too hard.”)

I reminded those assembled that at our last meeting I had been asked (by Phil R) to set up a bank account in Guernsey and, after doing so, was then asked by LIPS, “Why did you do that?” and when I told him because Phil R said so, LIPS said, “Well, we’re not going to do it that way.” 

The team's response:  Really sorry, send us a bill for your expenses. 

That really wasn't the point:  CIA had become more of a hindrance than a help.  

Phil R seemed confused, not remembering he even gave the Guernsey instruction, which disconcerted me further.  

I left fully understanding that CIA was little more to us at this point than an unfunny joke.

Funny was back at my hotel, the Bethesda Hyatt, where a gathering of the National Obesity Forum had been replaced by a Hemorrhagic Telangieltasia Vascular Biology & Pathophysiology convention.

In the Hyatt's bar (a mini-Morton's Steakhouse), as I attempted to enjoy a glass of Beringer Private Reserve cabernet, everyone around me spoke of rectal nodules—unappetizing, if preferable to what Central Intelligence had conveyed earlier that day.


June 9th was a marathon day of liaison dining, beginning with breakfast at the Four Seasons Hotel with Ambassador Vygaudas Usackas of Lithuania and his intelligence chief of station.  

Then lunch with Romanian Ambassador Sorin Ducaru and his deputy at Café Milano.

Finally, dinner at The Daily Grill in Bethesda with David Soumbadze, deputy chief of mission from the Embassy of Georgia.  

The main lesson I learned this day was not to deal with anyone from the diplomatic corps but go straight to intelligence service professionals through the best possible intermediary.  

Also, that Europe, not Washington, D.C., was my playground.  Anyone who served in Washington fell victim to its lethargy.


Next day I flew to California for a well-earned vacation.  It was punctuated with alarming calls from Monaco.  

My deputy had met with LIDDY and received new documentation on Philippe Narmino.  

And an informant called with an item about Steven Saltzman, who had apparently embarked on a "program to reform Monaco’s banking system," with the Prince’s tacit approval or not, though it seemed a ploy on Saltzman’s part to get himself named to bank boards. 

"Porc"

Saltzman had made calls to a number of senior bank officials, inviting them to meetings at “my office in the Palace.”  

I checked it with JLA, who told me Saltzman had neither Palace facilities nor official status.  He added, however, that Saltzman was “unmanageable” and that, as the Prince’s friend, had been overtly throwing his corpulence around in a bid to line his own pockets.

Proust, said JLA, was still dragging his feet on Biancheri.  

Tough decisions were needed; decisions only the Prince could make. But he kept putting them off week after week, month after month.


On June 29th I had my first indication that the knives, unsheathed and sharpened, had now been flashed.  

Thierry Lacoste, thwarted once too many times in his bid to enrich himself on the Prince’s coattails, was now determined—according to an excellent informant—to oust JLA.

Such was the state of play when I flew to London from California the next day, and on to Rome three days later.  

A SISMI officer met me at the airport and whisked me to lunch with Alberto Manenti, after which Alberto accompanied me to the Vatican to meet Dr. Domenico Giani, director of Gendarmeria Vigilanti di Vatican, which he described as the Pope’s “intelligence group.”

 

Giani told me he had been appointed by the Pope one month earlier to oversee all security and intelligence and to brief His Holiness personally.

I made my pitch for the Vatican to join the Micro-Europe intelligence association that we in Monaco and Luxembourg had created.  

Giani was quick to give us his blessing for our club but could not understand why I thought the Vatican (the world’s smallest country at 0.2 square miles) to be a microstate.  

So far as Giani was concerned, the Vatican is a macro-state, with global reach.  

(Later, my host Alberto joked all priests are case officers, all parishioners are agents, all confessions duly noted, cross-indexed, and filed away.)  

Nonetheless, Giani asked that I send him an invitation when we had a date for our first meeting; his attendance, he said, would be subject to approval by his boss, the Pope.

Giani sent me on a tour of Vatican City’s security nerve center, which featured a whole wall of large flat screen TV monitors showing every square inch of Vatican territory.  

If a car entered St. Peter’s Basilica, or any other entry road, a camera focused on the plates and its tags entered into a database that immediately identified the vehicle’s owner, with three concerns in mind:  vandalism, theft, and terrorism.


By mid-morning next day I was back at M-Base, after six weeks away.  

I had plans for the Dutch foreign intelligence chief to meet the Prince the following day, but I could not find Albert to reconfirm, so the Dutch cancelled.

I spent a long day in meetings with all of my various assets and informants. 

They painted a bleak picture revolving around the same themes:  lack of progress and indecisions and everyone jealous of everyone else for access to the Prince (called Malade de la Sovereign).  

Despite having his special project dossiers transferred to JLA’s desk, aide-de-camp Bruno Philipponnat had been increasing, not decreasing, his influence, spreading word that he now played a “super undercover role” doing “special international government missions.”  

These updates were brightened only by the occasional anecdote, like Proust apparently summoning Jean-Paul Carteron and demanding he have a say over who may attend Carteron’s summits—and Carteron storming out of their meeting. 

Or Steven Saltzman being called (by someone close to the Prince) “porc.”

“What do you mean, porc?” I asked.

“Porc!  Porc!”

He meant pig.  

Such were the delights of working with persons for whom English was a second language.