By Dan Christensen, FloridaBulldog.org
A U.S. senator has asked the Treasury Department whether it has investigated the apparent relationships between U.S.-sanctioned Russian arms makers and Russian-linked U.S. arms manufacturers, including Pompano Beach’s Kalashnikov USA.
“Kalashnikov USA appears to be closely linked to Russian arms manufacturers Kalashnikov Concern,” wrote Sen. Ron Wyden, D-OR, in a July 31 letter to the acting director of the Office of Foreign Assets Control (OFAC). “Kalashnikov USA has already been the subject of at least one Congressional inquiry to the Treasury Department for potentially violating sanctions on Russian arms manufacturers.”
President Obama imposed economic sanctions on Kalashnikov Concern, also known as Concern Kalashnikov, and other Russian arms makers in 2014 in response to the conflict in Ukraine.
Wyden, the minority ranking member of the Senate Finance Committee, also inquired about Texas-based TulAmmo USA, which sells small arms ammunition, and its ties to the Russian manufacturer Tula Cartridge Works, sometimes known as Tula Cartridge Plant.
Wyden indicated that widely reported news about how Russia may have targeted the National Rifle Association (NRA) to exert influence in American politics has become more intriguing since the July 15 arrest in Washington of Russian national Maria Butina for conspiring to act as a foreign agent.
According to the affidavit in support of the complaint, from 2015 through at least February 2017, Butina infiltrated a U.S. organization that promotes gun rights at the direction of a high-level official in the Russian government who was previously a member of the legislature of the Russian Federation and later became a top official at the Russian Central Bank. The official was also described as having been sanctioned by OFAC in April 2018.
Relationships ‘merit further scrutiny’
“The high-level Russian referenced in DOJ [Department of Justice] filings strongly matches the description of Alexander Torshin, Deputy Governor of the Central Bank of the Russian Federation,” Wyden wrote. “In light of these allegations, the relationships between Mr. Torshin, other sanctioned individuals and entities, and U.S.-based Russian-linked arms manufacturers merit further scrutiny, including an analysis of whether said companies are functionally managed, owned, or controlled by sanctioned persons.”
Similarly, the gun rights group is not named. But the affidavit contains a description of the organization given by an unnamed American political operative working with Butina as “the largest sponsor of the elections to the US congress, as well as a sponsor of The CPAC conference and other events.”
The NRA, a heavy donor to political candidates that support gun rights, is a long-time sponsor of CPAC, the Conservative Political Action Conference.
Wyden asked OFAC Acting Director Andrea Gacki for “more information about OFAC’s analysis of these relationships under your office’s ownership and control analysis, as well as the 50 Percent Rule,” a tool the government uses to evaluate sanctions evasion.
Wyden’s letter isn’t the first from Capitol Hill to Treasury about the matter.
In April, U.S. Rep. Ted Deutch, a Democrat whose district includes Pompano Beach, asked whether OFAC was investigating the relationship between “Kalashnikov USA and Kalashnikov Russia, including any connections between the executives, directors and employees of Kalashnikov USA and its parent, RWC Group LLC, and Kalashnikov Russia.” RWC stands for Russian Weapons Company.
A Treasury official wrote back a month later to say OFAC would neither confirm nor deny whether it was investigating.
Wyden, like Deutch before him, informed Treasury that RWC was managed by Michael Tiraturian, “a longtime business associate and friend of Alexey Krivoruchko, the chief executive officer and majority shareholder of Kalashnikov Concern in Russia. Then-Deputy Prime Minister of the Russian Federation Dimitry Rogozin, who the United States sanctioned in 2014 for his role in the Russian government’s annexation of Crimea, approved Mr. Krivoruchko’s appointment as CEO of Kalashnikov Concern in 2014.”
Wyden went on to note that Krivoruchko today is Russia’s deputy minister of defense, reportedly resigning from Kalashnikov upon his appointment in June.
In 2014, however, as the Ukrainian crisis escalated and the U.S. responded with a series of sanctions announcements, “Krivoruchko began transferring many of his assets in the United States to Mr. Tiraturian. Furthermore, the Treasury Department determined in 2015 that with Krivoruchko as CEO, Kalashnikov Concern ‘engaged in serious and sustained sanctions evasion.’ In 2016, your department determined that Kalashnikov Concern advised foreign companies to falsify invoices in order to circumvent US and EU sanctions.”
Florida Bulldog reported Feb. 20 that Gov. Rick Scott’s administration offered Kalashnikov USA/RWC $162,000 in state tax breaks in 2015 to induce the manufacturer of Russian-style assault rifles to relocate from Pennsylvania to Pompano Beach. News that the governor had backed using taxpayer money to bring to Broward an assault rifle maker tied to Russia’s most recognizable weapons brand became a focus of controversy and protests in the wake of the Valentine’s Day shooting rampage at Parkland’s Marjory Stoneman Douglas High School that left 17 students, teachers and coaches dead.
Scott’s Department of Economic Opportunity (DEO) was aware when it made the offer in 2015 that the company was doing business with blacklisted Kalashnikov Concern, Florida Bulldog reported in April.
No taxpayer money was ever paid because the company did not meet job-creation requirements, but the state’s offer was made more than a year after the sanctions were imposed against Kalashnikov Concern, freezing its U.S. assets and generally prohibiting transactions with it by “by U.S. persons or within the United States.”
Exclusive U.S. gun dealer
Prior to the sanctions, Kalashnikov USA/RWC was Kalashnikov Concern’s exclusive U.S. dealer. A five-year agreement signed in January 2014 anticipated Kalashnikov would export up to 200,000 units a year to the U.S. and Canada, according to Russia’s state-controlled news agency, Sputnik News.
A federal grand jury in Miami is continuing its criminal investigation of Kalashnikov USA and its incentives deal with Florida. In March the grand jury subpoenaed records about the deal from Scott’s Department of Economic Opportunity, Pompano Beach and the Greater Fort Lauderdale Alliance, Broward’s public-private development arm.
Meanwhile, Kalashnikov USA announced on July 30 that it had hired Jonathan Mossberg as its new chief executive. Mossberg, described by Forbes earlier this year as “the son of one of the storied families of American gun manufacturing,” was brought aboard to review and expand the company’s research and development capabilities, according to a company press release.
“In recent years, Kalashnikov USA has released several firearms design(s) based on the DNA of the renowned Russian AK design including the KS-12 shotgun based on the Russian Saiga series, the KR-9 9mm semi-automatic rifle based on the Russian Vityaz-SN submachine gun and the pistol versions the KP-9,” the release says.
“Mossberg intends to improve and expand the current line – with a USA made AK-47 next in line.”
Kalashnikov USA did not respond to a request for comment.