10578_Arcanum proposal to Stratfor 2-8-10

Transcription

February 8, 2010
PROPOSAL
Enhanced Due Diligence Projects in Iran
PRIVILEGED & CONFIDENTIAL ATTORNEY WORK PRODUCT February 8, 2010 ARCANUM PROPOSAL TO STRATFOR FOR ENHANCED DUE DILIGENCE PROJECTS IN IRAN Arcanum, AG (“Arcanum”) is honored to provide you this proposal for Startfor. Arcanum, the Zurich based strategic intelligence unit of RJI Capital Holdings, GMBH (RJI cap is 100% American owned), was founded by highly regarded intelligence professionals from the United States, United Kingdom and Israel. Our principals and professionals include experts in global intelligence, security, asset tracing and recovery, terrorism financing, anti money laundering, geopolitical risk analysis, global market research, public policy, and diplomacy. We are multinational, multilingual, and multi‐disciplinary, working in offices around the world on behalf of our clients’ interests. We deliver a disciplined approach to our clients, drawing on our ability to gather bespoke intelligence and operate in a global context. We are an “active investigator” and assist our clients by deploying our investigative and intelligence expertise with a particular focus on enhanced due diligence enquiries, asset tracing, asset recovery, terrorism financing, anti money laundering and other financial fraud investigations, geopolitical strategic risk assessment, and in‐depth market research. I. Arcanum’s Resources and Experience Drawing on the experience and networks of our Professionals, we provide our clients with 3 key services: Stratfor
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PRIVILEGED & CONFIDENTIAL
1. Intelligence‐led Investigation: We provide an intelligence‐led system known as “The American Model.” We are highly regarded by our clients for our skills in “de‐layering” complex structures and piercing corporate veils. We specialize in, and have an impressive track record of, success in terrorism financing, asset tracing and recovery operations, fraud investigations and litigation support. 2. Preemptive Intelligence: We provide clients with precise and timely Intelligence assessments of on‐going issues of concern. The information we provide has proven vital to our clients in contract negotiation, court cases, and corporate structuring. 3. Geopolitical Intelligence and Risk Analysis: We provide clients with in‐depth Intelligence . Our intelligence assessments are conducted both at the Strategic and Tactical. In today’s ever changing world much of a company’s success depends on the players and the plays, rather than just pure market factors. Many of the risk factors are often affected by individualities and personalities rather than pure commercial risk. At Arcanum we get to the bottom of these issues and provide pragmatic fact‐based assessments utilizing methodology, tools and information that are not available on the public domain. 4. Due Diligence Reports: Our Due Diligence reports provide detailed information, documentations and analysis, whether directed at an individual, company, group or large organization. In addition, we deliver customized due diligence services Stratfor
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in those jurisdictions and regions around the world where information is neither held in public records nor easy to access. Examples of Relevant Experience We have worked under contract with U.S. Government agencies on cases related to Terrorism Financing, Asset Tracking, Racketeering, Corruption, and Fraud. Due to the sensitivity of these investigations, the details remain confidential and cannot be publicly disclosed. Last year Arcanum was requested by a US federal law enforcement agency to assist them in investigations on Iranian financial activities in the U.S. and in other locations worldwide. In this capacity, Arcanum utilized its covert human intelligence sources to reveal Bank Melli’s undercover financial activities and the activities of Iranian shell companies that covered the Iranian government activities. We identified a scheme conducted by the Iranian government in New York City. Using unique human intelligence capabilities, we identified a building in New York City that was owned indirectly by Bank Melli, an Iranian state owned bank and traced the off shore structuring used to distribute funds from the asset. We have also provided intelligence services to private clients (companies and individuals). We have successfully traced identified and documented the connections between US companies and Iranian companies (in Iran, the Middle East and Europe) controlled or connected by the Iranian Revolutionary Guard Corps (IRGC) commercial entities. Stratfor
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III. The Arcanum Team Every member of Arcanum is an exceptionally bright, imaginative, experienced, and disciplined professional. M. Ron Wahid is Chairman & CEO of RJI Capital and serves as Chairman of Arcanum. Mr. Wahid has unique expertise in both business and international security. In his capacity as CEO of RJI Capital he has structured and closed transaction worth over $20 billion in Europe, Russia & FSU, Middle East, Asia and Africa. In addition, he possesses significant experience in intelligence operations and analysis, arms control and non‐proliferation, terrorism financing and international negotiations. Since September 11, 2001 Mr. Wahid has advised senior U.S. officials within the U.S. national security apparatus including the Department of Defense, National Security Council and the intelligence community on matters related to international terrorism. His government service included secondment to the U.S. Senate where he worked on issues related to national security. Earlier he had served as a senior analyst on arms control and non‐proliferation. He has also conducted discussions and negotiations at the head of state, head of government, cabinet level and military and intelligence leadership of many countries around the world to include: United Kingdom, Germany, France, Russia, United Arab Emirates, Iraq, Turkey, Lebanon, Bangladesh, India, Malaysia and Singapore among others. He has also served as a Member of the Board of Directors of the Potsdam Center for TransAtlantic Security. His opinions and editorials have been published in the Wall Street Journal, Washington Times, Petroleum World and the International Herald Tribune. He was also an advisor on national security matters to the Bush‐Cheney transition team. Stratfor
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Eitan Arusy is a Deputy Managing Director at Arcanum. Mr. Arusy joined Arcanum after being the Head of Intelligence Analysis for Investigation Division Central, New York County District Attorney’s Office (DANY). In this capacity he led investigations targeting terrorism financing, money laundering and international banking frauds as well as collecting intelligence from “Open Sources” and Confidential Informers and analyzing it while using the knowledge and deep understanding of the history, culture, religion and languages of the Middle East. Mr. Arusy has extensive experience in dealing with Iranian influence outside of Iran including tracing their governmental assets worldwide. He initiated two major cases regarding Iranian governmental entities, including the government owned bank Bank Melli, that concealed funds by creating shell companies in off shore jurisdictions (the Alavi‐Assa case) and Iranian governmental entities that used a UK bank to manipulate the US banking system (the Lloyds case and the Credit Suisse case). Mr. Arusy is fluent in Arabic. He worked with foreign governments, victims, and multi‐national corporations to conduct investigations to uncover and prosecute large‐scale frauds and thefts and directed the analysis and coordination of Suspicious Activity Reports (SARs), Currency Transactions Reports (CTRs) and Financial Crime Enforcement Network (FINCEN) products to collect intelligence data for investigations. During his tenure at DANY he worked with U.S. Federal Law Enforcement and Intelligence Agencies as well as with foreign governments and he has been used as an expert witness in cases related to the Middle East and terrorism financing. Prior to his position with DANY he served as a Major with the Israeli Defense Forces (IDF). As an intelligence officer with the IDF Intelligence Corps, he was responsible for collecting and analyzing intelligence material including terrorism financing and Stratfor
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money laundering. His responsibilities also included the analyses of intelligence data and developing conclusions for operational purposes. Calvin R. Humphrey is a Deputy Managing Director at Arcanum. He is the former Democratic Staff Director, Committee on Homeland Security, U.S. House of Representatives. In his capacity as Staff Director, Mr. Humphrey was responsible for developing strategies and policies to protect the U.S. against terrorist attacks, prioritizing risks through cost benefit analysis, and managing investments in critical infrastructure protection across all sectors, including both domestic and international land, air and sea transportation. Prior to that Mr. Humphrey for 11 years served as the Senior Counsel for the Permanent Select Committee on Intelligence, U.S. House of Representatives. During his tenure on the Committee, Mr. Humphrey distinguished himself on the Committee through his focus on Counter‐Terrorism, Counter‐Narcotics and Money Laundering, and the enhancement of human intelligence capabilities. In recognition of his distinguished service, Mr. Humphrey was awarded the Central Intelligence Agency’s Agency Seal Medallion and the National Security Agency’s Trailblazer Award. Stratfor
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IV. Work Product A. Background and Tasking: Last week, the Senate passed the Comprehensive Iran Sanctions, Accountability, and Divestment Act which includes increased sanctions against Iran’s import of refined petroleum products and urges the United States to continue targeting the IRGC. The House’s Iran Refined Petroleum Sanctions Act, which was passed in December 2009, calls for the President to submit a report to Congress detailing international companies doing business with the IRGC along with a list of IRGC‐front companies engaged in this trade. The Senate legislation, however, includes milder language, “urging” the United States to continue targeting the IRGC with sanctions. The two bills will be reconciled by Congressional conferees before it goes to the President. In October 2007, the IRGC was designated as a Foreign Terrorist Organization (FTO) and as a Specially Designated Global Terrorist (SDGT) entity by the U.S. Treasury as a result of its role in proliferation and support for terrorism. Before the June 12, 2009 fraudulent election in Iran, however, the Guards were familiar mainly to Iran experts and counterterrorism officials. These experts have tracked their role in the devastating terrorist attacks in Buenos Aires in 1992 and 1994, their support for the terrorist activities of Hezbollah and Hamas, their murder of Iranian dissidents in Europe, their training and arming of Iraqi‐‐and increasingly Taliban‐‐
insurgents killing American and NATO troops, and their deep involvement in Iran’s nuclear‐
weapons program. Today, however, the brutal suppression of the Iranian democracy Stratfor
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movement by the Guards and their Basiji paramilitary wing has made the IRGC almost a household name. The IRGC now control large parts of the Iranian economy; by some estimates, one‐third. Testifying before the Senate Committee on Banking, Housing and Urban Affairs, Stuart Levey, Under Secretary for Terrorism and Financial Intelligence, stated that, “In the name of ‘privatization,’ the IRGC has taken over broad swaths of the Iranian economy. Former IRGC members in Iranian ministries have directed millions of dollars in government contracts to the IRGC for myriad projects, including developing the South Pars gas field, managing the Imam Khomeini International Airport in Tehran, and expanding Tehran’s metro system. Furthermore, the IRGC seeks to monopolize black‐market trade of popular items, funneling the proceeds from these transactions through a patronage system and using them to help subsidize the government's support for terrorist groups.” In addition, the IRGC has taken over the Fars News Agency and has announced plans to launch its own news agency this year. The Guard also purchased control of Iran’s telecommunications sector in 2009, adding to its already rich portfolio of business interests, which includes a dominant presence in Iran’s oil and gas, construction and shipping sectors. International companies would find it difficult to do business in the Iranian energy sector without transacting with front companies linked to the Revolutionary Guards or other Iranian government designated entities. As just one example, multiple sources in the Iranian government have identified Pars Oil & Gas Company as a major Revolutionary Guards front Stratfor
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company intimately involved both in the gasoline trade and in the development of the South Pars natural gas field. International companies should be examining if they are knowingly or unwittingly involved in a complex supply chain with Pars or any other Guards‐linked front company. In order to increase pressure on the IRGC, the Obama administration is planning to submit a paper listing Iranian firms and individuals that should be targeted with stricter sanctions to the permanent members of the UN Security Council and Germany. The Wall Street Journal notes, “the U.S. paper specifically targets entities controlled by Tehran’s elite military unit, the Revolutionary Guards, and marks an escalation of Washington’s financial campaign against Iran for its defiance of international demands for a halt to its nuclear program.” The scope of work for Arcanum will be to investigate companies in business with the client and determine whether these companies have any current business with Iranian companies, especially with Iranian government designated entities such as the IRGC. B. Risk Assessment: It is our understanding, based upon several intelligence analysis we conducted over the last 12 months, that petrochemical companies from countries mainly from the Persian Gulf and south or southeast Asia pursues a business model of acting as an industrial conduit for Iranian raw materials, and then establish various manufacturing facilities to transform the raw materials into finished or semi‐finished products seemingly of their own countries’ origin. Stratfor
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We have information on several US based petrochemical companies that unknowingly became conduits of these companies that conduct business with Iran in violation of US Sanctions. Therefore, our primary focus would be to gather necessary intelligence for every case referred to us including any possible documentation that will assist us framing our conclusion whether company X conducts business with Iran or not. C. Methodology
Client should disclose at the outset all the available information they possess on the targets.
The initial research will be based on Open Sources Intelligence (OSINT). The sources used for this type of research Shall include publicly available as well as proprietary and unique databases.
During our research we shall focus our efforts in finding information and evidence that whether or not Iran exports or planned to export petrochemical raw materials [such as Mono Ethylene Glycol (“MEG”) and Polyethylene Terephthalate (“PET”)] to the target companies.
After concluding the OSINT research we will utilize Arcanum’s Covert Human Intelligence Source (CHIS) as a final step of the investigation Stratfor
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We currently possess information on certain US based petrochemical companies that could potentially be a conduit (knowingly or unknowingly) to certain Middle Eastern companies that are skirting around the Iran sanctions. D. Disclosure As a professional matter Arcanum can not and will not disclose the identity of its CHIS. However, the credibility of the information provided can be determined in a few ways:
OSINT – if the conclusion will be drawn from open sources material we will provide the source and a description of its capability.
When a conclusion is drawn based on several CHIS the level of credibility is higher.
If needed, Arcanum professionals can be available as expert witnesses in the past, our professionals has served as expert witnessed in the field of national security and terrorism financing. Client must recognize that all intelligence can not be disclosed at court. Should disclosure to third party clients (other then the one requesting the information) be necessary we shall advise client on specific information that can be disclosed. However, even if the information can not be directly disclosed, the intelligence can be extremely helpful in support of legal actions and discovery through judicial Stratfor
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proceedings. However, all materials can be discussed with US Government Departments and Agencies, provided Arcanum representatives are present, and we are even prepared to facilitate those discussions through our network and goodwill with those respective entities. E. Timing We are prepared to begin work immediately and move this matter as quickly as possible. We estimate every investigation to take between 1‐4 weeks depending on the location of the company, the depth of information needed and F Terms of Engagement At this point Aracnum can not provide a specific cost without knowing the exact scope of work of every project including the target company and its location. We would be happy to provide estimated costs once we get the details of the target/s from the client. We thank you again for the opportunity to work with you on this matter. Aracnum, AG LONDON
ZURICH
WASHINGTON, DC
BRUSSELS
www.arcanumglobal.com
TEL AVIV
DUBAI
HONG KONG