American charged with spying in Moscow worked for company with Russian ties
By KRISTEN JORDAN SHAMUS AND DEIRDRE SHESGREEN | Detroit Free Press | Published: May 11, 2019
(Tribune News Service) — Paul Whelan, the Michigan businessman accused of spying in Russia, entered the country on a business travel visa supported by BorgWarner Inc., he told his lawyers in Moscow.
Whelan, 49, of Novi was the director of global security for the Auburn Hills-based auto supplier when he traveled to Russia on Dec. 22 for the wedding of a friend. He was arrested six days later by the Russian Federal Security Service (FSB) and charged with espionage.
He remains in a prison cell at Moscow's czarist-era Lefortovo Detention Facility, held without much more information about the accusations against him than he knew on the day when he was initially detained.
"He was caught red-handed," Russian Foreign Minister Sergei Lavrov said at a news conference following Whelan's arrest in his hotel room at the upscale Metropol hotel in Moscow. In his possession was a flash drive containing what Russian authorities say was sensitive information.
It's a claim his family denies.
"Paul thought a friend of 10 years was giving him some photos of his hometown," on the flash drive, said his twin brother, David Whelan, in an email message. Whelan holds U.S., British, Canadian and Irish passports. If he's convicted of spying, he could be imprisoned for up to 20 years.
The State Department confirmed Friday that Secretary of State Mike Pompeo will travel to Russia next week and will meet with President Vladimir Putin and Russia's foreign minister. The discussions will be dominated by other hot-button foreign policy issues, such as Venezuela and Syria, but Pompeo is expected to raise Whelan's case, according to a senior State Department official who was not authorized to speak publicly about the secretary's agenda.
Since his arrest, Russian authorities are limiting Whelan's contact with the outside world, but he has been able to communicate some details about the case to his family through his lawyers. Among those details: BorgWarner helped him get into Russia by sponsoring his visa, and he believes his arrest might be tied to politics involving U.S. sanctions.
BorgWarner's Russian business deals
BorgWarner has 30,000 employees around the world with 68 locations in 19 countries, but it doesn't have facilities in Russia, said company spokeswoman Kathy Graham.
The company would not confirm that it sponsored Whelan's Russian business visa.
"As a general policy BorgWarner does not comment on travel of any of its employees, nor does the company discuss information about individual customers," said Graham in an email to the Free Press. "Paul was not in Russia on company business. We are deferring to the State Department regarding updates to his situation."
Although BorgWarner operates no facilities in Russia, the company does have a history of doing business there.
BorgWarner supplied Kamaz Inc., Russia's largest truck-maker, with turbochargers, fan drives and high-performance fans, according to U.S. Securities and Exchange Commission documents. BorgWarner parts are used in nonmilitary Kamaz trucks and Nefaz buses, and its total sales to Kamaz from 2013-15 through non-U.S. subsidiaries was $12.1 million.
"For over 15 years, BorgWarner has supported (Kamaz) with advanced air-flow technologies, and we are looking forward to continuing the successful collaboration," Daniel Paterra, who was then BorgWarner's president and general manager of thermal systems, said in a 2015 news release about the Dakar Rally, an off-road rally in South America in which Kamaz trucks are used.
About a year after Paterra made that statement, the SEC submitted a letter to the president and CEO of BorgWarner, asking for details about the company's dealings with Kamaz, which was reported to have delivered trucks to Syria and Sudan.
"Sudan and Syria are designated by the State Department as state sponsors of terrorism and are subject to U.S. economic sanctions and export controls," wrote Cecilia Blye, chief of the SEC's Office of Global Security risk in a letter to the company dated April 14, 2016.
"We are aware of publicly available information indicating that your subsidiaries have provided turbocompressors, fan drives and high performance fans to (Kamaz) Inc. and news reports indicating that Russia has delivered (Kamaz) military trucks to the Syrian Army."
The company responded in a letter later that month, writing: "There were no direct or known indirect sales or exports from BorgWarner Inc. ... or its subsidiaries ... to Sudan or Syria in 2013, 2014 or 2015.
"Non-U.S. subsidiaries of BorgWarner have had and in the future may continue to have de minimis light vehicle/non-military automotive business with customers in Sudan and Syria. U.S. law does not prohibit non-U.S. subsidiaries of U.S. companies from engaging in transactions with Sudanian or Syrian customers that do not involve exports or re-exports subject to U.S. jurisdiction."
BorgWarner declined to provide the Free Press with a specific explanation of what it meant by "de minimis" in its response to the SEC, although generally the term is used in legal references to suggest something so small or minor, it is insignificant.
A deep look raises questions
"There are some very good and reasonable questions to be asked from BorgWarner," said Ryan Fayhee, a Washington, D.C.-based attorney and former U.S. Justice Department prosecutor who is working on behalf of the Whelan family. "There's an open question right now around the role of a company when their employee, who did not go there for work, but they sponsored his visa, and they have meaningful operations in Russia. They don't have an office there, but what they do have is ... very, very meaningful relations with a company called Kamaz.
"Kamaz is a very interesting organization because it is actually headed by a businessman who was the co-chair of Vladimir Putin's re-election campaign. ... I wish this was a conspiracy theory. It is not."
The director general of Kamaz is Sergei A. Kogogin, who was, in fact, the co-chair of Putin's 2018 re-election campaign.
The largest shareholder in Kamaz (49.9%) is a government-run defense technology company called Rostec Corp., which produces such military products as high-precision artillery munitions, artillery shells, rocket launchers, ammunition, along with aircraft and bomb weapons, among other things.
The director general of Rostec is Sergey Chemezov, who is among the most powerful people in the FSB, according to the Warsaw Institute, a Polish think tank focused on international relations, energy security, defense and other issues important to Poland and east-central Europe.
Rostec was sanctioned by former President Barack Obama's administration after Russia invaded Ukraine. And Chemezov was barred from entering the U.S.
"I'm not suggesting BorgWarner has done anything wrong," Fayhee said, "but I would suggest ... what role can the company have in the horrible, unfortunate situation where one of their employees has become a political pawn? And how do they act, what should they do, and how do they manage it?"
BorgWarner declined to answer questions about its efforts to help recover Whelan from Russian authorities. Fayhee said the company has been less than forthcoming with the Whelan family and in answering his questions, too.
"The big question in the beginning was and still is, ... what, if anything, with respect to the company may have contributed to Paul's arrest?" Fayhee said. "For example, did somebody visit Paul in Detroit, or email or corresponded with him at the company? ... You know, if there's a missing person, you interview his family, you interview his company and you take all these reasonable steps to determine what was done ... things like doing some sort of internal review or gathering materials, forensically or otherwise to help support the government in its effort to examine what would have led up to Paul's arrest and disappearance."
Yet, Fayhee said when he asked BorgWarner whether any such internal review had been done, an attorney for the company told him it is more concerned with its reputation in the news media than conducting an investigation.
The response surprised him.
"What is clear is that Paul, and the family really deserve more out of BorgWarner," Fayhee said. "They deserve a dialogue. ... The family very much wants to engage in even a private dialogue with the company in order to make sure they are doing everything they can do to secure Paul's recovery.
"That's really at the core of it. The statements made by their lawyer, the fact that they're not speaking directly with the family is really troubling to say the least."
Through its spokeswoman, BorgWarner issued this statement in response to Fayhee's criticisms: "BorgWarner worked closely with the family before they engaged their own attorney, and it has coordinated with the State Department and other government agencies since Paul's arrest, and will continue to coordinate where appropriate, to help bring Paul home safely."
David Whelan said there's no indication that his brother's work for BorgWarner has anything to do with his arrest in Russia.
"We are not aware of BorgWarner's business connections to Russia beyond what's in the public record," David Whelan said. "We don't have any reason to believe Paul's situation has anything to do with BorgWarner, other than that it is an American-based company.
"However, we do think that he was targeted by the Russian police because he was an American businessman. Unfortunately, the FSB appears to have miscalculated whatever result they helped to extort out of Paul's false arrest. Paul has shared notes through his lawyer that he believes his arrest has some sanctions-related element, but we don't know why he says that. But there's no indication it has anything to do with BorgWarner."
Whelan's isolation in Russian prison
In recent weeks, bundles of handwritten letters from Russia have arrived at the Manchester, Michigan, home of Whelan's parents, Rosemary and Edward Whelan. The letters from their son have been censored by Russian authorities, but still are a welcome sight, his brother said.
"My mum and dad received about 75 letters, in three groups ... over the past 10 days or so," David Whelan said. "They're handwritten notes from Jan. 18 onward. ... They describe his day-to-day in jail. As they went through the routine prison censoring, before being held by the FSB investigator for months, they are purely day-in-the-life.
"We haven't really learned anything that helps us with seeking his release, but they are comforting for my parents. You can hear his 'voice' in them, and a letter can be read and re-read while they wait for his return."
Since his arrest, Russian authorities have limited Whelan's access to his lawyers and consular services. He has not received mail or phone calls or the English-language books, including an English-Russian dictionary.
Even Jon Huntsman Jr., the U.S. ambassador to Russia, has been restricted in what he's allowed to discuss with Whelan.
During an April 30 meeting with Whelan at the prison, Huntsman was not allowed to read letters from his family, to ask him to sign a power of attorney, and was banned from 'talking about anything that actually matters,' said Andrea Kalan, a State Department spokeswoman, on Twitter.
"Why haven't Russian officials provided proof? Perhaps it's lost along with Paul's mail. Complete lack of evidence + Paul's isolation = greater likelihood officials will try to get a forced false 'confession.' Stop playing games."
David Whelan said his family is concerned that his brother has been interrogated without the presence of his lawyers or his translator, and noted that his attorneys in Moscow, Vladimir Zherebenkov and Olga Karlova, were appointed by the FSB.
In addition, his brother's signed Privacy Act Waiver was held up for months by Russian investigators who alleged the document was lost in the mail. And now, a similar delay is keeping the family from getting access to a signed power of attorney, which would grant them the ability to manage his affairs at home and help him choose his own attorney in Russia.
"There's a real concern that ... at some point given the isolation, the limited access, a lawyer that doesn't even speak English, that at some point that affects your psychiatric health," Fayhee said. "Maybe that's done to try to extract some kind of confession out of him or to get him to say something on the record so the Russians can then use that as the basis of his continued detention. It's difficult or impossible to know. But we shouldn't understate the potential effects of being isolated the way he's being isolated."
Whelan's next hearing in Moscow City Court is happening at the end of May. His detention could be continued at the hearing, or, Fayhee hopes, Russian authorities could let him go.
"We hope they find this as an opportunity to acknowledge that the allegations ... have not been substantiated and that they'll release him. That would be the appropriate thing to do under the circumstances.
"But the family is prepared also for the possibility that the detention will be extended for another three months in order to further isolate him, in order to extract whatever benefit it is that they're seeking to achieve whatever goal Paul is being used to achieve."
In April, the U.S. State Department issued a travel advisory for Americans going to Russia, suggesting increased caution because of terrorist threats, and a risk of being harassed, mistreated, arbitrarily interrogated, detained or targeted for extortion.
"There is no doubt in our minds that Paul's arrest and imprisonment amount to a kidnapping by the Russian police," David Whelan said. "We hope the new designation will help other Americans avoid the same fate."
State Department spokeswoman Julia Mason said the department is continuing to closely follow the Whelan case.
"We urge the Russian government to guarantee a fair and transparent judicial process without undue delay, in accordance with its international legal obligations," she said. "We have visited Mr. Whelan seven times since he was first detained. We will continue to press for fair and humane treatment, due process, and access to appropriate medical care."
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