The Plot to Seize Russia: The Untold History

By Martin Armstrong

“Take care of Russia,” Boris Yeltsin said as he departed his presidency in August 1999. These words were directed at current Russian president, Vladimir Putin. Yeltsin specifically picked Putin as his predecessor to prevent the takeover of Russia.

So, who was Yeltsin warning against? Newly declassified documents from the Clinton Administration prove that there was a plot to rig the Russian election of 2000. These never-before-seen documents confirm numerous attempts to implement pro-Western policies using the Russian oligarchy headed by Boris Berezovsky.

On the other side were the communists who desired a return to the glory days of the Soviet Union. As one of the largest international hedge fund managers, author Martin Armstrong found himself in the middle of perhaps the greatest espionage, or attempt at a regime change for Russia, in modern history.

The Plot to Seize Russia pulls back the curtain to expose the most extraordinary attempt to seize power in modern history, but with the pen rather than armies. These declassified documents reveal a plot that has altered our thinking about the relations between the United States and Russia. The thirst for power comes seething through every line of these papers that alter our perception of reality, change the course of history, and now threaten us with World War III.

• Language: English
• Publisher: Gatekeeper Press
• Release date: Jun 23, 2023
• ISBN: 9781662939655

Martin Armstrong

Martin Donisthorpe Armstrong (October 2, 1882 - February 24, 1974) was an English writer and poet, known for his stories. He was born in Newcastle-upon-Tyne, and educated at Charterhouse and Pembroke College, Cambridge. He served in World War I in the British Army in France - a Private in the Artists' Rifles, he was commissioned into the Middlesex Regiment in 1915 and promoted Lieutenant in 1916. He was included in the final Georgian Poetry anthology. He married in 1929 Canadian writer Jessie McDonald after she had divorced Conrad Aiken, making Armstrong the stepfather of the young Joan Aiken. He appears in disguised form as a character in Conrad Aiken's Ushant.

Book preview

Battling the Club

The battle against what I came to call the Club, a group of banks and hedge funds joining together to manipulate financial markets, ended up costing me years of my life based upon propaganda. However, it also placed me in the center of a geopolitical crisis that today is pushing us closer to nuclear war than at any point in modern history. Our governments have abandoned us and the days of Woodward & Bernstein are no longer politically correct in this new age of wokeness.

The first manipulation I witnessed was that of the metals boom into 1980, with the real focus being silver. New Jersey, where I was based, was the center of gold for the three major refineries: Engelhard, Johnson Matthey, and Handy & Harman. If you submitted scrap gold to be refined, the minimum lot was 100 troy ounces. At $875 an ounce, one 100-ounce bar was $87,500. The time to refine it was about 6 to 8 weeks. A small store buying scrap gold and silver needs an awful lot of capital to keep buying metal before they are paid. I bought and refined a fair portion of all the scrap metal that the public had sold over that decade of what to me was the Roaring ‘70s with OPEC embargos, the worst economic crash since the Great Depression, and the wild inflation set in motion by the energy price shock of OPEC.

Ironically, my early days as a market-maker in gold brought me in contact with Philip Brothers and the adversarial culture of trading against your own clients since I was a client, and it was always a confrontation just to do business. It reminded me of haggling in a street bizarre in Iran. Gold and silver may have had an official price on the COMEX exchange, but that was futures—not the cash market.

I was one of the three market-makers during the late 1970s when gold rose to $875 going into January 21, 1980. All the stores that were buying scrap gold and silver needed to sell into the market. Back then, the New York metals exchange was COMEX, and the minimum contract was for 100 ounces of gold.

Philips Brothers (PhiBro) was the trading arm of Engelhard, and simply selling the metal into the market introduced me to their style of adversarial trading. It was not a relationship where they sought to help a client. They were your adversary. You had to learn how to trade, for they were not there to help or advise you. They were there to trade against you. Just as Goldman Sachs was criticized during the 2007-2009 Financial Crisis for creating products to sell to clients and trading against them, this was simply the culture—adversarial trading.

I believe it was PhiBro who spread the story that the Hunt Brothers were cornering the market on silver and that it was undervalued, using the silver/gold ratio of the Silver Democrats from the 19th century 16:1, saying silver should be at least $50. I knew Nelson Bunker Hunt. He was a client. He was buying silver from the beginning of the ‘70s at $1.29. I believe it was PhiBro who told everyone about the Hunts drawing in the average retail investor into precious metals. I believe PhiBro took short positions against the Hunts and made a fortune from 1979 to 1980. They made so much money that they then sought to take over the largest bond trading house on Wall Street—Salomon Brother. This was when adversarial trading became standard on Wall Street. Goldman Sachs responded by taking over J. Aron, an old commodity house that began in New Orleans in 1898. It moved to New York City in 1910 in time for the commodity boom of World War I. The firm was named after Jack Aron and was the competitor of PhiBro.

It was reported in August 1981 that the Salomon Brothers, one of Wall Street’s most prestigious firms, was being acquired for about $250 million in securities by PhiBro thanks to the metals boom into 1980.

Robert I. Friedman (1950-2002) did an in-depth investigation that was published by New York Magazine on January 22, 1996, entitled The Money Plane, which coincided with the 1996 Davos event that will become known as the Davos Pact of oligarchs, as we will explore later on. Friedman began by stating:

Five nights a week, at least $100 million in crisp new $100 bills is flown from JFK nonstop to Moscow… State and federal officials believe it is part of a multi-billion-dollar money-laundering operation. The Republic National Bank and the United States Federal Reserve prefer not to think so.

Indeed, Friedman dug deep and found that everyone knew what Republic was doing, but they conveniently looked away. He wrote:

IN BANKING, REPUTATION IS EVERYTHING. So, when agents of the Criminal Investigation Bureau of the New York State Banking Department learned two years ago that Republic National Bank was selling tens of billions of dollars’ worth of federal currency to as many as 50 corrupt Russian banks, they became alarmed. … State banking officials were so concerned by the Criminal Investigation Bureau’s findings, the source says, that they urged federal agencies to probe … [b]ut right down the line from the FBI to the CIA, ‘basically, the response that we were getting was, ’Yeah, it looks like we’ve got a potential problem here, but you know what? It’s not our problem.’

At the September 1994 conference, a Russian general was asked why Russian banks were buying billions of dollars in U.S. currency. According to a participant at the meeting, he chuckled, and said, ‘’Oh, that’s money laundering.’ Then he went, ’Hey, we’re being ripped off in our country; the money is coming over here, being cleaned, and being brought back.’"

It was the spring of 1998 when Edmond Safra (1932-December 3, 1999) and his Republic National Bank began soliciting me to invest in Russia. I warned them that my computer was projecting Russia would collapse in September 1998. I was told that was impossible. The International Monetary Fund (IMF) would never allow that to happen. I warned them that it did not matter. Not even the IMF could prevent that collapse. They kind of chuckled under their breath.

Republic National Bank was in league with the U.S. government to move billions of dollars in U.S. currency notes on skids to Russia by the planeload. Those in the bank would even brag to me about their deal with the U.S. Treasury and how they were involved with this scheme. I was offered a tour of their vault to show me the pallets of money. This became known as the Money Plane. It was all to convince me that they had all their bases covered and the government’s support.

Indeed, the U.S. Treasury was involved in this scheme to supply money to Russia.¹⁴ There were even Congressional hearings on what the U.S. government and Republic National Bank were doing. Senator Charles Schumer (born 1950) was concerned about the ties between Republic National Bank and Russian banks.¹⁵

It was 1996 when Edmond Safra formed Hermitage Capital Management with a curious partner, Bill Browder (born 1964). This was the same time Boris Berezovsky created the Davos Pact to rig the 1996 presidential election in Russia to guarantee a Yeltsin victory when he was at a 10% rating in the polls.

Interestingly enough, Browder actually got his start in the big leagues under the patronage of Lord Robert Maxwell (1923-1991), the father of yes, Ghislaine Maxwell (born 1961), who was sentenced to prison for 20 years over the Jeffrey Epstein (1953-2019) sex-trafficking affair. That too, I believe, was a honey trap scheme to blackmail people into favors since the people involved were all high-profile from Bill Clinton to Prince Andrew.

Former Clinton advisor Mark Middleton was found dead under mysterious circumstances in May 2022. Middleton was the main link between Bill Clinton and Jeffrey Epstein. Days after Ghislaine Maxwell revealed she would unveil her client list for a reduced sentence, Middleton suddenly died at the age of 59. However, at the same time, a 47-year-old woman by the name of Ashley Haynes was also found dead. She was connected to Middleton. Of course, the death of Middleton was ruled a suicide after he allegedly traveled 30 miles from his home to a ranch that he never had reportedly visited before. He hung himself from a tree and simultaneously shot himself in the chest with a shotgun. Or was it the other way around? The sheriff at the scene immediately claimed there would be no investigation, and the judge then sealed the case—the classic sign of corruption and hiding the truth.

Ghislaine’s father, Robert, was long suspected of being involved in intelligence. He was also fluent in English, German, French, Czech, Slovak, Hungarian, Romanian, Russian, and Hebrew. Curiously, Alexander Acosta was a prosecutor who was being considered for the position of secretary of labor in the Trump Administration. What arose was that Acosta struck a secret non-prosecution plea deal back in 2008 with Epstein’s attorneys. Acosta explained his reasoning that he had been told to back off, that Epstein was above his pay grade:

I was told Epstein ‘belonged to intelligence’ and to leave it alone.

Even more curious, both Epstein and Maxwell died mysteriously. Epstein supposedly committed suicide in a cell by himself. The video camera did not work, and the guards claimed they were sleeping. Maxwell died falling off his yacht on November 5, 1991, before he was to testify in London. There were railings. Both deaths were very convenient. I guess owning a yacht does not mean you know how to swim.

Robert Maxwell changed names like someone changes their underwear. He was not really Robert Maxwell at all but was born in 1923 in Czechoslovakia as Abraham Lazby of Mikhail and Anna Hoch’s family. When the Nazis took Czechoslovakia, his name was changed to Jan Ludvik Hoch to hide his Jewish heritage. During this period, he allegedly was recruited for espionage for a Jewish movement. Itzhak Shamir (1915– 2012) was an activist in the underground Irgun movement. He later became the seventh Prime Minister of Israel and was said to have recruited Jan Ludvik Hoch into the organization using a code name Little Czech.

Little Czech then ended up in France under the new name Ivan du Maurier. From there, he ended up in Britain under the name Leslie Johnson and was recruited into the British intelligence service. He received a combat decoration from Marshal Montgomery personally, and he had once again changed his name for the last time to Robert Maxwell.

Apparently, following the war, Maxwell sought the help of the Soviet military authorities in Germany to find his family. He was told that they had died in a Nazi concentration camp. This was the opening to Soviet intelligence. As the story goes, during the war, his main intelligence service was for Israel’s Mossad.

Maxwell’s service to Israel exposed that his contacts with Czechoslovak Communist leaders in 1948 were crucial to their decision to arm Israel in 1948 during the Arab–Israeli War. Indeed, the Communist Czechoslovak military assistance was crucial for Israel. Shamir had long opposed British control of Palestine. It was claimed that Maxwell smuggled aircraft parts into Israel, which led to the country having air superiority during the 1948 war of independence. He may have also been involved in the 1947 event of the ship Exodus that finally made it to Israel. Maxwell did make an effort to get the Jews out of Europe. On September 7, 1948, a telegram from the vicinity of Poppendorf reached Mossad headquarters in Paris. It was straightforward:

We have sent off the last of the Exodus passengers from Germany...We have kept our promise.

Finally, in January of 1949, the British were forced by international outrage to recognize the State of Israel. The Jews refused to return to concentration camps even run by the British. The British had sent many to Cyprus.

The British Foreign Office had suspected that Maxwell was a secret agent of a foreign government. They began to worry that he was a double agent or even a triple agent while working for British MI6. He had helped finance Russia and had links to the KGB and Israeli intelligence service Mossad. Six serving and former heads of Israeli intelligence services attended the funeral when Maxwell died. It was held in Israel. Israeli Prime Minister Shamir delivered the eulogy stating: He has done more for Israel than can today be told.

Leonid Brezhnev (1906–1982), who was head of Russia from 1964 to 1982, invited Maxwell to Moscow, and they would meet regularly. Maxwell remained in touch with all the subsequent leaders of Russia right up to Mikhail Gorbachev.

Viktor Chebrikov (1923–1999) was the head of the KGB from 1982 until he was replaced in 1988. Chebrikov sided with Gorbachev’s rival Yegor Ligachyov (1920-2021), who was a high-ranking official in the Communist Party opposing glasnost and perestroika. This was when Chebrikov was replaced by Vladimir A. Kryuchkov (1924–2007) in October 1988. Kryuchkov had also opposed Gorbachev’s reforms. He defended Stalinism and condemned the reforms in his memoirs.

Gorbachev made the fatal mistake of appointing Kryuchkov as the head of the KGB. Yet, the untold story was that NATO proposed that Russia should join in 1991. This was never reported in the press because Gorbachev could not accept that proposal, for it put his life in danger as they staged a coup. To the old hardline communists, a merger with NATO would be the surrender of the USSR to the United States.

During the first half of 1991, Kryuchkov held two secret meetings with Maxwell knowing he was an Israeli agent. He revealed a plot to overthrow Gorbachev yet wanted to buy Israel’s support from the West to make it legitimate.

Maxwell struck a deal with Kryuchkov, the head of the KGB, for the overthrow and arrest of Gorbachev. The deal was allegedly struck whereby Maxwell would use his worldwide media to support the coup, and in return, Kryuchkov guaranteed all Jews would be allowed to depart from the USSR to Israel.

The coup failed. Kryuchkov, in his memoirs, conceded that he acted to prevent the death of a great power. He admitted that he was the initiator of the creation of the State Committee on the State of Emergency, which arrested President Mikhail Gorbachev.

The KGB plot to restore the USSR began considering a coup in September 1990. On December 11, 1990, Kryuchkov made a call for order over the Moscow Program television station. Soviet politician Alexander Yakovlev (1923-2005) began warning Gorbachev about the possibility of a coup coming from the KGB following the 28th Party Congress in June 1990. Joining NATO was viewed as the surrender of Russia.

Kryuchkov, with help from the KGB officers, prepared for a state of emergency to be declared. Later, Kryuchkov brought Soviet Defense Minister Dmitry Yazov (1924-2020), Internal Affairs Minister Boris Pugo (1937-1991), Premier Valentin Pavlov (1937-2003), Vice President Gennady Yanayev (1937-2010), Soviet Defense Council deputy chief Oleg Baklanov (1932-2021), Gorbachev secretariat head Valery Boldin (1935-2006), and CPSU Central Committee Secretary Oleg Shenin (1937-2009) into his conspiracy to save Russia. Gorbachev knew there was turmoil, but he did not fully appreciate the extent.

These were all elite men of power. So, from their perspective, they were losing power as well as surrendering Russia to NATO. The reforms to them were conveniently viewed as ending a great empire truly created by Stalin by sheer terror and force. Gorbachev was returning the nation to the people. That was unacceptable.

As to be expected, the Russian hardliners (Neocons), led by the KGB, plotted a coup d’état in August 1991 when Gorbachev and his family were on holiday at their dacha, Zarya (’Dawn’) in Foros, Crimea by Ukraine. Two weeks into his holiday, the group of Neocons (Gang of Eight), calling themselves the State Committee on the State of Emergency, cut the phone lines to Gorbachev’s dacha. Three members and General Varennikov informed Gorbachev of the takeover.

The coup leaders demanded that Gorbachev formally declare a state of emergency in the country. He refused to comply. The coup members kept Gorbachev and his family under house arrest in their dacha while telling the public that Gorbachev had taken ill and thus Vice President Yanayev was now in charge of the country. Indeed, for 3 days, the world held its breath.

In Crimea, Gorbachev assumed that the coup plotters would order him and his family to be executed. He had his guards barricade his dacha as they remained loyal to him. With the people rising up and the military standing down, the coup’s leaders realized that they lacked sufficient support. Their coup collapsed since the people did not want to return to Stalinism. In Moscow, people climbed on tanks on the 20th of August with Boris Yeltsin. The coup leaders, Vladimir Kryuchkov, Dmitry Yazov, Oleg Baklanov, Anatoly Lukyanov, and Vladimir Ivashko, on August 21, 1991, arrived at Gorbachev’s dacha in Crimea and informed him that the coup was ending.

By August 21, most of the coup leaders had fled Moscow, and Gorbachev was rescued from Crimea and then returned to Moscow, where he thanked Yeltsin and the protesters for helping to undermine the coup. His supporters around the world subsequently hailed Yeltsin for rallying mass opposition to the coup.

The common theme that was offered to justify the coup was the collapse of the USSR, which they saw as the dissolution of a great power. The eight members of the so-called State Emergency Committee were arrested. They were:

1. Gennady Yanayev, Soviet vice president; today is a pension fund consultant

2. Vladimir Kryuchkov, head of the KGB; has since written his memoirs

3. Dimitri Yazov, Soviet defense minister; now an advisor to an arms exporter

4. Valentin Pavlov, Soviet prime minister; today is a banker

5. Oleg Baklanov, of the Soviet Defense Council

6. Vasily Starodubtsev, member of the Soviet Parliament

7. Alexander Tizyakov, president of state enterprises, industrial construction, transport, and communications

8. Minister of Interior, Boris Pugo

Interestingly, the very arrangement that Maxwell had struck a deal with Kryuchkov that Israel would support his coup if he let the Jews go to Israel was not public at the time. However, Mikhail Gorbachev, on Sunday, October 6, 1991, agreed to let the Jews migrate to Israel to placate Israel. That contributed to Russia supporting the Arabs against the Jews thereafter. Gorbachev sharply denounced hatred for Jews and lamented their exodus from the Soviet Union for their historical contributions over the years. Gorbachev’s statement was carried by the Tass news agency just before a ceremony marking the 50th anniversary of the Nazi massacre of thousands of Jews at Babi Yar, in a suburb of the Ukrainian capital of Kiev.

Maxwell’s attempt to free the Jews was eventually accomplished, but with a cost. However, it was just 10 weeks after the coup and 30 days after Gorbachev freed the Jews that Maxwell died mysteriously after falling off his yacht. Was he killed for his involvement in the coup? Were the bankers also involved, which is why they had to pay back all the missing funds?

Eleanor Berry wrote about the Robert Maxwell she knew. She said that a shortage of oxygen to his brain in later life destroyed his thinking process and caused him to be autocratic and irritable. It was then that the Mirror pensions funds scandal took place. She believed that he was no longer capable, and it was thought to be the bankers who transferred the funds, covering their own losses as they did to me, adversely affecting the pensioners.

Maxwell’s death on November 5, 1991, triggered banks to frantically call in their massive loans, causing the Maxwell companies to collapse and file for bankruptcy in 1992. Maxwell’s use of hundreds of millions of British pounds from the pension funds was claimed to have been involved in propping up the shares of his Mirror Group to save his companies from bankruptcy. However, that story made little sense.

Indeed, the pension funds of Maxwell’s company were being used most likely in league with alleged schemes of the Club that were possibly linked to Russia and may have been to support the coup financially. The rumor was that this had been the first attempt to cut a secret deal in hopes of controlling the Russian natural resources from gold to energy. After all, this was the time just before the privatization in 1992 and the emergence of the oligarchs. I believe the bankers would have been the oligarchs had the coup succeeded. Was Maxwell assassinated to protect the Club and their involvement in Russia? That question has never been answered, and the old standby suicide was preferred, as is always in controversial high-profile deaths. Bill Browder was working for Maxwell but then joined Edmond Safra to target Russia’s wealth still.

It was 1991 when the Soviet Union completely collapsed, resulting in massive losses for Russian investments. With the collapse of the Soviet Union in the 1990s, state resources, such as oil, mines, and telecommunications, were up for sale. The crack in communism in 1989, with the fall of the Berlin Wall on November 9, 1989, opened the door for the strip-mining of Russian assets.

Maxwell’s collapse clearly involved the bankers. For in truth, the pension funds were replenished with money from investment banks Shearson Lehman and Goldman Sachs. Indeed, Goldman made even limited partners from 1989 until 1991 chip in for the $250 million¹⁶ they owed and had to pay to settle lawsuits. There was no way the bankers would pay for Maxwell’s losses without involvement that was never made public. The same took place in my case, but HSBC/Republic National Bank had to return the money in criminal restitution.

In addition, there were other costs related to Goldman Sachs’ role in the collapse of the pension funds of Robert Maxwell. Maxwell’s investment bankers included even Salomon Brothers¹⁷, which was confirmed by the NY Times.

There were complaints before Maxwell died about dealings between his other public company, Maxwell Communications Corp, and Wall Street bankers at Goldman Sachs, according to The Guardian.¹⁸ Lawsuits began to be filed against Goldman Sachs for assisting Maxwell in a money laundering scheme involving the sale of 25 million shares of the Maxwell Communication Corporation, owned by the pension funds and worth about $94 million, to two Swiss companies controlled by Mr. Maxwell on April 26, 1991.

It was alleged that Goldman transferred $94 million to another company controlled by Maxwell and then later that same day received from that company a transfer of $94 million plus $188,000 for Goldman’s commission.¹⁹

The Club saw all the natural resources of Russia as the prize. Their next entry to Russia after the death of Maxwell in November 1991 would be the rise of oligarchs. At the time, Boris Berezovsky was selling used cars, including Mercedes imported from East Germany. Berezovsky then founded a car company, LogoVaz, which sold the old Russian car, the Lada. By 1993, Berezovsky had created an automobile empire. General Motors (GM) was then collaborating, and Berezovsky offered bonds to ordinary Russian citizens, which was very well received. However, GM backed out, and thousands of Russians lost their money. This resulted in the first questionable dealings of Berezovsky.

In September 1990, the Soviet parliament granted Gorbachev emergency privatization powers. This included the authority to transform state enterprises into joint-stock companies with shares offered on stock exchanges. No doubt, the bankers saw easy money to be had for the taking.

By the end of 1991, Russia was on the verge of bankruptcy. The dream of Gorbachev‘s planned economy had proved ineffectual. There was not even enough money to support enterprises and pay salaries. The ruble’s purchasing power was collapsing, and the coup merely accelerated the crisis as confidence collapsed. The rate of inflation reached 160% in 1991. It would only move into hyperinflation after the coup reaching 2,508.8% in 1992.

The world that emerged with the formation of the Club actually began with PhiBro bringing adversarial trading from commodities to Wall Street, creating the new wild west of finance. This trading atmosphere adopted the title of big swinging dicks, which is what the firm’s top bond traders called themselves at Salomon Brothers. This became the theme behind the book The Bonfire of the Vanities by Tom Wolfe. Salomon bankers had dominated the game of extraordinary bond trading. This was the culture instilled by PhiBro from the wild commodity trading side that they brought to Wall Street by buying Salomon Brothers in 1981.

John Gutfreund (1929-2016) became known as the King of Wall Street back in 1985 for building Salomon Brothers into the number one underwriter in the world. Gutfreund assumed control of Salomon in 1978 but agreed to sell it to PhiBro Corp., the commodities-trading firm that made a fortune on the silver rally into 1980 against the Hunts. Gutfreund was deposed as head of Salomon Brothers after the 1991 scandal of manipulating the U.S. government Treasury Auctions to be replaced by Warren Buffett (born 1930). This is when Buffett becomes involved in the alleged silver manipulations of 1993 and 1998 instigated by PhiBro.

Trader Paul Mozer (born 1955), who had a 12-year career at the firm coming from Morgan Stanley, allegedly submitted illegal bids for U.S. Treasury securities in August of 1990, attempting to corner the market in U.S. bonds by purchasing more than the 35% share allowed per individual transaction. Yet, he eventually pleaded guilty to what was based on only two transactions in the five-year notes on February 21, 1991²⁰ for $6 billion, which was $2 billion more than the bank was allowed to buy. The plea did not match the events. Other Salomon employees would later tell the NY Times²¹ they were shocked:

This was not driven by personal gain, if this is true. There’s a game here. And it was a desire to win the game.

It was PhiBro who had made the offer to buy Salomon Brothers in 1981, taking commodity trading and rigging the market philosophy to Wall Street. While Michael Lewis’ book Liar’s Poker provided a vivid account of those roaring ‘80s when he was fresh out of school and landed a job at Salomon Brothers, the premier investment firm on Wall Street at that time. He provides an account of those frenzied years behind-the-scenes of a new trading atmosphere that evolved into what I called the Club—adversarial trading.

During the 2007-2009 Financial Crisis, it came out that Goldman Sachs was creating products they expected to blow up and were engaged in this adversarial trading against their own clients, as reported by the Guardian on April 24, 2010.²² As Michael Lewis said, it required a killer instinct that made ambitious young men gamble everything on a high-stakes game of bluffing and deception during a period of an unprecedented era of power and the need for guaranteed victories at all costs.

During the 1980s, Aristotle Onassis (1906–1975), who had been one of my earliest clients, was also a hard-money man. He had a huge supply of platinum, which he had put into a Swiss bank as capital. I was called in to liquidate that position in the early 1980s. I had to apply for permission from the Commodity Trading Futures Commission (CFTC) because the amount of trading I would need to do was far above the legal limitations. I had to actually prove that such an amount of platinum actually existed.

When I finally obtained approval, all the dealers immediately knew my position thanks to inside information from CFTC. It indeed became a game of high-stakes poker and the CFTC was rotten to the core. The dealers would move the spreads bid and ask depending on the direction they thought I was going to buy or sell. I would have to play the game in order to trade. I would have to buy gold, then silver, and then ask for a market in platinum. They would assume I was going to be a buyer and moved the spreads upward. I would have to have several dealers on the phones at the same time and then say sell. Otherwise, by the time I would call the next dealer, he already knew I had just sold platinum. It was always a poker game. That made it interesting, and I had to hone my trading skills even to exist. This was adversarial trading, where dealers traded against their clients.

The investigation by four federal agencies into Salomon Brothers trading of government bonds scandal of 1991 had raised questions about the workings of the financial markets. There was never a thought about the social impacts around the world. It was also at this time in 1989-1990, when the insider trading scandals of Ivan Boesky (born 1937) and Michael Milken (born 1946) captured the headlines. Eventually, Milken was indicted at the end of March 1989, and on April 24, 1990, Milken pleaded guilty to six counts of securities and tax violations only after the prosecution threatened to indict his family. Hence, to save his family, he pleaded guilty to a bogus theory of insider trading.

Three of the charges involved dealings with Boesky to conceal the real owner of a stock. However, the theory of insider trading used at that time was illegal. Where during the 1930s, someone knew the company was bankrupt and sold their stock before announcing it to the public, hence inside information. The version used against Milken was that they defrauded others out of the same opportunity to make money.

Nonetheless, it was on August 19, 1991, when Treasury Secretary James Baker (born 1930), father of the G5 (Group of 5 now G20), reversed his position to bar Salomon Brothers from participating in the U.S. government bond auctions. Warren Buffett (born 1930) took the chairmanship of Salomon Brothers to save the firm, and this was when he became involved in trading commodities as a member of the Club, if he knew it or not. It was PhiBro’s traders who lured him into the game.

The very first silver manipulation by PhiBro took place in 1993, less than two years after Buffett became the chairman. The CFTC went to PhiBro and demanded the name of the client behind the trade. The CFTC refused to give up the name. As a result, the CFTC bowed to their status in the markets and ordered them to exit the trade. That caused a silver crash hurting all the retail investors.

Anyone else who refused the CFTC request would have been criminally prosecuted. Interestingly, those who worked in government agencies began to take high-paying jobs from the very institutions they regulated. Hence, the CFTC just walked away. Those who were manipulating markets basically bought the very people who were supposed to regulate them. That’s why no bankers ever went to prison for even blowing up the world economy more than once.

In 1997, members of the Club paid bribes to Russian ministers to recall all the platinum and palladium to take a claimed inventory. They rigged the market, sending prices soaring. Then at the top, they sold their positions and flipped around, taking short positions and selling the high. This was how they made money in commodities. It was always about creating fake shortages, typically moving the target commodity to an unreported warehouse. That way, the official reported inventories would decline, and that was always the battle cry to BUY! It was one of those guaranteed trades. I declined as always, never trusting the Club, for it was always adversarial trading.

My conflict with the Club was endless. I believed in trading, and they wanted guaranteed profits. They pulled off manipulations even in such markets as rhodium. Ford Motors was contemplating filing a lawsuit at the time over the platinum manipulation. I spoke to their lawyer on the subject.

Then again, they also came back to the silver market at the same time in 1997. This time, PhiBro walked across the silver ring to my brokers on the floor, Emerald Trading, showed them Buffett’s orders, and told me once more to join the Club. They said they would take silver from $4 to $7 between September 1997 and January 1998. I refused to join, but informed my clients—They’re back!

At first, a friend of mine who had been Prime Minister Margaret Thatcher’s economic advisor, Sir Alan Walters (1926-2009), became a board member of AIG in London. He called one day and asked if he could drop into Princeton the next morning when he arrived from London. To my surprise, he arrived with the head silver trader from AIG London, who then proceeded to try to convince me to stop talking about the manipulations. I told him I would never reveal any names, and the government didn’t care anyway.

The Club decided to try to silence me and made a huge mistake in the process. PhiBro had one of their paid pretend analysts who would talk the markets into whatever direction they wanted. He contacted the Wall Street Journal, claiming I was doing the manipulation. The journalist called and began accusing me, and we argued. He said if silver was being manipulated, then give him the name. I told him, Warren Buffett. Let me see you print it! He laughed and said everyone knew Buffett did not trade commodities. I told him that was how much he knew.

He carefully printed the story about me, claiming there was a manipulation going on, but downplayed it as absurd. The problem was that the CFTC knew who I was, which forced the CFTC to call me, asking where the manipulation was happening. I told them it was taking place in London, out of their jurisdiction. They told me that they could pick up the phone to the Bank of England and find out. I told them that they had to make that call and hung up.

A few hours later, my phone rang. It was a good source in London who was also helping to monitor the Club’s actions. He told me that the Bank of England had called an immediate meeting of all silver brokers in London in the morning. I was shocked. The CFTC had made the call. Within the hour, Warren Buffett was forced to make a press announcement. He admitted he had purchased $1 billion worth of silver in London yet denied he was manipulating the market.

After Buffett came out publicly, which was reported on February 5, 1998, the journalist from the Wall Street Journal called me back and asked—How did you know? I told him it was my job to know! Silver thereafter declined and made new lows going into 1999. So much for the famous Buffett’s long-term investment.

The Club always had the press in their pocket. The Wall Street Journal reported on December 24, 1997, to push the silver prices higher as the headline read: Silver Futures Advance as Inventories Plunge.

On January 13, 1998, the Associated Press reported that silver had crashed. They reported that I had been warning for weeks that silver was being manipulated. They were shipping silver from New York to London, and that created the image that there was a shortage of silver to justify the price rise. However, in truth, they are just moving inventories from warehouses. Hence, they create fictional shortages that never exist. This has always been the #1 scheme in commodities to create false rallies. The CFTC never once investigates, for then an agent will never get one of those high-paying jobs.

By the end of January 1998, everyone was starting to see the real plot. This has always been the game in commodities where anything goes. There was a rather famous connection between Marc Rich (1934–2013) and PhiBro. Rich once worked for PhiBro, but left the firm in 1974, taking the adversarial trading strategy with him. He set up a Swiss operation known as Marc Rich & Co. AG, which would later become Glencore Xstrata Plc.

Rich was indicted for tax evasion and never returned to the USA, staying in Switzerland. Glencore International A.G. (Glencore) and Glencore Ltd., both part of a multi-national commodity trading and mining firm headquartered in Switzerland, pleaded guilty on May 24, 2022, and agreed to pay over $1.1 billion fine for violations of the Foreign Corrupt Practices Act (FCPA) and a commodity price manipulation scheme.²³ The UK also brought charges, dated between July 2011 and April 2016, for paying bribes in Africa to manipulate commodity prices.

Those in the Club did not believe in my model. They always judged me by themselves, assuming I simply had more influence than they did since I predated them. The Club would pay bribes in search of the guaranteed trade. They would always attribute their losses to me, complaining that I was the largest international institutional advisor. They even had the CFTC issue a subpoena to me to turn over a list of all my clients worldwide so they could prove I was manipulating the world economy. My lawyer opposed and asked the court where it was a crime for someone to manipulate the world economy. If so, it was not in the power of the CFTC. He agreed they had no statutory authority and ruled against the CFTC. This agency was always corrupt and was itself beholding to the very people it was supposed to regulate. Their agent Seven Mehan was going to clients like shipping firms, saying I told them I was managing money for them. They taped the conversation and said I only advised them on FX risk. He would say, Sorry. Perhaps we had you confused with his many clients, and move on to the next. We handed tapes to the CFTC, and they refused to investigate themselves. The CFTC always protected the Club.

When I testified before the House Ways & Means Committee before Congress in 1996, we had the equivalent of 50% of the entire U.S. national debt in value under contract on an advisory basis. I was simply the largest foreign exchange advisor who covered the entire world. The banks always sought to manipulate markets in pursuit of that guaranteed trade and endless profits.

The Club had it all figured out. They were hiring the very people who regulated them in the Securities & Exchange Commission (SEC) as well as the Commodity Futures Trading Commission (CFTC). It was a brilliant scheme. For the very people supposed to police those in the Club would never charge any of them with anything serious because that would kill their future career for one of those big paying jobs. As we will see, the same scheme was used in Russia.

As the Wall Street Journal reported on June 16, 2010, a Senate panel had asked the Securities and Exchange Commission’s inspector general to review the agency’s revolving door, that shuttles many SEC staffers into jobs with the companies they once regulated. Of course, nothing came of it other than short-term headlines that gave the politicians the pretense of being concerned about the practice that they themselves would also seek.

Nevertheless, this was why not a single banker has ever been criminally put in prison. They will level a huge fine on the company that is, at best, 10% of what they made illegally. Nevertheless, that becomes just a bribe or cut in this illegal silent partnership between the Club and the regulators. If they charged individual bankers, they would never get such huge fines as their payoff and ruin their personal careers going forward. Everyone is happy, and as one New York lawyer told me about the practice of never charging the bankers with crimes: You don’t shit where you eat!

The Club, which was a group of bankers and hedge fund managers, would typically all jump on the same trade. Consequently, that’s why I called them the Club. They all attacked the British pound back in 1993 while George Soros got all the headlines. The entire crew was on that trade, standing in the shadows.

Russia was the hot market to invest in until 1998. The capital flows shifted from Southeast Asia in 1994, resulting in the Asian Currency Crisis of 1997, and the Club attacked all the fixed-rate currency pegs in Southeast Asia as well. What they failed to comprehend was that everything was connected. Undermining the Southeast Asian currencies undermined Russia, which was also an emerging market.

The Club turned to Russia and looked at a guaranteed 30% profit in Russia’s debt. It was debatable that government officials were bribed to sell the idea of issuing short-term debt and paying 30% on average was also a good idea. The Club was playing Russian roulette with the Russian bonds and was counting on the International Monetary Fund (IMF) loans that surely would never allow Russia to default—they had too many nukes. The Club thought they had the ultimate guaranteed trade and threw caution to the wind.

Russian debt became the next guaranteed trade, for they convinced themselves the IMF would not let Russia collapse with all those nuclear weapons. Indeed, this is where the Club was pouring money into buying Russian bonds known as GKOs, believing the IMF stood behind their trade. The entire Club was all on the same trade, deluding themselves convinced this would be a 30% annual profit—who needed anything else?

John Meriwether (born 1947), the supervisor in Salomon Brothers manipulation of the U.S. Treasury auctions back in 1991, left Solomon Brothers after the scandal and started Long-Term Capital Management (LTCM) hedge fund. He, too, allegedly joined this investment scheme in Russia, jumping in with not just his two feet but up to his neck and leveraged to boot.

Meriwether took with him the Black-Scholes-Merton model, which was thought to be one of the most important concepts in modern financial theory at the time. This mathematical equation was supposed to estimate the true theoretical value of derivatives based on other investment instruments, taking into account the impact of time and other risk factors. It was awarded the 1997 Nobel Memorial Prize in Economic Sciences. However, it becomes a joke when academics try to theorize free markets with no trading experience. After winning a Noble Prize, the model did nothing to warn about the 1998 Russian Financial Crisis and failed, blowing up the economy and taking LTCM with it. That impacted the banks, forcing the Federal Reserve to bail out the first hedge fund in history.

At the same time, this is when Edmond Safra and his Republic National Bank was in all the way. Bill Browder became Edmond’s partner in creating Hermitage Capital Management during 1996. Browder had previously served as a vice president of the Robert Maxwell’s Central & East European Partnership, where he was responsible for a portfolio of private equity investments in Eastern Europe and the C.I.S.

Following Maxwell’s mysterious death on November 5, 1991, after the Russian coup, Bill Browder also became a vice president at Salomon Brothers from 1992-1995, where he co-managed the Salomon Brothers’ Russian equity portfolio. He joined the ill-fated Salomon Brothers in 1992, where he was until 1995.

After leaving Solomon Brothers, Bill Browder was introduced to Edmond Safra (1932–1999) by Beny Steinmetz (born 1956). Safra partnered with Browder and founded Hermitage Capital Management in 1996 for the purpose of investing in Russia. Beny Steinmetz also became one of the original investors in Hermitage. This all coincided with Berezovsky and his oligarchs who all met in 1996 at the World Economic Forum in Davos and formed, as the declassified documents confirm, the Davos Pact to ensure Yeltsin’s re-election. This seems to have impressed Safra to join with Browder to form Heritage Capital Management also in 1996, coinciding with this scheme to reelect