THE SCHEME BEGINS
In December of 2003, just months after the creation of the TNK-BP joint venture, Lev Model formally created a Grenadian company called Global Petroleum Group.
The incorporation documents were prepared by a Grenadian attorney with close ties to Prime Minister Mitchell and the ruling party.
Other directors of Global Petroleum Group include Defendant Lev Korchagin and Eduaro Vasilev, who on information and belief is a Russian national. On information and belief, Mr. Model is the same "Lev Model" that is a convicted criminal. Back in 1991, when Mr. Model was a resident of Englewood Cliffs, New Times article describing the theft and the resulting guilty plea is attached hereto as Exhibit E.
In a nutshell, Model was given millions of dollars by a Soviet oil company, and was supposed to provide household appliances for the company to sell to its workers. Instead, Model stole and pocketed most of the money.
Mr. Model served 28 months in federal prison. On information and belief, his enormous and brazen theft from a Russian oil company made him a well known thief in Russian petroleum circles.
And this is the individual who defendant Fridman, Blavatnik, and TNK-BP selected to lead their efforts in Grenada, to organise Global Petroleum Group and to transfer millions of dollars to Grenadian officials in criminal violation of the Foreign Corrupt Practices Act and the 1997 OECD Convention on Bribery of Foreign Public Officials in International Business Transactions.
On information and belief, Model and Global Petroleum Group serve as fronts for Fridman's, Blavatnik's, BP's and TNK-BP's efforts to bribe Grenadian officials, and thereby acquire rights to explore, develop and produce the Grenadian offshore areas believed to contain very promising vast recoverable reserves of petroleum hydrocarbons.
From at least the time of the August 2003 creation of TNK-BP, on information and belief, Fridman, Blavatnik and TNK-BP were all aware of RSM's exclusive contract with the Government of Grenada.
And BP and Lord John Browne were aware of RSM's contract with Grenada at all times subsequent to Mr. Grynberg's January 1999 disclosure of the same to BP, and Mr. Morris' subsequent sharing of the information with Lord John Browne.
Indeed, BP and Browne personally possessed RSM's confidential, proprietary and exclusive geologic, geophysical and economic information on the giant oil and natural gas potential of offshore Grenada.
Nevertheless, on information and belief, BP and Browne have used this information, and have acted on it by conspiring to bribe Grenadian officials in clear violation of the US Foreign Corrupt Practices Act and the 1997 OECD Convention on Bribery of Foreign Public Officials in International Business Transactions.
Defendants have consequently interferedwith RSM's contract and economic relationship with Grenada.
THE SCHEME IS IMPLEMENTED
Within months after the formation of Global Petroleum Group, in 2003 Grenada took active steps to get out of its exclusive contract with RSM.
RSM and Grenada were previously honoring their 1996 contract. This despite a force majeure period necessitated by boundary disputes.
By letter dated July 18, 1996, RSM provided notice to the Government of Grenada, which was accepted, and agreed to, by Grenada through the countersignature of the then Minister of State, Ministry of Finance, Senator Patrick Bubb.
In the nearly eight (8) years that followed, both Grenada and RSM worked on resolving the necessary boundary issues, in spite of many uncalled for obstacles created by Gregory Bowen personally, and directed at RSM.
In reliance upon Grenada's contractual promise that an exploration license would be issued upon RSM's application, RSM made substantial multi-million dollar investments during this eight-year period in acquiring new and reprocessing older, seismic and geophysical exploration data and other subsurface geologic data obtained form Venezuela (and other) sources by RSM pertaining to all the offshore waters of Grenada.
By preliminary letter dated January 12, 2004, RSM wrote to the Prime Minister of Grenada, advising him that RSM believed that sufficient progress had been made to allow it to proceed and that it was in the process of revoking the force majeure.
By letter dated February 19, 2004, the Honourable Gregory Bowen, Grenada's Minister for Agriculture, Lands, Forestry, Fisheries, Public Utilities and the Marketing and National Importing Board, wrote to RSM, advising it that the January 12th letter had been passed to his legal department for advice on the agreement and the effect of the force majeure.
RSM delivered its application for an oil and natural gas exploration license to the Permanent Secretary of the Ministry of Finance on April 14, 2004, after a four (4) day holiday, in compliance with the contract.
RSM, not having received any communication from Grenada of any type since Mr. Bowen's letter of February 29, 2004, sent its agent, David Myrick, Jr, to meet personally with government officials at a Caribbean conference in Tobago, an island of Trinidad and Tobago near the island of Grenada.
On April 20, 2004, Mr. Myrick met with Minister Bowen, who expressed his frivolous concerns that the exploration license application did not contain audited financial statements and that a corporate surety bond had not been provided to cover the cost of the first exploration well.
Minister Bowen's comments did not indicate a rejection of the application, but rather concerns over certain portions of its contents relating to financial assurance.
None of these financial terms urged by Bowen were required by the exclusive contract between Grenada and RSM, and Minister Bowen's request was both frivolous and a typical harassment.
This exclusive contract was freely negotiated with the Prime Minister of Grenada, who utilised strong advice from experts in the Oil and Gas offices of the Commonwealth Advisory Service in London, Great Britain.
By letter dated April 27, 2004, Minister Bowen advised RSM for the first time of his position that the RSM exploration license application had been untimely filed.
By letter dated May 4, 2004, RSM explained to Minister Bowen its computation of the arbitrary 90-day application period and requested guidance as to how the dispute might amicably be settled.
By letter dated May 21, 2004, Minister Bowen stated that the Government of Grenada was not in agreement with RSM.
By letter dated June 16, 2004, Minister Bowen rebuffed RSM's efforts to resolve these issues, indicating that all future correspondence would be from Grenada's legal team.
From July 1, 2004 to August 31, 2004, no correspondence or other communications were received by RSM from Grenada's legal team or any other representative of Grenada.
RSM filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes ("ICSID"), on or about August 31, 2004.
The Arbitration between RSM and Grenada is now pending with ICSID, at great expense to RSM, with Grenada's legal expenses, on information and belief, being covered entirely by the Defendants.
Indeed, Grenada first took its ICSID case against RSM to the law firm of DLA Piper Rudnik Gray Cary, a law firm with close ties to Blavatnik and BP.
And Grenada's present counsel is Freshfields Bruckhaus Deringer, a firm in which Defendant John Browne served on its international advisory board at the same time he was Chairman of BP.
Grenada's Reputation for Corruption
Prior to the formation of either Global Petroleum Group or TNK-BP, the government of Grenada, which has existed in largely its present form under the rule of Prime Minister Mitchell since 1995, had a well-known reputation for criminal bribery and corruption. It also had a reputation for consorting with known felons.
One example is Prime Minister Mitchell's relationship with Viktor Kozeny a/k/a "the Pirate of Prague". Kozeny is a fraudster and mega-thief who has been implicated in numerous securities fraud and bribery scandals involving Eastern Europe and the former Soviet Union.
Mitchell named Kozeny "Honorary Consul" from Grenada to the Bahamas, where Kozeny was fighting off extradition attempts on the part of the United States and United Kingdom.
Mitchell is reported to have taken many rides on Kozeny's private jet. Mitchell also received much negative press for allowing Kozeny to buy the car Mitchell rides to official government functions.
Kozeny threw expensive parties for Grenadian officials on his yacht and on information and belief secured a diplomatic Grenadian passport which, pursuant to international law, may have complicated the United States and United Kingdom's efforts to have Kozeny extradited.
On information and belief, Mr. Kozeny has been released on bail from a Bahamian prison pending appeal of an order that he be extradited to the United States to face corruption charges in New York related to accusations that he paid millions of dollars of bribes to Azeri (Azerbaijan) officials as part of a failed effort to gain control of the state run oil company (SOCAR) which he never did. It is expected that Kozeny will be extradited to the United States soon.
Another example involves convicted securities fraudster Eric Resteiner. According to Timothy Bass, who was Mr. Resteiner's security director at relevant times, Bass videotaped a meeting in June of 2000 whereby Mr. Mitchell accepted, and Mr. Resteiner provided, $500,000 in $100 bills to Mr. Mitchell.
In exchange, Mr. Resteiner was reportedly provided Grenadian citizenship and was named Ambassador At Large from Grenada.
Mr. Bass has also testified to another exchange of $500,000 from Resteiner to Mitchell that was not videotaped. A copy of the transcript of Mr. Bass' pertinent testimony is attached hereto as Exhibit F.
Mr. Resteiner confirmed the existence of the bribery videotape in his request for leniency prior to being sentenced, on May 16, 2007 to 87 months in a Federal Prison.
Ironically enough, it was another of Mr. Mitchell's foreign "honorary" ambassadors which led to RSM's discovery of the criminal scheme to interfere with its exclusive contract.
RSM Discovers the Illegal Scheme
At the early stages of the still-pending RSM/Grenada arbitration, two individuals reached out to Jack Grynberg in an effort to settle the dispute.
One is Defendant Lev Korchagin, who called Mr. Grynberg on several occasions in or around August of 2005. Then, later in 2005 and early 2006, Mr. Michael Melnicke, a New York business person who is Grenada's "Ambassador-At-Large" reached out to Mr. Grynberg.
Melnicke also serves with Blavatnik as a Director of the American Jewish Congress. Around August 2005 Grynberg received an unsolicited call from a Lev Korchagin, from Moscow, Russia. Mr. Korchagin represented himself as being an attorney as well as the Director of Global Petroleum, a Grenadian oil & gas company.
Mr. Korchagin suggested that he and Grynberg meet in London, England, to resolve any problems RSM has in Grenada, which he, and the people he represents could be instrumental in resolving.
When Grynberg inquired as to why he would not come to the U.S. if he is willing to go all the way to London, Mr. Korchagin explained that he needed to have a "neutral" site and not a location which is subject to American jurisdiction.
Korchagin further explained that if his group could participate as a partner in RSM's offshore Grenada license, his group would work everything out.
Mr. Korchagin assured Mr. Grynberg of a positive outcome because he claimed that his group "owns" the Government of Grenada. At which point Grynberg sensed a violation of the U.S. Foreign Corrupt Practices Act, and told Korchagin to "have a good day", and that he had no interest in meeting him in London or anywhere else.
Thereafter, Mr. Melnicke called Mr. Grynberg to discuss brokering a deal between RSM and Grenada. There were many conversations between Grynberg and Melnicke, as well as correspondences from Melnicke to Grynberg, covering the contractual dispute between RSM in Grenada, and spanning late 2005 and early 2006.
Melnicke represented himself to be an American ambassador to Grenada, a representation that Grynberg later discovered was false. Instead, much like Kozeny and Resteiner, Melnicke was an "Ambassador At Large" of Grenada, appointed by Prime Minister Mitchell.
Melnicke offered to be a peacemaker who could resolve the dispute between Grenada and RSM. He asked that, as compensation for his efforts, he receive a substantial overriding royalty based on the amount of oil and natural gas that was ultimately produced pursuant to the exclusive RSM/Grenada contract.
Melnicke had a Colorado attorney named Barry Specter draft several revisions of a proposed contract for RSM to sign. Drafts of the agreements prepared by Melnicke's Counsel are attached hereto as Exhibit H.
RSM refused to sign any of these agreements in light of the apparent Foreign Corrupt Practices Act implications and potential violations.
In the course of trying to negotiate this agreement, Melnicke revealed to Grynberg in early 2006 that Blavatnik and Fridman had bribed Gregory Bowen so that their group could develop the vast petroleum reserves believed to exist in the offshore Grenadian territory.
Melnicke further revealed that Blavatnik and Fridman had promised additional bribes to Grenadian government officials in the future, and had promised to pay all of Grenada's legal fees in connection with the arbitration between RSM and Grenada.
According to Melnicke, at least one of the meetings designed to discuss the scheme occurred in New York, with Blavatnik, Fridman and Bowen all in attendance.
Melnicke also told Grynberg that he had arranged a fundraiser in New York for Prime Minister Mitchell's re-election effort.
Facts Learned Since the Filing of the Initial Complaint
On June 21, 2007, Gregory Bowen provided testimony in the arbitration pending between RSM and Grenada in London, England. For the first time, a Grenadian official gave testimony under oath concerning the organisational structure of the Global Petroleum Group.
RSM now understands what it had already suspected, which is that Global Petroleum Group is a front group for multiple large companies, including on information and belief TNP-BP and BP.
According to Mr. Bowen, Global Petroleum Group is affiliated with a company that is "one of the biggest.... seismic scientific investment company and that they did work in the US and the UK and (sic) China".
He further noted that the "group" of companies was active "nearly all over the world", including the Middle East and Russia.
On information and belief, given the small number of companies that could fit this profile, BP's knowledge of the Grenadian opportunity, plus Blavatnik's and Fridman's apparent involvement, Mr. Bowen was alluding to defendants BP and TNK-BP and perhaps affiliated entities.
In June and July of 2007, minutes of certain official Grenadian Government proceedings were made public.
These proceedings in conjunction with other documentation show that Global Petroleum Group has invested over $4 million (and quite possibly much more) into the legal defense of the Government of Grenada in the arbitration against RSM.
A (cheque) showing a wire transfer payment of $1,899,975 dated May 25, 2006 is attached hereto as Exhibit I.
On information and belief, Defendants decided to document these payments since they were for the benefit of the government and would need to be accounted for, but there are also substantial other payments that went directly to Bowen and other Grenadian officials.
Additional documentation discovered after the filing of the initial complaint indicate that there is an agreement between Global Petroleum Group and Grenada covering legal expenses to be employed against RSM, and that Lev
Model purported to personally advance the first $2.5 million in October of 2005 to cover Grenada's legal expenses. This led to RSM's investigation of Mr. Model and uncovering of his apparent criminal conviction and a separate civil judgement.
On information and belief, based in part on garnishment proceedings involving Mr. Model in New Jersey, Mr. Model had no ability to pay this money personally, but was acting as a front person for Defendants Blavatnik, Fridman, TNK-BP and BP.
RSM has also recently learned that Lev Model paid the college tuition of Gregory Bowen's daughter. This was learned through Michaele Rose, a woman who worked for the Call Centres of Grenada ("CCG") in 2004-2005, who heard both Mr. Model and Mr. Bowen's daughter confirm the same.
CCG was Call Centre owned by the Grenadian Government and run by Mr. Model. Michaele Rose was the number two person at CCG.
Mr. Model has also paid the salaries of hundreds of other Grenadian government workers.
On information and belief, based in part on garnishment proceedings involving Mr. Model in New Jersey, Mr. Model had no ability to pay this money personally, but was acting as a front person for Defendants Blavatnik, Fridman, TNK-BP and BP.
Thus Plaintiffs claim against Defendants, for conspiracy and intentional tortious interference with a significant and excellent prospective business advantage, which will in addition supply the badly needed oil and natural gas demand of the United States and enhance the National Security of the United States of America.
