What Michael Flynn Could Tell the Russia Investigators
What Michael Flynn Could Tell the Russia Investigators
(Bloomberg) -- It started with helping a friend pitch the Pentagon on a smartphone chip and moved on to more ambitious plans to sell nuclear reactor security in the Middle East and then to high-priced lobbying for the Turkish government.
Michael Flynn, who joined Donald Trump’s presidential campaign as a top military adviser, never believed the candidate would win and often treated the election like a business opportunity, associates say. Now, as Special Counsel Robert Mueller bears down on Trump, Flynn is a key cooperating witness.
A three-month Bloomberg investigation has found that Flynn, who was fired for having lied to the FBI and the vice president about his contacts with Russians, had a slew of other problematic entanglements. Previously unreported documents, including Pentagon contracts, emails and internal company papers, point to overlapping business conflicts around the world.
Self-dealing is, in some ways, at the core of the Mueller inquiry, which is looking at money laundering, contact with foreign (especially Russian) officials and a blending of personal profit with public policy. During the campaign, the transition and his few weeks as national security adviser, Flynn was in Trump’s inner circle. While it remains unclear what he’s providing Mueller, his history of mingling business with government could point investigators to look for similar overlaps among other Trump insiders.
“These conflicts of interest and hidden deals are highly relevant to what was going on with the Russians,” said Nick Akerman, a former Watergate prosecutor, noting that Flynn was in close touch with Russian Ambassador Sergei Kislyak while also being close to Trump. “His hidden business entanglements and his back channel communications with foreign governments raise a lot of possibilities.”
Flynn’s troubles trace back to a previously unreported million-dollar contract for computer chips forged with a friend, Bijan Kian, a suave, Iranian-born businessman. A former governor at the Export-Import Bank, Kian was chairman of a Persian cultural nonprofit group, the Nowruz Commission, that gave him entree into high Washington circles. He built a relationship with former CIA Director James Woolsey and, in 2013, used it to get Flynn, then the Pentagon’s top intelligence officer, to support his computer chip company’s bid for a contract.
The next year, when Flynn was forced out by the Obama administration, his friendship with Kian blossomed into a business partnership. Kian brought him into the chip company, GreenZone Systems Inc., as a board member. According to Flynn’s financial disclosure, GreenZone and its parent company paid him more than $150,000 in cash, plus an undisclosed amount of stock in 2015.
Kian also helped fund and found Flynn Intelligence Group, the ex-general’s consulting firm, and served as a senior partner. While it’s been known that Flynn was advocating in Saudi Arabia, Egypt and Israel in 2015 for a consortium seeking to build several dozen nuclear power reactors, it’s not been reported that he and Kian were also trying to sell GreenZone’s secure chips as part of the deal. Flynn lied about the trip in his federal disclosures.
Kian also brought Flynn Intel its most problematic deal: a previously reported $530,000 contract with Dutch company Inovo BV, ostensibly to improve the business climate in Turkey. Flynn later admitted that the contract primarily benefited Turkish leader Recep Tayyip Erdogan, and that his firm had been paid to lobby U.S. officials to extradite an Erdogan enemy living in Pennsylvania.
When he pleaded guilty in December, Flynn acknowledged that he had lied about the extent of his work for the Turkish government, though he was charged only with making false statements to federal agents about his contacts with Russia’s ambassador.
Neither Kian nor Flynn agreed to be interviewed for this story and their lawyers declined to comment. Kian has never spoken publicly about his business dealings with Flynn.
After Trump’s election victory, Flynn and Kian, both of whom served on the transition team’s intelligence committee, worked on highly sensitive matters without disclosing that they had been paid to represent Turkey’s government. Flynn also stopped a U.S. military plan to attack Islamic State in an offensive that would have armed the Kurds, Erdogan’s avowed enemy, according to a Flynn confidant who said the decision was aimed at assessing previous policy.
Once Trump was sworn in, Flynn used his position as national security adviser to promote the Middle East nuclear deal that he and Kian had also pursued as a business opportunity for GreenZone. Documents released by a congressional oversight committee, citing the Wall Street Journal, show that Flynn, without disclosing his investment, ordered his staff to prepare a briefing memo urging the president to approve the plan.
Flynn first met Kian in 2008, according to a disclosure Kian filed. There are photos of them socializing at the Nowruz Commission in 2011, and, by 2013, when Flynn was running the Defense Intelligence Agency, Kian came calling to pitch his computer chip.
Kian had tried for years to sell his chip to the government. White House logs show he was a frequent visitor, pushing the chip there in a 2012 meeting, according to a participant. The following February, Kian’s fortunes changed when he got former CIA director Woolsey, a GreenZone board member, to help him land a meeting with Flynn. Flynn greeted the men at Joint Base Anacostia-Bolling, a military base in Washington, and walked them to his office, a GreenZone colleague recalled. Woolsey declined to comment for this article.
Kian spent nearly two hours extolling the benefits of his microchip that, once plugged into a smartphone, can mask the user’s identity.
Flynn was impressed. In a move that hasn’t been reported before, he assigned the DIA’s chief scientist to help the chip maker pass military certification standards, according to people Kian briefed on the meeting.
“It was fantastic,” Kian told a colleague after that first meeting. “We got everything we wanted.” The colleague, who was involved in GreenZone’s promotional efforts, spoke on condition of anonymity.
By May, according to a previously unreported email Kian’s associate sent to GreenZone executives, the company was “way ahead” of competitors in its quest for a contract with the DIA, which was considering buying 250 units that included the chips.
GreenZone’s bid was still pending in August 2014, when Flynn left the military. In November, Flynn joined GreenZone’s board. The following year, GreenZone was awarded a $1.1 million contract from the Pentagon’s Combating Terrorism Technical Support Office, which works with, but doesn’t report to, the DIA.
In the view of many ethicists, Flynn’s actions challenged the spirit of Defense Department ethics guidelines but didn’t violate their letter. The rules forbid former employees from accepting a job or compensation from a company within a year of helping it obtain a government contract worth at least $10 million. GreenZone’s contract fell far below that threshold.
“That’s almost the classic revolving door problem in Washington,” said Larry Noble, general counsel of the Campaign Legal Center, a nonpartisan group that advocates adherence to campaign finance laws. “When you move right to a company that you helped when you were in government, it raises the appearance of something untoward going on, even if there was none.”
Kian also worked with Flynn Intel to drum up business around the globe. In October 2015, the two men traveled to Saudi Arabia, where they urged a utility company to hire GreenZone to design and install security systems around nuclear power plants the Saudis were said to be planning, according to company documents obtained by Bloomberg.
When asked about that trip by Congress last June, Flynn said he had traveled with a friend to speak at a conference. He declined to name the friend, the speakers bureau that represents Flynn has no record of a conference and the hotel he told Congress he stayed at doesn’t exist. Representative Elijah Cummings of Maryland, the ranking Democrat on the House oversight committee, told Bloomberg that Flynn misled the FBI about the trip and gave false information about it on his security clearance form, both crimes.
“This new information indicates that General Flynn’s use of public positions for profit was far more wide-ranging than previously known,” Cummings said. “We have been raising red flags and requesting documents about these issues for the past year, but the White House continues to stonewall us, and Republicans in Congress continue to wall off the White House from serious oversight.”
A year after the Saudi trip, in September 2016—the height of the presidential campaign—Kian met with half a dozen staffers from the House Homeland Security Committee to promote GreenZone’s secure communications products, saying their end-to-end encryption could protect communications by special forces in the battlefield. At the end of the meeting, Kian suggested a follow-up meeting for a live demonstration.
At that gathering, several weeks later at Flynn Intel’s offices in Alexandria, Virginia, Kian was accompanied by Justin Freeh, a GreenZone board member and son of former FBI Director Louis Freeh. After 20 minutes of demonstrating the technology, Kian abruptly ushered in another group with an entirely separate and unexpected agenda. They talked about Fethullah Gulen, the Turkish cleric living legally in Pennsylvania and accused by Turkish President Erdogan of leading a coup attempt. The presenters called Gulen a terrorist and urged hearings about the danger he posed in hopes of getting him extradited. Kian was told the committee couldn’t help. Freeh didn’t respond to requests for comment.
That same month, Flynn and Kian met with Dana Rohrabacher, a Republican congressman from California who is supportive of Russia, to discuss the construction of up to 40 nuclear power plants across the Mideast in cooperation with Russia, a plan promoted by a consortium that included former U.S. military men hoping to work with Flynn and GreenZone. Mueller’s office has inquired about that meeting, according to lawyers involved in the case.
The previous month, when Flynn began receiving classified security briefings as part of the campaign staff, Kian brought in the $530,000 Turkish contract.
Woolsey told the Wall Street Journal last year that Flynn and several Turkish government officials met in New York to discuss abducting Gulen and flying him to Turkey. Woolsey reported the plan to a friend who worked for Vice President Joe Biden, saying he considered it illegal, according to a former Biden aide.
Flynn’s lawyer, Robert Kelner, issued a statement last year denying that Flynn had ever considered detaining Gulen. An Inovo spokeswoman also said there wasn’t any such plan.
Kian also played a crucial role, according to several people involved, in the preparation of an anti-Gulen op-ed article by Flynn that was published the day Trump won the election and that has become a frequently cited part of the Turkish government’s campaign against the cleric.
In his guilty plea in federal court, Flynn acknowledged lying to FBI agents when he denied that Turkish government officials had played a role in the article.
Flynn helped Kian land a spot on the transition, where he prepared incoming CIA nominee Mike Pompeo for his confirmation hearing and pushed a number of policy proposals, including fighting a potential threat from electromagnetic pulses, or EMPs. Pompeo has recently been named secretary of state.
Another controversial and previously unreported proposal Flynn and Kian promoted was to hire private security contractors to collect information around the globe, then sidestep the CIA and provide the intelligence directly to the national security adviser, according to people who worked with them on the transition. Flynn couldn’t hold his administration job long enough to shepherd those plans into action.
Nine days after the inauguration, Deputy Attorney General Sally Yates warned the administration that Flynn was susceptible to blackmail because he had lied to officials about his contacts with the Russian ambassador. Flynn resigned after 24 days. He’s no longer on the GreenZone board.
Kian’s standing in official Washington has evaporated. According to associates, he has been spending long stretches of time in California. GreenZone was sold. And the Nowruz Commission has canceled its gala for 2018.
—With assistance from Andrew Martin and Peter Robison.
To contact the editors responsible for this story: Winnie O'Kelley at wokelley@bloomberg.net, Ethan Bronner Robert Friedman
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