Wednesday, March 22, 2017

What The Oilsands Sell-Off Actually Means

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By James Wilt

The last few months have been marked by some massive shifts in the oilsands.
In December, there was the $830 million Statoil sale to Athabasca Oil, followed in January and February by the writing down of billions of barrels of reserves by Imperial Oil, ConocoPhillips and ExxonMobil.
On March 9, Shell sold a majority of its oilsands assets to Canadian Natural Resources Limited (CNRL) in a huge $7.25 billion sale, while Marathon Oil split its Canadian subsidiary between Shell and CNRL for a total of $2.5 billion.
The question is: why are all of these companies selling their oilsands assets? While some celebrate the moves as successes for the climate movement, others blame the Alberta NDP for the exodus of internationals.
The reason that Shell, Total and Statoil are pulling out, and the reason that Exxon has had to write down much of its Kearl Lake reserves, isn’t because of the emissions profile of the oilsands bitumen,” Jeff Rubin, senior fellow of Centre for International Governance Innovation, told DeSmog Canada. “It’s rather because it doesn’t make any economic sense, before we even look at emissions pricing.”

Canadian Companies Have ‘Bullish Long-Run View’ on Oilsands

Global oil prices have been extremely low for years. West Texas Intermediate is selling under $50/barrel. Meanwhile, Western Canadian Select — the benchmark for Alberta’s heavy oil — is currently priced at $35/barrel, about half of what’s required to build new “greenfield” production.
Such prices certainly are largely the result of the U.S. being flooded with oil thanks to the “shale revolution” that’s taken place in North Dakota’s Bakken Formation and Texas’ Permian Basin and Eagle Ford Group in recent years.
Of course, no company with oilsands assets likes the situation or prices. But some — especially those that have long specialized in heavy oil production, such as Suncor and Cenovus — have more of what energy economist Andrew Leach describes as a “bullish long-run view on oilsands” compared to international companies.
He says that their buying up of other companies and projects means they see some compatibility with existing assets, allowing for reduced costs in the long run by combining operations and maximizing economies of scale.
In addition, it’s far cheaper to acquire existing projects in the current market context than building new projects; Rubin says the likes of CNRL would argue the economics of oilsands projects span decades and that business-as-usual growth will eventually bring them online, even if they don’t look particularly viable at the moment.
If you look at it from the buyers’ perspective, these are companies that see more value in the assets than the sellers do. It’s basic sales dynamics,” Leach, who teaches at the University of Alberta and chaired Alberta’s climate advisory team, told DeSmog Canada. 

Shale Oil Increasing in Prominence for International Companies

After all, the oilsands still has the capacity to produce more than two million barrels per day of oil, even if production doesn’t grow in the next few years.
ARC Financial’s Peter Tertzakian recently told a Vancouver audience that the oilsands are “going to supply three per cent of the world’s oil needs over the next many decades, but that’s not where the growth is.” He emphasized the potential of the Montney Formation in northeast B.C. and northwest Alberta.
Mark Oberstoetter, lead analyst at the consultancy firm Wood Mackenzie, told DeSmog Canada in an interview: “It’s not so much that companies are exiting the oilsands, it’s the Canadians looking to take an opportunistic strategy on low oil prices and acquiring some pretty rare assets that you couldn’t normally get in normal times. You could almost say its aggressiveness from the Canadians.”
Take Shell for example. The Dutch company has played an increasingly prominent role in the oilsands in recent years, including publicly backing Alberta’s climate plan, constructing the Scotford upgrader and building the Quest carbon capture and storage (CCS) project.
But Oberstoetter says that Shell is now focusing on assets such as integrated gas, liquified natural gas, pre-salt Brazil, Gulf of Mexico deepwater and Permian tight oil assets. It’s about “shifting their portfolio down the cost curve into the assets they’re good at.”
And the oilsands just don’t make the cut for them.
Tight oil has increased in importance for a lot of these companies,” Oberstoetter says. “They’re just refocusing their portfolios, at the end of the day. I don’t think they would have made these exits if they didn’t get a price that was attractive to them.”

Some Companies Reference ‘Decarbonization’ While Still Focusing on Fossil Fuels

To be fair, some such companies have predicted “peak oil demand” arriving earlier than other major companies, as well as received what Leach calls “significant shareholder pressure relating to their oilsands holdings.”
The interesting thing is if you look at Shell, Statoil and Total, who have all exited the tarsands, they’re the three companies that are saying, ‘we think a peak in oil demand is going to come in the next 10 to 15 years,’ ” says Keith Stewart, climate and energy campaigner at Greenpeace Canada. “It’s the Exxons of the world who are saying ‘oil demand will continue to grow for at least another 40 years’ who are doubling down on the oilsands.”
Recently, Shell announced it was tying executive packages to decarbonization. Leach notes the company has long had lower greenhouse gas emissions as a corporate priority, and has specifically carved out oilsands emissions in its annual sustainability report.
In addition, the company’s scrapping of the 80,000 bpd Carmon Creek project in October 2015 was reportedly tied to concerns about pipeline access, a problem arguably tied to activism by environmental groups. But it’s not like Shell is divesting from fossil fuels anytime soon.
While it has announced plans to increase annual spending on renewables up to $1 billion, there’s another $25 billion or so that will go to other non-renewable investments. Same goes for Statoil: while it operates in Norway, a country that’s had carbon pricing since 1991, and has indicated a desire to increase investments in renewables up to 20 per cent by 2030, the company’s speciality is still very much in offshore and deepwater oil extraction.

Writing Down Reserves Merely Reflects Last Year’s Prices

The writing down of reserves in filings to the Securities and Exchange Commission (SEC) simply indicates that oil prices were especially low, and that they wouldn’t be commercially viable if oil markets continue to look like they did on average last year.
If prices rebound, those reserves can and very likely will be added back.
What’s effectively happened over the last few months is the rearranging of corporate portfolios to get costs down and maximize strategic focuses, combined with some obligatory filings under SEC formulas.
Millions of barrels per day will continue to be pumped from Alberta’s oilsands. It will just be by different companies.


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SENTIMENT IN WASHINGTON may not reflect that the U.S. is at war, but two war correspondents described the astonishing extent and toll of recent U.S. military strikes in Iraq, Syria and Yemen on Intercepted, the weekly podcast by The Intercept’s Jeremy Scahill.

In Iraq, U.S. forces are helping Iraqi and Kurdish soldiers in their months-long battle to drive ISIS out of western Mosul. As many as 600,000 civilians are trapped there, amid widespread hunger and destruction, and more than 1,000 civilians were killed or injured last month in Iraq.
“There are American special forces on the ground but much more important than that is U.S. airpower, without which the Iraqi forces would not be able to get very far,” explained author and journalist Anand Gopal.
“And they’ve been hitting pretty much everything in sight and there’s been an extraordinary number of civilian casualties — just kind of gone through the roof in the last couple of months especially coming into Mosul.”
Gopal explained that the western half of the city, where the fighting is now, is the older part, with densely packed neighborhoods.
The “houses are really close together and so you can have a case where an ISIS sniper is on a house and the Americans are dropping bombs on the house and killing everybody inside including families that are cowering in the basement, people who are being shot on the street in sight. It’s a real humanitarian disaster that’s unfolding as we speak.”
The United States is also building up its own troop strength in Syria. “There the U.S. is allying with Kurdish forces — with the YPG — in the push towards Raqqa, and then if you look at the pattern of where the U.S. is deploying — where its airstrikes are hitting in Syria — what you see is the entire U.S. effort in Syria is to attack the enemies of [President] Bashar al-Assad,” Gopal said.
In Palmyra, for instance, U.S. warplanes in February carried out 45 strikes to help the Syrian government forces — the only forces on the ground — recapture the city from ISIS.
“You know, we tend to think that the U.S. is supporting regime change in Syria but on the ground it’s not the case,” Gopal said. “In fact, the U.S. has been avoiding doing anything to antagonize the Syrian regime and instead has been really focusing its fire on ISIS or on other enemies of the Assad regime.”
To complicate matters further, the United States has been also fueling a Saudi Arabian campaign against Houthi rebels in Yemen, and is now attacking alleged al Qaeda targets there directly. This month, independent war reporter Iona Craig covered a tragically botched Navy SEAL raid in Yemen for The Intercept. Craig interviewed survivors of the raid, which Trump called a success despite the death of one Navy SEAL, at least six women, and 10 children under the age of 13.
Craig said that a spate of airstrikes followed the raid. “In the space of 36 hours [the U.S.] carried as many strikes as they had done in the whole of last year [across] three provinces,” she said. One of the targets was the same village, Ghayil, where the raid had taken place.
Craig said the U.S. strikes killed two more children and three more adults, some of whom she had met while reporting her story. “They saw it as revenge — a revenge for killing a Navy SEAL basically — that the Americans were coming back to destroy their village entirely and to make sure that everybody was gone.”
Both Craig and Gopal said that the U.S. risks getting sucked into domestic and geopolitical dramas in the region in a way that could be disastrous.
Craig said the U.S. is already “being seen as very much taking one side” in Yemen. “That could get even worse if now the Trump administration decides to conflate the Houthis with Iran.”
Gopal said  that the United States harbors a “fantasy” of creating a Sunni force to fight ISIS in Iraq and Syria, while reducing reliance on Iranian-backed forces in the region.
“There’s this idea in some quarters that you can raise this almost like a second-awakening and this would be your proxy force. How realistic that is, is another question,” said Gopal, referencing the Iraq war based Iraqi “awakening” councils that fought al Qaeda. “Already it’s a bloodbath in the Middle East and already there [are] hundreds of different forces fighting,” he said. “Any attempt to try to either create Sunni proxy force or push onto Iran would be just an even greater disaster, and there we’re talking world war three level of disaster.”
Craig said the only winner is the defense industry. “Well, it’s good business,” she said. “In the first year of the war [in Yemen], the U.S. sold $20 billion worth of arms to Saudi Arabia, and Saudi Arabia has been buying more and more weapons as a result of this war, and the same goes for the British government as well,” she said. “Really it all boils down to financial gain and that’s the greatest win really for the U.S., but it’s an extremely costly one obviously for the civilian population of Yemen.”

Aid Officials Beg Congress to Help Yemen, While Trump Sends More Bombs

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AS THE TRUMP ADMINISTRATION resumes weapons shipments to Saudi Arabia for its devastating bombing campaign in Yemen — including precision-guided weapons the Obama administration had suspended on human rights grounds — a State Department official told Congress that the two-year-long conflict has led to the largest starvation emergency in the world.
Gregory Gottlieb, an acting assistant administrator for the U.S. Agency for International Development (USAID), told the Senate Foreign Relations Committee Wednesday that the conflict — which the U.S. is a silent partner to — has left the majority of the Yemeni people struggling to find food.
“In Yemen, more than 17 million people — an astounding 60 percent of the country’s population — are food insecure, including 7 million that are unable to survive without food assistance,” said Gottlieb. “This makes Yemen the largest food security emergency in the world.”
Gottlieb was testifying at a Senate hearing on foreign aid funding and humanitarian crises in Nigeria, South Sudan, Yemen, and Somalia.
USAID is the foreign assistance arm of the State Department — the same department that signs off on arms sales to Saudi Arabia. Since Saudi Arabia began bombing Yemen in March 2015, the U.S. has approved more than $20 billion in weapons sales to Saudi Arabia — and looked the other way as the Saudi-led coalition has bombed civilian infrastructurehospitals, and children’s schools.
Last week the UN warned that the majority of Yemen’s population is suffering and on the brink of famine. Stephen O’Brien, the UN’s undersecretary-general for humanitarian affairs, criticized both sides of the conflict for restricting the flow of aid, but said that the Saudi-imposed naval blockade was particularly devastating for the desert country, which imports most of its food.
The Saudi-led coalition has persistently attacked fisherman, who account for another major food source in Yemen.
The situation has worsened as the Saudi-backed forces prepare to retake the Western port city of Hodeida, once the waypoint of 70 percent of Yemen’s food and aid imports. Near the beginning of the war, Saudi Arabia bombed the cranes that port workers use to unload ships — slowing the pace of work to a crawl. Since then, airstrikes by the coalition have made it virtually impossible for aid to reach the port.
At Wednesday’s hearing, Yuris Dassard, the director-general of the Red Cross, urged the U.S. to help clear access to the port. “You can ensure access to the port. You make sure ensure that the blockade is done with a humanitarian exception.”
He continued: “It will make a lot of difference for a lot of people. … There is no choice. There is no market anymore in Yemen. So the blockade needs to cease, or needs to be managed.”
Last week, 52 members of Congress sent a letter to the State Department, urging it to pressure Saudi Arabia into making the port accessible. “Right now, the U.S. must act urgently to avert famine and employ our diplomatic clout with the Coalition members to ensure that humanitarian goods can get into the port of Hodeida,” the letter read. “The lives of hundreds of thousands of children are at stake.”
Sen. Ben Cardin, D-Md., the leading Democrat on the committee, acknowledged the port was a “major entry point for humanitarian assistance,” and said it was “unclear as to the current abilities to get current humanitarian aid into Yemen.”
Last year, USAID gave Yemen $56 million in humanitarian aid, but it is unclear if aid will continue at all under Trump. According to a budget outline released last week, Trump wants to slash 28 percent of USAID’s funding.
The Obama administration supported Saudi Arabia’s air war for more than a year, supplying weapons and intelligence, and helping refuel Saudi aircraft.
But after the Saudi Arabia bombed a funeral in Yemen’s capital city in October, the Obama administration put a hold on a transfer of precision-guided weapons, citing “systemic, endemic” concerns about their targeting. The Trump administration greenlighted the transfer in March.

In addition, the Trump administration has intensified its military operations against al Qaeda in Yemen, loosening counterterrorism rules and accelerating the pace of bombings and drone strikes.

What Trump's SEC Pick Needs to Explain

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By David Shipley

When Donald Trump announced that he would nominate Wall Street lawyer Jay Clayton to lead the Securities and Exchange Commission, he cited the need to “undo many regulations which have stifled investment in American business.” At Clayton’s confirmation hearing this week, senators should ask exactly what that means.
Scrutiny of Clayton has so far focused on his close ties to the industry he would oversee. He has represented large financial institutions facing U.S. investigations, and he worked on big investment deals for Goldman Sachs and Barclays Capital. His wife is a wealth manager at Goldman Sachs. Possible conflicts of interest matter -- but Clayton’s thinking on regulation and oversight of capital markets needs to be examined, too.
The SEC’s rulemaking -- much of it mandated by the 2010 Dodd-Frank Act -- has drawn criticism for doing too much and for doing too little. Some say its “risk retention” rule (which requires firms that repackage and sell loans to keep some of their own product) obstructs the flow of credit. Others complain that burdensome disclosure requirements prevent companies from offering their shares to the public. Traders say that the SEC’s failure to complete rules on credit derivatives is killing part of the market.
The agency’s leader will have the power to harden or soften the rules, and will decide how strictly to enforce them. So which of these regulations does Clayton see as the biggest obstacles to investment?
The SEC is also at the center of efforts to shed more light on markets, which would enable regulators to know what’s going on next time there’s a flash crash or some other crisis. It’s been working for more than six years to get market participants to build a system for recording all activity in stocks and options. Meanwhile it’s trying, along with other agencies, to put together the real-time derivatives data needed to spot dangerous concentrations of risk.
Without the SEC’s active support, such initiatives may founder. So does Clayton see the transparency they promise as important for investor confidence in U.S. markets?
Finally, the SEC is supposed to identify and punish misbehavior, to ensure that investors are treated as fairly as possible. Under former chair Mary Jo White, it cracked down in some new areas -- exposing, for example, the various ways in which private investment-fund managers divert money to themselves. It also came under fire, both for failing to hold individuals accountable and for steering too many cases to its in-house administrative proceedings, where defendants have fewer protections than they would in a real court.
Is Clayton satisfied with the aggressiveness and aim of the SEC’s enforcement actions? If not, what would he change?
Clayton’s insider status needn’t be disqualifying. As others, such as Goldman Sachs alumnus Gary Gensler, have demonstrated, it can be an advantage. Yet Clayton's views on how best to maintain U.S. markets’ reputation for dynamism and reliability remain unknown. It’s a mystery that the Senate must address.

The Senate Prepares to Send Internet Privacy Down a Black Hole

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TODAY, WHILE YOU’RE not watching, the Senate could gut rules protecting your internet privacy.
Last year the Federal Communications Commission passed a set of strict privacy regulations that ban broadband internet providers from selling your browsing data without your consent. Now, while most Americans are watching Neil Gorsuch’s Supreme Court nomination hearing and Obamacare repeal intrigue, senators could vote as early as today on a resolution to not only reverse the FCC’s action but block the agency from passing similar rules in the future. (The resolution would still need to pass the House and get President Trump’s signature to take effect.)
Even if Republicans spike the Obama-era FCC’s protections, most of which have not taken effect yet, the agency will still have some authority to protect your privacy. But little would stop internet providers from selling your personal data to ad buyers and anyone else hoping to turn a profit by targeting your browsing habits.
Republican lawmakers argue that the FCC’s rules confuse customers because they only cover internet providers and not websites like Google and Facebook. But repealing the them without a new privacy framework in place could create a enforcement vacuum that isn’t good for anyone.
For most of the internet’s existence, protecting users’ privacy has fallen to the Federal Trade Commission. But in 2015, the FCC reclassified internet providers as utility-style “common carriers,” which an appeals court decided the FCC has the sole authority to regulate. With that newfound power, the agency passed stronger rules than the ones enforced by the FTC. If they take effect, broadband providers could not sell your browsing data unless you explicitly opt in. The telco industry hated the order, claiming that it gave the likes of Google and Facebook an unfair advantage. After all, those web giants make billions selling your browsing data by default.
Industry lobbyists even argued that a rule requiring internet providers to provide “reasonable data security” to protect customers’ information from hackers was unreasonable, and new FCC chair Ajit Pai agreed. Earlier this month, he and fellow Republican FCC commissioner Michael O’Rielly voted successfully to suspend the security rules, the first slated to take effect. In a joint statement with acting FTC chair Maureen Ohlhausen, Pai suggested he would soon revisit the rest of the privacy rules as well.
He may not get that chance. Last month, senator Jeff Flake (R-AZ) proposed a resolution to throw out the FCC rules entirely. Flake signed on 23 other Republican senators, including former Republican presidential candidates Ted Cruz, Rand Paul, and Marco Rubio, as co-sponsors.
The resolution takes advantage of the Congressional Review Act, which allows Congress to reverse decisions made by federal agencies and, crucially, ban agencies from passing “substantially similar” rules in the future. “[The FCC’s privacy order] is unnecessary, confusing and adds yet another innovation-stifling regulation to the internet,” Flake told WIRED in a statement last month. “My legislation is the first step toward restoring the FTC’s light-touch, consumer-friendly approach.”

The Worst-Case Scenario

Even if you agree that the FCC’s rules are unfair or confusing, using the Congressional Review Act to reverse them completely at best complicates future privacy enforcement. One problem lies in the phrase “substantially similar.” The act is seldom used, and depending on how courts interpret it, the FCC could end up barred from introducing even the less controversial parts of the privacy order. “The only difference between the FCC rules and the FTC rules is that [the FCC rules] moves web browsing history to the ‘sensitive data’ category,” says Dallas Harris of the consumer advocacy group Public Knowledge. In other words, the FCC could be banned even from passing a less strict set of rules closer to the FTC’s provisions.
That could be a big problem even if the FCC or Congress reverses the common carrier classification that gave the agency the authority to enact its privacy rules in the first place. Most companies that sell internet access also offer telephone service, which are unequivocally common carrier services. And under one interpretation of the appeals court’s ruling last year, that would keep telcos under the FCC’s jurisdiction anyway instead of throwing it back to the FTC. With the FCC hobbled by Congress from passing new privacy rules, neither agency would have the ability to enact meaningful privacy guidelines.
Yes, the FCC still has some authority to regulate privacy under the Communications Act, authority it used when it fined Verizon last year for tracking subscribers’ web browsing without their knowledge. But if the FCC can’t define clear guidance dictating what carriers can and can’t do—or even whether they must take steps to protect customers from hackers—broadband providers and their customers are left guessing.
Critics of the FCC’s rules acknowledge the possibility of this worst-case scenario but call the odds overblown. The rules haven’t taken effect yet, so repealing them doesn’t actually change anything. Plus Congress could always change the rules that prevent the FTC from regulating common carriers, solving the enforcement gap. If all of this sounds confusing, that’s because it is. But one thing is clear: If Trump signs the Senate’s resolution to gut the FCC’s privacy rules, your internet provider will remain free to sell your data to the highest bidder.

US Bombing Blamed for Killing Dozens of Civilians Sheltering in Syrian School

"They're still pulling bodies out of the rubble"

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By Andrea Germanos

The U.S.-led coalition targeting the Islamic State (ISIS) is being blamed for an airstrike on a school where families had sought shelter near the northern Syrian town of Raqqa.
The monitoring group Syrian Observatory for Human Rights said at least 33 people died as a result of the Tuesday strike.
Those using the school in the village of Mansoura as shelter "were displaced civilians from Raqqa, Aleppo, and Homs," Observatory head Rami Abdul Rahman said to Agence France-Presse.
"They're still pulling bodies out of the rubble until now. Only two people were pulled out alive," he said.
The activist-run group Raqqa is Being Slaughtered Silently, which also accused U.S.-led coalition jets of being behind the airstrike, said almost 50 families were seeking refuge at the school.
The state-run Syrian Arab News Agency also reported that the U.S. led coalition was responsible for the strike.
The Associated Press writes that it "was not immediately clear who carried out the airstrike," as
Syrian Kurdish forces have been advancing on Raqqa under the cover of U.S.-led coalition airstrikes and are now 8 kilometers (5 miles) north of the city. Syrian and Russian aircraft have also carried out strikes against the IS group.
CNN adds that ISIS-held Raqqa
is now largely surrounded, its main supply routes cut off by advancing forces. U.S.-backed Kurdish and Arab forces are squeezing ISIS from the north, while Syrian government troops—backed up by Russia—have been pushing from the west.
The U.S.-led coalition against ISIS has also been carrying out airstrikes against the city.
The Pentagon said in a statement Wednesday that it has "no indication that an airstrike struck civilians near Raqqa as the Syrian Observatory for Human Rights claims," but that it would investigate. The Pentagon also said Monday that it was investigating claims that a U.S. airstrike last week killed dozens of civilians near a mosque in Aleppo, Syria. 
The six years of war in Syria have killed 321,000 people, including 96,000 civilians, the Observatory said last week.
According to United Nations High Commissioner for Human Rights Zeid Ra'ad Al Hussein, the conflict is "the worst man-made disaster the world has seen since World War II," while UNICEF warned last week that Syrian children were facing "unprecedented" levels of suffering.
"Each and every child is scarred for life with horrific consequences on their health, well-being, and future," said UNICEF regional director for the Middle East and North Africa, Geert Cappelaere.


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President Donald Trump's former campaign chairman, Paul Manafort, secretly worked for a Russian billionaire to advance the interests of Russian President Vladimir Putin a decade ago and proposed an ambitious political strategy to undermine anti-Russian opposition across former Soviet republics, The Associated Press has learned. The work appears to contradict assertions by the Trump administration and Manafort himself that he never worked for Russian interests.

Manafort proposed in a confidential strategy plan as early as June 2005 that he would influence politics, business dealings and news coverage inside the United States, Europe and the former Soviet republics to benefit the Putin government, even as U.S.-Russia relations under Republican President George W. Bush grew worse. Manafort pitched the plans to Russian aluminum magnate Oleg Deripaska, a close Putin ally with whom Manafort eventually signed a $10 million annual contract beginning in 2006, according to interviews with several people familiar with payments to Manafort and business records obtained by the AP. Manafort and Deripaska maintained a business relationship until at least 2009, according to one person familiar with the work.

"We are now of the belief that this model can greatly benefit the Putin Government if employed at the correct levels with the appropriate commitment to success," Manafort wrote in the 2005 memo to Deripaska. The effort, Manafort wrote, "will be offering a great service that can re-focus, both internally and externally, the policies of the Putin government."

Manafort's plans were laid out in documents obtained by the AP that included strategy memoranda and records showing international wire transfers for millions of dollars. How much work Manafort performed under the contract was unclear.

The disclosure comes as Trump campaign advisers are the subject of an FBI probe and two congressional investigations. Investigators are reviewing whether the Trump campaign and its associates coordinated with Moscow to meddle in the 2016 campaign. Manafort has dismissed the investigations as politically motivated and misguided, and said he never worked for Russian interests. The documents obtained by AP show Manafort's ties to Russia were closer than previously revealed.

In a statement to the AP, Manafort confirmed that he worked for Deripaska in various countries but said the work was being unfairly cast as "inappropriate or nefarious" as part of a "smear campaign."
"I worked with Oleg Deripaska almost a decade ago representing him on business and personal matters in countries where he had investments," Manafort said. "My work for Mr. Deripaska did not involve representing Russian political interests."

Deripaska became one of Russia's wealthiest men under Putin, buying assets abroad in ways widely perceived to benefit the Kremlin's interests. U.S. diplomatic cables from 2006 described Deripaska as "among the 2-3 oligarchs Putin turns to on a regular basis" and "a more-or-less permanent fixture on Putin's trips abroad." In response to questions about Manafort's consulting firm, a spokesman for Deripaska in 2008 - at least three years after they began working together - said Deripaska had never hired the firm. Another Deripaska spokesman in Moscow last week declined to answer AP's questions.
Manafort worked as Trump's unpaid campaign chairman last year from March until August. Trump asked Manafort to resign after AP revealed that Manafort had orchestrated a covert Washington lobbying operation until 2014 on behalf of Ukraine's ruling pro-Russian political party .

The newly obtained business records link Manafort more directly to Putin's interests in the region. According to those records and people with direct knowledge of Manafort's work for Deripaska, Manafort made plans to open an office in Moscow, and at least some of Manafort's work in Ukraine was directed by Deripaska, not local political interests there. The Moscow office never opened.

Manafort has been a leading focus of the U.S. intelligence investigation of Trump's associates and Russia, according to a U.S. official. The person spoke on condition of anonymity because details of the investigation were confidential. Meanwhile, federal criminal prosecutors became interested in Manafort's activities years ago as part of a broad investigation to recover stolen Ukraine assets after the ouster of pro-Russian President Viktor Yanukovych there in early 2014. No U.S. criminal charges have ever been filed in the case.

FBI Director James Comey, in confirming to Congress the federal intelligence investigation this week, declined to say whether Manafort was a target. Manafort's name was mentioned 28 times during the hearing of the House Intelligence Committee, mostly about his work in Ukraine. No one mentioned Deripaska.

White House spokesman Sean Spicer said Monday that Manafort "played a very limited role for a very limited amount of time" in the campaign, even though as Trump's presidential campaign chairman he led it during the crucial run-up to the Republican National Convention.

Manafort and his associates remain in Trump's orbit. Manafort told a colleague this year that he continues to speak with Trump by telephone. Manafort's former business partner in eastern Europe, Rick Gates, has been seen inside the White House on a number of occasions. Gates has since helped plan Trump's inauguration and now runs a nonprofit organization, America First Policies, to back the White House agenda.

Gates, whose name does not appear in the documents, told the AP that he joined Manafort's firm in 2006 and was aware Manafort had a relationship with Deripaska, but he was not aware of the work described in the memos. Gates said his work was focused on domestic U.S. lobbying and political consulting in Ukraine at the time. He said he stopped working for Manafort's firm in March 2016 when he joined Trump's presidential campaign.

Manafort told Deripaska in 2005 that he was pushing policies as part of his work in Ukraine "at the highest levels of the U.S. government - the White House, Capitol Hill and the State Department," according to the documents. He also said he had hired a "leading international law firm with close ties to President Bush to support our client's interests," but he did not identify the firm. Manafort also said he was employing unidentified legal experts for the effort at leading universities and think tanks, including Duke University, New York University and the Center for Strategic and International Studies.

Manafort did not disclose details about the lobbying work to the Justice Department during the period the contract was in place.

Under the Foreign Agents Registration Act, people who lobby in the U.S. on behalf of foreign political leaders or political parties must provide detailed reports about their actions to the department. Willfully failing to register is a felony and can result in up to five years in prison and a fine of up to $250,000, though the government rarely files criminal charges.

Deripaska owns Basic Element Co., which employs 200,000 people worldwide in the agriculture, aviation, construction, energy, financial services, insurance and manufacturing industries, and he runs one of the world's largest aluminum companies. Forbes estimated his net worth at $5.2 billion. How much Deripaska paid Manafort in total is not clear, but people familiar with the relationship said money transfers to Manafort amounted to tens of millions of dollars and continued through at least 2009. They spoke on condition of anonymity because they were not authorized to discuss the secret payments publicly.

In strategy memos, Manafort proposed that Deripaska and Putin would benefit from lobbying Western governments, especially the U.S., to allow oligarchs to keep possession of formerly state-owned assets in Ukraine. He proposed building "long term relationships" with Western journalists and a variety of measures to improve recruitment, communications and financial planning by pro-Russian parties in the region.

Manafort proposed extending his existing work in eastern Europe to Uzbekistan, Tajikistan and Georgia, where he pledged to bolster the legitimacy of governments friendly to Putin and undercut anti-Russian figures through political campaigns, nonprofit front groups and media operations.

For the $10 million contract, Manafort did not use his public-facing consulting firm, Davis Manafort. Instead, he used a company, LOAV Ltd., that he had registered in Delaware in 1992. He listed LOAV as having the same address of his lobbying and consulting firms in Alexandria, Virginia. In other records, LOAV's address was listed as Manafort's home, also in Alexandria. Manafort sold the home in July 2015 for $1.4 million. He now owns an apartment in Trump Tower in New York, as well as other properties in Florida and New York.

One strategy memo to Deripaska was written by Manafort and Rick Davis, his business partner at the time. In written responses to the AP, Davis said he did not know that his firm had proposed a plan to covertly promote the interests of the Russian government.

Davis said he believes Manafort used his name without his permission on the strategy memo. "My name was on every piece of stationery used by the company and in every memo prior to 2006. It does not mean I had anything to do with the memo described," Davis said. He took a leave of absence from the firm in late 2006 to work on John McCain's 2008 presidential campaign.

Manafort's work with Deripaska continued for years, though they had a falling out laid bare in 2014 in a Cayman Islands bankruptcy court. The billionaire gave Manafort nearly $19 million to invest in a Ukrainian TV company called Black Sea Cable, according to legal filings by Deripaska's representatives. 

It said that after taking the money, Manafort and his associates stopped responding to Deripaska's queries about how the funds had been used.

Early in the 2016 presidential campaign, Deripaska's representatives openly accused Manafort of fraud and pledged to recover the money from him. After Trump earned the nomination, Deripaska's representatives said they would no longer discuss the case.