Mikhail Prokhorov's purchase of the New Jersey Nets has encountered yet another obstacle fr om unhappy locals after a U.S. congressman from the struggling NBA team's home state asked the Treasury Department to investigate the billionaire's alleged business in Zimbabwe.
The $200 million purchase, which gives Prokhorov ownership of the Nets and a 40 percent stake in their new stadium, has aroused impassioned protests from residents of New Jersey and nearby Brooklyn, wh ere the team is supposed to move to.
"Mr. Prokhorov, a Russian national, has purportedly done business with the government of Zimbabwe, which is subject to United States sanctions," Representative Bill Pascrell, a Democrat, wrote Sunday to Treasury Secretary Timothy Geithner.
"I would respectfully request that you investigate all of Mr. Prokhorov's business dealings in Zimbabwe," he said, citing an article published the same day in the New York Post.
The sanctions target individuals and companies connected to Zimbabwe's authoritarian leader, Robert Mugabe. Russia used its veto power in the United Nations Security Council to override a 2008 resolution that would have imposed international sanctions.
In a separate letter to National Basketball Association commissioner David Stern, the congressman said "any business dealings by Mr. Prokhorov in a country that routinely violates human rights raises significant concerns as to his character and fitness to be an owner of an NBA franchise."
He also questioned the association's "thorough background investigation" of Prokhorov.
The New York Post alleged that Renaissance Capital, in which Prokhorov owns a 50 percent minus one share, violated U.S. sanctions by holding an investment summit in February with some Zimbabwean government officials.
Curiously, the article began with a quote from Pascrell calling the allegations "disgusting." But his office said reporters first came to them.
"We conducted a preliminary review of this information and it turned out true," Paul Brubaker, a spokesman for Pascrell, told The Moscow Times. The paper "connected the dots," prompting the congressman to react, he said.
The paper said Andrew Lowe, chief executive of Renaissance's African division, participated in a business panel with a government official at the summit.
Renaissance Capital called the report erroneous and denied having financed or participated in the summit in Zimbabwe.
"Renaissance Capital did not participate in any way," spokesman Quinn Martin said. "We did not finance it, Andrew Lowe did not speak at it, and no one from Renaissance attended it — specifically because government officials on the sanctions list were scheduled to speak there."
Renaissance Group's office in Harare, Zimbabwe, was established in the late 2000s and serves to facilitate portfolio investment for institutional investors who want to buy stock there by making arrangements with a local broker, Martin said.
Renaissance Capital does not own assets in Zimbabwe, he said.
Prokhorov's Onexim Group announced in September 2008 that it was purchasing the stake in the investment bank for $500 million.
"Renaissance Capital is fully aware of the sanctions imposed by the United States on certain Zimbabwean persons and companies, and takes its compliance obligations seriously," the company said in a statement.
Renaissance Capital's African offices are in Harare, Zimbabwe; Lusaka, Zambia; Accra, Ghana; Nairobi, Kenya; and Lagos, Nigeria, according to its web site.
Onexim Group chief executive Dmitry Razumov also denied that Prokhorov had any connections with the Mugabe regime. "Onexim has no business in Zimbabwe," he said, RIA-Novosti reported.
Prokhorov has faced considerable scrutiny in the United States, which has not experienced the sort of influx of Russian money into high-profile assets that Europe has. Rebranding the team as the New York Nets also has flamed tempers in New Jersey.
Meanwhile, the new arena — part of a broader $4.9 billion development in Brooklyn's Prospect Heights neighborhood — has faced stiff opposition and legal challenges from residents since well before Prokhorov bought into the project.
To improve his image among basketball fans and the American public in general, Prokhorov has done a series of high-profile interviews, including one on "60 Minutes" on CBS News. ?
The 6-foot-7-inch billionaire is a noted basketball enthusiast, and he told Bloomberg News last month that the purchase would make him "the first NBA owner who can dunk."
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.