South Africa

Spy Tapes and Amazon Clouds: South African at centre of bid for Pentagon data cloud linked to Kremlin insider

While South African, Andre Pienaar, founder of C5 Capital and exposed as the mysterious “Luciano” in the leaked “Zuma spy tapes” saga, is involved in a bid for the Jedi Pentagon Project – a cyber-cloud that will store highly sensitive data including US nuclear codes – he has also been linked to Ukrainian-born Russian oligarch, Viktor Vekselberg, who has close links to the Kremlin.

Former South African intelligence agent, Andre Pienaar, has been cited in an extensive investigation by BBC journalists into bids for the Pentagon’s $R10 billion Jedi Contract project aimed at storing sensitive military and other information on a single cloud. Pienaar was exposed in court transcripts in the Zuma “spy tapes” saga as the mysterious “Luciano” who allegedly leaked illegal National Intelligence Agency recordings of conversations between then Scorpions boss, Leonard McCarthy, and former NPA boss, Bulelani Ngcuka. The leak ultimately led to the initial withdrawal of charges of fraud and corruption against former President Jacob Zuma.

The BBC's Ruth Clegg and Manveen Rana, have linked Pienaar to Russian oligarch and Kremlin insider, Viktor Vekselberg, who is named on the US sanctions list for his close ties to the president, Vladimir Putin.

Pienaar, according to his own biography, “started his career at Kroll Inc in 1996 where he became the youngest managing director”. In 2004, he founded G3, “an international consulting firm that advises global companies and international law firms on cybersecurity.”

Around 2013 Pienaar sold G3 to Swedish private equity firm, Kinnevik. In January 2018 one of Pienaar's other companies, ITC Secure, bought the G3 Cyber Security “practice” component of the G3 group from G3 and Kinnevik.

In November 2016, C5 Capital acquired ITC Secure for £24 million.

Pienaar, who has been highly successful cornering this lucrative and sensitive market, said the January 2018 deal rendered ITC as “a leader in providing cyber security services and trusted advice to businesses across all sectors. Our experts are able to deliver strategic guidance to private clients and private equity groups worldwide”.

Back in 2014, when the “spy tapes” transcripts were released, Pienaar was named on page 26 as “a private intelligence operative close to Mbeki”. Pienaar has since been associated with ANC presidential hopeful, Nkosazana Dlamini Zuma, and is a council member of her African Union Foundation, which he helped set up in 2015.

While the AU Foundation claims that its aim is “to mobilise resources in support of the African Union’s vision of an integrated, people-centred and prosperous Africa, at peace with itself and taking its rightful place in the world”, it appears not much has been achieved in its three years of existence.

Pienaar is described on the AU Foundation website as “a private investor in specialist areas of technology. He is a founder of C5 Capital Limited. He is a trustee of several African charities.”

Daily Maverick inquiries and emails to the AU Foundation for a report-back on its work have been met with silence for several months.

C5 was founded in 2012 and since then Pienaar and his companies have become major international players. Pienaar has business connections with international political heavyweights including, according to BBC journalists Ruth Clegg and Manveen Rana “the most influential and trusted figures in military and security circles on both sides of the Atlantic”.

Pienaar's flagship company C5 Capital, boasts as “strategic partners” Charles McGarry, former CIA Operations Officer and CIA European chief; Admiral Mike Mullen, principal advisor to Presidents George W Bush and Barack Obama and 17th Chairman of the US Joint Chiefs of Staff from 2007 to 2011; Lord Gold, former “Corporate Monitor of BAE Systems” and current Chairman of the Conservative Party Disciplinary Committee; Sir Ian Lobban, former Director and Director-General of operations for the British Security and Intelligence agency GCHQ; Lieutenant General Graham Lamb, a former member of the UK regular and special forces.

Pienaar also has links, the BBC found, to Russian oligarch Viktor Vekselberg, who is named on the US sanctions list for his close ties to the Russian president, Vladimir Putin.

C5 has worked with the leading bidder for the Pentagon Jedi cloud, Amazon Web Services (AWS).

The $10 billion Joint Enterprise Defence Infrastructure (Jedi) is a mammoth project by the Pentagon aimed at storing all military data in one cloud instead of across departments which is the current situation.

It’s hard to overstate the significance of the Pentagon’s cloud contract. Known as JEDI, for Joint Enterprise Defense Infrastructure, it will help reshape American warfare by absorbing, processing, and analysing intelligence, sensor, and troop data, and by facilitating communications through the Defense Department’s worldwide network. The winner of the contract, should they meet stringent security and performance standards, will emerge as a front-runner for more huge cloud jobs across the government,” explained Defense One.

The BBC noted that Jedi “will provide soldiers on the front line with instant access to all of the latest intelligence, making them more effective on the battlefield.”

Bids were due by April 2019 and transnational technology companies like Microsoft, Oracle and IBM have submitted theirs. According to the BBC, however, “leading voices in the sector – including the other companies vying for the contract – say that Amazon Web Services (AWS) is the clear frontrunner.”

The Pentagon refused to comment to the BBC on the nature of and players in the “sealed bids” it has received.

C5 and AWS denied to the BBC that they are involved in the Jedi bid.

Amazon Web Services is currently the largest cloud service provider in the world and is a subsidiary of Amazon, the online shopping portal which controls a third of the cloud computing market.

AWS and C5 have collaborated on a number of international “cloud computing projects”. AWS vice-president, Teresa Carlson, and Pienaar have, said the BBC, “toured the world promoting their companies' relationship”.

C5 Accelerate, a member of the C5 group, describes itself as a“London, Washington D.C., and Bahrain based technology investment firm. C5 Accelerate is developing a Cloud Accelerator Cluster in Europe, the Middle East, Africa and the United States, alongside Amazon Web Services.”

The BBC investigated Pienaar's links to Vekselberg, and found that he [Pienaar] had been a paid portfolio manager for his businesses in South Africa.” Vekselberg said his relationship with Pienaar ended this year.

According to this version of events, he must have been working for Mr Vekselberg whilst running C5 and working on projects with Amazon Web Services,” reports the BBC.

Pienaar denied to the BBC that he had worked for Vekselberg's company, and said he had only advised it on a mining issue.

Clegg and Rana wrote that “Shortly afterwards, Viktor Vekselberg's spokesman came back to amend their earlier statement to match Mr Pienaar's – which would suggest that they are still in contact.”

The BBC also found “an injection of Russian money” after investigating the “labyrinthine structure of companies around C5.”

One of C5's subsidiaries, C5 Razor Bidco, brought in an investment of £16.1m in 2015, just as Vladimir Kuznetsov became a director and major shareholder of the company. AWS stressed that it does not work with C5 Razor Bidco. However, C5 Razor Bidco is part of the C5 Group and is owned by Andre Pienaar.”

Kuznetsov is Vekselberg's “trusted lieutenant” and worked for Vekselberg from 1999 to 2018 “when the sanctions against Mr Vekselberg led to mass resignations across the board of his business group, Renova.”

Kuznetsov told the BBC that his investment in C5 Razor Bidco had not been influenced by Vekselberg or the Kremlin while C5 said that the oligarch had not directly or indirectly invested in any of the group's companies.

Vekselberg, who is linked to US President Donald Trump's lawyer, Michael Cohen, was questioned as he got off a plane in New York by Muller Inquiry investigators. The businessman's electronic devices were seized as part of an investigation into his possible role into alleged Russian interference in the 2016 US election.

Vekselberg's company, Columbus Nova, affiliated to the Renova Group, allegedly paid Cohen $500,000, money which was funnelled to Cohen's Essential Consultants LLC, the firm he used to pay off Stormy Daniels.

The oligarch is also linked to the Skolkovo Innovation Centre in Moscow, established in 2009 by Russian Prime Minister Dmitry Medvedev as the Russian answer to Silicon Valley. Vekselberg heads the centre. The FBI and the US Military are unsurprisingly suspicious of the centre saying it could be as a front for industrial espionage”. DM

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