Democratic congressman Bill Pascrell of New Jersey has asked the Treasury Department to scrutinize Prokhorov's investment empire for ties to Zimbabwe's notorious dictator Robert Mugabe, whose regime is subject to strict U.S. sanctions.Well, it's a little more complicated, isn't it? Is Renaissance Capital's only presence in Zimbabwe stock research, as a spokesman for the firm, owned in significant part by Prokhorov, told the Times?
"I really encourage foreign investment in the United States of America," says Rep. Pascrell, "but I believe we have an obligation and responsibility to very carefully investigate the people and companies involved, and I believe we have not done that in this particular case."
Pascrell admits he's disappointed to see the Nets leaving home state New Jersey (after spending the coming two seasons in Newark). He is outraged by what he calls the lack of transparency in the background check the NBA says it conducted this spring.
...In 2008, Prokhorov bought half of Renaissance Capital, an investment bank with numerous interests in the former Soviet states and Africa. Stern vigorously disputes Rep. Pascrell's claims that the bank's business with Zimbabwe violates trade law.
"There have been allegations, but there have been no facts," says Stern. "We're satisfied on the issues that were raised."
...In another economic climate, this background would not fly with the NBA Board of Governors, says Dave Zirin, the author of the forthcoming book "Bad Sports: How Owners Are Ruining the Games We Love."
"There are numerous reports on the public record that Mikhail Prokhorov made a great deal of money in ways that might raise an eyebrow or two," says Zirin. "It's not a question of whether he was vetted, but of how much Stern was willing to overlook."
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David Stern says that the firm the NBA hired to investigate Prokhorov's business background could find no reason why he shouldn't be an owner. He wouldn't name the firm because he worries that identifying it might compromise the firm's ability to conduct future investigations. Stern did say it was not a law firm, and that the league has used the group's services in the past.
"We retained a firm that has important investigative assets and contacts on a global basis," says Stern. "We made additional discrete inquiries of various agencies and departments that are not at liberty to talk to us on the record. We made a complete round of inquiries."
The Times whiffed, but the Zimbabwe government newspaper stated that Renaissance Capital was among several companies that "have confirmed their participation" in an investment summit in February.
The conclusion to the article comes from Russian NBA star Andrei Kirilenko, who plays for the Utah Jazz:
"He's not just going to be good for the Russian community," says Kirilenko, who peruses the bookstores of the Russian enclave of Brighton Beach when he visits New York, "everyone in the area is going to like him."