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Island law firm named in anti-fracking funding controversy

Controversy: An anti-hydrofracking sign, in Cooperstown, New York. A Bermuda law firm has been named in documents that contain allegations Russian oil tycoons are funding anti-fracking campaigns in the US

A Bermuda legal firm has been named in documents that contain allegations Russian oil tycoons are funding anti-fracking campaigns in the US.

Wakefield Quin, based in Hamilton’s Victoria Street, is the home of Bermuda-based Klein Ltd which paid millions of dollars to charity Sea Change Foundation, which supports prominent US environmentalist groups like the Sierra Club.

The Sierra Club — which received $8.5 million from the foundation in 2010-11 — launched a campaign called Beyond Natural Gas in 2012 to fight fracking — the use of high pressure water mixed with sand and chemicals to break open rock and release gas and petroleum — and natural gas extraction.

Widespread use of the technique in the US has reduced the need for imports — further damaging the struggling Russian economy.

The funding of charities is not illegal and there is no suggestion anyone involved has broken the law — but questions have been raised about Klein’s activities by the US Senate Environment and Public Works Committee last year.

The Committee’s report on Klein — which includes a reference to Wakefield Quin’s managing director Nicholas Hoskins as being a director — said: “None of this foreign corporation’s funding is disclosed in any way.

“This is clearly a deceitful way to hide the source of millions of dollars that are active in our system, attempting to effect political change.”

The links between Wakefield Quin, Russian big business and Klein were reported on this week in the Washington Free Beacon.

Mr Hoskins, in an e-mailed statement to The Royal Gazette, said: “We have reviewed the article which appeared in the Washington Free Beacon on January 27, 2015.

“The article is full of unfounded speculation, innuendo and is simply not accurate.

“For reasons concerning client confidentiality, we are not able to comment on the business of our clients suffice to say Wakefield Quin Limited denies in the strongest terms any wrongdoing.”

Mr Hoskins added: “We note that the Washington Free Beacon and its sources have been attacked by reputable media critics and watchdog groups in the past and we question their motivation in publishing this unfounded article.”

Klein Ltd is run by California-based hedge fund millionaire Nathaniel Simons. Several Wakefield Quin lawyers are listed as directors of companies he manages and in which the Sea Change Foundation had assets while it was being funded by Klein Ltd.

Wakefield Quin lawyer Roderick Forrest is listed as a director of San Francisco-based Meritage Holdings, while Mr Simons is a non-executive director.

Mr Forrest is also a director of Medallion International Ltd, a hedge fund management firm with close links to Mr Simons’ father Jim Simons.

Both companies have listed the Bermuda offices of Wakefield Quin on filings with the US Securities and Exchange Commission.

Klein Ltd was incorporated in Bermuda in 2011 “exclusively for philanthropic purposes” and a statement to the Registrar of Companies said that none of the earnings would go to private shareholders or individuals and that it did not propose to carry out business on the Island.

Wakefield Quin and its lawyers have Russian oil and gas companies as clients — including the massive Rosneft, which is majority owned by the Russian government. Mr Hoskins has also been listed as a director of firms associated with Russian oil and gas interests.

Mr Hoskins has served as vice-president of London-based Marcuard Services Ltd whose president, also chairman of Bermuda-based parent Marcuard Holding Ltd, is Hans-Joerg Rudloff, deputy chairman of Rosneft until 2013.

In 2012, Mr Hoskins and Mr Forrest were listed as directors of Spectrum Partners, a fund with offices in Bermuda, Moscow and Cyprus and substantial holdings in the oil and gas industries.

The former Secretary General of the western military alliance NATO, Anders Fogh Rasmussen, said last year: “I have met allies who can report that Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organisations — environmental organisations working against shale gas — to maintain European dependence on imported Russian gas.”

Wakefield Quin was embroiled in a long-running investigation into Bermuda-based IPOC International Growth Fund Ltd, incorporated in Bermuda in 2000.

IPOC, which had a string of subsidiaries in the British Virgin Islands, was eight years later fined $45 million in a BVI court after pleading guilty to perverting the course of justice and furnishing false information.

Three BVI IPOC subsidiaries were ordered to stump up a total of $2.5 million.

Earlier, in 2006, the Bermuda Monetary Authority declassified the fund as Bermuda-registered and a month later the Registrar of Companies asked The Supreme Court to wind up IPOC and eight related firm on the grounds of regulatory breaches.

Wakefield Quin and the Bermuda Commercial Bank were among local firms which provided services to IPOC, which was found to be owned by former Russian Telecommunications Minister Leonid Reiman.

Wakefield Quin’s Mr Forrest had served as a director of five IPOC firms and as vice-president of IPOC International Growth Fund.

Then-Finance Minister Paula Cox said that an investigation had found that IPOC had not broken any laws in Bermuda and that local service providers were blameless.