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An article we published on D.C. Council member Brooke Pinto was deeply flawed
On October 29 we published an article raising questions about the largely self-financed campaign of Brooke Pinto, a member of the D.C. Council who was standing for reelection. In particular we highlighted the longtime business relationship that her father, James Pinto, had with Moscow CableCom Corp. and its Russian-owned successor firm, Renova, which the Treasury Department had sanctioned for “worldwide malign activity.”
Given Russia’s well documented, covert interference in the 2016 and 2020 elections, we were concerned about that relationship, as were two former CIA officers with deep Moscow experience, whom we quoted.
We repeatedly sought pre-publication comment from Brooke Pinto about her father’s current relationship with Moscow CableCom Corp. and with Renoiva, but she did not respond. We also repeatedly reached out to James Pinto with the same question, but he did not respond, either. Likewise, the Treasury Department’s Office of Foreign Assets Control, which administers and enforces sanctions, did not respond to our queries. We noted all this in our story.
This week, however, James Pinto’s attorney, Chris Schultz, of the New York firm of FisherBroyles, called to inform us that Mr. Pinto had, in fact, resigned from the board of Moscow CableCom Corporation on July 19, 2007, and that he has had no further dealings with the company or Renova since then. He supplied us with a Securities and Exchange Commission document that persuasively backed up his assertion, thus undercutting our overarching theme that James Pinto’s Russian business interests posed a threat to D.C. voters, not to mention the national security of the United States.
As a result, we are retracting our story in its entirety and taking it down from our web site. We feel we did perform due diligence on the question of James Pinto’s relationship to Moscow CableCom Corp. and Renova, but we still fell short. We intended no malice toward them, but made an honest error in our interpretation of the available evidence. We deeply regret the error.
But SpyTalk readers, not to mention the Pinto family, deserve an explanation of how we reached our initial conclusion. First, we had obtained an SEC document stating Pinto would remain on the Moscow CableCom Corporation board until January 2008 following the company’s merger with Renova. Since Moscow CableCom Corp. was now a wholly-owned subsidiary of Renova, a Russian company, it was no longer required to file reports with the SEC. This left us to wonder whether James Pinto had remained on the board after 2008. We saw no evidence that he had resigned. Brooke Pinto had also dodged questions about the possible Russia-connected financing of her campaign in a story by the local DCist news outlet, dismissing the questions as a “dark web conspiracy.” She did not respond to our own.
Lauren Wolfe, a D.C. attorney who specializes in cases involving money-laundering and U.S. Treasury sanctions, and who had originally brought this issue to our attention and shared her extensive SEC research with us, told us she had asked “multiple” sanctions experts to examine Mr. Pinto’s connections to the Russian firm and had found no evidence that he had resigned. Deeply troubled, she said she had reported her concerns to not just the Treasury Department, but the FBI as well.
Moreover, FactSet, a respected Lexis Nexis-style database for financial researchers, still had Pinto listed as a board member of Moscow CableCom Corp. as of June 2020.
This week, Schultz called our attention to a subsequent SEC merger document, which he said required Pinto to step down once the merger took effect in July 2007. He provided us with a “Definitive Proxy Statement” document filed with the SEC that neither Wolfe, her experts, nor SpyTalk had previously seen.
And there’s a good reason why. Section 7.13 of Annex A of the document makes no specific reference to a Pinto resignation. It says only, “The Company shall use commercially reasonable efforts to obtain the written resignation from the Company Board of each member of the Company Board prior to the Effective Time, such resignations to take effect at the Effective Time,“ referring to the July 19, 2007 date when the merger took effect.
So we pressed Schultz further for specific mention of Pinto’s resignation.
“The wording of 7.13 is the standard wording for the merger covenants that apply when the merger is closed,” he replied. “The company being acquired can't force each director to resign, should they refuse to do so. But as I mentioned, every public company director does so because they do not want to have potential liability for actions that the acquiring company takes post-merger. If a director refused to resign, the acquiring company would simply remove them from office by unanimous written consent of the sole shareholder after the merger closes.”
He added that, “In this case, my team drafted the letters of resignation, and I delivered them to the directors, obtained their signatures prior to closing, and delivered them to Renova at closing.” We were troubled that he said he no longer had “access to the letters of resignation because I was a partner at another law firm when I worked on the merger and no longer have access to the files.” But we are accepting his “assur[ance] that Mr. Pinto resigned.”
As to FactSet’s listing that still had James Pinto on the board of Moscow CableCom Corp., Schultz responded that “their information is often inaccurate. When we contacted them today, they were grateful for the correction and immediately corrected the entry to delete the reference to Mr. Pinto.”