By Lia Avagyan
Konstantin Sokolov, the Russian-born businessman heading a $201 million U.S.-backed investment fund established to support the Trump Route for International Peace and Prosperity, or TRIPP, and wider Trans-Caspian trade, has major business interests in Armenia that six ethics experts told Reuters create a conflict of interest.
Sokolov, 51, holds major stakes in Viva Armenia, the country’s leading mobile phone operator, and purchased Armenia’s second-largest copper and molybdenum mine earlier this year after receiving special U.S. government authorization for the transaction.
The ethics experts said the conflict arises because Sokolov’s role gives him control over government money that could potentially benefit his companies.
“I think Congress should be asking questions,” Ann Skeet, an ethics expert at Santa Clara University, said.
The investigation found no indication of wrongdoing by Sokolov. U.S. legislation governing such investment funds does not prohibit directors from holding investments in the regions where the funds operate.
A representative for Sokolov’s private equity firm, IJS Investments, said the fund was prohibited from investing in any of his businesses and that Sokolov had complied with “all due diligence and security requirements.”
A State Department spokesperson said the enterprise fund would comply with annual reporting requirements and independent audits, as well as applicable conflict-of-interest requirements.
Also read: Russia-born U.S. entrepreneur with businesses in Armenia to head Washington’s TRIPP fund
From TRIPP+ to a wider regional fund
Sokolov was put in charge in January of the investment vehicle now called the Trans-Caspian Enterprise Fund, according to incorporation documents reviewed as part of the investigation.
The vehicle was initially presented as the TRIPP+ Enterprise Fund. It has since been renamed the Trans-Caspian Enterprise Fund, with a broader regional mandate covering the South Caucasus and Central Asia and supporting TRIPP as well as wider Trans-Caspian trade.
The fund’s board, led by Sokolov, can make grants, loans and investments in Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. Its website lists critical minerals, energy and rail infrastructure among its main investment priorities.
The fund is part of a broader U.S. push to develop trade routes and investment across the South Caucasus and Central Asia, an effort that could reduce the region’s reliance on Russian and Chinese infrastructure.
Sokolov and Chinese businessman Zhe Zhang acquired control of Viva Armenia in January 2024 from Russia’s largest mobile provider, MTS, according to company statements and Armenian corporate records.
More recently, Sokolov’s Texas-based Dynamic Frontier Holdings said it received authorization from the U.S. Treasury Department’s Office of Foreign Assets Control, or OFAC, on June 1 to buy the Teghout mine from sanctioned Russian state-owned VTB Bank.
OFAC licenses permit transactions that would otherwise be prohibited under U.S. sanctions and typically take several months or years to process. A representative for Teghout said the licenses and approvals were obtained through OFAC’s “standard independent regulatory process.”
A review of the three other active U.S. enterprise funds, focused on Egypt, Tunisia and Ukraine-Moldova, found no indication that their heads had significant business interests in the countries where those funds operate.
Also read: Russian bank exits Armenia’s Teghut mine as investigation identifies new controlling owners
Russia ties and Republican donations
Sokolov’s previous business activity connected to Russia also drew scrutiny.
His personal biography says he grew up in St. Petersburg, disliked the Soviet government and immigrated to the United States at 21. Corporate and government records, however, showed that his ties to Russia continued long after he left.
Two ethics experts said Sokolov’s purported ties to the Russian government warranted scrutiny to ensure U.S. interests came first in managing the fund.
Richard Painter, a University of Minnesota professor who served as ethics counsel to former U.S. President George W. Bush, said: “I’d want a very thorough security clearance review if I were in the US government.”
A 2015 promotional brochure for the now-defunct Gotthard Investment Fund, a Russia-focused real estate investment operation where Sokolov was listed as a fund manager, highlighted what it described as “strong and long-lasting personal and professional trust relationships” with Moscow, St. Petersburg and federal governments.
A former project manager with the fund said they recognized the brochure as authentic. Lawyers representing Sokolov said he “does not believe” the brochure is authentic and said its logo did not appear to be one used by the fund.
Sokolov’s representative said he has no relationships with Russian government officials or the Russian government and does not hold Russian citizenship.
The reporting could not independently confirm that Sokolov no longer has Russian citizenship. Travel records showed he used a Russian passport for international travel as late as 2016.
Sokolov has also donated about $13 million to Republican political groups, according to Federal Election Commission data.
He was among 37 corporate and individual donors listed by the White House for U.S. President Donald Trump’s White House ballroom project. The Washington Post reported that Sokolov donated $1 million to the project.
The White House referred questions about Sokolov to the State Department. The department did not provide details about his background check or say whether he had a security clearance.
Stories
