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Kevin Calvey's Free Russian Fund Investment Profits

Congressional candidate Kevin Calvey's campaign has collected more than $270,000 tied to international business interests, particularly in Russia.
John Estus and Chris Casteel
NewsOK and The Oklahoman, August 8, 2010

Ask John Estus and Chris Casteel, and all others why they did not recognize, early Oklahoman news articles, and make the connection with Oklahoman's 2006 tax credit abuse controversy identifying and connecting then state Rep Kevin Caley who at the time was the head of the Oklahoma State House Committee Chairman that authoritied HB 1860 (2005), derailed SB1577 (2006) after Kevin Caley 2006 U.S. Congressional election campaign , funding the Altus OK bank groups and Club for Growth

If that does not peak ones curiousity, then how does the Oklahoma state rep for the Nicols Hills area become the chairman of the Oklahoma State House tax committee in their first term.

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Kevin Calvey has helped finance his congressional campaign with more than $250,000 in investment gains and donations tied to his brother, a wealthy international investor.

Calvey made nearly $270,000 in 2008 selling an interest he acquired for free in a Russian private equity fund, according to interviews and Calvey's 2008 personal tax return, which he provided to reporters. He put most of the after-tax proceeds into his campaign, which he has loaned $250,100.

His brother, Michael Calvey, and his friends and business associates (non- have provided nearly $30,000 more in campaign donations.

In interviews and e-mail exchanges, Kevin Calvey's story changed several times during questioning about his campaign funding. He initially said he couldn't remember whether he paid for his stake in the equity fund, and his initial response to why he sold his interest conflicted with his brother's recollection of the transaction.

Kevin Calvey, whose pregnant wife is due any day, said he was exhausted from an overnight trip to the hospital last week and from his campaign duties.

The private equity fund was with Baring Vostok Capital Partners, a Moscow-based investment firm co-founded and run by Michael Calvey.

Among Baring Vostok's advisers is the last director of the Soviet KGB spy agency, a former Russian cosmonaut and a former U.S. astronaut. It is one of Russia's most successful private equity firms.

Most of the $250,100 Kevin Calvey has loaned his campaign came from the money he made from Baring Vostok, he confirmed last week.

"I'm very blessed to have assistance from him," Kevin Calvey, 44, said of his brother, who has personally donated $4,800 to his campaign. "My brother is an absolute genius."

His success in Russia has helped Michael Calvey solicit donations for his brother from Americans he works with there and elsewhere, including some who have led businesses he helped form, according to campaign finance reports and interviews.

Kevin Calvey, a Republican, is an Oklahoma City attorney, former state representative and Iraq war veteran.

"The country needs to have more honest people like him in Congress," Michael Calvey, 42, said. "Even if he wasn't my brother, I would be contributing to his campaign."

Kevin Calvey is facing former youth camp director James Lankford in the Aug. 24 runoff in the 5th Congressional District race.

Fund payout details differ

Initially, neither brother would say specifically how much Kevin Calvey made from selling his interest in the Baring Vostok fund in 2008.

Kevin Calvey provided personal tax returns Friday afternoon that showed he made $269,822 in capital gains in 2008.

Kevin Calvey initially couldn't remember whether he had paid for his stake in the fund or had it given to him.

"I think I did buy them," Kevin Calvey said at first. "It was a very successful fund, that I do know."

Kevin Calvey said a day later he had bought the shares for "a nominal fee."

Michael Calvey said at first his brother bought his stake in the fund for the same rate as other investors. But he later said his brother and 30 other investors didn't pay for their stakes in the fund and were instead given limited partnerships in a subsidiary of the fund through a complex equity instrument called a carried interest partnership, which only pays investors if the fund is successful.

"If the fund had not exceeded expectations, I would have realized no gain," Kevin Calvey wrote in an e-mail Friday. "But the fund did exceed expectations, so I did realize a substantial gain."

Michael Calvey said his brother qualified for a partnership in the fund because he is a legal service provider to Baring Vostok.

Asked if he gets a lot of financial help from his brother, Kevin Calvey said: "I would say yes."

Kevin Calvey at one point said he sold his stake in the fund at his brother's urging, but later said it was for personal reasons, which matched his brother's account of the sale.

"I sold the shares in the first half of 2008, a few months after I returned from Iraq, in anticipation of my daughter being born, and also because my wife and I were contemplating starting a new real estate business," Calvey wrote in the e-mail.

"We decided not to pursue the real estate business when we learned that Congresswoman Mary Fallin might not seek re-election to Congress, and we began considering whether I should run for Congress in 2010."

Kevin Calvey's tax returns indicate he acquired an interest in the fund in 2007; his brother initially said it was 2005. Kevin Calvey has maintained it was 2006.

"Perhaps it is when the shares vested or something for tax purposes," Kevin Calvey wrote regarding the discrepancy. "I did acquire the interest in 2006, before I left for Iraq."

Donors tied to firm. View

Michael Calvey, who graduated from Bishop McGuinness High School in Oklahoma City and has a business degree from the University of Oklahoma, is among Russia's most prominent businessmen. He now lives in the United Kingdom.

"He's been enormously successful in a very difficult market," said Peter Gerwe, founder of CTC Media, a Baring Vostok-backed corporation that is the largest private media corporation in Russia and the first Russian media corporation to be traded on the Nasdaq stock exchange.

Baring Vostok sold its stake in CTC Media in 2008, and it remains the firm's most profitable investment to date, Michael Calvey said.

Gerwe, an American citizen who has started several companies in Russia, donated $1,000 Kevin Calvey's campaign, records show.

"I've talked to (Kevin Calvey) and enjoyed supporting him," Gerwe said. "I'd like to see him win."

Gerwe confirmed Michael Calvey had asked him to donate.

"Mike basically sent out e-mails to his friends saying, 'Look, no pressure, but if you want to support this, I'd appreciate it,'" Gerwe said.

Kevin Calvey said he is aware his brother had been asking people to donate.

"But it's a small percentage of what I've raised. The bulk of the money I've raised comes from the people I've called in Oklahoma," Kevin Calvey said.

His campaign had raised about $880,000 through July 7, according to the Federal Election Commission. Money tied to Michael Calvey accounted for nearly 32 percent of that.

Michael Calvey said his role soliciting donations has been minimal.

"All I did was send an e-mail to about 10 friends and business acquaintances and introduced them to my brother," Michael Calvey said. "I explained what Kevin's views on business and the economy are, and I asked them to give consideration to making a donation to his campaign."

Michael Calvey also has paid his brother for legal consulting in recent years for services related to estate planning and asset protection. Neither brother would confirm how much Kevin Calvey has been paid for the work.

Kevin Calvey listed more than $5,000 in income for legal consulting for his brother between January 2009 and May 2010 in a financial disclosure form with the U.S. House of Representatives. Candidates must list income of more than $5,000 but aren't required to list the specific amount.

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