Burlington Northern Santa Fe Railway

Golden Boy

31-year-old Texas millionaire Phillip A. Rose, the director of a Mexican gold mine and two St. Louis real estate corporations, has a soft spot for Republican Senate Majority Leader Mitch McConnell and so does his daddy.

Phillip A. Rose, whose wide-ranging business interests includes St. Louis real estate and a Mexican gold mine, contributed $5,000 to Senate Leader Mitch McConnell’s successful reelection campaign this year, according to campaign finance records. Rose’s father, retired Burlington Northern Santa Fe Railway CEO Matthew K. Rose kicked in another $2,800 to McConnell’s coffers. The elder Rose contributed an additional $10,000 to the Kentucky Republican Party in 2020.

U.S. Senator Mitch McConnell (R-Ky.) enjoying his visit to Fort Knox in 2017. Mexican gold mine owner Phillip A. Rose and his father donated  more than $17,000 to the senator’s reelection campaign and the Kentucky Republican Party this year.

The two bundled payments by Phillip A. Rose represented his only political donations during the election cycle.

Father and son own controlling interest in the San Jose de Gracia gold mine in the Mexican state of Sinaloa, which is under control of the Sinaloa Cartel. The Roses are invested in the gold mine through a limited liability company, Golden Post Rail. Golden Post Rail owns an 80 percent stake in Dallas-based DynaResource.  Since 2017, the mine has been the alleged target of a money-laundering investigation by the Financial Intelligence Unit of the Mexican government, according to a press account published in La Razón newspaper in May.

McConnell did not support the Trump administration’s efforts to increase tariffs on Mexico last year.

In Missouri, Phillip A. Rose is the manager and director of two Texas-registered limited liability corporations active in real estate investment in St. Louis. His fellow manager and director in AKR Ventures LLC and RedRose Capital LLC. is James Ryan Redlingshafer Jr.

Redlingshafer Jr., 31, is also tied to another real estate business — Artemis Holdings LLC — with his father, James Ryan Redlingshafer Sr. Together they own a rental property in Richmond Heights that garnered media attention recently for violations of city and county laws during the demolition inside the building.

 

 

 

South of the Border

This residential property at 5844 Marquita Ave. in Dallas is the registered address for AKR Ventures STL LLC and RedRose Capital LLC. Incorporation records tie both companies to James Ryan Redlingshafer Jr. of St. Louis and Phillip A. Rose, son of retired BNSF Railroad exec Matthew K. Rose.

One degree of separation: A Texas financier, with a stake in a controversial Mexican gold mine, is hooked up with St. Louis real estate baron James Ryan Redlingshafer Jr.    

The Mexican government’s Financial Intelligence Unit (UIF)  investigated a Dallas-based gold-mining company for alleged money laundering, according to a newspaper report in the Spanish language press published earlier this year. A director of that company is a business associate of St. Louis real estate investor James Ryan Redlingshafer Jr.

Redlingshafer, who resides in University City, is the organizer of St. Louis-based Artemis Holdings LLC with his father, James Ryan Redlingshafer Sr. That company received local media coverage last month for its violations of municipal and county laws related to demolition work on a Richmond Heights apartment building.

Though more far-flung, Redlingshafer Jr.’s other real estate ventures have garnered less attention, including the joint directorship and management of two Texas corporations with Phillip A. Rose of Westlake, Texas.

The range of Rose’s business activities is even wider. His diverse interests include sitting on the board of directors of DynaResource, the Dallas-based mining company, which controls a majority stake in the San Jose de Gracia gold mine in Mexico. He and his father, Matthew K. Rose, former CEO of the Burlington Northern Santa Fe Railway, own a controlling interest in the mining company through Golden Post Rail, a limited liability corporation.

Mauricio Flores, who writes the People Behind the Money column for La Razón de Mexico, discounts the possibility that the St. Louis real estate dealings are related to the subject of his reporting. He has, however, questioned why a reputable American financier would allow himself to become entangled in such a controversy. His May 5 column says DynaResource has been allegedly under investigation by the UIF since 2017 related to its gold-mining operations in the Mexican state of Sinaloa.

Journalist Mauricio Flores writes the People Behind the Money column for La Razon de Mexico.

Flores reported that the government probe stems from questions raised by a 2014 U.S. Security and Exchange Commission filing, which attracted the Mexican anti-corruption agency’s attention to gold ingots that DynaResource claimed were produced at the mine. That claim raised official eyebrows because the mine is not known to possess technology capable of processing raw ore into ingots, Flores reported. Other unidentified UIF records cited by Flores allege an unnamed mining company director’s assertion that the ingots were transferred to the mining company by an unidentified member of organized crime. Flores reported that Mexican authorities were  first alerted to the alleged money laundering in 2017 by Keith Piggot, the then-CEO of GoldGroup, a Canadian mining company. Over the last decade, DynaResource has been mired in litigation with GoldGroup, which holds a minority interest in the mine.

However sketchy this may seem, the allegations merit consideration because DynaResoure’s San Jose de Gracia gold mine is located in a region that is under the control of the Sinaloa Drug Cartel. The territory is essentially lawless, and thousands of its inhabitants have been displaced in recent years due to violence attributed to drug traffickers. Inexplicably, Sinaloa’s gold-mining operations have grown during the same time period, leading some informed sources to suspect that mine operators are paying protection money, or falling directly under the control of the cartels.

If this were not enough, DynaResource has encountered continuing labor and safety troubles at the mine. But these ongoing issues did not deter Golden Post Rail from investing $3.9 million in the company this year.

The Treasures of the Sierra Madre

Phillip A. Rose’s financial interests are not confined to The Treasures of the Sierra Madre, however.

North of the border, he and Redlingshafer Jr. are managers and directors of RedRose Capital LLC and AKR Ventures STL LLC — two Texas-based limited liability corporations engaged in acquiring real estate in Missouri. Redlingshafer Jr. is also the registered agent of the two companies. But the mailing address for both is listed as being hundreds of mile away from his suburban home in the St. Louis suburb of University City. According to Texas incorporation records, the registered address for the companies is  5844 Marquita Ave., a single-family residence in Dallas.

In this case, there is no proof of wrongdoing. It may even be argued that such unfettered capitalism is emblematic of good-old fashioned American (and Mexican) free enterprise. But but these transactions are also bereft of any transparency. In recent years, Byzantine networks of limited liability corporations have been the subject of investigations that have uncovered how such shell companies are used by the wealthy to secretly acquire real estate to hide assets and avoid taxes. These backroom transactions may be legal or illegal, but their purpose is the same. Since the publication of the Panama Papers in 2016 not much has changed.

Pending legislation before the lame duck session of Congress is seeking to shed some light on this dark place.

In an op-ed that appeared in The Hill this week, Rep. Carolyn B. Maloney (D-NY), House sponsor of the Corporate Transparency Act, outlined the problem and what is at stake:

“… Corporations and limited liability companies (LLCs) are formed at the state level in the U.S., and no U.S. state currently requires companies to disclose their true, beneficial owners. This means that the U.S. is the world capital of anonymous shell companies — and is a hub for not just money laundering but also terrorist financing. Yes, that’s right — the same terrorist groups that attack the U.S. are also using the U.S. financial system to move their money, and to finance their operations. It’s appalling, and it has to end. …”