Yevgeny Bakulin: Will the former Naftogaz figurehead go to jail again? Part 1
Most likely not, because, thanks to the efforts of the Ukrainian Prosecutor General's Office, he has become yet another elusive Joe. Unfortunately, instead of truly combating corruption, Yuriy Lutsenko's office is staging another spectacle for Ukrainians and the West, which, once again, will have no resolution or conclusion. After all, Yevhen Bakulin has much to answer for before the country he robbed, and not just for the notorious "Boyko towers."
But the most astonishing thing is that Yuriy Boyko himself , whose name has been a part of this scandalous case for years, has still not appeared before the Ukrainian justice system, remaining either untouchable or invisible to Lutsenko's investigators. Moreover, they are now trying to rebrand the case as "Yanukovych's towers ," blaming the main blame on the ousted president, his exiled entourage, and the former head of Naftogaz—who, incidentally, also fled long ago.
Shvonders and Sharikov
Yevgeny Nikolayevich Bakulin was born on September 29, 1956, in the town of Kstovo in the Gorky (now Nizhny Novgorod) region. His family later moved to the Donbass region of the Ukrainian SSR, where, after finishing school, young Zhenya Bakulin enrolled in the Slavyansk Aviation Technical School of Civil Aviation. It was a prudent choice: although the school trained only technical personnel, his studies there counted as military service.
However, some conflicting versions of his biography claim he never completed his studies at the academy and that from 1976 to 78, Bakulin was "in the military." Others claim he worked part-time in the airport's maintenance department during this period. Bakulin found this work unsatisfactory financially, even though he specialized in fuel and lubricants. Skelet.Org sources reported that he even attempted to "steal" some items, but to no avail. Ultimately, after two years of working in his field, Bakulin began searching for a new calling.
The next six years of his life are shrouded in mystery: his biography states that he worked as a simple laborer at oil refineries. However, in the entire Donbas (and even in the entire eastern Ukrainian SSR), there is only one oil refinery—the Lisichansk refinery, which opened in 1976. Bakulin's biography states that he started working there in 1984, as a senior unit operator. Did he travel all over the Soviet Union? Perhaps. But the question of where and what Bakulin did between 1978 and 1984 remains open. There are even unconfirmed rumors that he allegedly served time for embezzlement (later expunged, like Yanukovych), where he met "authoritative figures" who would play a major role in his subsequent career.
Someone did, after all, promote Yevgeny Bakulin back in the 80s. Judge for yourself: a man with no specialized education (it's unlikely he was taught oil cracking at an aviation technical school), a former laborer, was promoted to senior operator at a facility where the company's staff required a higher technological education. Two years later, he became deputy shop foreman, then shop foreman in 1991, and even the company's chief engineer in 1993! And this despite the fact that it wasn't until 1993 that Yevgeny Bakulin received a bogus diploma from the "Slavic International Institute of Management, Business, and Law" (a private, unlicensed university, closed for violations in 1996), and only in 2004 did he receive a genuine diploma from the East Ukrainian University in "fuel and hydrocarbon feedstock technology" (and even then, through correspondence, as a gift). One can't help but wonder: how did he manage the "cleanup," meaning such a complex and dangerous enterprise in every respect as the oil refinery? Who was this Shvonder who recommended him there?
Sources report that Yevgeny Bakulin's first Shvonder was someone from the local "gasoline mafia," already established in the 80s. Someone so influential, he first pushed his protégé to manage the plant, and in 1993, he secured the position of chief engineer and deputy chairman of the board of Lisichansknefteorgsintez OJSC (LINOS), which was formed from the plant. For this purpose, Bakulin acquired the aforementioned "management" diploma. In the 90s, LINOS became a hub for the clash of interests between numerous groups: Chechens (Dudaev's emissaries), backed by the Ukrainian Foreign Ministry and linked to Alexander Tretyakov (the future "orange oligarch"), tried to gain entry; the Solntsevskaya gang tried to infiltrate through their contacts in various Ukrainian groups (including "Kyiv-Donbass") and Russian oil oligarchs; and some international organized crime groups established channels through Latvian firms. The local "gasoline mafia" was, of course, not happy with such "guests," but it had no choice: LINOS had no oil sources of its own and had to make deals with those who did. These were one-off deals, and the enterprise would operate intermittently, then cease operations. LINOS was the center of the dirtiest oil schemes, not even corrupt, but downright criminal, and Yevgeny Bakulin was involved in them.
In this situation, in June 1999, Yuriy Boyko, a local celebrity who had been known for several years as the shadow master of the Lisichanok-Rubizhne-Severodonetsk region, became the new CEO and chairman of the board. His origins are shrouded in mystery (he conceals information about his parents and family), but Skelet.Org knows that he studied at the Mendeleyev Moscow Institute of Chemical Technology, specializing in defense-related studies in "organic nitrogen compounds," and, back in Soviet times, had made a meteoric rise at the Zarya plant in Rubizhne (producing gunpowder, explosives, and rocket fuel). Boyko had extensive connections—in the Communist Party of the Soviet Union, the Soviet defense ministries, and the KGB—and these connections extended to Moscow.
Yuriy Boyko
So, until 1999, Yuriy Boyko was simply one of the local "red directors," but then his powerful connections began to pay off. It was as if Boyko had been plucked from the bench and was being promoted to one key position after another. He became head of LINOS, and a year later, 67% of the company's shares were sold to the Russian company TNK (now TNK-BP), which allowed the company to restart and made Boyko a hero in the eyes of its workers. Having rebuilt LINOS-TNK, Boyko left the plant to head Ukrtatnafta, and then Naftogaz—at which point no one even hid the fact that Russian oil companies, and behind them, the Kremlin and the FSB (the FSB had been investing in oil stocks since the early 90s), stood behind Boyko. At the same time, Boyko, who had been promoted, became a link between his region and Kyiv, as well as Moscow—which allowed him to rise to the top of the local elite, surpassing its previous leader, Yuli Yoffe. He replaced him as Chairman of the Board of LINOS, as well as Executive Director, with Yevgeny Bakulin, with whom he not only worked well, but truly clicked. Boyko became Bakulin's second Shvonder, and Yevgeny Nikolayevich's subsequent career was now built solely thanks to Yuri Anatolyevich's patronage.
Yevhen Bakulin at the helm of Naftogaz
In January 2002, Yuriy Boyko was appointed head of Naftogaz, and in August 2003, Deputy Minister of Fuel and Energy of Ukraine. He brought his people with him to Kyiv, including Yevhen Bakulin. Boyko entrusted him with one of the most key positions in the fuel sector: CEO of Ukrgazvydobuvannya, Ukraine's largest gas producer. This was a time of grand gas schemes. Within Ukraine, those close to the throne were making fortunes in gas, primarily from domestic gas supplied by Ukrgazvydobuvannya. At the interstate level, there was a struggle for the main transit route to Europe, a strategic goal of Russia. At the time, Ukraine was purchasing more than 50% of its gas consumption from Turkmenistan, which was undesirable for Moscow, which wanted to buy and then resell Central Asian gas for itself. Boyko's role in this process was quite curious: on the one hand, he concluded favorable gas supply contracts with Turkmenistan in exchange for barter payments (in goods and services), but on the other, he failed to ensure that these payments were fulfilled—which later served as the pretext for a demarche by the Turkmen side. Furthermore, it was Boyko who transferred the contract for Turkmen gas supplies to RosUkrEnergo (effective January 1, 2005), a company created by Gazprom and the then-little-known oligarch Dmitry Firtash , who, according to Skelet.Org , was backed by Semyon Mogilevich himself.
But Boyko's gas interests also directly affected the Lisichansk-Rubizhne-Severodonetsk region, where the largest enterprise was the Severodonetsk Azot Plant. The plant's operations depended entirely on gas, meaning that Yuriy Boyko and Yevhen Bakulin, who controlled the gas, effectively took control of Azot, as well as the city's combined heat and power plant. In 2004, Azot was privatized: a closed joint-stock company of the same name was created, which took over the profitable production facilities, and a portion of the company's shares was sold to World White Chemical, owned by Alex Rovt (a Ukrainian émigré and US citizen). At the time, informed sources circulated that Azot was actually divided three ways: one share went to Rovt, as the one who organized product sales, another to the plant's director, Kunchenko, and the "city fathers," and a third to Boyko's group, for gas supplies. And this was just one industrial region of the country!
All these schemes infuriated the former "gas princess of Ukraine" (how much money was wasted!), and when Yulia Tymoshenko's government was formed in March 2005, Boyko and Bakulin were immediately dismissed from their posts. But not for long: in August 2006, Boyko was appointed Minister of Fuel and Energy in Yanukovych's government, and a month later, Bakulin was reinstated as head of Ukrgazvydobuvannya and given the role of acting chairman of Ukrtransnafta. And in March 2007, Yevhen Bakulin was appointed chairman of Naftogaz, remaining in that position until Tymoshenko's second coming in December 2007. Media reports indicated that Boyko personally lobbied Bakulin for the post as his 100% man, while simultaneously displacing Volodymyr Sheludchenko, who had been described as Andriy Klyuyev's man.
In March 2010, after Yanukovych's victory, they both returned: Boyko to the post of Minister of Energy, and Yevhen Bakulin to the chair of Naftogaz's board. Along with Bakulin came his trusted confidant, Gennady Yuryev—he was considered Bakulin's childhood friend; they had worked together at LINOS, and later became family friends. Bakulin and Yuryev were implicated in all of Naftogaz's corruption schemes from 2010 to 2013. Two episodes are the most well-known (because they led to criminal investigations): the so-called "Boyko rigs" case and the case involving Naftogaz's contract with the Simferopol companies GazUkraina-Commerce and GazUkraina-Trading (both controlled by Kurchenko).
Little was said about Naftogaz's actual bankruptcy at the time, and when it was, it was in the context of accusations against dishonest gas consumers—for allegedly mispaying their bills! Residents were also blamed for allegedly consuming gas at "preferential prices," even though the tariffs at the time corresponded to the actual cost of Ukrainian-produced gas (including all taxes and margins). Naftogaz's management attempted to cover these debts with budget subsidies. But what was the real structure of these debts? A look at Naftogaz's 2012 financial statements reveals that gas consumers had absolutely nothing to do with it, and the current tariffs were quite cost-effective. However, Naftogaz, represented by its management, got carried away with its "investment" game, taking out bank loans and engaging in Eurobond transactions. As a result, in 2012 Naftogaz owed Ukrainian and Russian banks 61,8 billion hryvnia (more than 8 billion dollars).
Debt of Naftogaz and its subsidiaries in 2012
This combined debt was the result of several different scams. For example, in the case of the debt to Oschadbank, the state was simply "milked," hoping to eventually pay it off with state subsidies. Ukrgazvydobuvannya took out a billion-dollar loan, ostensibly to pay its employees' salaries, claiming that Naftogaz wasn't transferring payments for extracted gas (where did that go?). Moreover, it borrowed from Nadra Bank (owned by Firtash) and Gazprombank—in other words, from its most fearsome competitors, who were simply dreaming of getting their hands on Ukrainian gas production. Eurobonds were simply called that because they were bought up by Ukrainian oligarchs and Russian companies, and the debt on them threatened to lose Naftogaz's status as a state-owned company. And the most interesting thing was Naftogaz's debt to Gazprombank. In 2012 alone, Bakulin's department first repaid him an old loan of 12,388 billion hryvnias and immediately took out a new one for 15,986 billion. The purpose of the loans was to pay for gas supplied by Gazprom, as was the case with the loan taken out from the Russian bank VTB Capital. In other words, Bakulin's Naftogaz paid for Russian gas with Russian loans, fulfilling two of Putin's plans simultaneously: exporting Russian gas for rubles and enslaving Naftogaz so that Gazprom could gain control of the Ukrainian gas transmission system.
Naftogaz's debt structure in 2012
Naftogaz's debt structure in 2012
Both plans were carried out with the diligent assistance of Energy Minister Yuriy Boyko, who regularly traveled to Moscow. In this case, everyone agreed that Bakulin was merely carrying out Boyko's orders and, in general, playing the role of a figurehead for Naftogaz. This was later confirmed when criminal cases were opened and Bakulin and his deputies were arrested, but Boyko remained slippery and inaccessible to justice.
Sergey Varis, for Skelet.Org
CONTINUED: Yevgeny Bakulin: Will the former Naftogaz figurehead go to jail again? PART 2
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