Natalia Yaresko
Since Natalia Yaresko's appointment as Minister of Finance of Ukraine, the internet has exploded with various "publications" and "exposés." Most of them were in foreign languages or provided links to English-language resources. However, for most readers, it wasn't immediately clear what exactly was so suspicious about Natalia Yaresko.
Let's answer briefly. Natalie Jaresko is a friend of Catherine-Claire Chumachenko, the wife of former President Viktor Yushchenko, who rose to power thanks to the so-called "Orange Revolution." The text of the article most often cited as evidence is " Meet and Greet Natalie Jaresko, US Government Employee, Ukrainian Finance Minister."
Based on the article, it is clear who the new minister is.
SKELET-info offers you its original translation of this material. Draw your own conclusions:
(P.S.: Links to www.horizoncapital.com.ua no longer open. However, the information remains in Google's cache.)
Meet and greet Natalia Yaresko, U.S. government official, Ukrainian Minister of Finance
In addition to John Helmer's article about how the US is closely monitoring its client state, Ukraine, through the appointment of its employee, Natalia Yaresko, as Minister of Finance, we suggest you read the following publications in the German press:
Ukraine: US-Investment-Bankerin ist neue Finanzministerin
There's a sneaking suspicion that the US press will overlook the appointment of new Finance Minister Natalia Yaresko and her ex-husband's accusations that she secured fraudulent loans from an investment company financed largely, if not entirely, by the US government. As Helmer writes:
It's quite common for American spouses to manage business assets in the former USSR and profit from US government-guaranteed profits using information obtained through their position or connections within the government. It's rare for them to fall out over the spoils...
The author, John Helmer, is a longtime foreign correspondent in Russia and the only Western journalist to head his own bureau, independent of any national or commercial ties. He is the first and only member of the US presidential administration (Jimmy Carter) to establish himself in Russia. Original article: ( Dances with Bears).
Natalia Yaresko
Ukraine's new finance minister, Natalia Jaresko, converted her American citizenship to Ukrainian earlier this week, but her employer remains the US government, long after she announced she was leaving the State Department. Court and other written records in the US reveal that Jaresko, as a co-owner of an asset management company and Ukrainian investment funds registered in Delaware, relies on a $150 million grant from the US Agency for International Development for her salary and investments. US sources indicate that, according to information from her ex-husband, Jaresko committed financial crimes.
Natalie Jaresko was appointed to the post (Minister of Finance of Ukraine) on Monday (December 01, 2014 – ed.), and her appointment was approved by the Verkhovna Rada on Tuesday evening ( Rada supports coalition-proposed government lineup ). The president's Twitter account ( Deceived to grant Ukraine's citizenship to three foreign experts – Natalie Jaresko, Aleksandr Kvitashvili, and Aivaras Abromavicius ) and information from the office of President Petro Poroshenko report the signing of a law ( President signed decrees on granting Ukrainian citizenship to three candidates for the ministerial posts ) granting Jaresko Ukrainian citizenship so that she can take up the post. The legal validity of this law was questioned by the head of Poroshenko's bloc in Parliament, Yuriy Lutsenko. ( Poroshenko's office denied granting citizenship to Jaresko and Abromavicius (updated)).
For more information on Yaresko's predecessor, Kyiv Finance Minister Oleksandr Shlapak, see here: ( LINK )
On Tuesday, US State Department spokesperson Marie Harf was asked ( LINK ): "As we see, a US citizen has been appointed as Ukraine's Minister of Finance. Does Washington have anything to do with this appointment?" Harf replied: "No, this is the choice of the Ukrainian people and their (yes!) representatives. It's their decision. Of course, I don't think we should have anything to do with it at all... The Ukrainian people and their representatives can choose who they want in their government. That's the beauty of how this process works."
Jaresko was born into the Ukrainian émigré community in Chicago ( Chicagoan granted Ukrainian citizenship to serve in the government ) and took her father's surname, John Jaresko. Her brother, also John, was an activist in the Ukrainian movement and received a medal from Ukrainian President Viktor Yushchenko in 2010 ( Ukrainian Genocide Remembrance Day 2005 Keynote Address by John Jaresko ). Around this time, Natalia's sister was appointed to Yushchenko's Foreign Investors Advisory Council and the Advisory Board of the Ukrainian Center for Promotion of Foreign Investment. Yushchenko awarded her the St. Olga Medal in 2003.
Her older sister, Kateryna ( Katherine M. Jaresko-Marcyniuk ), married a 49-year-old Ukrainian, just like Natalia. In 1989, Natalia Jaresko married Igor Figlus and bore his surname until their divorce in 2010.
For more information on the influence of Kateryna Chumachenko and other Ukrainian-American women hired by the State Department, including Yaresko, in Kyiv, see " The Secrets of Viktor Yushchenko's Wives and Women. Kateryna Klehr and Her Friends." Chumachenko (below, second from left, with President George W. Bush in 2005 ) is the second wife of Viktor Yushchenko, President of Ukraine from 2005 to 2010.
Figlus was at the US Embassy in Kyiv when Natalia held a post there.
Figlus continued to lead the American Chamber of Commerce in Ukraine. He later headed the Western NIS Enterprise Fund (WNISEF). According to Natalie's resume ( An Interview with Natalie A. Jaresko, Managing Partner, Horizon Capital, Kiev ), she co-founded Horizon Capital and served as its managing partner since March 2006, while simultaneously serving as President and CEO of WNISEF—a position she held since February 2001. Before joining WNISEF, Jaresko worked for the U.S. Department of State. From 1992 to 1995, she served as the First Chief of the Economic Section at the U.S. Embassy in Ukraine, and before that, she held various economic positions at the State Department in Washington.
After Yaresko and Figlus's divorce, he was erased from the business history, which she presented as justification for her experience and her preparation for the position of Ukraine's new finance minister. The Horizon Capital website ( LINK ) lists two Americans as founders: Yaresko (with Harvard degrees and Chicago roots like Yaresko: 1 and 2 below) and a Canadian-Ukrainian woman (3).
According to a recent article in a Chicago-based Ukrainian community newspaper ( Chicagoan Granted Ukrainian Citizenship to Serve in Government ), "Yaresko has worked in Ukraine for over 20 years as a venture capitalist, bringing countless investments to Ukraine." Counting "countless," Yaresko explains that WNISEF was launched by the US government to invest in small and medium-sized businesses in Ukraine and Moldova—essentially to spur the development of private investment in the region. "We began investing in this region in 1995 and have invested $122 million over the past 12 years in 30 businesses across a wide range of sectors. Building on our team's ability to successfully navigate this economic environment, our track record, and Ukraine's promising economic environment, we founded Horizon Capital in 2006."
US government funding came from the US Agency for International Development (USAID). The organization's website promises reports ( LINK ) on funding operations in Ukraine and Moldova between 1997 and 2005, but these are missing. The financial report ( LINK ) for WNISEF for 2003, the first publicly available, shows that USAID's grant to the fund reached $150 million, with a letter of credit commitment of $141,7 million; $113.6 million had been disbursed by the end of 2003. The fund's assets declined that year, while management salaries, travel expenses, and other costs rose. The fund was unprofitable—a negative balance of $4,3 million in 2002 and a loss of $5,1 million in 2003.
The latest available WNISEF report is for 2012 ( LINK ). It can be found here. Investment asset value in 2012, having increased in 2003, declined in 2011. Investment income reached $1,2 million in 2012, a 43% decrease compared to the previous year. Management continued to receive high salaries, but business travel decreased. Most importantly, a loss of $6,4 million was recorded, compared to an income of $401,662 in 2011.
Horizon Capital describes WNISEF as a "cornerstone limited partner in EEGF"—that is, Emerging Europe Growth Fund LP, a private equity fund. Its investment portfolio can be viewed here ( LINK ). EEGF II LP is what Yaretsko's group calls a "follower fund, expanding on the success of EEGF," a $132 million fund launched in 2006 with a similar investment strategy. Investors have included European and American funds, banks, private pension funds, university endowments, private funds, and high-net-worth individuals. EEGF II typically invests between $15 million and $40 million in each of its portfolio companies, including expansions, buyouts, and the creation of select early-stage opportunities. Tinkoff Credit Systems in Russia is (or was) its leading portfolio holding ( LINK ).
Horizon Capital's claims of its funds' success were revealed to be based on the failure to file reports in the loss-making years of 2003, 2004, 2005, 2006, 2008, 2009, 2010, and 2012. In the only two years in which the company under Yaresko's leadership turned a profit, 2007 and 2011, reported net income was $1,8 million and $401,662, respectively. USAID's $150 million investment dominates the asset section of the annual reports. Investments in other investors' funds were squandered.
When asked about her investment activities, Yaresko said, "We are very pleased with both the investment inflow and the scope of its implementation, and we hope that 2006 will be a fruitful year for our investors." The final report ( LINK ) for 2006 revealed a net investment loss of $5,3 million.
In a commentary published in Kyiv ( Ash comments on reports Poroshenko wants Natalie Jaresko as finance minister ) by Timothy Ash, an analyst at Standard Chartered Bank in London, Jaresko is "extremely well-prepared, experienced, and resilient, with the unique ability to pick up the phone and virtually connect with any decision-maker in Washington without any preamble; she is known—and trusted." Ash also says: "She fits the bill as an international expert, a clear and seemingly radical thinker—able to think outside the box. She speaks Ukrainian and has lived in Ukraine for many years, so she knows the ropes, and how things work, or rather, don't work."
In a telephone interview, Ash said he didn't know whether the US government had financed Jaresko's investment fund. "The US does," he acknowledged. When asked if he knew anything about the success of her investment portfolio and experience, Ash said he hadn't delved into the details. "She was in the country (Ukraine) for 20 years... I don't know anything about the success (of the investment company)." "To be finance minister," Ash added, "you don't necessarily have to be a person from the Ministry of Finance."
She is extremely well qualified for the job—there's no doubt anyone reading her CV would say the same. A career in politics, not finance, would have qualified Chancellor George Osborne, or even his predecessor, Gordon Brown, for his post. Asked what Ash meant by describing Jaresko as "clean" and what he knew about her connections to Ukrainian oligarchs, he replied, "I don't think she can be put in the same league as any oligarch."
What influence does his bank currently have in Ukraine? Ash replies: "Under UK regulatory requirements, I don't have access to that information... Perhaps you'd like to verify that I have any 'incomplete' advice for either Ukraine or Russia—well, if you suspect anything inappropriate, I don't care."
Yaresko's only officially documented connection to a Ukrainian oligarch is her contacts with Viktor Pinchuk ( read more about him in the article Viktor Pinchuk: Ukraine's Richest Son-in-Law ): she was a regular participant in his Yalta European Strategy (YES) forum and also spoke at other events sponsored by Pinchuk ( Yalta Annual Meeting ).
Yaresko hasn't said much publicly this year.
In May 2014, addressing the German Marshall Fund of Washington, she spoke about "competitiveness" and "infrastructure" in Ukraine, but in no way noted the impact of the civil war on investment attractiveness.
The following month, June 2014, speaking in Stockholm, Yaresko said: "What you see in the newspapers is a small, very small part of reality. The reality is much richer, the possibilities are much greater, the real changes are much deeper than you can read about in the newspapers." And again, not a single mention of the civil war.
For a more detailed picture of Horizon Capital's fund performance in 2013, Tetyana Bega, the fund's investment relations spokesperson in Kyiv, was asked to clarify whether Horizon Capital is registered in Ukraine, the size of its current assets under management, whether the firm is currently profitable, and which portfolio investments she considers successful. No response was forthcoming. In January of this year, Yaresko published an authorized version of her career progression in the Ukrainian edition of Forbes, which can be viewed here ( Patriot Investments ). Journalist Olena Shkarpova did not bother to verify Yaresko's final reports to confirm her statements.
What happened when Jaresko left the State Department to pursue her own government-funded business in Ukraine was revealed by her ex-husband in documents filed with the Chancery Court of Delaware in 2012 and 2013. The decision rendered by Donald Parsons confirming these facts can be found here (LINK). Without Figlus and without the US government, Jaresko would not have had an investment business in Ukraine. The funds to finance the business and their partnership fees, as it turns out, were funneled to Figlus and Jaresko from Washington.
According to the court documents, “Plaintiff EEGF, LP, a Delaware limited liability company, was formed to make equity and debt-based financial investments in private companies in Ukraine and Moldova. Plaintiff Horizon Capital GP, LLC, a Delaware limited liability company and the general partner of EEGF. Defendant Igor Figlus, a limited partner of EEGF, was previously married to Natalia A. Yaresko, a non-partisan activist. Yaresko is a co-founder of Horizon Capital and serves as the chief executive officer of EEGF. Figlus and Yaresko were married in 1989. In February 2006, the couple jointly invested $150,000 in EEGF. Later that year, in September, they invested an additional $1,1 million in EEGF. Figlus and Yaresko divorced in 2010. They continue to operate EEGF jointly until their assets are finally settled.
The court found that in January 2011, after their divorce, Figlus discovered he owed money jointly with Yaresko as a co-signatory on loan agreements that financed their fund activities. Judge Parsons: "He demanded information about EEGF and several loans Figlus and Yaresko received from Horizon Capital Associates, LLC, an affiliate of Horizon Capital GP, to finance the couple's investment obligations to EEGF."
Igor Figlus
By September 2011, after Figlus testified that he had read documents provided by his wife's partners, he concluded that the loans were "illegal." Jaresko disagreed, so Figlus contacted journalist Mark Rankevich at the Kyiv Post, a local English-language newspaper. According to the case file, "since he lacked the funds to investigate the loans, Figlus decided to inform Rankevich of his suspicions and ask him to investigate the loans' legality. Over the next five months, Figlus and Rankevich communicated via videoconference on matters related to EEGF."
When Yaresko realized the truth had come out, she sent Figlus a reminder that they had signed a non-disclosure agreement. She then followed this up with a cease-and-desist demand that Figlus cease and desist from further illegal actions on behalf of EEGF, demanding that he immediately cease disclosing confidential information regarding EEGF. Since Figlus could not be restrained, Yaresko filed a lawsuit in Delaware in October 2012 and obtained a temporary restraining order against Figlus preventing further disclosure.
Yaresko's goal, as he now claims, was not only to silence Figlus, but also to deprive him of his share in their common business.
The judge noted that the court was faced with the unusual circumstance of a divorce in which the ex-wife, a co-founder of one plaintiff company and director of another, attempted to force her husband to comply with a non-disclosure agreement to the detriment of his interests. Figlus claims that he offered to settle the matter under strict confidentiality, but the plaintiffs insisted on a full settlement at his expense in order to dispossess him of his share in the partnership. In this case, the plaintiffs are coercing the husband to act in the interests of his ex-wife. Under these circumstances, the court finds it impossible to consider the allegations against the defendant.
The Kyiv newspaper went silent, and its archives contain no evidence that Rankiewicz, while still its correspondent, had any investigative interest in Figlus, Jaresko, and Horizon Capital.
Yaresko also asked Judge Parsons to compel Figlus to reimburse her legal fees for Figlus's breach of obligations to the Yaresko Group. In a 26-page ruling dated March 28, 2013, Parsons dismissed Yaresko's claims. The plaintiffs presented no precedent, and the court found no precedent, as in this case, for a limited partner being ordered to pay damages (or costs) of this kind based on a breach of the partnership agreement. Furthermore, there are numerous unresolved factual issues. Under these circumstances, given the plaintiffs' lack of credible evidence to support their claim, judgment is found against the plaintiffs.
It's quite common for American spouses to manage business assets in the former USSR and profit from US government-guaranteed profits using information obtained through their position or connections within the government. It's rare for them to fall out over the spoils...
The story of US government-funded investments in Russia through USAID, Harvard University, Andrei Shleifer (bottom left), Jonathan Hay, and their wives, Nancy Zimmerman and Beth Hebert, ended in a notoriously tragic way, but not with mutual recriminations in a divorce case. Harvard admitted to intentionally embezzling USAID stock but reimbursed $26,5 million. The perpetrators were accused of criminal embezzlement of stock but only reimbursed $5,5 million. The scam also contributed to the dismissal of Lawrence Summers (right) as Harvard president due to conflicts of interest.
Andrey Shlyafer | Lawrence Summers
Read the full story ( How Harvard Lost Russia ) and more ( Would Harvard Ever Help Russia? ). Jaresko's promotion to the post of Ukrainian Finance Minister is a very different outcome for USAID and for the Harvard graduates involved in the earlier Ukrainian scheme. Whether Horizon Capital and its operations were a scheme similar to the Russian one, designed to manipulate Ukrainian business to serve American political strategy, and how much profit Jaresko personally reaped, may become clear when or if details of the divorce proceedings between Figlus and Jaresko become public. They are currently under wraps, but there is a strong temptation to investigate further...
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