Elections, elections, candidates, as we all know... you know who. And in a bad way. It would be better if they had each other, but they're trying to screw everyone. As always. It's especially surprising that among the candidates are those who have long been labeled thieves and scum in the public consciousness. And yet, they're still pushing their way in like cockroaches.
Here, for example, Vitaly ZhuravskyA candidate, probably, for every convocation. A man absolutely useless from a legislative standpoint, and in his last term, downright harmful. This wasn't even hinted at, just consigned to the trash heap. Not his competitors, as he claimed, but the very same electorate, tired of seeing this lying face of a professional political prostitute. But he can't stop himself; he wants to get back to the Rada. Although, in the Rada, the chances of ending up in the trash heap are much higher than, say, in his Spanish villa. But there's nothing you can do about it. You want to steal, even despite the risk of ending up in the trash heap.
Or there's this unique party running for parliament right now. "Vidrodzhennia." The party of the late Kirpa. The list is filled with railroad workers. It seems like they've decided to lock up the entire railroad management. And they know it. And they've taken a deferment by running for office. A departmental party is a strange thing altogether. It would be funny if there were a party of cops, a party of customs officials, a party of tax officials, and a party of prosecutors. That would be brutal. But it feels like people here still don't quite understand the purpose of parliament and what parties are. That's why they confuse political parties with trade unions or gangs. And another question: are things really so good on the railroad that its entire management has rushed to spend money on registration, election campaigns, and so on? Maybe the prosecutor's office should look into this strange wastefulness?
I was surprised to find the deputy head of the Main Directorate "K" of the SBU on the list of candidates Konstantin BrylApparently, already a former deputy. Because Konstantin Ivanovich is now listed on the electoral list as "an officer with special responsibilities of the first category of the Group of Advisors and Consultants of the Apparatus of the Head of the Security Service of Ukraine." So, they kicked him out again? And this time quickly. It happens. And this isn't the first time in Bryl's turbulent career. It's high time to change jobs again. Especially since the Pereyaslav-Khmelnytskyi district, where Bryl is running, has long been his own, and he'll likely become a deputy. And he'll probably try to get on some committee overseeing customs. Otherwise, why bother spending money on the election?
A very funny new formation, it either goes to the elections or doesn't. It's called "Opposition Cinder Block." They're still hiding the lists; apparently they've filled them with so many people it's scary to show. Apparently, Lyovochkin is on this list for Kornatsky's district. But even from what's already been revealed... it's a hell of a hell. Yuriy Boyko is at the top. With the glaring trail of the "Boyko towers" case. He didn't flee the country. He so strongly believes he can buy his way out. He'll probably buy his way out of the prosecutors and judges. But he's clearly afraid to go outside. What if there's a trash can nearby? At best. Nestor Shufrich. I remember his cheerful face behind the Berkut ranks. The cheerful Nestor. Nestor's buddies, Tsarev and Kalisnichenko, who dreamed of drowning him in blood, have long since disappeared. And Nestor—the brazen one. She believes Medvedchuk won't betray her, and Poroshenko won't eat her. She's probably right to believe that. But it would also be better not to walk the streets of Kyiv without security. Well, Natasha Korolevska is on the list—a clear sign that the ship will sink before it even leaves the harbor. Remarkably, Korolevska herself will end up getting rich again as a result. A cynical woman, like Alice the fox from Buratino. But she's back on the list. You don't need a knife to kill a fool; sing along with him a little... and you're back on the list. Another Berkut fan on the list is Dobkin. Well, no comment. Basically, a complete cinder block.
But let's return to the leader of the "cinder block." Yuriy Boyko. A Hero of Ukraine, by the way. Which is quite ironic, considering that Boyko was initially a representative of what's called the "mafia" in Ukraine. He was called a "mafia manager." It's probably worth recalling this story, unearthed by the late Roman Kupchynsky. The only good news is that the "regionals," in their attempts to oust a more or less unblemished leader, ended up ousting a thief who simply couldn't be blamed.
Yuriy Boyko: Mafia Manager. Part 1
To better understand Yanukovych's reforms, it's worth taking a closer look at the individuals destined to drive these national-scale reforms—the President's management team. As is well known, only six "old" ministers "survived" after the reform announcement. Perhaps the most influential remains Yuriy Boyko, who only expanded his influence after becoming Minister of Energy and Coal Industry. This battle-hardened figure will not relinquish power and influence while the gas is being "divided." As WikiLeaks documents and those published in Ukraine indicate, Boyko and Firtash are protégés of Semyon Mogilevich's "Red Don" (as classified by Western intelligence agencies). But Yanukovych, like his predecessors, seems unconcerned. So who's boss in Ukraine? It appears to be the international mafia, placing its own managers in key positions in the Ukrainian economy. Below is an analysis of Boyko's rise to power and his connections to the mafia. This story, translated from a foreign source and published seven years ago, remains relevant. It makes for thoughtful reading.
The Ukrainian National Joint-Stock Company (NAK) Naftogaz of Ukraine is a state-owned monopoly responsible for supplying natural gas to consumers across the country. Naftogaz controls the Druzhba gas pipeline to Western Europe, which meets approximately 20% of Europe's gas needs, and sells Ukrainian natural gas to foreign buyers. It is also Ukraine's largest debtor to the Russian Federation. Since 2001, Naftogaz of Ukraine has been headed by Yuriy Boyko, a relatively newcomer to the Ukrainian gas business. Furthermore, many believe that Naftogaz is a source of illicit money flowing into the hands of corrupt officials in the Ukrainian government and the President of Ukraine.
Naftogaz Ukrainy was founded on May 25, 1998, by decree of Ukrainian President Leonid Kuchma, dated February 25, 1998. According to this decree, the former state gas monopoly Ukrgazprom, along with other organizations, were merged into Naftogaz NAK. This occurred just over a year before the 1999 presidential election, when Kuchma was running for a second term.
Even earlier, in 1997, the Ukrainian parliament attempted to pass a law that would have granted the State Accounting Chamber the power to audit budget revenues. According to a Financial Times commentary on December 9, 1998, this would have allowed it to investigate companies' pricing policies and income concealment. However, President Kuchma vetoed the bill twice. The Financial Times writes: "When parliament overrode his veto, the Constitutional Court, widely considered an arm of the executive branch, found the law unconstitutional." This paved the way for the birth of Naftogaz, a company whose accounting would be beyond the reach of the State Accounting Chamber.
To better understand the nature of Naftogaz, it's necessary to delve into the relationship between the Ukrainian gas industry and Gazprom, the Russian gas monopoly. Ukrgazprom, Naftogaz's predecessor, signed a contract with Gazprom in 1998 for the annual purchase of 36 billion cubic meters of gas. Having satisfied Ukraine's natural gas needs, Gazprom also offered to supply gas to Europe via the Ukrainian pipeline, paying for transit in gas. To protect itself against the risk of gas theft during the contract, Gazprom took out insurance with Sogaz, its Moscow subsidiary.
One of the first steps of Viktor Yushchenko's newly formed Ukrainian government in January 2000 was to send Deputy Prime Minister for Energy Yulia Tymoshenko to Moscow to discuss Ukraine's energy debts. Upon her return, Ms. Tymoshenko, the former head of the United Energy Systems of Ukraine, informed the press that Ukraine's gas debt to Russia amounted to $2.23 billion. Discussing the results of Ms. Tymoshenko's trip, the subsequent head of Naftogaz Ukrainy, Igor Bakai, claimed that his figures showed a debt of $740 million, while Prime Minister Viktor Yushchenko stated that the debt was $1.24 billion.
Shortly thereafter, on January 20, 2000, a meeting between the Ukrainian government and Gazprom executives was held in Kyiv to normalize natural gas supplies to Ukraine. The minutes of this meeting, a copy of which is in the possession of the Organized Crime and Terrorism Watchdog, signed by Ukrainian Prime Minister Viktor Yushchenko and Gazprom President Rem Vyakheryev, state: "The Ukrainian side will take the following measures to liquidate the debt for Russian natural gas... Within one week, (Ukraine) will make a decision prohibiting the resale of Russian gas, as well as gas from other countries, and will cease its supplies to businesses in Hungary, Poland, Romania, Moldova, and Slovakia."
Despite this agreement, on February 2, 2000, Gazprom President Vyakhirev was forced to send a telegram to Ukrainian Prime Minister Yushchenko, a copy of which is also in the possession of the Organized Crime Watchdog. Vyakhirev wrote: "I am forced to draw your attention to the fact that the agreements we reached in Kyiv on January 20 of this year between the Ukrainian government and Gazprom have been forever destroyed by the national joint-stock company Naftogaz Ukraina. The theft of Russian gas continues, as does its sale to third countries."
Amid the controversy over ongoing thefts, Gazprom announced that it was considering building a new gas pipeline to Western Europe, bypassing Ukraine, to prevent them. At the same time, Gazprom filed a claim for $88 million against its insurer, Sogaz, for gas theft by Naftogaz, which was paid to Gazprom. Sogaz's expenses were in turn reimbursed by Monegasque of Reassurances SAM (Monde Re), a branch of Reinsurance Australia Corporation Ltd. in Monaco, under the reinsurance agreement. It's quite surprising that Gazprom apparently never proved to Sogaz that anything had been stolen or in what quantities. Within the agreed-upon five-day period, Sogaz paid Gazprom the $88 million.
Monde Re, in turn, sued Naftogaz and won in a Russian arbitration court, which ordered Naftogaz to pay Monde Re $88 million. Naftogaz filed an appeal to the Russian Supreme Court, which upheld the arbitration court's decision. However, Naftogaz still refuses to comply with the court's decision and pay Monde Re.
Monde Re then sued Naftogaz and the Ukrainian government (since Naftogaz is a state-owned company) in the United States, where on September 1, 2001, the United States District Court for the Southern District of New York ruled in favor of the Ukrainian government. This district court decision was upheld by the appellate court. According to official records, this court decision is dated September 4, 2001.
In the district court's decision, Judge Victor Marrero wrote: "There is no reason for the court to believe that the arbitration award against Ukraine, if affirmed here, would be more easily enforced in the United States than in Ukraine."
To this day, Naftogaz has not paid Monde Re $88 million in damages as determined by a Russian court. In press releases, Naftogaz has reinterpreted the court's ruling, claiming it was a "victory" for Naftogaz, which "proves" they did not steal anything.
This case is interesting because Gazprom received the money from its subsidiary, Sogaz, and had no need to prove any losses. Sogaz was compensated for its losses by Monde Re, a little-known reinsurer based in Monaco, while Naftogaz itself was not required to pay a penny to anyone. Where, then, did the $88 million that Naftogaz was accused of stealing come from?
Another question concerns the money allegedly paid to Gazprom by Sogaz. Was any payment made at all? A partial explanation can be found in the Rossiysky Zhurnal of November 15, 2002. In an article about insurance in Russia, the newspaper writes:
"It's rare for a local investment bank to jeopardize an entire commercial market with complex tax evasion schemes, allegations of false payments, paper transfers, and misleading international valuations. But that's exactly what the United Financial Group (UFG) has accomplished with the Russian insurance market in its new report, "The Russian Insurance Industry: Enter the Man from RU." "From an initial estimate of $9.5 billion in insurance payouts officially reported in Russia in 2001, approximately half—$4.7 billion—can hardly be considered insurance at all, as they represent policies paying out one to five years in the form of tax-free annuities, but in reality, constitute tax-free income."
The article cites Ruben Vardanyan, a representative of Dialog-Troika, who recently became the executive director of Rosgosstrakh, the state-owned insurance company. Vardanyan believes that Russian insurers are either investing their high-risk funds to cover defaults, or the missing funds don't exist at all, since "large amounts of 'paid' premiums don't actually exist, being nothing more than figures on paper used in salaries and basic plans."
Further adding to the mystery surrounding Gazprom's insurer, Sogaz, were reports in the Russian press (Kommersant, Vedomosti) on May 22, 2002. These reports revealed that on May 21, 2002, Andrei Petukhov, Sogaz's general director, was murdered along with his driver near Moscow's dachas. Police reported that the crime was committed by at least two people. The shooters used Makarov pistols with silencers.
Newspapers have put forward numerous theories regarding the possible motives for the contract killing. According to one, Petukhov's murder, which was possibly ordered by the head of Sogaz in April 2002, could have been connected to a purge within the company, planned by the old management team, which had not yet retired and was controlled by former Gazprom CEO Rem Vyakherev. Some anonymous sources claim that after taking office, Petukhov discovered operations that were "not entirely legal."
The other part of the equation concerns the money Naftogaz allegedly stole from Gazprom. During the New York litigation, Monde Re claimed that Naftogaz held deposits in US banks. But, as Judge Marrero wrote in the court ruling, "Monde Re's own source claims something different – that Igor Bakai, the chairman of Naftogaz, simply transferred money through a US bank account for his personal use in 2000." In other words, it wasn't Naftogaz as an organization that stole, but its chairman who received the proceeds from the stolen gas.
In January 2000, the Ukrainian-American commission, headed by Kuchma and Gore, was preparing for its annual meeting in Washington to discuss bilateral issues. One of the members of the Ukrainian delegation (selected by the Ukrainian President and his advisers) was scheduled to be Ihor Bakai, President of Naftogaz Ukrainy. But an extraordinary event occurred: Mr. Bakai was denied a U.S. visa. The Financial Times subsequently reported that Mr. Bakai's name was on a list of corrupt Ukrainian government officials provided to President Kuchma during the commission's work.
Mr. Bakai's career in the gas business began in 1993. In 1993-94, he headed a company called Respublika, which supplied natural gas from Turkmenistan. Through its operations, Ukrainian debt soared to $664 million, and Respublika's accounts ended up with $240 million from Russia and Turkmenistan. In 1995, Bakai became head of the closed joint-stock company Intergaz, whose controlling stake belonged to ADI. Igor Bakai was ADI's sole shareholder. In 1997, Intergaz owned $340 million, $140 million of which belonged to Gazprom. On August 11, 1995, a foreign corporation, Intergas Inc. (ID #2664703), was registered in Pennsylvania, listing Igor Shariv as its chief operating officer (CIO) and Stanislav Melnyk as its accountant. Corporate documents list Intergas's address as Kyiv. Mr. Melnyk, the accountant, lists his residence in Meadowbrook, Pennsylvania, a house he purchased for $174,550 in cash.
In 1997, Ukrainian President Kuchma appointed Ihor Bakai as First Deputy Chairman of the State Committee for the Oil and Gas Industry, which in 1998 became part of Naftogaz Ukrainy. Bakai was appointed Chairman of the Board of Naftogaz by then-Prime Minister Valeriy Pustovoitenko.
The American side, when denying Mr. Bakai a visa, knew very well who they were dealing with. Bakai, who had a U.S. Social Security number of 179-74-0451, also had a residential address in Meadowbrook, Pennsylvania. This property was purchased by him and his wife, Elena, on April 18, 1994, for $1.8 million in cash. On July 13, 1997, it was sold for $1 to Elena Bakai, then sold again on the same day for $1 to Bronislava Demchuk (Igor Bakai's mother-in-law), and then sold again for $1 to Sergei Demchuk (his father-in-law), who was listed as the owner of the property in 1999.
But the Meadowbrook land purchase was just the beginning. On July 17, 1995, Elena Bakai purchased a parcel of land in Fort Washington, Pennsylvania, for $475 in cash; she later sold it on December 12, 1997, for $395.
On December 12, 1994, Igor Bakai purchased land in Naples, Florida, on behalf of his mother-in-law, Bronislava Demchuk. In 1997, a new house was built there at a cost of $6.432.250.
After building the Naples mansion, Mr. Bakai, now the head of Naftogaz Ukrainy, had to maintain the homes where his wife and children lived. Thus, through his Kyiv bank, Finance and Credit, he transferred $450,000 on December 21, 1998, $380,000 on December 22, 1998, and $680,000 on December 23, 1998 (a total of $1,510,000) to a San Francisco commercial bank, account number 001-754867.
Earlier, in October 1998, through the same Kiev bank, he transferred a total of 2 million 450 thousand dollars to the account of the company “Dogmatos Trading Ltd” (Dogmatos trading ltd) in Ireland, with an account at the First Credit and Trade Bank in Nauru in the Central Pacific.
In 1999, the money transfers continued. Between December 98 and January 99, Mr. Bakai transferred a total of $550 from various Ukrainian banks to an account he controlled in Hong Kong belonging to a company called United Global Enterprises Ltd., using the Hong Kong and Shanghai Financial Corporation.
While Bakai headed Naftogaz, proceeds from the sale of stolen gas were invested in President Kuchma's election campaign. Recordings made in 1999 by the president's bodyguard, Mykola Melnychenko, contain conversations in which Kuchma openly asks Bakai to transfer large sums of money needed for his election campaign.
One such conversation between Bakai and Kuchma was recorded in October 1999.
Kuchma: "You understand, money (expletives deleted), I don't want to do this anymore. I was forced to work with people I'd rather not deal with. Please, guys, help me! There are only 20 days left until the elections.
Bakai: "You need to give us a specific and very clear task. I will find the sources for this as soon as you do. Leonid Danilovich, so far we have already transferred 48 million 800 thousand hryvnia (9.8 million dollars), as well as 10 million 4 thousand 957 dollars. This was done by my deputies... Then, we paid 4 million dollars in cash, but they told us that 100 thousand were missing. I will not dispute this point... We had to issue these 100 thousand again.
In the summer of 2000, the Western press reported on Bakai's activities, forcing him to resign his post at Naftogaz. Wasting no time, he entered parliament in a by-election and received parliamentary immunity. He ran in the 2002 elections but lost. Members of parliament complained that Bakai appeared in parliament only once—on the day he took the oath of office.
In February 2003, Ukraine's Prosecutor General, Svyatoslav Piskun, announced sanctions against Bakai. But so far, nothing has been done. Mykola Azarov, the former head of the State Tax Administration and now Vice Prime Minister, stated that he was investigating Bakai's tax violations, but this never happened. In fact, recordings made in Kuchma's office and a conversation between Kuchma and Azarov indicate that Azarov was well aware of Bakai's illegal activities and was covering for them. Bakai remains at large, but he is banned from entering the United States.
Kuchma temporarily replaced Bakai with his deputy, Ihor Didenko. However, Didenko's tenure was short-lived, as he was arrested by German police and accused of embezzling millions of marks from the compensation fund for Ukrainian Ostarbeiters. He remains in prison.
For the Kuchma administration, the position of head of Naftogaz was crucial, so they rushed to fill it as quickly as possible. After the arrest of Ihor Didenko, V. Kopylov became the new head. It was believed that he had been promoted by Mykola Azarov, the former head of the Tax Administration, who was rumored to have close ties to the Donetsk clan. When Oleh Dubina became the new Deputy Prime Minister of Energy in May 2001, Kopylov was removed, and in January 2002, Yuriy Boyko, who leads the company to this day, was appointed in his place.
Yuriy Boyko was born in 1957 in Horlivka, Donetsk Oblast. He graduated from the Mendeleyev Moscow Institute of Chemical Technology. From 1981 to 1999, he served as director of the Zarya plant, which produced explosives for the military industry. He was then appointed head of LiNos in Luhansk, one of the largest oil refineries, where he worked until April 2001. He then moved to Kyiv and became the head of the department in August 2001.
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