Why was the management of flights for top government officials entrusted to a man with a criminal past, implicated in large-scale thefts at Boryspil and Simferopol airports?
Recalling the numerous atrocities of the "criminal regime," journalists often attribute them to the fugitive president and members of his inner circle. But the "family" is only the tip of the iceberg, skillfully concealing hundreds and thousands of second- and third-tier officials who are as entangled in corruption schemes as their superiors. And while the latter sit out the simmering corruption in once-fraternal Russia, loyal "cogs" of the system continue to spin the flywheel of corruption by inertia. Some Yanukovych-era officials have found a place in the new government, despite their declared intentions to conduct a comprehensive lustration. However, Ukraine can no longer afford to maintain a state apparatus of experts in plundering the treasury—under current conditions, this poses a far greater threat to the preservation of statehood than Russian tanks on the borders.
Entrepreneurs-extortionists
One of the main keys to the survival of a virus as a biological species is its ability to mutate in response to environmental changes. Similarly, the hallmark of a true corrupt official in Ukraine is the ability to find a place for themselves under any government, profiting from public funds, and remaining in the shadows. One such individual will be discussed below.
The name Yuriy Solonchuk is unlikely to ring a bell to anyone not closely connected to the aviation industry. An engineer by profession, he, like many of his colleagues, went into business at the dawn of independence, followed by a meteoric rise as a government official.
Solonchuk's entrepreneurial career is linked to some of the most high-profile scandals in the history of independent Ukraine. From 1992 to 2005, he held senior positions at Top Service and Unicon.
At Top Service, Solonchuk held the position of deputy director. In the early 90s, the company traded computers and was an authorized partner of the American company IBM. In 1997, Top Service LLC's export volumes reached 150 million hryvnias per year, and the company was split into several separate LLCs, the largest of which were TOP-Service-Systems, which specialized in computer equipment, TOP-Service, and TOP-Service-Vostok, which specialized in agricultural exports.
As early as April 2000, Igor Shagin, head of Top-Service-Vostok LLC, was arrested on suspicion of committing a number of contract crimes. He was accused of creating a criminal group to ensure illegal VAT refunds and organizing the murder of Tamara Kaliushko, deputy head of the Oktyabrsky District Tax Administration in Kyiv, in August 1997. Other victims of the organized crime group included the former head of the Oktyabrsky District Administration, Mykola Podmogilny, who obstructed TOP-Service's illegal VAT refunds (an attempt was made on his murder); Patsyuk, head of the State Department of Veterinary Medicine; officials of the Kyiv Regional Customs Office; and the heads of competing firms, who were the subject of repeated armed robberies. As a result of the trial, 15 people were jailed, and Igor Shagin, the head of Top-Service-Vostok, was sentenced to life imprisonment. Solonchuk, however, managed to avoid criminal liability, in no small part thanks to the protection of former Minister of Transport and Communications Nikolai Rudkovsky.
It was his friendship with Rudkovsky that became the defining factor in Solonchuk's meteoric rise. Solonchuk worked as a director at the company "Unicom," which was associated with the former minister. Residents of Chernihiv remember this limited liability company for the destruction of the stalls at the local Central Market because they were interfering with the construction of a shopping center.
42 days at customs and schemes in Boryspil
In 2005, Yuriy Solonchuk unexpectedly received a prominent government position – head of the Chernihiv customs office. This appointment was lobbied by Rudkovskyi to carry out several major operations on the Ukrainian border. This fact confirms that Solonchuk didn't last even two months as customs chief, serving only 42 days. Naturally, no investigation was conducted into the operations carried out by Solonchuk under Rudkovskyi's supervision.
In 2006, Rudkovsky was appointed Minister of Transport and Communications, and his protégé, Solonchuk, received another prominent government position at the country's main airport, Boryspil Airport. The appointment itself was quite aggressive: first, Solonchuk was thrust upon the airport's then-general director, Mazur, as his deputy, and then, with the support of MP V. Sivkovich, who had approved Solonchuk's candidacy with Klyuyev, he was appointed general director.
The high-stakes game had begun. In his new position, Yuriy Solonchuk was remembered for actively implementing a number of corruption schemes that cost the airport and the state treasury millions in losses. Specifically, the Audit Office's audit of the airport's financial performance in 2006-2008 uncovered a litany of official abuses, including underpayments to the budget, overstatement of completed work, inefficient spending, and lost revenue due to significant underreporting of leased space. One of the most significant frauds, estimated at over 90 million hryvnias in losses, involved depositing airport funds with the bankrupt BIG Energy Bank. Furthermore, funds received from bond issuances, intended for use in the Boryspil International Airport Development Project, were even deposited there.
Following the resignation of Yanukovych's "anti-crisis government" in late 2007 and the subsequent arrest of Mykola Rudkovsky in early 2008, Solonchuk was dismissed from his post. An investigation into his actions was launched, but he again escaped responsibility. In early 2010, Viktor Yanukovych was elected president, and everything returned to normal.
Solonchuk proved to be a valuable asset to the Yanukovych regime, and immediately after his "team" came to power, he was promoted to a high-ranking position – deputy head of the State Aviation Administration of Ukraine. Paradoxically, in February 2011, the former president issued a decree appointing Solonchuk a member of the interagency coordination headquarters for security and law enforcement. Whose security was Solonchuk supposed to protect? His already impressive record of corruption provides a comprehensive answer to this question.
Privatization, Odessa style
The aviation sector was of particular interest to the ex-president's "family" and inner circle, as it offered good opportunities to plunder budget funds and profit from state assets. To this end, a simple scheme was devised, which local businessmen successfully implemented in Odessa. Kaufman and GranovskyThe Odessans would hardly have been able to pull off this scheme without patronage from above, and, according to rumors, one of its beneficiaries was the fugitive guarantor's eldest son, Alexander.
The deal consisted of creating a private company, "Odesa International Airport" LLC, on the premises of the municipally owned Odessa Airport. The city received a 25% stake, while the remaining 75% went to a certain "Odesa Airport Development" LLC, with a charter capital of 1000 hryvnias, registered in a non-residential building on Grushevsky Street in Kyiv. The new owners of the airport declared ambitious goals, promising to build a new airport terminal for $84 million and find another $90-120 million for the reconstruction of the runway. But in reality, municipal assets were simply transferred to private ownership, prices were raised for literally everything (for example, parking went up from 75 hryvnias per month to 60 hryvnias per day), and the financially unprofitable runway was left on the balance sheet of the municipal enterprise.
A similar plan was planned to seize another major airport – in Simferopol. To this end, and to ensure Odessans' cooperation with the Yanukovych administration, Kaufman and Granovsky enlisted the help of Yuriy Solonchuk, who was hastily appointed chairman of the board of Crimea's main air gateway on May 23, 2012 (within three days). Solonchuk's tenure at Simferopol Airport was short-lived but productive. At the end of 2012, he resigned. The official reason given was family matters, but industry experts say he was unable to fully find common ground with Kaufman and Granovsky, who were the airport's "protector." However, this latter circumstance did not prevent Solonchuk from leaving behind a trail of corruption schemes, similar to those at Boryspil.
After the annexation of the peninsula, in June 2014, the Russian financial inspectorate conducted an audit of Simferopol Airport and uncovered a number of violations totaling over 60 million hryvnias. These included a significant understatement of dividends payable to the budget in 2012, the siphoning of funds through Kaufman and Granovsky's Odesa-based Finbank PJSC using letter-of-credit schemes (a loss of approximately 20 million hryvnias), numerous ineffective management decisions, and illegal expenditures (approximately 8 million hryvnias).
Security of top officials
Of course, Russian executive authorities are unlikely to hold Solonchuk accountable for the fraud at Simferopol Airport. But more importantly, he's not hiding from law enforcement in Ukraine either. Moreover, for reasons unknown, Solonchuk has found a place in the new government's ranks. In December 2014, he was appointed General Director of the State Enterprise "Ukraine," a state-owned enterprise providing air transportation for top government officials and official delegations. Why Poroshenko entrusted the security of top government officials to a man who had worked so effectively for a regime whose remnants the current president is so actively trying to combat (at least ostensibly) remains a mystery. But one thing is certain: effective management at the state-owned enterprise under Solonchuk's leadership, given his extensive experience with corruption, is unlikely. Such appointments pose a direct threat not only to the integrity and security of budget funds but also to the approval ratings of the new government.
Igor Ilyin, for ORD
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