Taras Kutovoy
For some, Ukraine's fertile soil is a means of production, while others see it merely as a commodity for real estate speculation and collateral for financial scams. Unfortunately, Ukraine will continue to buy Polish potatoes and Chinese apples for a long time to come, as long as its agriculture is controlled by ostensible patriots and lobbyists for oligarchic corporations. Over the past three years, the country has had three ministers of agricultural policy, all of whom are remembered by Ukrainians only for political and corruption scandals. How long will the current head of the ministry, Taras Kutovyi, remain in office? That depends on how diligently he fulfills the wishes of those who appointed him.
Soros's child
Future Ukrainian minister Taras Viktorovych Kutovoy was born on February 25, 1976, in Kyiv, into an intelligent family of mathematics teachers. His father, Viktor Aleksandrovich, taught formulas to students at the Kyiv Institute of National Economy (now the Vadim Hetman National University of Economics), and his mother drew functions for students at Kyiv Physics and Mathematics School No. 145. They instilled an interest in numbers and calculations in their children: two sons and three daughters. Taras Kutovoy attended his mother's school, which in the early 1990s was transformed into a lyceum and attracted the interest of the International Renaissance Foundation, one of George Soros's most famous and largest projects. The Foundation took the lyceum under its financial wing (eight of its teachers became Soros scholarship recipients), effectively saving it from collapse, as many of the lyceum's teachers were planning to quit and seek better opportunities. At the same time, the most promising students of the lyceum were also taken under the wing of the fund.
However, by that time, having received his high school diploma with honors in 1992, Taras Kutovoy decided to enroll in the newly opened SBU Personnel Training Institute (now the SBU Academy), which he graduated with honors in 1997. He never spoke about the specialty he received there, but it was in economics. However, working for the SBU, even though it was considered very prestigious and promising at the time, did not appeal to the young officer. Perhaps thanks to his mother's connections, in 1998 Taras Kutovoy left the Service and took a position at the Vozrozhdenie Foundation as deputy chief auditor of projects and programs for regional offices. This job shaped Taras Kutovoy's future political and economic outlook, and he became a proponent of a pro-Western "open society" and "liberal economics." However, whether he truly shared these ideas or was simply assenting to his employers remains unknown.
That same year, 1998, Taras Kutovoy received a diploma from the Kyiv National University of Economics (where his father taught), becoming one of the youngest holders of two higher education degrees in the country. In 1999, he was appointed financial director of the newly established All-Ukrainian Foundation "Step by Step"—a joint project of the Soros Renaissance Foundation and the American Child Development Center, focused on working with children in the field of school education. His appointment as the foundation's de facto chief treasurer demonstrated that Taras Kutovoy had quickly earned the highest level of trust within Soros's financial institutions.
The career of "Soros's favorite," Taras Kutovoy, was booming. In 2002, he received his third degree in economics from the Kyiv branch of the International Institute of Management. This was effectively a diploma from Soros, which was no surprise. Indeed, the International Institute of Management in Kyiv was opened in 1990 on the initiative of Canadian Bohdan Hawrylyshyn, who had established the Soros Renaissance Foundation in Ukraine the year before.
Although Soros's foundations actively financed the preparations for the "Orange Revolution" through numerous public organizations and media outlets during 2003-2004, Taras Kutovoy stayed out of politics and focused entirely on economics. In 2004, he unexpectedly left his position as financial director of the Step by Step foundation, remaining a member of its supervisory board, and became financial director of the XXI Century Investment Company. Kyiv residents knew it as the company of oligarch Lev Partskhaladze (Read more about it in the article Lev Partskhaladze: The Glamorous Builder of Kyiv Politics), who was involved in the acquisition of land plots in the capital and their development, the owner of the Elite-Service group, the Shvidko chain of snack bars, the Tsarskoye Selo, Korona-Club and Pervak restaurants, and the Globus and Kvadrat shopping centers.
XXI Century CJSC's core business was development—that is, the resale of real estate, increasing its value through modification, reconstruction, or construction. The key to XXI Century CJSC's success was the acquisition of land plots in the capital at symbolic prices, thanks to the company's owners and management's direct connections to the Kyiv city government, as the head of XXI Century CJSC served as a member of the Kyiv City Council from 2002 to 2006. Furthermore, Lev Partskhaladze had access to all government offices, including the Secretariat of the President of Ukraine.
Lev Partskhaladze
It seemed strange why Taras Kutovoy suddenly left the "Soros empire" for private business, but some details about the work of XXI Century CJSC provide a comprehensive answer. Almost simultaneously with Kutovoy, Yaroslav Kinakh, a Ukrainian of Austro-Canadian descent who arrived in Ukraine in the early 90s as a representative of the European Bank for Reconstruction and Development (EBRD), joined the company. He was said to be connected to Soros's international business (not his charitable foundations, but his business). At the same time, Kinakh took the position of head of XXI Century Investments, a company registered in Cyprus that received XXI Century CJSC's profits. Thus, Partskhaladze brokered the acquisition of land plots in Kyiv and the surrounding region and was involved in development, while Kinakh was involved in siphoning off profits to a Cyprus offshore company—not without the assistance of Kutovoy's financial director. But beyond this, Kutovoy had another important task: selling the Kyiv real estate he had acquired at auction in London and boosting the share price of XXI Century, which Soros's companies were already directly speculating in. Some information about XXI Century's activities was published by MP Mykola Tomenko in early 2006, causing a major scandal.
In the field of agribusiness
In 2006, Kyiv Mayor Oleksandr Omelchenko ( read more about him in the article " Oleksandr Omelchenko: The Secret Past of Klitschko's Main Competitor in the Kyiv Elections "), with whom Partskhaladze had practically kissed each other on the gums and easily settled business, lost the election to Leonid Chernovetsky, who had his own interests in Kyiv real estate. Simultaneously, Lev Partskhaladze's "European Capital" party also lost the election. Over the next two years, XXI Century JSC's fortunes declined, and its rivalry with Chernovetsky led to the "European Capital" party merging with the newly formed Vitali Klitschko Bloc in 2008, after winning the snap Kyiv City Council elections. This marked the formal beginning of Taras Kutovyi's political career: at least, he was now considered a member of the "Klitschkoites."
The global financial crisis of 2008 had a direct impact on his career. Trading Ukrainian real estate and especially shares in London became unprofitable: the capitalization of XXI Century CJSC, inflated by Kutovoy's efforts, plummeted, angering minority shareholders (Kutovoy had managed to sell his stake for $10 million before the crisis). Therefore, in 2009, Taras Kutovoy left XXI Century, which focused on acquiring real estate from owners ruined by the crisis.
And then, in another unexpected move, the mathematical and financial genius headed to the fields—meaning, to work in the agricultural sector. In 2010, Taras Kutovoy made a successful deal: he exchanged his Kyiv land for shares in the agricultural holding company "Rise Company" OJSC, which was suffering from the effects of the crisis. Kutovoy became a co-owner and proposed to the holding's main owner, Vitaly Tsekhmistrenko, that he revive the enterprise. Tsekhmistrenko agreed, and Kutovoy was appointed president of the company. However, Kutovoy's actions resulted in the sale of Rise in 2011 to UkrLandFarming, a corporation owned by billionaire oligarch Oleh Bakhmatyuk . Media reports claimed that Kutovoy managed to defraud both Tsekhmistrenko and Bakhmatyuk. He essentially "reformed" the company using Soros's economic method: he restructured its financials, artificially inflated its value, and, in the process, brought the company's operations to a virtual standstill, forcing it to urgently sell. He then sold it at a clearly inflated price, convincing Bakhmatyuk it was a "good investment." He also earned some "margin" himself: it was reported that Kutovoy sold his stake in Rise for $5 million.
In 2011, Taras Kutovoy offered his services to Privat-Agroholding and had even begun working with them, when Igor Kolomoisky "made inquiries" about Kutovoy and kicked him out. However, Kutovoy quickly found another interesting job, becoming the managing director of A1 Global Holdings Limited (EDRPOU 2660886), a representative office of the A1 investment company owned by Russian billionaire and Alfa Group owner Mikhail Fridman. For two years, Taras Kutovoy conducted "market research" for Fridman, which wouldn't have been a bad thing had Alfa Group not been one of the five largest corporate raiders in Ukraine and the CIS at the time. Thus, Kutovoy served as a "scout" and information gatherer on companies and assets of interest to Alfa Group.
And judging by the fact that Taras Kutovoy unexpectedly surfaced in 2012 as the chairman of the supervisory board of the All-Ukrainian public association "Union for Village Salvation," he was also searching for "investment targets" in Ukrainian villages for Alfa Group. Furthermore, Taras Kutovoy's official biography states that during that period, he himself acted as an "investor in Ukrainian agriculture." The nature of these investments was revealed later: Kutovoy leased agricultural land through shell companies and then subleased it. Naturally, this was difficult to accomplish without "buttering up" local authorities and gifting villagers with trinkets. Thus, Taras Kutovoy became a "benefactor" of the town of Lokhvytsia in Poltava Oblast, where he decided to run for parliament in the 151st single-member constituency.
A Soros-esque financial wunderkind from Kyiv, who had never lived in a village, dressed up in an embroidered shirt and introduced himself as an opposition figure from the Klitschko bloc. He denounced the "criminal regime" and threatened to impeach President Yanukovych, declaring the need to support Ukrainian villages and Ukraine's European choice. However, from the very beginning, the 2012 elections in Lokhvytsia were marked by scandal. It all began when local activists from the "For Fair Elections" movement began distributing newspapers and leaflets in Lokhvytsia containing incriminating evidence against Taras Kutovoy. His reaction was rather tense: first, Kutovoy issued denials on a local television station, claiming it was slander perpetrated by his political enemies. Then he attempted to organize a campaign to collect the leaflets from the population in exchange for... porridge. Finally, the "oppositionist and democrat" who denounced the "criminal regime" resorted to pure physical force—hiring a gang of burly, grim-faced men who began harassing activists of the "For Fair Elections" movement. Thus, Taras Kutovoy was using "titushki" a year before the infamous events in Kyiv! Furthermore, it was reported that members of Kutovoy's "support group" had previously been used during corporate raids and for "conversations" with stubborn landowners.
Behind the screen of patriotism
Distribution of campaign promises and gratuities, along with assistance from "titushki," helped Taras Kutovoy win the 2012 elections with 41,25%. As required by law, Kutovoy left his job at A1 Global Holdings Limited, but simultaneously, his "better half," Antonina Gapchenko (now Kutovaya), became the co-founder and director of Pro Capital Investment, a company within the Pro Capital group. The company focuses on what Taras Kutovoy himself has always done: increasing the market value of enterprises and their shares, as well as finding "successful investments" for clients. Pro Capital is also known to serve the interests of large agricultural holdings, including the acquisition of agricultural land (currently leased and subleased) and the acquisition of agro-industrial enterprises.
Interestingly, Taras Kutovoy always introduces his wife as a TV presenter and analyst, not a businesswoman: Antonina did indeed host the program "Pro Kapital" on Channel One Business. Equally interesting is that in his 2011 income statement, Kutovoy listed only 1,2 million hryvnias as a director's salary for A1 Global Holdings Limited, a modest 100 hryvnias in dividends, a 103-square-meter apartment, and no car. He strangely omitted the ownership of a house in Kensington (London) worth 6,5 million pounds.
The Kutovs' "Khatynka" in Kensington
Taras Kutovoy's image as a "savior of the village" became so ingrained that he became deputy chairman of the Verkhovna Rada Committee on Agrarian Policy and Land Relations from 2012 to 2014. However, his image alone wasn't enough: Kutovoy was promoted to lobby for the interests of Ukrainian "hangar barons" and major foreign investors, and not just Mikhail Fridman's Alfa Group. As early as 2011 and 2012, he had already reached out to potential investors from China, Turkey, and Arab countries. But the former "Soros financier" had another side to his work: leveraging the economic potential of the Ukrainian agricultural market for financial transactions.
The events of 2014 forced Taras Kutovoy to run again: this time, he was re-elected in District 151 with 63% of the vote, facing virtually no resistance from his competitors or truth-seekers. According to local Lokhvitsa opposition figures, this was partly due to the fact that this time, Kutovoy's "titushki" were dressed in camouflage uniforms of "patriots" and "anti-terrorist operation" veterans. Furthermore, Taras Kutovoy had become friends with the "gas workers" extracting hydrocarbons in the area (Poltava Oblast is a gas-rich region). The extraction caused considerable inconvenience to local residents, and they complained to all authorities, including their own deputy. Kutovoy "conned" the gullible villagers by promising them... free gas to their homes! Naturally, the villagers are still waiting for this promise, while the gas well owners are now very grateful to Kutovoy for easing social tensions.
Running again as a member of Klitschko's UDAR bloc, he joined him in the newly formed Petro Poroshenko Bloc (PPB), where he became the coordinator of the UDAR cell. In 2014-2015, Taras Kutovyi distinguished himself with two initiatives. In parliament, he authored bill No. 2527, which provided for VAT refunds to producers who were direct exporters. Critics indignantly claimed that the VAT refunds ultimately benefited shell companies that exported agricultural products only on paper. And after the state refunded almost 37 billion hryvnias in VAT to these companies, the treasury ran out of money. In his new "homeland" in the Poltava region, Taras Kutovoy became embroiled in a scandal involving the acquisition of a long-term (49-year) lease on 4134 hectares of land, which had been withdrawn from the companies where Kutovoy had previously worked (including Raiz) and transferred to his trusted associates in Lokhvitsa. These were identified as Grigory Shamritsky (head of the Lokhvitsa branch of UDAR), and "farmers" Anatoly Maiboroda and Oleh Tymoshenko. Sources claimed that this trio were merely proxies through which Kutovoy consolidated the leased lands into his own hands.
But these scandals didn't prevent Taras Kutovyi from becoming Ukraine's Minister of Agrarian Policy in Volodymyr Groysman's new government in April 2016 ( read more about him in the article "Volodymyr Groysman: Dark Spots in the Biography of the Speaker of the Verkhovna Rada "). Given that the third "post-Maidan" government was also a coalition, Taras Kutovyi was seen as a quota for UDAR, while noting his rapidly growing influence within Klitschko's motley crew. Nevertheless, the forces promoting Kutovyi continue to remain in the shadows. This is largely due to the fact that Ukraine's agricultural oligarchy itself does not desire publicity, and its business remains the most "shadowy" and corrupt: the grain schemes of Ukrainian traders are far more intricate than the gas schemes of Firtash and Boyko ( read more about them in the articles DMITRY FIRTASH. THE STORY OF A TERNOPIL BILLIONAIRE and YURIY BOYKO - "UNTOUCHABLE ")!
As Minister of Agrarian Policy, Taras Kutovoy immediately published a program for reforming the sector, entitled "3+5." Despite the fact that it was written in convoluted economic terms and presented in a celebratory, patriotic atmosphere, the program was harshly criticized. Experts noted a number of strange inconsistencies: for example, Kutovoy advocates the rapid, total privatization of all enterprises in Ukraine's agricultural complex (including port elevators), which fits perfectly with the concept of a proponent of liberal economics. However, he also opposes the free sale of agricultural land, preferring long-term leases (49 years) and turning leasehold rights into a commodity that can serve as bank collateral. According to experts, Minister Kutovoy is simply defending the existing system of "latifundist tenants," who have no interest in purchasing land at market prices because they rent it for pennies from villagers (who don't know what to do with their shares). Moreover, Taras Kutovoy was once personally involved in creating schemes to increase the capitalization of agricultural holdings with leased land. Today, his companies operate under these schemes, and he, too, has no interest in changing the established rules of the game. After all, financier Kutovoy is ultimately interested in the value of shares and real estate, not the volume of harvested crops.
Kutovoy Taras
A flurry of criticism has also been leveled at the planned privatization of the State Food and Grain Corporation of Ukraine (SFGCU), currently the country's largest grain trader (with an export capacity of up to 2,5 million tons). Not only has SFGCU been deliberately incurring losses since 2014 (currently reaching UAH 3,9 billion), but the current Minister of Agrarian Policy has also denied it a UAH 900 million VAT refund. Private grain oligarchs received VAT refunds, but the state-owned corporation did not. Therefore, Taras Kutovoy has been directly accused of deliberately bankrupting SFGCU and then selling it for pennies – thus eliminating the main competitor of Kutovoy's friends from the market.
"3+5" was also criticized as an outright scam. Specifically, the plan to lease Japanese agricultural machinery to farmers was described as a scheme in which the equipment would be supplied through shell companies (operating under the minister's protection), which would then transfer the proceeds to offshore accounts, leaving the state indebted to Japan. Why did some experts conclude this? Apparently, Taras Kutov already has a certain reputation.
Meanwhile, in the summer of 2016, a fierce battle for a vacant parliamentary seat in Lokhvytsia's 151st constituency unfolded. Rumors circulated that, having received the ministerial portfolio, Kutovoy promised in exchange to guarantee victory in Lokhvytsia for the BPP candidate—Oleksiy Ryabokon (he ran as an independent). However, polls showed Ryabokon losing the race to Batkivshchyna candidate Ruslan Bohdan. Then, on the last day of candidate registration (a month before the elections), the list was expanded by 17 more nominees (bringing the total to 48), including "anti-terrorist operation" veterans and members of "patriotic organizations." Then, unprecedented pressure was exerted on the local Batkivshchyna branch, with many of its members simply leaving Lokhvytsia before the elections were over. And yet, Ruslan Bohdan won—after which Kutovoy's people could only try to declare the elections rigged by calling on all the losing candidates to participate in the protest.
In July 2016, another scandal involving Taras Kutov erupted in Odesa, where Andriy Tofan, head of the Odesa Regional Phytosanitary Inspectorate, was caught accepting a $27,000 bribe. His appointment was made by the minister in agreement with Ruslan Solvar, a BPP MP ( read more about him in the article " Ruslan Solvar: The Family's Overseer of Rail Freight Transport Is Still in Business "), who is close to the Presidential Administration and literally controls freight traffic through Odesa.
Just two weeks after this high-profile scandal, another of Taras Kutovoy's subordinates was caught taking a bribe in Kharkiv: an official from the Ministry of Agrarian Policy demanded $150 from a company for assistance in winning a government tender. The minister immediately fired the arrested woman and reiterated his intention to purge his department of corrupt officials. This only elicited ironic smirks from those who knew Taras Kutovoy well.
Sergey Varis, for SKELET-info
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