Vadim Rabinovich: Secrets of an Underground Billionaire
He's somewhat reminiscent of his namesake from the anecdotes: the same calculating pragmatist, never at a loss for words. While in full view, he manages to remain one of the most secretive figures in Ukrainian business and politics.
Rabinovich Vadim Zinovievich He belongs to that category of people who don't do anything without a reason and know about events before they happen. And if he's now renamed his "Center" party to "Life," and his media outlets have started publishing its passing ratings, it means Kyiv is once again in the throes of early elections. For the lucky, this is a chance to win a mandate, for the rich, it's an opportunity to buy one, and the smart ones will be able to sell many mandates on party lists.
The splendor and poverty of the oligarchs
Rabinovich could certainly use some money, as according to income declarations filed in recent years, he has literally become impoverished, as if in solidarity with the Ukrainian people. In 2013, his income amounted to one million hryvnia (over $120 at the time) from the sale of securities: Rabinovich was divesting some assets, as if sensing imminent upheaval. He still had 550 hryvnia "in the authorized capital of enterprises and organizations," 147 hryvnia in bank accounts, and two cars: a Lexus LX 460 (2011) and an old but armored Mercedes W 140 S 600 (1996), which he perhaps holds dear as a memory of the turbulent 90s.
Vadim Rabinovich: Secrets of an Underground Billionaire
Yet, one of Ukraine's richest men had no real estate whatsoever: he was, as they say, "neither a man nor a woman." Three plots of land (0,067 hectares, 0,1 hectares, and 2,4 hectares), two residential buildings (106,6 square meters and 688,2 square meters), a dacha (357,8 square meters), and a one-room apartment (29,7 square meters), which is woefully inadequate in comparison, are registered to his family members: his wife, Irina Igorevna Rabinovich, and his eldest son, Oleg (born in 1973). They also own five vehicles: a 2003 Toyota Land Cruiser, a 2008 Lexus LX570, a 2005 Lexus LX470, a Brig Eagle 645L motorboat (market value: approximately $20), and a Yamaha VX 1100-H jet ski (market value: approximately $000). The declared income of Rabinovich's relatives for 2013 was 20 hryvnias (approximately $000) in salary and 42,7 hryvnias (approximately $210) from the sale of property and securities.
A year passes, and the well-being of Vadim Rabinovich and his family has become much worse.
He never acquired any real estate, nor did his wife and son buy anything new, although they didn't sell theirs. They still owned the same fleet of cars, but their income plummeted. For 2014, he declared only 32,366 hryvnias of personal income: this included Rabinovich's parliamentary salary for November and December (he was elected fourth on the Opposition Bloc list in the snap elections on October 26, 2014) and proceeds from the sale of property. Meanwhile, his share in the authorized capital increased to 1,213,490 hryvnias, but his bank deposits fell to 87,900 hryvnias—a reasonable figure given the onset of inflation. Rabinovich's wife and son officially received only 16,909,000 hryvnias between them in 2014, which would hardly have been enough to cover utility bills and gasoline. However, according to the declaration, their annual maintenance expenses for this property amounted to only 8,160 hryvnias. Is this for the maintenance of three houses (over 1100 square meters in total), a one-room apartment, and three cars, a boat, and a jet ski?
In 2015, the Rabinovich family's life improved and, presumably, became more enjoyable, as their official income increased. Vadim Rabinovich brought home 72,855 hryvnias from his parliamentary salary and 50,000 hryvnias from the sale of securities. However, it's unclear what these securities were, as the size of his declared assets remained unchanged, and he didn't disclose any others. His family's income increased to 28,992 hryvnias in 2015, and their social benefits likely increased. Quite a feat, even for a family of office workers living in an ordinary apartment in Obolon. But it's still very modest for a businessman with 35 years of experience, an international media mogul, and a Ukrainian oligarch.
Vadim Rabinovich. Soviet "workshop worker"
They say that the habits of youth last a lifetime. This could explain why Vadim Rabinovich still hasn't emerged from his role as the underground millionaire Koreiko, as he began his business career during the Soviet era of stagnation.
Vadim Zinovievich Rabinovich was born in Kharkiv on August 4, 1953. His father was a former military man who retrained as a factory engineer, and his mother was a local physician. It all began with the classic "I wanted a bicycle, but my dad didn't earn enough." Furthermore, the Rabinovich family had four children (two boys and two girls), so their parents' income was truly insufficient to fulfill all their childhood dreams. Whether young Vadik's financial problems were resolved is not revealed in Rabinovich's biography—apparently, he never got his bicycle. His admission to the Kharkiv Highway Institute (1970), expulsion for "immorality" (1973), and subsequent service in the Air Defense Forces (1973-75) did not distinguish the future genius of underground entrepreneurship in any way. But here's an interesting fact: immediately after his military service, Rabinovich took a job as a foreman in the construction department (SMU) of the Kharkiv City Executive Committee. A demobilized soldier could only get a similar position in a construction and installation department like this through someone's patronage.
It was there that his business acumen came into its own. Few people know today how exactly the young craftsman Rabinovich earned extra money to buy new jeans, but in January 1980, he was arrested for embezzling building materials. As he later claimed, for just three rolls of wallpaper. One wonders what three standard rolls of wallpaper could cover—a hallway in a Khrushchev-era apartment. However, as the aliens in the famous film said, "there is other information." It's that, along with the three rolls of wallpaper, the young craftsman had also pilfered nearly 500 meters of scarce linoleum and a certain amount of even more scarce parquet flooring. Of course, not by himself, but as part of some scheme. This story had a strange ending: after nine months in pretrial detention, Rabinovich was suddenly released "for lack of evidence of a crime," closing this little-known chapter of his biography.
Upon his release, Rabinovich immediately took up a far more respectable endeavor than stealing wallpaper from construction sites: he became a "workshop worker," opening a shady production of wooden panel doors. At the time, installing such doors as a second entrance, or even replacing interior "cardboard" ones, was considered quite chic. Prices for doors started at 100 rubles, but there was a queue for them, also an "underground" one: since production was illegal, the doors were distributed through a closed network of connections and acquaintances.
However, the OBKhSS knew these schemes very well and even controlled them.
Several aspects of Vadim Rabinovich's early entrepreneurial career, not fully covered in his official biography, are of interest. For a young man fresh out of pretrial detention to open his own "workshop" was even more difficult at the time than for a demobilized soldier to become a foreman in the executive committee's construction and assembly department. This required extensive connections, recommendations, and the help of "respected people." Yet, he became not just a "workshop worker," but the overseer of several production facilities. "In Soviet times, I owned a small crystal manufacturing business. I earned 3000 rubles a day."" he bragged in one of his interviews. He also oversaw the illegal production and distribution of wall calendars featuring photographs of popular artists.
In 1982, Vadim Rabinovich was arrested, which, however, did not stop the illegal production of doors, calendars, and crystal in Kharkiv. He was given a harsh trial, charged with theft of social property on an especially large scale, which was hardly consistent with door production or even the casting of crystal vases. Rather, it involved "misuse" and the simple disappearance of large quantities of materials from major enterprises. Rabinovich was sentenced to 14 years in prison, with confiscation of property. However, there was almost nothing to confiscate from the young entrepreneur—just as there is now, now that he has become a seasoned oligarch.
Kholodnogorsk Correctional Colony No. 18
In pretrial detention, Rabinovich attempted to "pass a confession," then feigned insanity, but ultimately ended up in the "zone," located just beyond the fence of the pretrial detention center. Kharkiv's maximum-security prison colony No. 18 (Kholodnaya Gora), which housed first-time long-term prisoners, accepted them. There, he says, he found a job as something of a "supervisor," thanks to his good connections and support from the outside. This support also came from the authorities: many of Rabinovich's acquaintances who had left for Israel appealed to the Soviet authorities from there, calling for the release of this "outstanding man." This was far too much support for an ordinary Soviet "workshop worker," albeit one of Jewish descent, and it speaks volumes about how Vadim Rabinovich was far from ordinary even then.
Vadim Rabinovich. From Nordex to 1+1
Rabinovich was released from prison early in 1990, following General Secretary Gorbachev's decree amnestying all "workshop workers." His first venture into freelance business was the company "Pinta," which Rabinovich founded with his former camp detachment commander, Andrei Aleshin, who became his trusted business associate. However, selling imported cosmetics and furniture didn't bring Rabinovich the satisfaction he desired. An old connection came to the rescue: influential people in Kharkiv's metallurgy industry suggested he start exporting cast ingots. With the help of other old acquaintances, Rabinovich quickly found a buyer in Israel, entrepreneur Mark Labelle, earning his first major fortune of $750. Over the next few years, trading metal and coal captivated Vadim Rabinovich: he registered his own company, "Rico" (Rabinovich and Company), and significantly expanded his business connections.
In the early 90s, Nordex, founded in Austria by émigré Grigory Luchansky, entered the fertile field of the former Soviet republics. It had signed numerous contracts, many of which ended in high-profile scandals, resignations, and criminal cases. Vadim Rabinovich became Nordex's representative in Ukraine in the fall of 1993. Nordex devised a scheme whereby the company became the exclusive intermediary for Russian oil supplies to Ukraine. In exchange, Ukraine, which lacked a freely convertible currency, was to pay with sugar shipments to Russia, while Nordex was to receive the profit from these barter transactions in dollars, following a rather convoluted scheme.
The deal was concluded at the government level with the participation of the then Deputy Prime Minister Efim Zvyagilsky, who became acting head of the Ukrainian Cabinet of Ministers in September 1993. This deal fell through after the Verkhovna Rada suspected a scam and indexed Ukrainian sugar prices according to market value. A serious scandal erupted, leading to Zvyagilsky's unexpected "illness," his subsequent flight to Israel, and the president's urgent intervention. Kravchuk, who took over management of the economy.
Meanwhile, Nordex, with its business connections spread across the globe, became embroiled in a corruption scandal in the United States, where the press linked Luchansky's name to the "Russian mafia." As a result, Rabinovich, as a Nordex representative, was barred from entering the United States for several years. He decided to officially sever this connection, which had begun to hinder his future business. In the summer of 1995, Rabinovich, along with Luchansky, founded Ostex AG in Switzerland. In March 1996, he bought out his other half, publicly announcing the end of his partnership with Nordex. Ostex and Rico then merged to form RC-Capital-Group, which became his primary trading company.
However, Rabinovich's interests weren't limited to metal and fuel. In 1994, his attention was drawn to the media, which he saw as a profitable business: advertising, promotion, and sales of television channels and publications, PR and anti-PR for politicians. His first major step in this field was the creation of the 1+1 television channel in 1995. Rabinovich's first partner in this project was Boris Fuksman, who was also banned from entering the US at the time on charges of criminal ties, but for a different "business": since the 70s, Fuksman had established international trafficking channels for stolen antiques. His second partner was Alexander Rodnyansky, who later became a renowned Russian producer.
Three years later, their joint business ended in a scandalous split: Rabinovich accused Fuksman of "rat-hunting," who recruited Rodnyansky, and together they ousted Rabinovich from "1+1," forcing him to sell his stake to Fuksman for $2,5 million. The pressure was exerted by leaking incriminating evidence against Vadim Rabinovich, whom the Associated Press had named a Ukrainian billionaire in the late 90s.
Tanks and the Golden Menorah
On June 24, 1999, the SBU press center published a decision banning "Israeli citizen Vadim Rabinovich" from entering Ukraine for five years. This was explained by his "activities causing significant losses to the Ukrainian economy and in the interests of ensuring the country's security." By that time, Rabinovich had become embroiled in another scandal involving the shadow arms market, shipping from Ukrainian warehouses to the world's hot spots. And yes, he had long held dual citizenship: Ukrainian and Israeli. Despite the fact that both are banned in Ukraine, second and even third passports of oligarchs and politicians have always been overlooked.
Vadim Rabinovich: Secrets of an Underground Billionaire
The irony of the situation, however, was that Rabinovich was "in deep trouble" at the time: he was being investigated not only by Ukrainian and American authorities, but also by Israeli ones. The reason was the broad geography of the arms deals, which affected the interests of many countries. While tank shipments to Liberia angered only the Ukrainian opposition, arming the Taliban and Chechen militants angered Russia, arms and ammunition sales to Yugoslavia angered Europe, and the sale of certain components to Iran infuriated Israel and the United States.
Vadim Rabinovich: Secrets of an Underground Billionaire
Many Ukrainian and foreign businessmen were implicated in the arms scandal: the names of Semyon Mogilevich, Leonid Minin, Sergei Mikhailov, and Leonid Wulf were mentioned. In June 1999, Israeli police arrested and interrogated another defendant in the case, Andrei Aleshin, a close associate of the oligarch. After the interrogation, he was stripped of his Israeli citizenship and deported from the country. The ring around Rabinovich was tightening.
There were already rumors that he would be banned from entering Israel, which was clearly what his competitor wanted. Evgeny Chervonenko, with whom they clashed not only over business, but also over the title of "chief Jew of Ukraine." The fact is that in 1997, Rabinovich headed the All-Ukrainian Jewish Congress, to the creation of which he donated a million dollars, and in April 1999, the Jewish Confederation of Ukraine, with the support of Yefim Zvyagilsky and Viktor Pinchuk (Read more about it in the article Viktor Pinchuk: Ukraine's richest son-in-law) was headed by Chervonenko.
To this day, it remains unclear what exactly led to Rabinovich's unexpected acquittal and the clearing of all suspicions and accusations of involvement in both arms trafficking and ties to the "Russian mafia." But the turning point was the appearance of a golden menorah in Jerusalem, near the Western Wall—the manufacture of which he paid for out of his own pocket. At the time, Ukrainian media reported that the menorah contained nearly 700 kilograms of pure gold; later, Israeli media cited figures of 50 and 37 kilograms, while Rabinovich himself modestly remained silent about its value. But this investment in the culture of his second (or first) homeland, as well as Vadim Rabinovich's subsequent participation in volunteer missions supporting the fighting Israeli army, fully paid off. Not only did he once again become a respected Israeli citizen, a street in Jerusalem was named after him—the very same one on which his golden menorah stands.
However, it appears that the matter was not merely a minor one for Israel. On December 20, 1999, the head of the Ukrainian Orthodox Church of the Moscow Patriarchate, Metropolitan Vladimir, presented Rabinovich with the Order of St. Nicholas the Wonderworker, First Class, with the inscription "for increasing goodness on Earth." What this goodness was, how much Rabinovich increased it by, and who received it remained another secret of the Ukrainian Koreiko.
Vadim Rabinovich, pRessa, tits and mandate
In the fall of 1999, Rabinovich returned to Ukraine at the invitation of then-head of the Security Service of Ukraine (SBU), Leonid Derkach, who personally accompanied him to Israel. Rabinovich's return coincided with several important events: the presidential election and Kuchma's second term, the redistribution of the Ukrainian market and a new wave of privatization, and the emergence of a new generation of Ukrainian oligarchs. Against this backdrop, Rabinovich was no longer Ukraine's richest man, and he no longer had much room to invest: the metal, coal, chemical, and especially oil and gas markets had been firmly redistributed among the clans that had emerged under Kuchma. Rabinovich, however, had the good sense not to try to take anything from them. He chose his niche, developing his media business and preparing for a career in politics.
The foundation of Rabinovich's new business in Ukraine was the company "Media International Group" (MIG), which gradually acquired numerous media outlets, including the television channels OTV, News Network, and Jewish News One, the publishing house "CN-Stolichnye Novosti," the website "MIG-news," the weekly "Delovaya Nedelya," and the publishing house "MIG" (Israel). However, while developing his media outlets, he sold most of them to other oligarchs, always retaining only "MIG-news." Only Rabinovich himself knows how profitable this business is, and whether it generates any significant income at all. And he still prefers to keep not only his income but also his assets private.
Vadim Rabinovich
Vadim Rabinovich is not only secretive but also unpredictable, sometimes possessing a very peculiar imagination. For example, he is believed to be the main sponsor of the scandalous pornographic feminist movement "FEMEN," which became famous throughout Ukraine and then Europe for its outrageous displays. There is also a connection between the "general of the Ukrainian Cossacks," Mykhailo Gutsol, co-chairman of the Raduga party and a loyal sycophant of Rabinovich, and his daughter, Anna Gutsol, the main inspiration for FEMEN.
Why does Rabinovich need a "Cossack general" who defends not only nature but also the rights of sexual minorities, and a troupe of screaming, naked feminists adorned with slogans? Maybe he's just having fun! But he also doesn't advertise his patronage of Raduga and FEMEN. Such connections are completely unnecessary for Rabinovich the politician, who is currently attracting the votes of protest and conservative voters by positioning himself as a defender of ordinary people living on a single salary.
Sergey Varis, Skelet.Org
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