The prime minister and president's inner circle continues to profit from state-owned enterprises and tenders, while law enforcement turns a blind eye. When laws fail to work, or work selectively, the streets speak.
On November 9, the Ukrainian Pravda website published an investigation, “Nuclear Enrichment of Nikolai Martynenko.”
It described in detail the scheme for the supply of Kazakh uranium concentrate to the Ukrainian state-owned enterprise VostGOK using the Austrian shell company Steuermann Investitions.
We were able to prove this company's connection to Mykola Martynenko, head of the parliamentary committee on fuel and energy issues and a close ally of Prime Minister Arseniy Yatsenyuk. Because the contract was not signed directly with the manufacturer, the Stepnogorsk plant, the Ukrainian state-owned company will be forced to overpay approximately 770 million hryvnias annually. This money represents the margin of an Austrian company that produces nothing, has no website, and whose director is the founder of a dozen other similar companies.
The editorial staff has access to all the documents necessary for the investigation, and law enforcement agencies in other countries have already expressed interest in the facts presented in it (it is too early to disclose details).
There was no reaction from Ukrainian law enforcement, although the SBU had already expressed interest in the contract in the summer and even issued a press release detailing the uranium concentrate supply chain and estimating the state's damage at the time at $10 million.
According to our information, the uranium concentrate supply chain is far from the only one Martynenko has a hand in. Our sources in the energy sector claim he influences the operations of several state-owned companies: Energoatom, Ukrgazvydobuvannya, Ukrtransgaz, and the Odesa Port Plant.
The connection with the last state-owned enterprise, whose privatization the Cabinet of Ministers postponed again in October of this year, was revealed literally today.
Liga.net published an article about an unknown Austrian company that signed a gas supply contract with the Odessa Port Plant in October of this year.
The contract provides for the toll-based processing of natural gas supplied, including via reverse flow, from Europe. Antra GmbH, as the publication notes, has never previously supplied gas, much less exported chemical products.
According to Austrian commercial registers, the company was registered in October 2013. 90% of its share capital belongs to the Swiss Universal Exports Holding AG, headquartered in Cham (Canton of Zug), and another 10% is owned by Austrian lawyer and entrepreneur Hinrichs-Schramm Eugen Jakob.
Until May 2015, this company was called System Actives GmbH and specialized in telecommunications projects. Its sole owner was Leonid Marchuk, a Vienna resident with Kyiv roots.
Previously, Ukrainska Pravda's sources in the oil and gas market reported that the entourage of Prime Minister Arseniy Yatsenyuk and President Poroshenko fought for informal control of the Odessa Port Plant this summer.
On the Prime Minister's side, they named Nikolai Martynenko. On the President's side, they named his business partner, Igor Kononenko.
The connection to Kononenko can be traced back to Olga Tkachenko, who was appointed to the OPZ board in May of this year. Ukrainska Pravda covered this in more detail in the article "The President's Universal Soldier: How Igor Kononenko Ran from Businessman to Eminence Grès."
Martynenko's trail at the OPZ can be traced through Leonid Marchuk, who was mentioned in a report by colleagues from Liga.net.
Until 2007, he was a shareholder and member of the supervisory board of JSC Starobabansky Granite Quarry, according to smida.gov.ua.
Marchuk's partner and the head of the supervisory board of this enterprise was a certain Mykhailo Anatolyevich Vergeles. In 2007, Marchuk and Vergeles jointly sold their shares in JSC Starobabansky Granitnyy Karyir and simultaneously resigned from the JSC's supervisory board.
This same Vergeles, Mykhailo Anatolyovich, headed the enterprise with foreign capital, KSK TA KO, whose founder is the firm BRINKFORD, which belongs to Martynenko and Zhvania.
(For more on the true identity of Mykola Martynenko's longtime partner, David Zhvania, see our publications: David Zhvania: A Man Without a Homeland, David Zhvania: A Man Without a Homeland. Part 2, and David Zhvania Lost More Than an Election. It's outrageous that businessman D. Zhvania, who clearly works for the Russian secret services, and former Komsomol member N. Martynenko, who likely also represents the same secret services, have been unpunished by Ukrainian law enforcement for nearly 20 years for their exploitation of Ukraine's state budget. The Zhvania-Martynenko tandem successfully exploited top government officials under Presidents Leonid Kuchma, Viktor Yushchenko, Viktor Yanukovych, and Petro Poroshenko—Argument).
KSK ta KO is also the founder of Energoinvest, which owns Diamantbank. One of the financial institution's shareholders is Martynenko's longtime partner, David Zhvania.
What is the "crime," you might ask? The fact is that this scheme will only harm the Odessa Port Plant, which the state has once again refused to privatize. Working with toll-based raw materials means that the entire final product will ultimately be the property of the gas supplier. The OPP will lose foreign currency revenue.
That means someone stands to make a good profit from the state-owned enterprise's facilities. This is far from the only suspicious contract signed by a state-owned enterprise this year.
The first contract, for the supply of ammonia, was signed by Odesa Port Plant with London-based Newscope Estates Limited, and the second with Hong Kong-based ExpoTrade Global Limited (signed by Olga Tkachenko, who has a connection to presidential team member Igor Kononenko). Ultimately, only the contract with the London company was implemented. Now, unknown Austrians, who may have patrons in the Ukrainian government, have joined the pool of those seeking to profit from the state-owned enterprise.
Old rake
Three years ago, around this time, my colleague Oleksandr Akimenko and I published our investigation, "The Gas King of All Ukraine." It revealed to the public the identity of then-President Yanukovych's "wallet man," Serhiy Kurchenko. The article presented evidence of several illegal schemes for siphoning money from the state budget in the petroleum products market.
Such machinations would not be possible in principle in a country where law enforcement agencies are not dependent on political influence.
But at that time, neither the Prosecutor General's Office, nor the Ministry of Internal Affairs, nor the Security Service of Ukraine found sufficient evidence to initiate a criminal case against the Gaz Ukraina group of companies. This was due to political inexpediency. The same situation occurred with the investigations of other of our colleagues—whether it was about the Boyko rigs, Mezhyhirya, or fraud in the agricultural market and the supply of coal to state-owned enterprises from coal pits.
Law enforcement agencies then responded to all parliamentary inquiries with formal replies that no violations in the companies' activities had been identified and that the facts cited were insufficient to initiate criminal proceedings.
A "green light" from law enforcement, tax officials, customs officials, and other officials turned Kurchenko into one of the country's most successful entrepreneurs in just a few months—he bought football clubs, factories, ships, and even a media holding company that then belonged to the current head of the Presidential Administration, Boris Lozhkin.
It seemed like nothing threatened this business empire, which was growing by leaps and bounds. And yet, 2015, the presidential elections, and Yanukovych's second term loomed on the horizon. And so did all members of Yanukovych's so-called "Family."
Until, in November, several thousand people decided to go out to Maidan.
What happened next is history. Kurchenko fled the country following Yanukovych, and his empire, lacking administrative resources, turned into a house of cards. For a year and a half now, he, like most members of Yanukovych's team, has been living in Moscow, facing criminal charges and sanctions.
Why did I recall this story? Because, unfortunately, little has changed in Ukrainian politics and business since then. The prime minister and president's inner circle continue to profit from state-owned enterprises and tenders, while law enforcement officials turn a blind eye.
The current government is making the same mistake, hoping that silence is salvation and the best response to well-founded accusations. That controlled law enforcement will avoid problems. That everything, as they say, will "blow over."
The president controls the Prosecutor General, who is constantly at Bankova. He's trying to keep Shokin in office, despite the discontent of his European partners and the loss of his personal approval rating. Why? Because he'll have a hard time finding someone equally loyal to the government who followed his orders.
The Minister of Internal Affairs is Arsen Avakov, a close associate of the Prime Minister, whose position was the subject of a real battle during coalition negotiations last year. Avakov could, for example, open a criminal case against Firtash, with whom the Prime Minister's camp is at war.
Law enforcement agencies in post-Maidan Ukraine are failing to fulfill their functions. They can be used by political actors solely as a tool of pressure. As has been said repeatedly: "Today it's Korban, tomorrow it'll be someone else."
Or they could just throw dust in people's eyes—as happened with the detention of the Ministry of Emergency Situations officials at a Cabinet meeting or the arrest of Mosiychuk in the parliament building.
For some reason, people at the very top think that the population doesn’t understand anything.
They don't really understand.
That Maidan stood not for European integration, but for changing the rules of the game and the law enforcement system.
That when laws don't work or work selectively, the street starts to speak.
—
Sevgil Musayeva-Borovik, published in the author's blog on the website of the Ukrainian Pravda publication
Translation: Argument
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