"Ukraine’s Oligarchs Turn on Each Other"

[KoKo]

Ukraine’s Oligarchs Turn on Each Other
March 24, 2015

Exclusive: Ukraine’s post-coup regime is facing what looks like a falling-out among thieves as oligarch-warlord Igor Kolomoisky, who was given his own province to rule, brought his armed men to Kiev to fight for control of the state-owned energy company, further complicating the State Department’s propaganda efforts, reports Robert Parry.

By Robert Parry

In the never-never land of how the mainstream U.S. press covers the Ukraine crisis, the appointment last year of thuggish oligarch Igor Kolomoisky to govern one of the country’s eastern provinces was pitched as a democratic “reform” because he was supposedly too rich to bribe, without noting that his wealth had come from plundering the country’s economy.

In other words, the new U.S.-backed “democratic” regime, after overthrowing democratically elected President Viktor Yanukovych because he was “corrupt,” was rewarding one of Ukraine’s top thieves by letting him lord over his own province, Dnipropetrovsk Oblast, with the help of his personal army.

Last year, Kolomoisky’s brutal militias, which include neo-Nazi brigades, were praised for their fierce fighting against ethnic Russians from the east who were resisting the removal of their president. But now Kolomoisky, whose financial empire is crumbling as Ukraine’s economy founders, has turned his hired guns against the Ukrainian government led by another oligarch, President Petro Poroshenko.

On Thursday night, Kolomoisky and his armed men went to Kiev after the government tried to wrest control of the state-owned energy company UkrTransNafta from one of his associates. Kolomoisky and his men raided the company offices to seize and apparently destroy records. As he left the building, he cursed out journalists who had arrived to ask what was going on. He ranted about “Russian saboteurs.”

It was a revealing display of how the corrupt Ukrainian political-economic system works and the nature of the “reformers” whom the U.S. State Department has pushed into positions of power. According to BusinessInsider, the Kiev government tried to smooth Kolomoisky’s ruffled feathers by announcing “that the new company chairman [at UkrTransNafta] would not be carrying out any investigations of its finances.”

Yet, it remained unclear whether Kolomoisky would be satisfied with what amounts to an offer to let any past thievery go unpunished. But if this promised amnesty wasn’t enough, Kolomoisky appeared ready to use his private army to discourage any accountability.

On Monday, Valentyn Nalyvaychenko, chief of the State Security Service, accused Dnipropetrovsk officials of financing armed gangs and threatening investigators, Bloomberg News reported, while noting that Ukraine has sunk to 142nd place out of 175 countries in Transparency International’s Corruptions Perception Index, the worst in Europe.

The see-no-evil approach to how the current Ukrainian authorities do business relates as well to Ukraine’s new Finance Minister Natalie Jaresko, who appears to have enriched herself at the expense of a $150 million U.S.-taxpayer-financed investment fund for Ukraine.

Jaresko, a former U.S. diplomat who received overnight Ukrainian citizenship in December to become Finance Minister, had been in charge of the Western NIS Enterprise Fund (WNISEF), which became the center of insider-dealing and conflicts of interest, although the U.S. Agency for International Development showed little desire to examine the ethical problems – even after Jaresko’s ex-husband tried to blow the whistle. [See Consortiumnews.com’s “Ukraine Finance Minister’s American ‘Values.’”]

Passing Out the Billions

Jaresko will be in charge of dispensing the $17.5 billion that the International Monetary Fund is allocating to Ukraine, along with billions of dollars more expected from U.S. and European governments.

Regarding Kolomoisky’s claim about “Russian saboteurs,” the government said that was not the case, explaining that the clash resulted from the parliament’s vote last week to reduce Kolomoisky’s authority to run the company from his position as a minority owner. As part of the shakeup, Kolomoisky’s protégé Oleksandr Lazorko was fired as chairman, but he refused to leave and barricaded himself in his office, setting the stage for Kolomoisky’s arrival with armed men.

On Tuesday, the New York Times reported on the dispute but also flashed back to its earlier propagandistic praise of the 52-year-old oligarch, recalling that “Mr. Kolomoisky was one of several oligarchs, considered too rich to bribe, who were appointed to leadership positions in a bid to stabilize Ukraine.”

Kolomoisky also is believed to have purchased influence inside the U.S. government through his behind-the-scenes manipulation of Ukraine’s largest private gas firm, Burisma Holdings. Last year, the shadowy Cyprus-based company appointed Vice President Joe Biden’s son, Hunter Biden, to its board of directors. Burisma also lined up well-connected lobbyists, some with ties to Secretary of State John Kerry, including Kerry’s former Senate chief of staff David Leiter, according to lobbying disclosures.

As Time magazine reported, “Leiter’s involvement in the firm rounds out a power-packed team of politically-connected Americans that also includes a second new board member, Devon Archer, a Democratic bundler and former adviser to John Kerry’s 2004 presidential campaign. Both Archer and Hunter Biden have worked as business partners with Kerry’s son-in-law, Christopher Heinz, the founding partner of Rosemont Capital, a private-equity company.”

According to investigative journalism in Ukraine, the ownership of Burisma has been traced to Privat Bank, which is controlled by Kolomoisky.

So, it appears that Ukraine’s oligarchs who continue to wield enormous power inside the corrupt country are now circling each other over what’s left of the economic spoils and positioning themselves for a share of the international bailouts to come.

As for “democratic reform,” only in the upside-down world of the State Department’s Orwellian “information war” against Russia over Ukraine would imposing a corrupt and brutal oligarch like Kolomoisky as the unelected governor of a defenseless population be considered a positive.

(Parry allows his articles to be posted in full)

https://consortiumnews.com/2015/03/24/ukraines-oligarchs-turn-on-each-other/

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1. Ukraine’s President Dismisses Key Governor in ‘Oligarch Crisis’

(Bloomberg) -- Ukraine’s president dismissed the billionaire governor of the Dnipropetrovsk region, escalating a clash that may complicate the government’s efforts to counter pro-Russian rebels and fix an economy devastated by war.

President Petro Poroshenko, himself the owner of a chocolate confectionery empire, signed a dismissal order for Igor Kolomoisky, Ukraine’s third richest man with a net worth of $1.36 billion estimated by Forbes. The order, in which the president officially accepted Kolomoisky’s resignation, came after the former governor’s security guards barricaded the headquarters of a state oil company last week.

The dispute with Kolomoisky, who has funded a group of volunteer troops fighting on the government’s side in Ukraine’s easternmost regions, opens a new challenge for an administration struggling to prevent a separatist advance and steer the economy away from default.

“Now I’m just a simple jobless Ukrainian,” Kolomoisky, 52, said Wednesday on Twitter.

http://www.bloomberg.com/news/articles/2015-03-25/ukraine-s-president-dismisses-key-governor-in-oligarch-crisis-

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2. Russia’s Lavrov compliments Obama

Russia has chosen to sidestep the provocative resolution passed with an overwhelming majority of 348 to 48 by the US Congress on Monday urging President Barack Obama to send lethal weapons to Ukraine. Of course, Obama himself would ignore it.

However, the Russian assessment rests on more fundamental considerations. In a television interview in Moscow last week, Foreign Minister Sergey Lavrov was optimistic that Obama is unlikely to decide on supplying lethal weapons to Ukraine. This is what he said:

“So far, the administration of US President Barack Obama has opposed supplying lethal weapons to Ukraine. They are proceeding from considerations rooted in their overwhelming desire for a political solution, and also from purely pragmatic reasons. They are aware that this could lead to a grave military situation. And the most important thing is the European Union doesn’t want it either. It is not taking its cues from a small, aggressive and noisy group of its member countries that couldn’t care less and are eager to endlessly blame Russia for all the sins in the world, to preserve the sanctions against our country, and so on. As things stand now, a change in the EU position seems entirely unlikely to me.” [Emphasis added.]

The friendly tenor of Lavrov remarks — as friendly toward Obama as circumstances would permit a Russian foreign minister at the moment — would suggest that there might have been Russian-American cogitations on this topic and Lavrov would have spoken in the light of recent exchanges with US Secretary of State John Kerry. Most certainly, an overall lowering of the US’ anti-Russia rhetoric on Ukraine is palpable in the recent week or two.

http://atimes.com/2015/03/russias-lavrov-compliments-obama/

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3. Ultra-Nationalist Ukrainian Militia Gears up For More Fighting

URZUF, UKRAINE—

The far-right Azov battalion, whose symbol resembles a black swastika on a yellow background, is preparing to defend the port city of Mariupol in southeastern Ukraine against a widely expected attack by pro-Russian separatists.

The 1,000 strong ultra-nationalist militia has a reputation as a fierce pro-government fighting force in the almost year-old conflict with the Russia-backed rebels in east Ukraine, and is disdainful of peace efforts.

But the radical views of the commanders of a group affiliated to Ukraine's national guard which works alongside the army, and the use of symbols echoing Nazi emblems have caused alarm in the West and Russia, and could return to haunt Kyiv's pro-Western leadership when fighting eventually ends.

“We don't like the cease-fire at all. As with the previous ones, it'll only lead to another offensive by the enemy,” Azov commander Andriy Biletsky told Reuters while watching artillery drills at Urzuf, on the shores of the Sea of Azov, about 40 km south-west of Mariupol.

http://www.voanews.com/content/ultra-nationalist-ukrainian-battalion-gears-up-for-more-fighting/2693676.html

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4. Ukrainian officials arrested in bribery case during televised cabinet meeting

Ukrainian police officers charged into a televised government meeting Wednesday and detained two top officials on suspicion of extorting bribes.

Police snapped handcuffs onto emergency services chief Serhiy Bochkovsky and his deputy and calmly marched the pair out of the Cabinet meeting.

Interior Minister Arsen Avakov said Bochkovsky and his deputy, Vasiliy Stoyetsky, were suspected of extorting bribes from fuel suppliers.

http://www.theglobeandmail.com/news/world/ukrainian-officials-arrested-in-bribery-case-during-televised-cabinet-meeting/article23610469/

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5. To See Ukraine’s Future, Recall Crimea

LONDON — Just over a year ago, Russia annexed Crimea in the first major land grab in Europe since World War II. The world has paid little attention to Crimea since then, but developments on the Black Sea peninsula provide fearsome insights into both the folly of Russia’s president, Vladimir V. Putin, in Ukraine and his campaign of intimidation against Russia’s near neighbors.

Over the past 15 years, Mr. Putin has built a system in Russia in which opposition voices are silenced, individual rights are trampled on, freedom of expression is restricted, organized crime is rampant and property rights are arbitrarily enforced. Since Russia annexed Crimea, Mr. Putin has imported the same grotesque mode of governance to the peninsula.

Many of the so-called self-defense forces that sprang up a year ago, alongside Mr. Putin’s “little green men” (as the unmarked Russian armed forces are colloquially known), were the foot soldiers of Crimea’s criminal gangs. The region’s elite has long had a close relationship with organized crime. Various news organizations have reported that Mr. Putin’s handpicked leader in Crimea, Sergei V. Aksyonov, was known in mafia circles as “the Goblin” in the 1990s. (Mr. Aksyonov has denied links to organized crime.)

http://www.nytimes.com/2015/03/25/opinion/to-see-ukraines-future-recall-crimea.html?partner=rss&emc=rss&_r=0

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6. Putin says Russia's military drills will continue

MOSCOW -- President Vladimir Putin said Tuesday that a recent Russian military exercise has marked the beginning of a series of such drills this year, a show of force that comes amid a bitter strain with the West over Ukraine.

Reflecting the tensions, U.S. and other NATO forces staged manoeuvres in the Baltics, and a convoy of U.S. troops has driven through eastern Europe in a bid to reassure the allies.

---

Defence Minister Sergei Shoigu reported to Putin Tuesday that the manoeuvres were aimed at checking the readiness of the newly formed group of forces in the Arctic, as well as the military's capability to quickly field troops to several theatres of operations.

"I proceed from the assumption that this was just the start of efforts to train the armed forces," Putin said.

http://www.ctvnews.ca/world/putin-says-russia-s-military-drills-will-continue-1.2295147

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7. Kremlin heads for collision course with Ukraine over debt haircut

Ukraine’s finance minister has insisted Russia will have to take part in a private sector debt write-off, putting the embattled country on a collision course with the Kremlin.

Natalie Jaresko said there was no alternative but for her government to proceed with a $15.3bn debt restructuring programme as part of the conditions of a rescue plan from the International Monetary Fund.

“We don’t see another path right now,” said the American-born Ms Jaresko, who is visiting London in a bid to drum up western financial support for her war-ravaged country.

Russia has resisted taking any losses on a $3bn bond which is due mature in December. The debt was issued as part of a bail-out for the then pro-Moscow Yanukovych regime which was toppled last year.

http://www.telegraph.co.uk/finance/economics/11492680/Kremlin-heads-for-collision-course-with-Ukraine-over-debt-haircut.html

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9. Ukraine Continues to Spend Billions on Arms Despite Debt Crisis

Russia expects Ukraine to discharge its $3 billion debt in December. The latter is, however, unlikely to follow the arrangement, as it seems to focus more on arms procurements, rather than on maintainance of its financial obligations.

According to forecasts of financial analysts, Ukraine is unlikely to repay Russia its debt of $ 3 billion, while at the same time it is planning to spend $ 3.8 billion on arms purchases, “Deutsche Wirtschafts Nachrichten” reports.

Since the beginning of the crisis, Ukraine has received several loans from the IMF and the EU, but the financial situation in the country remains fragile. The country is to repay $ 15 billion debt over the next four years, including the debt for Russia that is to be discharged by December 2015.

http://sputniknews.com/business/20150324/1019959267.html

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8. Internal Rifts in Ukraine Play in Russia's Favor – Analysts

When the incoming Ukrainian government faced the threat of sweeping separatism in the country's eastern regions one year ago, pugnacious billionaire Ihor Kolomoisky was the only oligarch to help.

As other tycoons hovered on the fence, unsure of how the ongoing fighting between pro-Russian rebels and government troops in the country's east would end, Kolomoisky assumed the office of governor of the key Dnipropetrovsk region, funding voluntary military battalions to fight against the rebels and offering hefty cash rewards for each captured separatist mercenary or government building returned to state control.

But as Kolomoisky, an owner of Ukraine's largest bank PrivatBank, gained political power in his stronghold, he sought to expand his influence to the national level and have a say in Ukraine's defense and foreign policies — ambitions that were at odds with the government's attempts to assert its power throughout the country, experts said.

Now the precarious balance of powers holding Ukraine together appear to be cracking. During the past week, Kolomoisky and his team have clashed with Ukraine's president —fellow tycoon Petro Poroshenko — and the central government in Kiev over the control of key national companies. While Russia may be indifferent to the ultimate winner in the struggle, the conflict itself plays in Russia's favor, said Alexei Makarkin, deputy head of the Moscow-based think tank Center for Political Technologies.

http://www.themoscowtimes.com/news/article/internal-rifts-in-ukraine-play-in-russias-favor--analysts/517994.html

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10. Ukraine's latest challenge: unhappy oligarchs with private armies

Moscow — As Ukraine struggles with near-financial meltdown and a shaky peace deal with pro-Russian rebels in the east, the last thing it needs is a showdown with a powerful oligarch with a private army. But that may be just what is brewing.

President Petro Poroshenko announced he has fired rough-and-tumble tycoon Igor Kolomoisky on Wednesday from the position as governor of the restive Dnipropetrovsk region of east Ukraine, setting up a potential clash between Kiev and one of its key oligarch allies. Mr. Kolomoisky was handed political power and the right to establish an army in the wake of last year's Maidan revolution, but last week triggered what some are calling a serious political crisis by using that force to seize the state oil company's headquarters in Kiev.

At stake now, experts say, is a harsh redivision of property and influence under way as Ukraine tries to meet International Monetary Fund demands for deep reforms to its oligarch-dominated economy.

http://www.csmonitor.com/World/Europe/2015/0324/Ukraine-s-latest-challenge-unhappy-oligarchs-with-private-armies

[KoKo]

14. A bit more that was interesting from the article: "Laws Unfriendly to Oligarchs"

Laws unfriendly to oligarchs

The trigger for the current crisis was a law passed by parliament last week to make it easier to change the management of state corporations. Kolomoisky owns a minority stake in state oil company UkrNafta, but he has controlled the company for years, cutting out competitors and channeling oil to his own concerns through the state pipeline company, UkrTransNafta, which he also controlled. When the government tried to fire the head of UkrTransNafta, the Dnipropetrovsk governor stormed its Kiev office with his armed militia. In an epic rant caught on video, he told journalists that he was protecting the building from "Russian saboteurs."

But he may be overstepping, say observers.

"Kolomoisky is an extremely influential oligarch and politician. He has a very strong lobby in Kiev," and he owns a major Ukrainian broadcaster, says Vadim Karasyov, director of the independent Institute of Global Strategies in Kiev. "But he's going up against the state here. He's threatening political stability in Ukraine."

Most experts say Kolomoisky's actions in Kiev, and the rally his supporters at home are planning Wednesday, are a bargaining ploy and not a declaration of war. The conflict might even have positive consequences if it forces Kiev to move on long-stalled plans for "decentralization" of power to the country's diverse region.

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15. Yeah, the IMF "requirements".

That and Yats is upset about getting the volunteer battallions under control, that's what's going to start the war up again, when the various warlords start going after each other, or maybe the rebels in the East will decide to duke it out with Kolomoisky or one of them. And the dramatic arrests during a cabinet meeting for corruption, that was convincing ... Not.

[KoKo]

16. There's been some speculation

that Yat's is "The Chosen One" if Regime Change is brewing. But, who knows if that's what will occur. The Battle of the Oligarchs (some with Private Armies /Security) can't be good for stability--any way one could look at it.

Every time I see video with Poroshenko he looks like "deer in headlights,"-- what am I doing here?" But, then one can't always judge by body language and he may just suffer from acute acid reflux given the situation he's in.

[bemildred]

17. I've been waiting for him to bolt somewhere.

Whatever they have on him, it must be good.

Although he is one of them too, the oligarchs, supposedly one of the honest ones. But it's hard to think he doesn't know the score, so to speak, he's been there and thriving too. He does look uncomfortable. But there are lots of possible reasons for that, money, guns, other politicians with ideas, he has a long list of worries.

I don't know what they are going to do, to be honest, anybody except Putin. Putin will keep watching and making counter-moves, he doesn't need to do much. But the guys in Kiev and the Westerners involved, the IMF, Merkel, the contradictions just keep getting more pronounced, like I said, I'm waiting for someone to bolt.

If the war starts up again, undeniably (although pretty much anything is deniable these days), the IMF program will have a short life. If it does not start up again, there will be endless wrangling over the Minsk II terms. We may well get both. Endless political wrangling and low-level warfare. In fact I think we do already.

[KoKo]

18. Indeed....

There's much for him to be fearful of.

I wonder if this would have occurred if they'd accepted the Russian Bail Out, instead. Or, perhaps since (unrest with Yanokovich was brewing all along) if Ukraine had accepted then Putin would have been in the middle of the Ukraine Oligarch Wars in addition to the oligarch problems he has to confront at home. Maybe the Russia Deal would have just delayed the inevitable. But, now it's the IMF and Europe's problem with us in the background cranking up the Cold War-2 Heat. Putin will continue to confront bellicose General Breedlove and NATO expansion with "backattcha" and Ukraine may fall apart to his advantage in the end.

Pepe Escobar thinks its all about "Pipelanistan" and what we are seeing is the struggle over the pipelines and the countries that get the money for the right of way, money and influence in the various "Pivots." It would explain our Freak Out over Ukraine and Putin when we should have just let the IMF and Eurozone figure it all out. And, there were both John McCain's early visits and Nuland's cookies (and private conversations) that can't be denied for our real interests there. And, addin Biden's errant son...who certainly is involved with oil...and Pipelanistan whose VP father has visited him there several times.

Of course....all just speculation. But does the West need WWIII with Russia when the MENA is in flames and chaos?

[bemildred]

19. I've read so many theories by now,

that I don't believe any of them. I have felt from the beginning that this was a surprise to everybody, Putin was fat dumb and happy there at Sochi, and I'm sure nobody else is getting the results they expected either, it's been a real lose-lose kind of deal this war in Ukraine.

It is a rich stew now, that's for sure.

It is interesting to think about how much of this was "baked in" as you suggest, but no way to tell. I have felt for some time that we over-estimate our own control over these events, the idea that somebody must be pulling the strings, and that sort of ties in with the "baked in" idea that external factors, not people, might be controlling events in-the-large more than we usually see or acknowledge. Since social unrest in all its forms often is related to economic problems (lack of food, water, etc.) this is often a much more productive way to think about things than listening to the back and forth among the politicians, who don't like to talk about such things.

So to summarize: yeah, you could see trouble was coming.

[bemildred]

11. . nt

[KoKo]

12. A bit of humor from the article:

A year ago Kolomoisky described President Vladimir Putin as "a diminutive schizophrenic" who is "completely unreasonable and crazy" during a meeting with local government members in Dnipropetrovsk.

The next day, Putin responded by calling Kolomoisky a crook.

"He even managed to cheat our oligarch Roman Abramovich two or three years ago. Scammed him, as our intellectuals like to say. They signed some deal, Abramovich transferred several billion dollars, while this guy never delivered and pocketed the money," Putin told journalists during a meeting on the unfolding Ukraine crisis.

In June, Russia's Investigative Committee opened a criminal case against Kolomoisky, accusing him of organizing murder, kidnapping and using banned methods of warfare.

[bemildred]

13. Yeah, it's not pretty. I think the war is going to start up again.

Soon. Lots of immovable objects and irresistable forces laying around.

[bemildred]

20. Ukraine's Oligarchs Joust, Putin Laughs

As if its festering conflict with Russia and war-torn economy weren't enough, Ukraine is facing a growing self-inflicted problem: a showdown between the government in Kiev and an influential billionaire with his own private army.

Sadly, this is not a righteous fight on either side.

The standoff -- which started last week -- entered a new phase today when President Petro Poroshenko fired the billionaire, Igor Kolomoisky, as governor of the economically and politically important Dnipropetrovsk region. The dismissal, ostensibly requested by Kolomoisky, comes as the two have been vying for control of state-owned oil pipeline monopoly Ukrtransnafta and oil and gas producer Ukrnafta -- a battle in which Kolomoisky has reportedly threatened to send troops to Kiev and actually deployed camouflage-clad fighters at an Ukrtransnafta office.

http://www.bloombergview.com/articles/2015-03-25/ukraine-s-oligarchs-joust-putin-laughs