Friday, March 28, 2014

Ukraine – Corruption

Ukrainian investigators are moving as fast as they can to track down all that was looted from the country in the past three years.  The amount is staggering, $40 to $70 billion dollars.  They are finding millions in loose change at the properties of several ex-ministers.  The following are clipped from three articles cited below.

On March 21, the Ukrainian Prosecutor General's office has conducted 32 searches at the firms connected with ex-energy and coal industry minister Eduard Stavytsky and ex-agrarian policy and food minister Mykola Prysiazhniuk.  

Interior Minister Arsen Avakov said, "We have seized $286,000 plus UAH 659,000 and several expensive watches of famous brands from Prysiazhniuk, and $1.717 million plus UAH 1.25 million from his deputy Symonov." He clarified that the searches were carried out as a part of a criminal investigation into embezzlement of budget funds at the Agrarian Policy Ministry.

Another search, conducted in the apartment of a former high-raking Agrarian Policy Ministry official close to Stavytsky, produced $1.7 million, 1.4 million hrivna and several thousand Euros in cash, he said.

"The former civil servants managed to transfer a larger share of their assets to foreign bank accounts. What was found in the searches was cashed-in assets. We think the cash had been taken out of the country in bags in several flights," the deputy prosecutor general said.

Just one police raid on March 21 on a property that belonged to former Energy Minister Eduard Stavitsky uncovered a fortune that cannot be explained by his $15,000 in earnings declared last year.

“One safe was completely stuffed with cash – about $5 million. Another safe was fully stuffed with gold and jewelry – 50 kilograms of gold bars, and jewelry made of various metals – gold, platinum and diamonds,” Prosecutor General Oleh Makhnitskiy said on March 22.

The previous day, Ukraine’s law enforcement agencies searched 32 different premises that belonged to Stavitsky and another former top official, Agriculture Minister Mykola Prysyazhnyuk. In his flat, he kept $300,000 and Hr 800,000 in cash, among other things. Both ministers were a part of overthrown President Viktor Yanukovych’s close circle.

The raids also yielded many title deeds to land, ownership documents of offshore and other companies and details of various bank accounts that would be enough to keep law enforcers busy for months, untangling webs of business deals and chasing stolen assets.

But there has barely been a day when the law enforcers did not get back home with an impressive catch, which has been both satisfying and extremely depressing for the nation, which is discovering just how much it has been looted from over the past few years.

Moreover, the job has turned into a truly international project as teams from the United Kingdom and the U.S. stepped in earlier this month to help trace international operations of Ukraine’s corrupt elite, many of whom already face travel and economic sanctions and asset freezes by the European Union, the U.S. and a few other countries.

Bounty hunters, the lawyers who specialize in asset recovery, are digging into company documents in exotic destinations anywhere from North Africa to Central America.

In the meantime, journalists at home continue combing through files found in presidential real estate Mezhyhirya and gluing back together shredded documents from the offices of Serhiy Kurchenko, a young former billionaire whose companies served as a front for the business activities of the president and his family.  Investigators have uncovered Kurchenko’s gas trading schemes that robbed the state treasury of $1 billion.

This link has pictures of the loot:

Then there is Mr. 50%, Yanukovych, himself.  

This blog post in the Financial Times explains how Yanukovych rose from being a small time government gangster in the Donetsk region to establishing mafia-like control of the entire country. http://blogs.ft.com/beyond-brics/2014/03/24/guest-post-viktor-yanukovich-mr-50-per-cent/#axzz2wuxthxCI

Once Yanukovych became Prime Minister in 2002, he was in a position to provide cover for his “friends” for which he charged them a mere 50%.  Because Government officials are immune from prosecution under Ukrainian law, The Party of Regions became popular after the Orange Revolution for former Kuchma era officials and oligarchs who wanted protection, initially from the Yushchenko election campaign slogan of ‘Bandits to prison!’ and then from Yulia Tymoshenko’s anti-elite populism. Once they were elected as Deputies or had friends who were in a position to protect them, they were safe.

Documents found in Yanukovich’s ostentatious Mezhihirya palace, first-hand evidence from businessmen who had been corporate raided and interviews provided by business leaders all point to his long-established rule of a 50 per cent tribute in return for providing a krysha (roof). After Yanukovich fled Ukraine, Dmytro Oliynyk , the deputy head of the executive council of the Federation of Employers of Ukraine spoke about the 50 per cent rule having become the norm ‘in recent years’. (See link above for how it worked).

To see pictures of ONE of his homes, the famous (infamous) Mezhyhirya, just Google it under images.  There are scores of great picture and more added every day as investigators continue to go through his house.

Which brings us to Mr. Putin and his life as a galley slave for Russian people.

"As for my personal perception, I am not ashamed before the citizens who voted for me. All these eight years I worked like a galley slave, to spare no effort.  I am happy with the results"

An organization in Russia put together a booklet of Putin’s luxury items from estates and palaces to ships to watches called “Life of a Galley Slave”.  
Here are some examples with photographs of the 20 palaces, villas and residences at President Putin’s disposal including a $1 billion dollar palace at Sochi.

Here is the original Life of a Galley Slave site in Russian but you can use Google translate to get a half decent English version.  I have seen a copy and you can download it from the site below as a PDF.

A few other pictures of his Sochi palace here:

Medvedev can’t begin to touch him as he has only this little cottage at Sochi


3 comments:

  1. It just gets worse, and worse, and worse.I expect it will take years to find tens or hundreds of billions of dollars diverted to the "presidential pocket." No wonder the country is in so much trouble. Of course the IMF will make things worse.

    Blessings and Bear hugs!

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  2. I am sure these guys feel they are all entitled to steal from their people for the great service they have done. Is there any deterrent at all in place or is justice only done in revolution?

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    1. The interim government is in process of cleaning up the judiciary and the police though it is very difficult as virtually all were involved in helping enforce Yanukovych's diktats.

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