Page 11 - UKRRptFeb24

These structures were entirely useless middlemen between Gazprom and Naftogaz, the state-owned gas company, that made hundreds of millions of dollars in profit a year. They were state-level institutionalised corruption schemes with Big Four audited accounts. For example, the director for Eural Gas was Andras Knopp, a former Hungarian communist cultural functionary with no experience of the gas business whatsoever.
They replaced even more opaque companies like Russia’s Itera gas company, a nominally independent gas trader that even aspired to IPO, Gazprom used to give exclusive export deals to handle and similarly made hundreds of millions of dollars in profit for doing very little. I interviewed Itera’s CEO Igor Makarov in his Moscow office who practised putting while we talked with a golf club made out of gold.
These schemes were created to legally siphon off huge amounts of money that was then distributed between Gazprom’s management, high Kremlin officials and top Ukrainian politicians.
Maidan
The fight against corruption has been a perennial theme since the original Orange Revolution in 2004 when the people rose up to install Viktor Yushchenko as president after the establishment’s Viktor Yanukovych tried to fix the vote.
Tens of thousands came out onto the streets in protest and eventually Ukraine’s constitutional court ruled in Yushchenko’s claim and he was legitimately installed as president in a very rare victory for real democracy in the Former Soviet Union (FSU).
A former banker and liberal reformer, Yushchenko was not corrupt and that might have been his problem. He brought with him the promise of change, but he proved to be ineffective, before being forced into a fateful deal with the existing oligarchs that undermined his programme. But even the Orange team didn’t escape the taint of corruption.
Yushchenko appointed Yulia Tymoshenko with her trademark peasant hair braid Prime Minister. In Ukraine she is better known as “the gas princess” as after she served several years as Ukraine gas minister, during the heyday of the gas trading company scams, she allegedly left the job worth an estimated $350mn. Once asked by a journalist how she could afford Channel suits on a minister’s salary, Tymashenko shot back, “Don’t ask rude questions.”
The Orange team were ousted when Yushchenko’s Prime Minister and Ukraine’s Marianne aux barricades was narrowly defeated at the polls by Yanukovych’s second bid for the presidency in 2012, in what was again considered one of the few “free and fair” elections ever to be held in Eastern Europe.
Yanukovych’s legitimate victory in the polls ushering an era of some of the most unprecedented corruption that the FSU has seen – even by Ukraine’s low standards.
Yanukovych’s rule was more like that of a mafia boss, who took a percentage of any business of value. On one occasion legend has it he took over a
11 UKRAINE Country Report February 2024 www.intellinews.com