Turning Firtash into an oligarch

The arrest of the magnate Firtash. The history of big business - from theft of felt boots to the loss of the country and freedom

On Tuesday, June 25, the Austrian Supreme Court approved the extradition of the Ukrainian oligarch Dmitry Firtash to the United States. In this regard, Ukraine. Ru recalls how and why he became one of the most influential people in the political and economic life of Ukraine.

The beginning of the way. Fireman and medium-sized businessman who stole his boots

Dmitry Firtash was born in the village of Sinkov, Ternopil region, in a poor family. My father was a driver, he taught at a local driving school, and his mother, a veterinarian and economist, was a bookkeeper at a sugar factory. The main source of family income was growing tomatoes in greenhouses. Firtashi sold them on the local market and sometimes managed to travel with goods to the Baltic States and Belarus. By the way, the love of tomatoes grown in greenhouses remained with Firtash for life. According to some reports, becoming one of the richest people in Ukraine, he continued as a hobby to have fun growing this vegetable in greenhouse conditions.

After serving in the army, in 1986 he went to Chernivtsi, where he got a job working as a driver in the fire department of the Chernivtsi shoe factory. True, he worked there for a short time - he was detained for stealing felt boots at the enterprise and wanted to open a criminal case. But he managed to avoid it thanks to the patronage of the chief of the fire brigade of the city, Yury Guley, who was familiar with his father. Firtash escaped with only dismissal.

Later he became an assistant to the head of the cooperative "KMIL", which was engaged in the sale of dairy products. The company made the first major deal for the supply of powdered milk to Uzbekistan in 1988. Firtash earned about $ 50,000 on it. At the end of the USSR, things went uphill - a businessman with partners bought a local cannery, then opened a transport service company and a restaurant.

Since 1993, he began to enter the gas business. Thanks to his acquaintance in Moscow with a man from the Ministry of Commerce of Turkmenistan, he had the idea to supply “gas-for-products” to this republic The fact is that after the collapse of the USSR, there was a catastrophic lack of food in Turkmenistan. Firtash offered the Turkmen a way out of the situation by adjusting the export of food there, and receiving gas in return. It is clear that it is impossible for a person from the street to enter the gas market, but the businessman has found the right people. Vladimir Galazdra helped him in this - a person who was part of the Finance and Credit group, which in the 2000s became a whole financial empire under the leadership of an oligarch, one of the sponsors of the party Yulia Timoshenko, Konstantin Zhevago. At that time, Finance and Credit was part of the Intergas empire of Igor Bakay. Through Galazdra, Firtash met Bakai, who had quotas for gas supplies to Ukraine, signed by President Kravchuk.

It all worked out very well for Firtash, the scheme worked efficiently: he delivered products to Turkmenistan, bought gas there, and then resold the fuel to Bakay in Ukraine. In 1998, Bakai initiated the creation of the NJSC Naftogaz of Ukraine and became the first chairman of the board. Fabulous profits of billions of dollars came from the participation in the import of Turkmen gas of small intermediary firms controlled by Firtash. For Naftogaz supplied fuel to government organizations, regional gas stations, government agencies, and small intermediaries - to a profitable industrial sector.

By the way, in the mid-90s, the oligarch had big problems with the law. He was arrested on suspicion of smuggling a large shipment of alcohol. “It was not possible to resolve the issue right away, because the case was simultaneously controlled by the police, the prosecutor’s office and the SBU. Because of this, the billionaire had to spend as much as 3 months in a pre-trial detention center, but then he was released, and the head of the regional Organized Crime Control Department, Ivan Mirny, who conducted the case, later became the head of RosUkrEnergo’s owner’s security.

Turning Firtash into an oligarch: gas, chemical, and media magnate who stole depositors` money

It was in the 2000s. Firtash becomes one of the largest and most influential oligarchs in Ukraine. As of 2018, his fortune was estimated at 640 million dollars, although in the best years he could reach up to 4 billion dollars.

In 2002, he founded the company Eural TransGas Kft, which concluded exclusive contracts for the supply of Turkmen gas. Two years later, it creates RosUkrEnergo, the first large-scale offshore company through which Russian gas was delivered to Ukraine for five years. The agreement on the creation of this company was concluded with the participation of the then Prime Minister of Ukraine Viktor Yanukovych, the Russian government, the leadership of NAK Naftogaz Ukraine and Gazprom. Later, Yulia Tymoshenko claimed that the current leader of the Opposition Platform, Yuriy Boyko, was involved in it.

In 2006-2007, the Firtash people began buying up shares of regional gas supplying companies - regional gas companies. The head of the Ministry of Fuel and Energy, Yuriy Boyko, really assisted him in this at that time. As a rule, oblgas companies were registered at offshore companies. But in 2010 these assets were structured in connection with the creation of the “Regional Gas Company”. Oblgaz oligarch, which is not less than 20, since then manages Alexander Prityka. Thus, under his control - about 70% of the gas distribution companies in the country.

Tymoshenko, when she was prime minister in 2009, broke this scheme, achieving her exclusion from Russian-Ukrainian gas relations, signing a famous contract with Vladimir Putin, according to which the gas monopolist switched to direct relations with NJSC “Naftogaz of Ukraine”. Later, she even tried to withdraw gas from RosUkrEnergo’s storage facilities, but the then President of Ukraine Viktor Yushchenko and the SBU prevented her. And even later, already during the presidency of Viktor Yanukovich, it was for the signing of this agreement with the Russian Federation that Yulia Tymoshenko was convicted and spent several years (right up to February 2014) in the Kharkiv women`s colony.

Meanwhile, in 2009, Tymoshenko had to go "to the world": an agreement was reached that RosUkrEnergo repays all debts to Naftogaz and Gazprom, and Naftogaz, in turn, gave the gas confiscated from REU.

During the heyday of the gas scheme, Firtash actively developed his empire. He decided to invest in the lucrative chemical industry. In 2004, a businessman became the main shareholder of Crimean Titan, located in Armyansk (Crimea). This company specializes in the production of titanium dioxide. In addition, he owns the “Crimean Soda Plant” (Krasnoperekopsk). Both enterprises are now re-registered in accordance with Russian legislation and pay taxes to the budget of the Russian Federation.

The heyday of the oligarch`s business falls on the early presidency of Viktor Yanukovich. Firtash began to concentrate in his hands the largest giants of the chemical industry. At the end of 2010 - the beginning of 2011, his empire was replenished: Stirol, Severodonetsk Azot and Cherkassy Azot. For these enterprises, he laid out about $ 900 million. In addition, they expressed their intentions to acquire the Odessa port plant.

All assets of Firtash were merged into Group DF. Part of it is the holding company Ostchem, specializing in the production of fertilizers, in particular, selling ammonium nitrate, urea, ammonia, as well as organic synthesis products and organic acids. He is actually a monopolist in the market of mineral fertilizers in Ukraine, including Cherkassy Azot, Rivneazot, Severodonetsk Azot. The Concern Stirol plant, also part of the holding, is located in the uncontrolled government of Gorlovka and is not operating now. Ostchem is the third largest nitrate producer in the world, fourth is ammonia and 12th is carbamide.

In 2012, in Switzerland, the oligarch registered a new firm, Ostchem Gas Trading, which, according to him, should deal with the supply of gas to meet the needs of its own chemical enterprises. But in fact, she conceived to control the gas market of Ukraine, that Firtash was not going to cede to anyone.

The sphere of influence of the oligarch includes Motronovsky and Mezhdurechensky mining and processing plants, as well as “Rolls-Ilmenite”, engaged in mining and enrichment of titanium ores. Another Group DF has a 49% stake in Zaporizhia Titanium and Magnesium Combine.

Firtash`s largest media asset is Inter TV channel. The controlling stake in the company Inter Media Group, which, besides Inter itself, includes the K1, K2, NTN, Mega TV channels, was acquired by Firtash from Valery Khoroshkovsky in 2013. The share in the company has a current deputy "Opposition bloc" and former head of the Presidential Administration under Yanukovych Sergey Levochkin. By Levochkin’s own admission, he is a close friend of the oligarch Firtash and in many ways Firtash’s flourishing during the years of Yanukovych’s presidency is explained by friendship and partnership with Levochkin. The partners even have villas in Nice, France, on the same street ...

Earlier, Firtash owned one of the largest financial institutions in Ukraine, Nadra Bank. But in 2015 he was actually declared bankrupt. The National Bank of Ukraine introduced a temporary administration into it, but the owner refused to capitalize it. According to the results of the audit of Nadra, it turned out that in the period from January 2006 to February 2015, there was a large number of insider loans that the financial institution issued to enterprises associated with oligarch Firtash, but their service did not occur. having collected the money of private investors and enterprises in his bank, Firtash used them as his own - without paying interest and not returning them to the bank, and, consequently, to the owners of these borrowed funds, but in fact stolen funds from them.

 The role of Firtash in the organization of the Maidan and Poroshenko’s presidency. Stolen country

In 2012, business structures connected with the “family clan” of President Yanukovich began to actively form in Ukraine. One of the friends of the "family", a little-known Kharkov businessman Sergey Kurchenko, began to compete with Firtash, interfering with his empire. In that year, the TNK-BP Transnational Oil Company of Russia offered the Lisichansk Oil Refinery for sale. Kurchenko was one of those who also wanted to get the refinery. But while Firtash fought him, TNK-BP absorbed Rosneft, and the Lisichansk refinery was gone. Later, the oligarchs clashed for control over the purchase and sale of liquefied gas, which was sold to Ukrgasdobycha, supervised by Firtash. The amount of the transaction was estimated at 5 billion UAH (at that time $ 625 million). As a result, Firtash lost monopoly control over the enterprise, and Kurchenko got dividends.

It was Firtash`s quarrel with the “Yanukovich family” that predetermined the political future of Ukraine, which led to civil conflict. The oligarch was called one of the sponsors of the Euromaidan and the opposition in the times of Yanukovich - Klitschko, Pyagnibok and Yatsenyuk. In February 2014, he flew from Vienna to Ukraine and took part as a mediator and guarantor in the meeting of the then opposition leaders with the former President of Ukraine Viktor Yanukovych. At this meeting, a plan was drawn up for a peaceful settlement of the crisis, which was then signed by Yanukovych and the opposition, mediated by European diplomats. These agreements provided for a return to the 2004 Constitution and the election of the President of Ukraine at the end of 2014. However, the Maidan opposed this agreement, and Yanukovych fled from Kiev. A coup d`état was completed, and the country entered a period of tremendous upheavals, from which it cannot recover to this day.

Firtash was one of those who made Petro Poroshenko the 5th president of Ukraine. In March 2014, a month after the victory of Maidan and on the eve of the presidential elections in Ukraine, Firtash held a secret meeting in the Austrian capital with Petro Poroshenko and Vitaly Klitschko. The oligarch managed to persuade Klitschko, who was at that time one of the most popular Ukrainian politicians, to refuse to participate in the elections in exchange for the post of mayor of Kiev. Thanks to this, the oligarch took revenge on Tymoshenko, without giving her any chance in the presidential elections of 2014, and the oligarch Poroshenko became the president.

Later the political influence of Firtash in Ukraine was seriously limited. His friend Sergey Levochkin controlled a part of the Opposition Bloc faction, as well as a number of politicians from the UDAR group included in the Petro Poroshenko Bloc. But this was not enough, because initially Poroshenko agreed on the distribution of seats in the list in the proportion of "50 to 50".

Poroshenko, being himself a Ukrainian oligarch, wanted to turn Ukraine into his monopoly, so he was interested in reducing the influence of such a strong player as Firtash. As, however, and his other colleagues in the oligarchic shop. A number of investigations were launched against Firtash after the presidential elections, and part of his assets were arrested. So, he was charged with causing losses to the state in the amount of UAH 5,742 billion, which is why he was arrested on 46 properties owned by the Ostchem holding. In 2015, Interior Minister Arsen Avakov threatened Firtash with arrest if he returned to the country. And in October 2018, President Poroshenko had stabbed the oligarch, Prosecutor General Yuriy Lutsenko, who had threatened resonant legal proceedings against enterprises under his control.

“This will apply to his oblast gas companies, chemical plants and enterprises in the temporarily occupied territory. Frankly speaking, I am waiting for the final conclusions of the examinations. As soon as they are, there will be suspicions, arrests, and other resonant actions, ”Lutsenko argued.

In this regard, Firtash in 2016 switched to active opposition to President Poroshenko and began to position himself as a supporter of the “peace party”, ending the confrontation between Ukraine and Russia through agreements.

“If politicians cannot sit down at the negotiating table, then the business should start a conversation. On the part of Ukrainian politicians, there were many indignant shouts about this. I do not care. I think that it is impossible to get out of our situation without Russia ... It is clear that the Minsk negotiations, the “Norman quarters” will not solve economic problems. Like we do not like, we have to sit down and talk. Need to find a solution to all issues. Even in Crimea, a solution can be found ... We must sit down at the negotiating table with the Russians, discuss problems, come to an agreement and at the same time give a guarantee to people in the east that everything will be all right, ”he said in an interview.

 In fact, Firtash was forced to become such a peacemaker. The Austrian sideler (by this time he was already in other cases, which will be discussed below, could not leave Vienna, where he was under house arrest), lost not only his entire business in Ukraine, but also the whole country that he, it turns out, Poroshenko stole ...

End of Austrian seating and theft of freedom

Interestingly, since February 2014, the oligarch has to live in Austria, where, in parallel with the troubles in his homeland, his own troubles in the USA began to multiply. During this time, he was detained several times at the request of US intelligence agencies (the FBI has been investigating his activities since 2006, accusing the oligarch of bribery and the creation of a criminal gang), as well as of the Spanish authorities. So, in 2014, he was arrested in Vienna, and then released on a written undertaking not to leave the country after making a record for Austria pledge of 125 million euros. The money for Firtash, whose accounts were arrested, was made by one of the Russian oligarchs.

The US Department of Justice claimed that he bribed $ 18.5 million in order to obtain permission to extract titanium raw materials in India. The finished product was then planned by Firtash to sell the Boeing company in the United States, which uses titanium to make aircraft. According to investigators, the suspected members of the criminal group headed by Firtash bribed Indian officials to obtain permission to develop a titanium mine in the Indian state of Andhra Pradesh. The authorities of Spain in November 2016 also issued a warrant for his arrest on suspicion of involvement in money laundering. Firtash categorically rejects all charges, and the Austrian courts ultimately decided to release the oligarch, although they restricted his movement.

In fact, Firtash suffered because he tried to get into a big American business. It cost him his freedom and almost all the wealth "acquired by overworking" wealth.

And on June 25 of this year, the Austrian Supreme Court nevertheless authorized the extradition of the oligarch in the United States, rejecting the appeal of his lawyer, although previously the country`s Prosecutor General’s Office asked the court to cancel the extradition because of violation of the country`s legislation.

This situation is very unusual, since Firtash does not have American citizenship. And the formal sign on which he is being persecuted in the United States is the fact that Firtash was going to build part of his business in the United States, which they considered as sufficient grounds for criminal prosecution of the Ukrainian oligarch.

In fact, as some experts suggest, the arrest and extradition of Firtash to the United States will allow the Themis of this country and its intelligence services to have at their disposal a huge amount of compromising material on most representatives of the political and business elites of Ukraine and Russia. After all, Firtash knows all the political issues in his homeland, in the Russian Federation and in some other countries of the former USSR and Eastern Europe. And this compromising material can become material for further investigations and prosecution, and maybe for political blackmail of many politicians and businessmen of Russia, Ukraine and Europe by the secret services of the United States.

In the meantime, according to the already established tradition, Firtash`s business in Ukraine will be squeezed out and shared amongst his former oligarch colleagues.

Image: © AFP, HERBERT NEUBAUER / APA | Go to the photo bank

Written by Виталий Диденко

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