The National Anti-Corruption Bureau of Ukraine on April 20 arrested on graft charges ex-People’s Front party lawmaker Mykola Martynenko, one of the most influential powerbrokers to be detained in Ukraine since it gained independence in 1991.
Despite being suspected of multimillion-dollar corruption, Martynenko was released without bail after a powerful collection of members of parliament and ministers vouched for him in court. The no-bail release may foreshadow the fate of any criminal prosecution against Martynenko.
The chances that he will get a fair trial leading to his conviction under the current government are low: While the NABU is deemed to be relatively independent, the judiciary and the prosecution service are notoriously corrupt and viewed as subservient to President Petro Poroshenko and other politicians.
Martynenko, who sees the case as fabricated and political, has been charged with organized crime and embezzling $17 million during uranium ore sales to the state-owned Eastern Ore Dressing Plant.
The way to the top for Martynenko, 56, started in the 1980s when he was a top Kyiv apparatchik of the Komsomol, the Communist Party’s youth organization, where many businesspeople got their start when the Soviet Union collapsed.
In the 1990s he set up trading companies in the nuclear and natural gas industries.
Martynenko is a long-timer in politics: He has wielded influence over the energy industry since he became a member of parliament’s energy committee in 1998. He had been the first deputy chairman of the committee since 2002 and its chairman since 2007, managing to survive four presidents before he stepped down as a lawmaker in 2015 amid a corruption scandal.
Given his clout, Martynenko is an even bigger fish than State Fiscal Service Chief Roman Nasirov, who was arrested by the bureau on graft charges and released on Hr 100 million ($3.77 million) bail in March.
“Nasirov was a high-ranking official who implemented decisions, while Martynenko was one of the decisionmakers,” political analyst Vitaly Bala said.
Nasirov and Martynenko are the first political heavyweights who were arrested while they or their close allies were in power.
Before, politicians arrested in Ukraine were either in the opposition or out of power, like ex-Prime Minister Yulia Tymoshenko.
Both Poroshenko and ex-Prime Minister Arseniy Yatsenyuk have been accused of being implicated in Martynenko’s schemes, which they deny. Still, Martynenko has been seen as the main cash cow for Yatsenyuk and the People’s Front.
No bail set
Oleksandr Bobrovnik, a judge at Kyiv’s Solomyansky Court, released Martynenko without bail on April 22, two days after the arrest.
Sports Minister Ihor Zhdanov, Central Election Committee Deputy Chief Andriy Mahera and 18 People’s Front lawmakers officially vouched that the suspect would not attempt to flee, while three other ministers publicly supported Martynenko.
If Martynenko flees, the 20 officials who vouched for him will only have to pay a fine worth a total of $1,454 to $2,908.
Bobrovnik is accused of having links to Poroshenko’s top ally and lawmaker Oleksandr Hranovsky, who denies them. The judge has ruled in favor of Hranovsky’s ex-aide Olga Tkachenko in a graft case.
Uranium scheme
Martynenko was arrested because of his suspected involvement in the uranium supply scheme, which is being investigated by the NABU and Austrian authorities.
The Ukrainska Pravda online newspaper reported in 2015 that Austria’s Steuermann Investitions, which is allegedly controlled by Martynenko, was selling Kazakh uranium ore at a huge profit to the state-owned Eastern Ore Dressing Plant, which buys uranium for Ukraine’s state nuclear power monopoly Energoatom.
The NABU suspects that the state-owned plant was buying the overpriced uranium and receiving kickbacks.
Martynenko’s business partner Serhiy Pereloma, a deputy CEO of oil and gas firm Naftogaz and chairman of the Odesa Portside Plant’s board of directors, is also a suspect in the case. He was also released without bail.
Eastern Ore Dressing Plant CEO Oleksandr Sorokin was charged as part of the same case earlier this month and placed under night-time house arrest, which is tantamount to release during daytime, on April 26. Another suspect, former Eastern Ore Dressing Plant Deputy CEO Volodymyr Bohdanets, has fled Ukraine.
The fifth suspect is Ruslan Zhurilo, acting CEO of United Mining and Chemical Company and an ex-deputy CEO of the Eastern Ore Dressing Plant.
Titanium scheme
Another NABU case linked to Martynenko is an alleged graft scheme at the United Mining and Chemical Company (OGKhK), which used to sell titanium ore at below-market prices to Austria’s Bollwerk, whose owner Wolfgang Eiberger is the CEO of Steuermann — a firm allegedly controlled by Martynenko. The case is also being investigated in Austria.
Zhurilo and ex-OGKhK executives Yury Pertsev and Oleksiy Morokhovets were charged with embezzling Hr 300 million ($11.3 million) from the company, arrested and released on bail in January.
Other schemes
The NABU, as well as Swiss and Czech authorities, have also been investigating Martynenko on suspicion that he accepted 30 million Swiss francs from Czech engineering firm Skoda to give it a contract to supply equipment to Energoatom.
Yet another case involving Martynenko concerns an alleged corruption scheme at the Odesa Portside Plant, through which Austria’s Antra sold natural gas to the plant at above-market prices.
Martynenko’s partner Pereloma and Shchurikov, a deputy CEO of the plant, are accused of embezzling Hr 205 million ($7.7 million) from the company. They were arrested in July and released on bail.
The Prosecutor General’s Office has also investigated ex-lawmaker Ihor Skosar’s claim that he gave a $6 million bribe to Yatsenyuk through Martynenko for a place on the Batkyvshchyna Party’s parliamentary list in 2012.
Yushchenko poisoning
Both Martynenko and his main business partner David Zhvania were investigated in the case of the dioxin poisoning of the former President Viktor Yushchenko, then a presidential candidate, in 2004.
According to a document leaked from the Prosecutor General’s Office, the investigators were considering a version that Zhvania could have poisoned Yushchenko because the late Russian tycoon Boris Berezovsky and his Georgian partner Badri Patrkatseshvili had removed him as an intermediary for funding the Yushchenko campaign, and Zhvania, switching his support to another candidate, wanted Yushchenko out of the race. The funding was switched to Yulia Tymoshenko, who later became prime minister, according to the investigators.
Zhvania denies the accusations.
Meanwhile, Yushchenko’s treatment in Austria was organized by executives of Austria’s Steuermann, which is allegedly controlled by Martynenko.
Poroshenko’s role
Fugitive lawmaker Oleksandr Onyshchenko, a suspect in a graft case, on April 20 released an audio recording in which a person alleged to be Martynenko implicates Poroshenko in his schemes linked to Energoatom and says that the president had “broken” them.
Onyshchenko told the Kyiv Post that Martynenko had been talking about the Eastern Ore Dressing Plant and that Poroshenko had allegedly wanted to get a share in Martynenko’s schemes.
Poroshenko has denied Onyshchenko’s allegations, while Martynenko has confirmed meeting with Onyshchenko in Spain and London, where the recordings were made.
Not only Martynenko but also Poroshenko’s top ally Ihor Kononenko and lawmaker Hranovsky are being investigated in corruption cases connected with the Odesa Portside Plant.
Martynenko has been an associate of Poroshenko since they were both part of ex-President Yushchenko’s inner circle in the 2000s. In 2005 Yushchenko’s chief of staff Oleksandr Zinchenko resigned and accused both Poroshenko and Martynenko of corruption.
Martynenko and Poroshenko also have business links.
One of the connections is Diamanatbank, which is co-owned by Martynenko and Zhvania. The bank went bankrupt on April 24, saying that Martynenko’s arrest had triggered a cash outflow from it.
Salaries at the president’s Fifth Channel used to be paid through the bank, while firms co-founded by Yevhen Besarab, CEO of Diamantbank, and his brother Andriy, used to co-own properties on the territory of the former Kyiv Footwear Factory with Poroshenko.
Meanwhile, companies co-owned by Poroshenko, his business partner Kostyantyn Grigorishin, Zhvania and Martynenko also used to co-own properties on the factory’s territory.
Martynenko’s business partner Zhvania is a long-time friend of Poroshenko and was a top member of Poroshenko’s election headquarters in 2014. Onyshchenko and Artem Bidenko, a candidate for parliament from the Poroshenko Bloc in 2014, have accused Zhvania of selling seats on the Poroshenko Bloc’s list, though Bidenko later retracted the claim.
No rule of law
Critics say that the risk of Martynenko fleeing Ukraine is high.
At least 21 top associates of ex-President Viktor Yanukovych accused of corruption and the murder of over 100 EuroMaidan protesters fled in 2014. At least four top officials fled in 2015 and another four escaped in 2016.
In 2014 to 2017, 27 former Berkut officers charged with murdering and cracking down on EuroMaidan protesters also left Ukraine.
Moreover, the chance of Martynenko being convicted is low due to a lack of independent courts. Critics say that Poroshenko can also influence the case through the anti-corruption prosecutor’s office, which is technically subordinated to Prosecutor General Yury Lutsenko, a Poroshenko loyalist.
Anastasia Krasnosilska, an expert at the Anti-Corruption Action Center, argued that only an independent anti-corruption court selected with the participation of foreign experts could convict Martynenko.
“(Otherwise) the court is likely to refute the key charges and close the case, citing a lack of evidence,” she said.
