Ex-Ecology Minister Mykola Zlochevsky’s Burisma group has supplied natural gas to firms owned by President Petro Poroshenko and his top allies Ihor Kononenko and Oleh Gladkovsky, Radio Liberty’s Schemes investigative show reported on Feb. 2.
Kononenko is first deputy head of Poroshenko’s faction in parliament, while Gladkovsky is first deputy secretary of the National Security and Defense Council. Both Kononenko and Gladkovsky, as well as Poroshenko’s representatives, told Radio Liberty that they had no executive control over the assets and thus were not responsible for who their companies deal with.
The report comes shortly after the Prosecutor General’s Office closed the criminal case against Zlochevsky. The ex-minister who served under ex-President Viktor Yanukovych had been investigated for illicit enrichment in Ukraine and money laundering in the UK, where millions were found in his bank accounts.
In Ukraine, the investigation against the ex-minister came down to a Kyiv court ruling against his companies that evaded taxes. The court ordered the companies of the Burisma group to pay the due taxes in November, with no consequences for Zlochevsky himself.
Civic activists and politicians have accused Poroshenko and Kononenko of reaching a backstage deal with Zlochevsky, which they deny.
The scandal has become international since Hunter Biden, son of former U.S. Vice President Joe Biden, and former Polish President Aleksander Kwasniewski are on Burisma’s board of directors.
Gas payments
In 2016 Burisma supplied gas worth Hr 97.8 million to the Piskivka Glass Product Factory, which is co-owned by Kononenko and Poroshenko; Hr 1.25 million to Kononenko’s International Tennis Academy, a sports facility, and 2.57 million to Fifth Element, a fitness club co-owned by Poroshenko, Kononenko and Gladkovsky, Radio Liberty said, citing Burisma’s annual report that they obtained.
Oleksandr Onyshchenko, a fugitive lawmaker charged with embezzlement, claimed in an interview with the Kyiv Post in December that Zlochevsky had paid about $80 million to Poroshenko for unfreezing Burisma’s assets in Ukraine.
Burisma denied the accusations, while Poroshenko’s administration dismissed Onyshchenko’s allegations as “lies” and part of “Russia’s information war against Ukraine.”
Onyshchenko also claimed in December that Zlochevsky had been supplying gas free of charge to Poroshenko’s Piskivka Glass Product Factory as part of the settlement. Under the deal, the factory pays for gas but then the money is refunded back to Poroshenko and Kononenko in a laundering scheme, he argued.
Meanwhile, Ukrainska Pravda reported on Dec. 27, citing a market source, that Esko Pivnich, a Burisma subsidiary, was currently selling natural gas at a dumping price of Hr 7,400 to Hr 7,500 per 1,000 cubic meters. Onyshchenko said that, by selling gas at a below-market price, Zlochevsky was effectively paying a bribe to Poroshenko’s inner circle.
Mysterious meeting
Olga Vasilevskaya, a journalist at television channel 1+1, on Dec. 25 published what she claimed to be photos of Kononenko meeting in Vienna with Zlochevsky. Kononenko’s face is visible, while the person identified by her as Zlochevsky is seen from behind.
The alleged meeting took place after Onyshchenko testified about Poroshenko’s alleged raid on Zlochevsky’s business while interrogated by anti-corruption prosecutors by Skype on Dec. 22.
Unfreezing assets
Last year Dmytro Sus, a prosecutor accused of links to Kononenko and his ally Oleksandr Hranovsky, ordered a freeze on the assets of Burisma and other firms controlled by Zlochevsky as part of an embezzlement case. But later courts unfroze them, and Sus did not dispute the rulings.
Zlochevsky, who has been charged with unlawful enrichment, was taken off the wanted list at the request of Sus’ department last October. The unlawful enrichment case against Zlochevsky was transformed into a tax evasion case and closed in November.
British case
The unlawful enrichment case against Zlochevsky was opened after the 2013-2014 EuroMaidan Revolution.
The UK subsequently opened a money laundering case against Zlochevsky and froze his accounts worth $23 million. But the accounts were unfrozen in early 2015 due to Ukrainian prosecutors’ failure to provide assistance in the case. The Prosecutor General’s Office said then that there were no grounds for issuing a notice of suspicion for Zlochevsky.
Then-Deputy Prosecutor General Mykola Herasymiuk, who later became a parliamentary aide to Hranovsky, was accused of helping Zlochevsky in late 2014. He transferred the case from the prosecutor’s office to the police and failed to help British authorities to investigate the money laundering case.
According to emails obtained by the Organized Crime and Corruption Reporting Project, a Kyiv Post partner, Herasymiuk was being offered bribes to drop charges against associates of Yanukovych. Herasymiuk told OCCRP he had no personal email address.
Under Western pressure, the Prosecutor General’s Office subsequently transferred the case back from the police to prosecutors and issued a notice of suspicion for Zlochevsky.
