In Manafort’s World, Ev­ery­one Had A Price

Amer­i­can Paul Manafort re­mains the only of­fi­cial from the era of ex-Pres­i­dent Vik­tor Yanukovych's klep­toc­racy too see time be­hind bars. Courtt doc­u­ments re­veal how Ukraineaine was run from 2010-2014, when­hen ap­prox­i­mately $40 bil­lion was stolen from Ukrai

Kyiv Post - - Front Page - BY JOSH KOVENSKY KOVENSKY@KYIVPOST.COM

For the first few months Paul Manafort worked in Ukraine,ine, his home was a lux­ury ho­tel in down­town Donetsk - the Don­bass Palace. There, onn as­sign­ment for lo­cal ty­coon Ri­nat Akhme­tov in early 2005, Manafort would work from the room, reached by as­so­ciates via the ho­tel tele­phone.

But when an Ukrain­ska Pravda re­porter called throughugh to his room, Manafort hung up, re­fus­ing to talk to the re­porter, who later de­scribed­cribed him in a story as “fa­mous for an in­dis­crim­i­nate as­sort­ment of clients.”

As his­tory has since shown, by that time Manafort wasas al­ready wind­ing up his work with this broad “as­sort­ment of clients,” fo­cus­ings­ing in­stead on one.

From then on, Manafort would work for the Party of Re­gions, bur­nish­ing the im­age of then-Prime Min­is­ter Vik­tor Yanukovych in Ukraine and in Western cap­i­tals while run­ning er­rands for the party’s wealthy back­ers around the world.

Doc­u­ments from the court cases that have dogged Manafort since then, and in­ter­views with those who en­coun­tered him dur­ing this pe­riod, tell a markedly dif­fer­ent story about his time in Ukraine than has pre­vi­ously been por­trayed. He comes off as a man in­ti­mately ac­quainted with post-Soviet deal­mak­ing, lead­ing him to break the law in run­ning an il­le­gal pro-Western lob­by­ing cam­paign to con­vince the Eu­ro­pean Union to sign an As­so­ci­a­tion Agree­ment with Ukraine.

Manafort pitched the cam­paign to Yanukovych in prac­ti­cal terms — “to en­sure that you never have to deal with a 2004 sce­nario again” — a ref­er­ence to the Or­ange Rev­o­lu­tion, which saw Yanukovych lose in a re­peat sec­ond-round pres­i­den­tial vote to Vik­tor Yushchenko.

Manafort pleaded guilty to fail­ing to reg­is­ter as a for­eign agent in Septem­ber af­ter be­ing con­victed of tax and bank fraud in an Au­gust trial. He has agreed to co­op­er­ate with the in­ves­ti­ga­tion of Spe­cial Coun­sel Robert Mueller, ap­pointed to in­ves­ti­gate Rus­sian med­dling in the 2016 U.S. pres­i­den­tial elec­tion.

The big three

While court doc­u­ments and trial tes­ti­mony show that six Ukrainian oli­garchs and pub­lic of­fi­cials fi­nanced Manafort’s work, three peo­ple stand out as play­ing the big­gest roles dur­ing his time in Ukraine.

They are Akhme­tov, Yanukovych Pres­i­den­tial Ad­min­is­tra­tion Chief Ser­hiy Lovochkin, and bil­lion­aire gas trader Dmytro Fir­tash.

Each has his own dis­tinct in­ter­ests, shaped by their sep­a­rate back­grounds.

Akhme­tov

Akhme­tov emerged from the bloody world of Donetsk in the 1990s as the bil­lion­aire head of Sys­tem Cap­i­tal Man­age­ment — a steel and ener- gy con­glom­er­ate span­ning all of Ukraine, but with a fo­cus in the coun­try’s east.

With huge cash flows, Akhme­tov be­gan to in­vest in pol­i­tics, sup­port­ing the can­di­dacy of Vik­tor Yanukovych in the 2004 pres­i­den­tial elec­tion.

Yanukovych lost in a runoff elec­tion to Vik­tor Yushchenko, af­ter mass vot­ing fraud pro­voked protests known as the Or­ange Rev­o­lu­tion.

It was in this tu­mult that Manafort first came to Ukraine, ar­riv­ing in De­cem­ber 2004 osten­si­bly to work on a po­ten­tial IPO for SCM.

But in a 2010 memo to Yanukovych, Manafort him­self says that his work for SCM was a front.

“As we did in the early days, with SCM be­ing my tech­ni­cal client while I, in fact, fo­cused on your pro­gram, we would find an­other client (prefer­ably not SCM since they have had this bur­den al­ready), who would pay for my ser­vices un­der a multi-year con­tract,” Manafort wrote.

An Akhme­tov spokesman de­nied the ve­rac­ity of Manafort’s state­ment in the memo, say­ing that SCM had not worked with Manafort since 2005.

Pros­e­cu­tors ac­cused Manafort in his first trial of oper­at­ing undis­closed shell com­pa­nies in Cyprus to re­ceive money from his Ukrainian clients, sup­pos­edly on the ad­vice of former deputy Prime Min­is­ter and Akhme­tov ally Bo­rys Kolesnikov.

Kolesnikov dis­puted the no­tion that Manafort would have needed help.

“So Paul Manafort, ar­riv­ing in Ukraine af­ter 80 elec­tion cam­paigns in 20 coun­tries of the world, needed some­one’s ad­vice???” Kolesnikov wrote in a Face­book mes­sage.

“It’s as ridicu­lous as the black ledger,” he added, re­fer­ring to the hand­writ­ten ledger of se­cret pay­ments al­leged to have been made by Yanukovych’s Party of Re­gions, found af­ter the former pres­i­dent fled Ukraine.

Lovochkin

The vast ma­jor­ity of Manafort’s pay­ments — in the or­der of around $40 mil­lion — ended up com­ing from Lovochkin, a tall, well-con­nected Kyi­van who came out of the coun­try’s po­lit­i­cal elite.

His fa­ther, Volodymyr, was a long­time of­fi­cial in Ukraine’s In­te­rior Min­istry. Volodymyr Lovochkin worked as direc­tor of the prison ser­vice’s pun­ish­ment en­force­ment depart­ment at the same time that his son was scal­ing the Kyiv po­lit­i­cal lad­der — a use­ful po­si­tion in a world where Yanukovych, a con­victed felon who served time in Soviet pris­ons, was play­ing a king­maker role in

Ukrainian pol­i­tics.

The younger Lovochkin en­tered pol­i­tics in the 1990s through the bank­ing sec­tor, be­fore be­com­ing an aide in the Kuchma gov­ern­ment and an ad­vi­sor to then-Donetsk Oblast Gov­er­nor Yanukovych.

Lovochkin quickly earned him­self a rep­u­ta­tion as a deal­maker. Ac­cord­ing to Op­po­si­tion Bloc Mem­ber of Par­lia­ment Nestor Shufrich, a former Party of Re­gions mem­ber, “in De­cem­ber 2004, and at the end of Novem­ber, the 'Or­ange' pro­tes­tors had ac­cess to Kuchma pre­cisely through (Lovochkin).” The two sides “reached an agree­ment through Lovochkin,” he added.

By 2006, Lovochkin had be­come an of­fi­cial in Yanukovych’s Cabi­net of Min­is­ters, while the Ukrainian press be­gan to link him with oli­garch Fir­tash.

Fir­tash

From a small vil­lage in Ukraine’s west, Fir­tash be­gan to pop up in the early 2000s as a busi­ness­man de­liv­er­ing gas from Turk­menistan while buy­ing up fer­til­izer plants.

His em­pire metas­ta­sized through­out the decade, cul­mi­nat­ing in RosUkrEn­ergo: a mid­dle­man com­pany formed to move gas from Rus­sia, through Ukraine, to Western Europe that later dis­solved amid ac­cu­sa­tions of mafia in­volve­ment and price in­fla­tion.

The RosUkrEn­ergo case drew the at­ten­tion of the U.S. gov­ern­ment, while Fir­tash con­tin­ued to play a king­mak­ing role in the Party of Re­gions specif­i­cally, and in Ukrainian pol­i­tics as a whole.

Fir­tash and Lovochkin con­trol the In­ter TV chan­nel, one of Ukraine’s most in­flu­en­tial me­dia sources, and a use­ful tool for their po­lit­i­cal projects.

Nar­o­d­niy Front Mem­ber of Par­lia­ment Ser­hiy Vysot­sky told the Kyiv Post last month that Lovochkin would pro­vide ac­cess to Fir­tash in ex­change for fi­nanc­ing.

“Lovochkin guar­an­teed en­trance to the nec­es­sary of­fices… un­der Yanukovych or (Vik­tor) Yushchenko, and Fir­tash worked out the busi­ness schemes. And through the busi­ness schemes he bought in­flu­ence, through In­ter, the Party of Re­gions, and later the Op­po­si­tion Bloc,” he said.

Turn­ing to EU

Manafort worked with the above-men­tioned three up through the 2010 pres­i­den­tial elec­tion, which saw Yanukovych beat Yu­lia Ty­moshenko in a runoff.

In a meet­ing with U. S. Am­bas­sador John Tefft in the runup to the elec­tion, Manafort pur­port­edly said that he had “a dou­ble-digit lead” against Ty­moshenko, who was “mov­ing to dis­credit the elec­tion process as the only means of stop­ping Yanukovych.”

Af­ter Yanukovych’s elec­tion, Manafort turned his sights on the gov­ern­ment’s for­eign out­reach. In a memo to Yanukovych two weeks af­ter his vic­tory, Manafort laid out a strat­egy in which he would be the “man­ager” of “a plan to man­age strat­egy, pub­lic re­la­tions and in­ter­na­tional af­fairs for Pres­i­dent Yanukovych.”

The doc­u­ment calls for the gov­ern­ment to “de­velop ad­vo­cates within the diplo­matic and po­lit­i­cal com­mu­ni­ties of Europe and the United States” in or­der “to en­sure that you never have to deal with a 2004 sce­nario again.”

A big part of the cam­paign was man­ag­ing Ukraine’s move to­wards sign­ing an As­so­ci­a­tion Agree­ment and trade agree­ment with the EU.

Caught by a mix­ture of geog­ra­phy, his­tory, and pol­i­tics be­tween Rus­sia and Europe, Ukraine would use the deal to edge to­wards EU ac­ces­sion and away from Krem­lin in­flu­ence.

Memos re­leased by pros­e­cu­tors af­ter Manafort’s plea deal show him mas­ter­mind­ing a covert lob­by­ing cam­paign in fa­vor of Ukraine tak­ing a Eu­ro­pean path.

In one June 2012 memo to as­so­ciates Kon­stantin Kil­imnik, Rick Gates, and Alan Fried­man, Manafort said it was nec­es­sary “to ag­gres­sively pro­mote Ukraine’s com­pli­ance with (Western) de­mands and make the case that Ukraine is com­mit­ted to build­ing a demo­cratic so­ci­ety.”

Of­fi­cials work­ing in Ukraine’s Min­istry of For­eign Af­fairs at the time told the Kyiv Post that the gov­ern­ment’s main pri­or­i­ties were tamp­ing down crit­i­cism of the 2011 pros­e­cu­tion and im­pris­on­ment of Ty­moshenko, vet­ting a new crim­i­nal code writ­ten by Pres­i­den­tial Ad­min­is­tra­tion aide An­driy Port­nov, and por­tray­ing the 2012 par­lia­men­tary elec­tions as free and fair.

“We should make the case that if the West is se­ri­ous about help­ing to build a rule of law so­ci­ety, it should stop at­tack­ing Ukraine and be­gin to work with the gov­ern­ment to train and as­sist in the im­ple­men­ta­tion of the new laws,” Manafort wrote in the memo, adding that he in­tended “to as­sem­ble a small group of high-level Eu­ro­pean highly in­flu­en­cial (sic) cham­pi­ons and po­lit­i­cally cred­i­ble friends who can act in­for­mally and with­out any vis­i­ble re­la­tion­ship to the Gov­ern­ment of Ukraine.”

The cam­paign con­tin­ued through 2013, with most of the fi­nanc­ing com­ing from Lovochkin. A re­port in BNE In­tellinews shows that Manafort flew around Europe for the cam­paign on Lovochkin’s air­craft.

By the time the Novem­ber 2013 EU sum­mit in Vil­nius came around, Brus­sels was ready to ink the agree­ment. But Yanukovych, sus­cep­ti­ble to buy­outs, was not — he re­fused to sign the deal, spark­ing protests on Kyiv’s Maidan Neza­lezh­nosti Square.

The protests started small, with stu­dents hud­dled on Maidan. But in the early morn­ing of Nov. 30, a Berkut unit bru­tally at­tacked the stu­dents, spark­ing huge demon­stra­tions the next day which later snow­balled into a rev­o­lu­tion that took down Yanukovych.

It’s not clear who or­dered the cat­alyz­ing at­tack on the stu­dents, but one the­ory — sup­ported by In­te­rior Min­is­ter Arsen Avakov and oli­garch Ihor Kolo­moisky — holds Lovochkin re­spon­si­ble for the at­tack.

Lovochkin de­nies the ac­cu­sa­tion, telling the Kyiv Post in a state­ment “let me re­mind you that I sub­mit­ted my res­ig­na­tion be­cause of Pres­i­dent Yanukovych’s de­ci­sion to refuse to sign the (free trade agree­ment with the EU) at the East­ern Part­ner­ship Sum­mit in Vil­nius in Novem­ber 2013, and (be­cause of) the use of force against peace­ful pro­test­ers in Kyiv fol­low­ing it.” His press ser­vice said in­ves­ti­ga­tors had found no ev­i­dence of his in­volve­ment.

Investigations have fo­cused on two of­fi­cials who al­legedly gave direct or­ders for the purge — one is Vladimir Sivkovych, a former KGB agent who worked with the Davis Manafort firm in Kyiv, and the other is then-Kyiv City Ad­min­is­tra­tion Chair­man Olek­sandr Popov.

In a leaked phone call with

Bloc of Petro Poroshenko Mem­ber of Par­lia­ment Mustafa Nayyem, Kolo­moisky called Popov “Lovochkin’s,” adding “I think there’s a ques­tion. Who owned Popov?”

Shufrich, the former Party of Re­gions mem­ber of par­lia­ment, said in De­cem­ber 2017 that “it couldn’t have hap­pened with­out Lovochkin and Sivkovych.”

Con­crete de­tails of who or­dered the at­tack — and whether Manafort had any role or knowl­edge of it — re­main un­known. Those di­rectly in­volved have scat­tered. Sivkovych fled to Rus­sia in 2014, while Popov was fired over the beat­ings in De­cem­ber 2013, be­fore be­ing ex­on­er­ated.

But an ex­cerpt of hacked texts from Manafort’s daugh­ters have lent more cre­dence to the the­ory that the at­tack could have fig­ured in a broader po­lit­i­cal cam­paign.

“To send those peo­ple out and get them slaugh­tered,” wrote one of Manafort’s daugh­ters to the other. “Do you know whose strat­egy that was to cause that Re­volts (sic) and what­not?”

“As a tac­tic to out­rage the world and get fo­cus on Ukraine.”

She later called money her fa­ther had made in Ukraine, “blood money.”

Cops on the take

Yu­lia Ty­moshenko was sen­tenced to seven years in prison af­ter Kyiv Judge Ro­dion Kireyev found her guilty of abus­ing her author­ity on Oct. 11, 2011.

The in­ter­na­tional com­mu­nity con­demned the ver­dict, with ob­servers at the time see­ing it as a ma­jor step away from ac­cept­ing the le­gal norms re­quired for even­tual EU ac­ces­sion.

Manafort sprang into ac­tion, bring­ing in pres­ti­gious U.S. law firm Skad­den, Arps, Slate, Meagher, & Flom to write a re­port white­wash­ing the pros­e­cu­tion. Head­ing the team was a former White House Coun­sel to Barack Obama, Gregory Craig.

Manafort’s plea agree­ment re­veals, how­ever, that Skad­den was in­volved much more deeply than was pre­vi­ously known, and that an un­named oli­garch fi­nanced many of the firm’s ac­tiv­i­ties.

The firm “was re­tained to rep­re­sent Ukraine it­self, in­clud­ing in con­nec­tion with the Ty­moshenko case and to pro­vide train­ing to the trial team pros­e­cut­ing Ty­moshenko,” Manafort’s plea agree­ment reads.

A law­suit filed by Ty­moshenko against Fir­tash in New York City claims that Fir­tash fi­nanced the Ty­moshenko re­port; he con­tested the claim in court.

At the same time, An­driy Port­nov was work­ing on up­dat­ing Ukraine’s crim­i­nal code from the 1962 Soviet ver­sion on which it was then based.

Ukrainian diplo­mats were faced with the task of con­vinc­ing Eu­ro­pean bod­ies like the Eu­ro­pean Com­mis­sion and the Par­lia­men­tary As­sem­bly of the Coun­cil of Europe that the le­gal changes were le­git­i­mate and in line with Eu­ro­pean prin­ci­ples.

Manafort sent Port­nov — who fled to Rus­sia af­ter EuroMaidan, be­fore re­ceiv­ing res­i­dency in Aus­tria — to Wash­ing­ton D. C. in Fe­bru­ary 2013. In a memo to Lovochkin about the visit, Manafort wrote “(the tone) was gen­uinely pos­i­tive, open-minded, con­struc­tive, and did not fo­cus on (Yu­lia Ty­moshenko).”

Port­nov con­tin­ues to use his mas­tery of the coun­try’s crim­i­nal code to de­fend Ukraini­ans from afar.

“He knows how to use the crim­i­nal code — he cre­ated it,” said Kyiv po­lit­i­cal an­a­lyst Volodymyr Fe­senko.

The en­ablers

None of this — nei­ther Manafort’s mass move­ment of un­de­clared cash into the United States nor the lob­by­ing cam­paign to le­git­imize Yanukovych — would have been pos- sible with­out the help of rich, po­lit­i­cally con­nected Western­ers.

The Haps­burg Group was con­ceived specif­i­cally to wield the in­flu­ence that such peo­ple — in this case former Pol­ish Pres­i­dent Alek­sandr Kwas­niewski, former Aus­trian Chan­cel­lor Al­fred Gusen­bauer, and former Ital­ian Prime Min­is­ter Ro­mano Prodi — could pro­vide.

A sec­tion of one Fe­bru­ary 2013 memo to Yanukovych — en­ti­tled “back-chan­nel diplo­macy” — de­scribes the Haps­burg Group’s ef­forts to “fi­nal­ize the (EU As­so­ci­a­tion) agree­ment.”

Manafort wrote in the memo that the Haps­burg strat­egy had been suc­cess­ful in dis­pelling con­cerns over Ty­moshenko’s pros­e­cu­tion and other is­sues, be­cause “the par­tic­i­pants are sig­nif­i­cant Eu­ro­pean lead­ers who are viewed as ob­jec­tive re­gard­ing Ukraine. This has al­lowed them to make their points with­out any ap­par­ent self-in­ter­est, thus giv­ing their com­ments more weight and im­pact.”

On the U.S. side, Skad­den’s Greg Craig is un­der in­ves­ti­ga­tion for fail­ing to reg­is­ter as a for­eign agent as part of his en­gage­ment, U.S. me­dia re­ports in­di­cate.

He left the law firm in April 2018 amid the in­ves­ti­ga­tion. Skad­den re­funded the Ukrainian gov­ern­ment $567,000 in June 2017 over pay­ment is­sues from the $4 mil­lion re­port.

Craig was warned by peo­ple he in­ter­acted with at the time that the case could turn out to be a prob­lem.

“I told Craig: ‘this is a cor­rupted case!'” Ty­moshenko at­tor­ney Ser­hiy Vlasenko told the Kyiv Post in Au­gust 2016.

That month, Manafort would re­sign from the Trump cam­paign amid re­ports that $12.7 mil­lion was ear­marked for him from the Party of Re­gions's "black ledger." Two years later, he was con­victed on tax and bank fraud charges.

(AFP)

Former Party of Re­gions ad­viser and ex-Don­ald Trumpp 2016 Cam­paign Man­ager Paul Manafort en­ters a fed­eral court­house­ourt­house in Wash­ing­ton DC in June 2018. Manafort was con­victedd on Aug. 21 of five counts of tax fraud, two counts of bank fraud and one count of fail­ure to re­port a for­eign bank ac­count. Manafort­nafort struck a plea agree­ment to fully co­op­er­ate with spe­cial coun­selnsel Robert Mueller's in­ves­ti­ga­tors as part of the ongoing probe of Rus­sian in­ter­fer­ence in the U.S 2016 pres­i­den­tial elec­tion andd re­lated crimes.

Former Yanukovych Pres­i­den­tial Ad­min­is­tra­tion Chief Ser­hiy Lovochkin (R) looks on quiz­ically at a panel at the 2015 YES Con­fer­ence, seated next to former Pol­ish Pres­i­dent Alek­sandr Kwas­niewski. Lovochkin fun­nelled money into and Kwas­niewski took part in a covert, in­ter­na­tional lob­by­ing cam­paign to con­vince the Eu­ro­pean Union to over­look the im­pris­on­ment of former Prime Min­is­ter Yu­lia Ty­moshenko and sign an As­so­ci­a­tion Agree­ment with Ukraine. (Volodymyr Petrov)

Mem­bers of the Berkut at­tack and ar­rest stu­dent pro­test­ers on the morn­ing of Nov. 30, 2013. The vi­o­lent crack­down helped cat­alyze huge protests that even­tu­ally brought down ex-Pres­i­dent Vik­tor Yanukovych (UNIAN)

Na­tional Se­cu­rity Coun­cil Sec­re­tary An­driy Klyuyev, former Vice Pre­mier Vladimir Sivkovych, and Kyiv City Ad­min­is­tra­tion Chief Olek­sandr Popov talk in Kyiv in Oc­to­ber 2013. One month later, Sivkovych and Popov would stand ac­cused of or­der­ing a vi­o­lent dis­per­sal of stu­dent pro­tes­tors on the morn­ing of Nov. 30, 2013, in the early days of the EuroMaidan Rev­o­lu­tion that ended Vik­tor Yanukovych's pres­i­dency. (UNIAN)

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