Ukraine deal goes to Perry backers
Duo offered millions less than opponents
KYIV, Ukraine — Two political supporters of U.S. Energy Secretary Rick Perry secured a potentially lucrative oil and gas exploration deal from the Ukrainian government soon after Mr. Perry proposed one of the men as an adviser to the country’s new president.
Mr. Perry’s efforts to influence Ukraine’s energy policy came earlier this year, just as President Volodymyr Zelenskiy’s new government was seeking military aid from the United States to defend against Russian aggression and allies of President Donald Trump were ramping up efforts to get the Ukrainians to investigate his Democratic rival Joe Biden.
Ukraine awarded the contract to Mr. Perry’s supporters little more than a month after the U.S. energy secretary attended Mr. Zelenskiy’s May inauguration. In a meeting during that trip, Mr. Perry handed the new president a list of people he recommended as energy advisers. One of the four names was his longtime political backer Michael Bleyzer.
A week later, Mr. Bleyzer and his partner Alex Cranberg submitted a bid to drill for oil and gas at a sprawling governmentcontrolled site called Varvynska. They offered millions of dollars less to the Ukrainian government than their only competitor for the drilling rights, according to internal Ukrainian government documents obtained by The Associated Press. But their newly created joint venture, Ukrainian Energy, was awarded the 50-year contract because a government-appointed commission determined they had greater technical expertise and stronger financial backing, the documents show.
Mr. Perry likely had outsized influence in Ukraine. Testimony in the impeachment
inquiry into Mr. Trump shows the energy secretary was one of three key U.S. officials who were negotiating a meeting between Mr. Trump and the Ukrainian leader.
White House and State Department officials have testified that the president would only meet with Mr. Zelenskiy if he committed to launching an investigation into Joe Biden and his son Hunter. In the impeachment inquiry against Mr. Trump, the officials have also said that U.S. military aid to Ukraine was being withheld until Mr. Zelenskiy publicly announced such an investigation.
The sequence of events suggests the Trump administration’s political maneuvering in Ukraine was entwined with the big business of the energy trade.
Mr. Perry made clear during trips to Kyiv that he was close to Mr. Bleyzer, a
Ukrainian American investor and longtime Perry supporter who lives in Houston, and Mr. Cranberg, a Republican megadonor who provided Mr. Perry the use of a luxury corporate jet during the energy secretary’s failed 2012 presidential bid.
Mr. Perry’s spokeswoman said Wednesday that the energy secretary has championed the American energy industry all over the world, including in Ukraine.
“What he did not do is advocate for the business interests of any one individual or company,” said Shaylyn Hynes, the press secretary for the Energy Department.
Jessica Tillipman, who teaches anti-corruption law at George Washington University, said even if Mr. Perry did seek to influence foreign officials to award contracts to his friends, it is likely not illegal.
“My gut says it’s no crime,” she said. “It’s just icky.”
Mr. Zelenskiy’s office did not respond to requests for comment.
In a statement to the AP, Mr. Bleyzer denied that Mr. Perry helped his firm get the gas deal.
“I believe that Secretary Perry’s conversations with Ukrainian government officials, if they in fact took place, did not play any role in Ukrainian Energy winning its bid,” Mr. Bleyzer said Tuesday. He said the process was competitive and transparent and “will hopefully serve as an example of how the Ukrainian energy market can be opened for new investments.”
Amy Flakne, a lawyer for Mr. Cranberg’s company Aspect Holdings, said Wednesday that Mr. Perry and other U.S. officials supported “a fair, competitive process to bring foreign capital and technology to Ukraine’s lagging energy sector.”
“Aspect neither sought, nor to our knowledge received, special intervention on its behalf,” Ms. Flakne said.
As Mr. Trump’s energy secretary, Mr. Perry has flown around the globe to push for U.S. exports of liquefied natural gas, which he calls “Freedom Gas.” He’s made multiple trips to Ukraine and other former Soviet-bloc nations, where shipments of American gas and drilling technology take on strategic importance as a potential alternative to continued dependence on imports from Russia.
Ukraine has long suffered from a reputation for political corruption, particularly in its oil and gas sector. In the chaotic days following the breakup of the Soviet Union, the newly independent Ukrainian government sold off many state-owned businesses worth billions to a cadre of well-connected oligarchs who amassed immense fortunes.