Novice judging 'trial of the century'

Astonishingly, the 31-year old judge, Rodion Kireyev [see above], who is presiding over Yulia Tymoshenko's shambolic pre-trial hearing in Ukraine's 'trial of the century', has, until now, has only been involved in petty crime cases e.g. thefts of 1000 hryven, and everyday hooliganism. The hapless Kireyev, nicknamed "Harry Potter" in the media, was selected at random from a pool of judges..

His experience of multimillion-dollar fraud cases seems to be....er.. nil..

Looks like someone really "dropped him in the sh*t"...sent a boy to do a man's job..

Why the gas charges against Tymoshenko cannot be proven

So, "Tymoshenko is accused of causing a loss of some $190 million to the Ukrainian state because of a 2009 energy deal she signed with Russian Prime Minister Vladimir Putin."

How can anyone be so sure of this figure?

Has Putin or Gazprom ever admitted on the record that they would have sold the gas in question for $190 million less to NaftoHaz Ukrainy in the event that, in 2009, the Ukrainian side had been represented by anyone else? Not very likely...

So to claim anyone else would have got a better deal is pure conjecture..

Or does the prosecutor intend to prove Tymoshenko received a kick-back from Putin, as PM Azarov recently intimated? If the prosecutor intends to 'go down this route' what is Putin's reaction likely to be?

Yanukovych hastily cobbled together a subsequent gas deal and received a 30% discount on gas from Russia in the notorious Kharkiv agreement last year...but as the 'Kyiv Post' said at the time, the “discount” only gives shady gas-trading intermediaries fatter profit margins along the change from import to end consumer; the industrial-baron oligarchs are sure to benefit in all this murkiness.."

And recently PM Azarov received short shrift from Putin when he tried to renegotiate a better price one year later...so perhaps Yanukovych could be accused of selling the country short when he handed over Sevastopol to the Russian Black Sea Fleet in exchange for the 30% discount too. Maybe he could have got 35%? Or 40%? Who knows?

Yanukovych's Mezhyhirya interview

President Yanukovych has finally shown a select few journalists around his Mezyhirya home. Not one of them were amongst the 'troublemakers' who had initially requested such a visit over a year ago.

The interior of the building is decorated in the usual hideous/cheapo, tacky central European '60's communist dictator style - and does not give the impression that it is actually lived in..But the building itself is very grand, and the extensive forested grounds are palatial. They include fountains, lots of marble, waterfalls, a large swimming pool etc. The journalists behaved as if they were impressed.

Afterwards, they interviewed the president at length under a rather grand gazebo, fountain playing in the sylvan background. The president answered the soft-ball questions put to him in his usual bumbling style, but looked quite relaxed and confident inside his botoxed and buffed face.

One passage that struck me was almost at the end of reel 4 of the interview.

With a fancy swimming pool, fountain an exotic trees and flowers behind his shoulder, he said rather inarticulately: "Life has not been simple for me and has taught me to suffer/endure..[terpity]. In order to do this for people that have already suffered much. I cannot look at this when poor people are still suffering...the government should apply just policies for people..we need to reduce the distance between rich and poor.."

Somehow I don't think he would have convinced many viewers...

Naturally, he was not asked the obvious question: How did a man who has only worked as a civil servant, and never run any business acquire such a property? And naturally, not a word about the remaining 135 hectare of Mezhyhirya with its massively bigger 'clubhouse', tennis courts, riding range, boating lake, yacht club, ostriches, llamas, kangaroos etc. etc..Or about the swanky downtown Kyiv apartment, the Crimean mansions, hunting lodges, Donetsk properties etc.

p.s. How it can end if you get too greedy...

Many times in recent history have the palaces of greedy and vain leaders been ransacked But Yanukovych was probably more interested in running a street crime gang than studying history while at school..and he spent three and a half years in prison as a youth for theft and violent crimes..

Prejudice and intimidation

Not for the first time, PM Azarov has made highly prejudicial public statements concerning the criminal charges being faced by his predecessor, Yulia Tymoshenko.

When asked in a television interview why Tymoshenko had signed such an allegedly bad gas deal for Ukraine, Azarov explained: "Shortly there will be a trial. Let's listen to what will be said at the trial. I can only express my own supposition. There was an interest - of course - 100%" - I think, a personal interest. Because to move away from from the state's interests, and to sign such uncomfortable conditions, is difficult."

The premier declared: "What other interests could there be there, other than personal?"

With such statements emanating from the president and PM, and with the Ukrainian judiciary being so tightly controlled by Yanukovych's 'vertikal', how can any judge possibly acquit Tymoshenko?

The numerous grim-faced policemen glowering over Tymoshenko's shoulder in the courtroom during the pre-trial hearings [see previous blog] were there no only to intimidate the accused, but to intimidate the young bright-eyed, bushy tailed judge...

And yes, the behaviour of Tymoshenko's supported in the courtroom was also intimidatory - as was the presence of a large number of mysterious young persons, wearing tee-shirts with anti-Tymoshenko images, sent with the intention of packing the courtroom even tighter..

No fair trial can take place in such circumstances..but it has nothing to do with the pursuit of justice has it?

No way to treat a lady..

Photos from day 2 of Yulia Tymoshenko's pre-trial hearing..

Intimidation, no?

Is this Pol Pot's Cambodia?

What else can be expected from the Donbas thugs that are in power today..What are they so scared of? Shame on them...

p.s. In a measured, brief presentation during last Friday's 'Shuster Live' show, old NUNS hand Roman Bessmertnyi, made the following points:

Whatever the judges, the president, and the cabinet of ministers say, the Ukrainian nation has already made up its mind - the criminal investigations and trials of Yulia Tymoshenko and Yuriy Lutsenko are politically motivated. This is what most Ukrainians believe.

Western politicians in the EU and beyond, whatever the the current authorities tell them, are convinced, and will remain convinced that these are acts of political repression. [Bessmertnyi was, until a few days ago, the Ukrainian ambassador in Belarus..]

Between 80 and 90% of the supposedly balanced studio audience at the Shuster show assessed Bessmertnyi's statements positively on their monitors while he was speaking..

p.p.s. Although Yanukovych's ratings are falling, Party of Regions' membership is burgeoning - it is now one of the biggest parties in Europe with one and one half million members...The author of this article says that in Soviet times, being a member of "the party" could only mean on thing. It's the same now...if you want to get on - you have to join the PoR. Simple as that. Just as in Soviet times...You have to join "the party" to be 'more equal than the others'..

p.p.p.s. The number of Ukrainians who consider no-one is safe from being tortured by the law enforcement agencies has increased to 66%. The figure was 61% two years ago.

The number who think coercion is widely practiced by the police has increased to 59% over the same period.

Last year 51 persons died inside police establishments. This year the figure so far, is 26.. ..

Trial in a cattle truck

Yulia Tymoshenko attended the first day of her pre-trial hearing today - in a courtroom the size of a cattle truck.

One report describes the scene thus: "Puddle of sweat on the floor. Dictaphones and camera slip from wet hands. Journalists, deputies, security guards, lawyers and others pressed tightly against each other. About fifty people are squeezed into the 40 square meter Pechersk courtroom. The air in the room is fetid, devoid of oxygen, and there's a smell of sweat. [See jacket of Tymoshenko's bodyguard, above]

Head of the European Commission to Ukraine, Jose Manuel Pinto Teixeira, who attended the court session, called the conditions in the courtroom where the Yulia Tymoshenko 'gas case' is being held, "inhuman".

"I just attended a meeting of the Pechersk district court, where the case against former Prime Minister of Ukraine has begun. I can testify to the inhuman conditions in which it taking place. A small room without any air conditioning was filled with a large number of people. There were also many people who could not get into the room standing in the corridor. But I think I was lucky. I stood at an open window and was able to withstand [the conditions] and even did not finish up in hospital because of dehydration, " said Teixeira.

Yulia Tymoshenko's attourney, Sergey Vlasenko, requested the court be transferred to a more suitable room. He suggest premises of two thousand square meters which were available in the Writers' Union headquarters nearby, free of charge.

Tymoshenko herself said: "In Soviet times, when dealing with dissidents' court cases, there was a directive - choose a small room where you cannot not invite the press or others to attend these processes. Your honour, I would like to once again urge you not to humiliate people today in this room, do not show contempt to them and their health. Look all those present in the room, look what condition they are in. Already several people have passed out in the hall. So I would like to support the request of my counsel. "

Judge Rodion Kiryeyev, [presiding over the case] said he will consider the request "at the appropriate stage of the process." As a result, the court hearing continued in the crush..".

Other reports claim there were over one hundred persons in the courtroom at one time, including a number of suspicious and moody-looking 'plant's who had been there before it had opened. The report estimates the entire 9-hour 'sauna' took place in a room of 30 square metres.

Ukraine's legal authorities have had plenty of time to organise this 'trial of the century'. But IMO their intention was to deliberately humiliate Tymoshenko, and subject her, and her team in court to 'inhuman' conditions - [dare I say "make them sweat?"]

Surely a twice head of government, well known throughout the world, whatever the rights and wrongs of the case, deserves better. This took place not in a third-world despotic African country, but in a member country of the Council of Europe, a country that considers itself 'part of Europe'.

Karadzic and Mladic are immeasurably better treated in the 'Hague Hilton'..

It is a humiliation not for the accused, but for the Ukrainian authorities and judiciary..

p.s. Brief Euronews video report here

p.p.s. Several unedited video clips of this 'kangaroo court in a cattle truck' here.

Hryshchenko talking bollocks*

Several days ago in Strasbourg, at a PACE session, the Ukrainian Foreign Minister Konstantyn Hryshchenko explained that democracy in Ukraine, "is the same as in the British Parliament".

"We live in a country where democracy is a tool, a means of political competition. We live in a country where all political forces convey their [political] messages directly, " he said.

In Ukraine there exists, " a situation that allows all political forces to deliver their message and ideas to people, to those who support them or who challenge them."

"Thus, a situation exists where on weekly live television politicians answer the same questions. This is the same situation as in the British Parliament ," he said.

LEvko says this is bollocks.

Every week in the Westminister parliament, on live television, the British prime minister answers questions, frequently hostile, from the leader of the opposition and from opposition members of parliament, as well as from his own members of parliament. The leader of the opposition is allowed to ask six or seven questions, including follow-up questions in response to the PM's answers, during each session.

In the Ukrainian parliament, opposition deputies have been physically assaulted and intimidated on quite a few occasions by Party of Regions' deputies. in premeditated attacks. As a result, several have even had to be hospitalised.

Parliamentary voting is a farce. Multiple-voting 'piano-players' have turned the Verkhovna Rada into a laughing stock. Large numbers of deputies do not attend parliament for months at a time. Some never attend.

In Ukraine all leading television channels are owned by magnates linked to the Party of Regions.

In Great Britain television broadcast are scrupulously vetted to ensure that both government and opposition spokesmen of equal stature are granted equal airtime to air their views.

In contrast to Great Britain, in Ukraine the head of the ruling 'vertikal', Viktor Yanukovych never faces direct questions from the opposition. The rare television interviews that have taken place with him over the last year have been total 'brown nose' jobs.

During last year's presidential elections, Yanukovych 'chickened out' of live head-to-head television debates with his rival, Yulia Tymoshenko. She was left to debate with an empty chair.. [He didn't have the balls?]

Television talk-show debates are heavily biassed in favour of the ruling party. Representatives from right wing extremist parties, with no sitting parliamentary deputies, frequently feature more prominently that the parliamentary opposition. Air-time is heavily loaded in favour of ruling party representatives. [Detailed analysis about this here ]

Leader of the opposition, Yulia Tymoshenko has been virtually shut out from talk-shows for many months. She has been prevented from travelling at home and abroad to carry out her political duties.

The report by the US Trout Charteris and Akin Gump on Tymoshenko's alleged maladministration during her period in office, commissioned by the current administration, was given massive exposure in the Ukrainian media. In contrast, the recent US Covington and Burling preliminary report, commissioned by BYuT, which gave her a 'clean bill of health', was all but ignored by the mainstream Ukrainian media, even though both companies are comparable legal 'heavyweights'. [Links to these two reports here]

p.s. This is what Her Majesty's Government think about the democratic situation in Ukraine..

*Bollocks - testicles. Talking bollocks - speaking nonsense [UK English]

British 'Guardian' on Tymoshenko trial

Check this out...

Jarring prejudicial comments by president in Europe

Last Friday, in Bratislava, president Yanukovych was quoted as saying:

"[As] to Yulia Tymoshenko, my wish is that she will show [or will prove] her innocence in court, and can live, work, and occupy herself with her beloved matters."

In most countries, defendants accused of crimes do not have to prove anything - they are innocent until the prosecutor proves their guilt 'beyond reasonable doubt' in a courtroom. Yanukovych's statement, was therefore, highly prejudicial.

And yesterday, in Strasbourg, he was asked:

"And if we assume that Yulia Tymoshenko will, nevertheless, be convicted. What do you think.. what will be the legitimacy of next parliamentary elections, without the participation of the leader of the opposition?"

Yanukoych reply was again prejudicial: "It is too early to say - we need to separate politics and the law! In no case should any criminal activity be covered over by political slogans. I am convinced of this."

Mustafa Nayem's comments, in the conclusion of his 'Ukrainska Pravda' piece describing yesterday's visit by Yanukovych to the European parliament:

[This] response of the President was indirect. But one thing was obvious: no matter what, and without even waiting for a court decision, he had already decided that the activities of Tymoshenko are criminal. And all other attendant processes - including protests in Europe and at home against selective justice will be considered exclusively as 'political slogans'.

Nayem correctly points out that preventing Tymoshenko visiting Strasbourg on the same day as the president, despite appeals by the most influential group in the European parliament,

was an act worthy of a third-world country. Tymoshenko's visit would have changed nothing, but Yanukovych would definitely would have gained 'brownie points' for being fair-minded had she attended. As it was, Tymoshenko's ban merely reveals a morbid fear of the woman by the ruling authorities.

Meanwhile, the British ambassador in Kyiv, Leigh Turner, in a newspaper article, has declared:

"We have clearly explained to representatives of the Ukrainian authorities, that any impression of selectivity and disproportionate use of legal action [against leaders of the political opposition] may substantially and permanently damage the international image of Ukraine. At the moment we do not consider sanctions such as travel bans, appropriate. [But] in the case of the deterioration of the situation we will be forced to reconsider our position and will consult with our European and international partners as to the most appropriate response."

The problem for Yanukovych and his advisors is any retreat from their current plan to stage show-trials against Tymoshenko, Lutsenko and other opposition leaders, would be a huge humiliation. They now know the price that may have to be paid if the trials, which will be closely scrutinised, are not considered absolutely fair.

Another example of "Ukrainian justice"

In April I posted a blog about a 20-year old student, Hanna Sinkova, who together with some friends, fried some eggs and sausages on the Eternal Flame Memorial in Kyiv's 'Park of Eternal Glory', as part of an artistic event /prank /demonstration, call it what you will,.

The students were protesting about the wasteful consumption of gas at the memorial at a time when many WW2 veterans are receiving meagre pensions and living on the 'bread line'.

Absolutely no damage was caused to the bronze and stone memorial, and it is highly debatable whether the behaviour of the students, as recorded on this video, could be considered in any way loutish or abusive.

Yesterday, a Kyiv court ordered Sinkova be detained in jail for a further period at least until the next court session at the end of June.

Sinkova, who has been in prison for nearly three months, is charged with desecration of a grave [even though, apparently, no-one is buried there]. She claims to have been maltreated, threatened with violence, and subjected to unlawful interrogations [not difficult to believe]. If found guilty the poor girl could face up to five years in prison.

In matters of law Ukraine frequently seems closer to Tehran than Europe.

Someone recently said: "So Ukraine wants to move toward Europe...right now they're not even in the position to catch a tram to the edge of town...

p.s. The recent Covington and Burling preliminary report, in English, on two of the charges being faced by Yulia Tymoshenko, here

The pdf report by the US Trout Charteris and Akin Gumps on Tymoshenko's alleged maladministration during her period in office, in English, is here

Digital broadcasting in Ukraine to be in hands of one oligarch?

Viktor Yanukovych is often described as a man of the oligarchs, steered into the presidency by a a handful of mainly Donbas-based oligarchs in order their corporate interests prevail above all else. Almost invariably, sell-off's of state assets, and the granting of contracts, tenders, licences etc. by the state takes place in a non-transparent, rigged manner for their benefit.

An article in the current 'Dzerkalo Tyzhnya' highlights yet another highly dubious scheme, this time involving Digital Terrestrial Television Broadcasting. The scheme will enable one media baron to control Ukraine's entire DTT network. Furthermore, all of the country's other television broadcasters, including small independents and those not completely subservient to the ruling authorities, will be in his thrall.

Below is a summary and loose translation of portions of the 'DzT' article:

"Whether we like it or not, the problem of digital TV will sooner or later affect most domestic TV viewers. On June 16, 2006, in Geneva, 104 states signed a regional agreement to upgrade to digital broadcasting.

According to this document, on June 17 2015, the transition period when both analogue and digital broadcasting co-exist, expires. After this all parties to the agreement (including Ukraine and its neighbors) cease broadcastsing on analogue TV frequencies and move to a digital format.

Mysterious digital overlord

From the very start, the development of digital broadcasting in Ukraine has taken place in the traditional sluggish manner, but in 2010 the tempo of progress radically changed.

In late October, the Ukrainian National Broadcasting Council abolished all its decisions taken in relation to digital broadcasting over the previous three years, and a few days later it announced a tender competition to determine who the provider of entire digital network in Ukraine was to be.

Oddly, only two companies participated - one of them was what Ukrainians call "a purely technical" company, i.e a dummy bidder, who did not even bother to file all the required documents.

The other company, and winner, was the previously unknown "Zeonbud LLC " whose owners are registered offshore [surprise, surprise]. The company cannot point to any other successful projects in this field, and its true owners are not known.

All current broadcasters will have to reapply for digital broadcasting licences, and because of unclear rules and transgressions already made by "Zeonbud", some broadcasters may find themselves 'shut-out'.

The experiences undergone in previous years by the channels "TVi" and "Channel 5" clearly demonstrate that depriving a TV channel of its license is not a big problem for the authorities."

A few minutes Googling reveals that Rinat Akhmetov could well be the man behind "Zeonbud". He is Ukraine's richest oligarch, one of Ukraine's biggest media moguls, and, allegedly, one of Party of Region's biggest sponsors.

E.g. the following [which I've tidied up] from this link:

Donetsk trace

The proprietor of the company which will receive all dividends from introduction in Ukraine digital TV, is unknown. However, according to participants of the market, the company is close to the SCM [corporation owned by] Rinat Ahmetov. Before recent time "Zeonbud" belonged to the offshore company "Omni International Ventures Ltd" which is supervised by SCM [owned by Rinat Ahmetov].

However, in October owners of the company have [ex]changed. The new 100 % owner [of] "Zeonbud" is an unknown Cyprian offshore company "Planbridge Limited."

The rotten core of Ukrainian politics

This, from an article about Ukraine in the current Polish 'Newsweek' magazine:

"The relentless attack on the [Ukrainian] opposition is gaining strength. The case against Yulia Tymoshenko, at best, will prevent her actively participating in the running of the opposition during the parliamentary election campaign at the end of 2012. At worst, the former PM will be under arrest together with [some of] her party political colleagues.

It's not about political revenge, or a crackdown against the opposition. Since the beginning of his presidency, Yanukovych has been in the clutches of a powerful gas lobby associated with the intermediary gas trader, RosUkrEnergo. The group comprises oligarchs and senior officials from the president's close environment, e.g. the head of presidential administration Serhyi Lyovochkin, and head of the Security Service of Ukraine, Valery Khoroshkovsky. It is linked by such a complicated web of companies scattered around the world , that it is difficult to determine who actually controls the corporation.

We know one thing: this network of gas interests is effectively the bulwark of the Ukrainian political elite, and the defence of its interests is a priority for Viktor Yanukovych's team. The gas lobby in Ukraine fear nothing more than the return of Tymoshenko to power. Already, once in early 2009, she came to an agreement with Russia's Gazprom to eliminate intermediaries from the gas market. Now her ratings are growing again. In the May polls, 'Batkivshchyna', for the first time, was ahead of the Party of Regions, with a support of more than 15 percent."

Energy minister Yuriy Boyko, hero of my last few blogs who overpaid $150 million via a sham tender for a drilling platform at a time when Naftohaz Ukrainy and its ChornomoroNaftohaz subsidiary are tottering on the verge of bankruptcy, is of course one of RUE's 'godfathers'.

Mr Vanahels, Mr Gorin, Boyko's drilling rig, and Tymoshenko's vaccines

Following my previous two blogs, this investigative article entitled "Massive Ukrainian government money-laundering system surfaces", from 'Business New Europe', is a 'must-read'..

Energy minister Yuriy Boyko is trying to explain away glaring inconsistencies in the drilling platform scam. First he said that the $150 million mark-up [see previous blogs] was for helicopters and ships. Once is was clear that no helicopters were mentioned in the tendering documentation he put forward a second version - the $250 million received by the source company was for a 'base model' platform only. The $150 million paid on top was for 'extras' - just like in an automobile..he said.

Now head of 'Naftohaz', Yevhen Bakulin says the mark-up was to cover the cost of safety equipment to eliminate disasters such as befell BP's Deepwater Horizon platform in the Gulf of Mexico... And all these extras were to be provided by...the winners of the tender, 'Highway Investment Processing LLP, whose registered offices are over a plumber's merchant between a Chinese take-away and a tattoo parlour in Cardiff, Wales.

This pathetic floundering fools no-one, you guys. And Yanukovych's war against corruption is a sham..But we knew this all along didn't we?

p.s. the article may go to 'subscribers only' so I will be naughty and paste it complete, below:

Graham Stack in Kyiv
June 2, 2011

What do Ukrainian tank exports to Kenya, flu vaccine imports from Oregon and oil rig imports from Wales all have in common? They are all deals carried out by the same shell companies that are linked to a small set of Latvian directors. A scandal is unfolding in Ukraine that could be dubbed Vanagels-gate as more details of dodgy and outright illegal deals using a string of shell companies emerges, which can be traced directly back to the upper echelons of the Ukrainian government.

When the merchant vessel Faina was intercepted on its way from Odesa to the Kenyan port of Mombasa by Somali pirates in September 2008, international concern focused not only on the plight of the crew of 21, but on the cargo of 33 T-72 tanks, heavy weaponry and ammunition that the pirates found on board. The ship was bound for Mombassa, Kenya, but the pirates (and later US intelligence officers) said the actual destination was Juba in Southern Sudan – a country that is currently under a blanket UN arms embargo.

Who did the ship belong to and who was pocketing the profits from the embargo busting illegal arms shipments? Faina is owned by an anonymous Panamanian company Waterlux AG, which lists two more anonymous Panamanian companies: Systemo AG and Cascado AG, as executives. The latter two companies in turn both list Latvians Erik Vanagels and Stan Gorin as president and treasurer, but at the time no-one could make much of this information, dismissing the Latvians as mere nominees.

According to an investigation conducted by bne, Vanagels and Gorin – together with Latvian colleagues such as Juri Vitman, Elmar Zallapa and Inta Bilder – preside over a sprawling network of companies with Baltic bank accounts that have extensive dealings with the Ukrainian state, covering everything from arms exports to machinery imports.

Companies headed by Vanagels and Gorin won a government order in a March tender on behalf of state-owned oil company Chernomoreneftegas, Ukraine's Black Sea oil producer, for the delivery of $400m worth of oil drilling equipment.

The tender was won by Cardiff-registered Highway Investment Processing LLP, which lists Stan Gorin as a director according to the UK's Companies House. The only other company to "compete" in the tender was Falcona Systems Limited, registered in New Zealand and listing another Latvian, Inta Bilder, as director. It will come as no surprise that this company was founded by Interhold, which lists the ubiquitous Erik Vanagels as a director.

In other words, there was no competition for the oil equipment order, which was parcelled out to the Latvian cabal in a sham of an tender. According to Ukrainian weekly Zerkalo Nedeli, the producer's price for the oil equipment was only $248.5m, so someone made a handsome $150m profit from the deal for doing nothing more than some paperwork.

The Latvian cabal is politically non-partisan, having done similar deals under the previous Ukrainian administration. On May 28, a US court in Oregon found that US-registered company Olden Group LLC had illegally overcharged the Ukrainian government $19m for flu vaccines during the swine flu scare of autumn 2009, according to a government press release.

President Viktor Yanukovych ordered an investigation into the medicine purchases after taking office in 2010. The investigation by US detective bureau Trout Cacheris found $40m of state purchase of vaccines and medical equipment in the two previous years had all been put through the same network of offshore intermediaries with bank accounts in Lithuania and Latvia. Vanagels, Gorin and another member of the network, Juri Vitman, were linked to all these companies, which the investigation found routinely inflated prices by 50%.

Vanagels' role is only coming to light now as the local press starts digging out more and more information on the Latvian cabal and its ties to the present and past administrations. The network's activity can be traced back over a decade to the establishment in the mid-1990s of Ukraine's state weapons export monopoly Ukrspetseksport. Evidence suggests Venagals, Gorin and Zallapa have scores of companies dating from that time registered around the world - Ireland, the UK, New Zealand and Panama – and those are only the ones that have come to light so far.

The Ukrspetseksport connection continues right up to the present day as the Faina scandal reveals. Ukrainian court records reveal that contracts for goods shipments carried by Faina's sister ship, MS Brilliant, which plies its way weekly from Odesa to Syria on behalf of an Ukrspetseksport partner company, were in the name of Panamanian offshore Ridemax Systems Inc, a sister company of Waterlux AG.

The talented Mr Vanagels

According to British director records, there are in fact two Erik Vanagels, both registered at the same Riga address, pointing to a father and son team – one, a 44-year-old Latvian businessman is apparently the active party, while the Erik Vanagels that features so ubiquitously as a director is his 71-year-old father. Neither responded to attempts to contact them by bne.

bne visited the listed address, which was a fairly rundown place behind a jeans store (see photo above) - not the sort of place one would expect to find someone who owns an oil rig. The man who answered the door, dressed in overalls, said Vanagels - or rather a relative of Vanagels (possibly a sister in law or sister) - used to live there "a long time ago." He had no idea where they were now.

Are Vanagels and Co. anything more than nominees fronting for Ukrainian officials? Apart from the overlapping Baltic directorships and bank accounts, one pointer to a coherent organisation is that Vanagels and Co. do not only head shell companies, but also act as directors of a wide assortment of online foreign exchange trading sites. The online High Yield Investment Product (HYIP) schemes are basically glorified Ponzi scams, such as HYIP "cherryshares" that went offline in December 2010 to the despair of its investors. The site was owned by New Zealand-registered Brooksell Universal Limited, which was under a Inta Bilder and Vanagels directorship.

In December 2009, the US Securities and Exchange Commission (SEC) cracked down on a Latvian Ponzi scheme called Rockford Funding, alleging it had taken over $10m off gullible investors in a matter of months. It transpired that investors' money had been transferred to Latvian banks Rietumu Bank, Regional Investment Bank JSG and Trasta Komercbank. Of the linked companies listed by the SEC, one was a UK company set up by Vanagel's Milltown Corporate Services and Ireland&Overseas Acquisitions – companies in the 1990s that were heavily involved in setting up suspected Ukrspetseksport fronts in Ireland and England. A second company named by the SEC, Panamanian Houseberg Impex Inc, was none other than a sister company of Waterlux AG, the owner of the ill-fated Faina, bringing together two apparently very different worlds - piracy and arms smuggling, and online scamming.

While the Vanagels network clearly poses questions about Ukraine's capacity to fight corruption, with these schemes systematically conjoined to the state, it also raises questions about the willingness of Baltic banks to comply more than superficially with money-laundering requirements, especially in a post-crisis situation where the legal easy money has dried up.

The US sent shockwaves through Baltic banking by blacklisting two Latvian banks in 2005 under the Patriot Act on suspicion of terrorist money laundering, one of which was forced to close. A diplomatic dispatch from Turkmenistan in December 2007, released by Wikileaks, bemoaned, however, that little seemed to have changed in Baltic banking, with Turkmen officials increasingly holding cash in Riga bank accounts.

Parex Banka, now state-owned after getting into trouble in 2008, confirmed to bne that Juri Vitman - one of the Vanagels' network named in the Trout Cacheris investigation - was a client manager at the bank until 2006.

The danger for the Baltics is that money-laundering activities re-import corruption to home territory. One such Latvian affair involving impounded cars was unmasked in 2008-09 and featured a security company with ties to interior ministry officials - Stab 58 - and a New Zealand front company called Geomark, which has almost inevitably, Erik Vanagels listed as director.

Update on drilling platform scam

'Dzerkalo Tyzhnya' is taking Minister of Energy Boyko to court over his allegations that DzT's articles on the purchase of a drilling platform at $150 million over market price via shady intermediaries, were "100%" planted in order to discredit him. [See previous two blogs]

DzT now claim President Yanukovych has requested the Security Service [SBU] investigate whether state company Chornomornaftohaz had indeed purchased the platform for $400 million dollars, $150 million over the proper price, and if so, who was behind the scheme.

Chornomornaftohaz have apparently already paid 80% advance 'up front' [presumably to the highly suspicious intermediary British 'name-plate' company - Highway Investment Processing LLP].

LEvko says only an untouchable 'top banana' could sanction such a huge scam. But you can buy a 'big roof' for $150 million..and it helps if the head of the SBU is one of Boyko's close business associates.

Some observers claim: "the intensified wave of high-level corruption since Yanukovich came to power last year is essentially a final fight over the spoils as part of a prelude to a new period of Ukraine making a concerted effort to deepen its relationship with the EU. This in turn will lead to enhanced domestic reform, a clampdown on corruption, and an unequivocal return to the path of democratization."

LEvko says kleptomania is a serious, incurable epidemic disease frequently observed amongst Ukraine's elites. Sufferers are driven by a creed of 'do unto others before others do unto you..' To suggest that closer ties with Europe will cure them is merely wishful thinking...

The story of Boyko's oil platform will run and run in the non official media - as will the story surrounding the scandalous 'sky's-the-limit' Mezhyhirya palace, which Yanukovych has built for himself, and about which I have written many postings over the last few years.

Exactly one year ago, in an off-the-cuff but on the record remark when he was being queried by journalists , Yanukovych offered them an invitation to visit the place. But soon after, the offer was postponed indefinitely.

Tomorrow the 'Stop Tsenzuri' journalists association were to picket its entrance and demand the president delivers on his offer, but permission to do so has been denied by the local village mayor, and by the Kyiv regional administrative court.

Reasons given? The demo would cause an obstruction - even though only 30 journalists were to attend - and the road outside Mezhyhirya is very wide and carries no through-traffic. The demo would, according to the presiding judge, apparently also violate Yanukovych's human right to a personal life, and his right to rest during his leisure time. More, including videos, here on this.

Yanukovych should look at the countless demonstrations outside the White House, 10 Downing St. etc. etc. over the years...and stop behaving like a pathetic petty tin-pot dictator..

This story will 'run and run' too..and journalists have an absolute right to keep on digging...