Why Ukraine will not go to Arbitration Court over gas deal

Gazprom has sent Ukraine’s Naftogas a huge €5.2 billion bill under a ‘take-or-pay’ clause that Ukraine has to pay even if it hasn’t imported the gas.  This was part of a dreadful 2009 gas deal negotiated by Yulia Tymoshenko during the last Russian - Ukrainian 'gas war'.

When Yanukovych was elected president, not only did he not annul this 2009 gas deal, he set it in concrete when, by signing the so-called inter-state Kharkiv accord, he unconstitutionally gave away the use of  the Sevastopol naval base and its facilities to the Russian Black Sea fleet for decades, in exchange for a small discount on the price of gas imported by Ukraine from Russia.

As commentators have mentioned, many other European countries have recently successfully renegotiated gas deals with Russia at the Arbitration Court of the Chamber of Commerce, in Stockholm.

Ukraine would have a good case - they could probably prove the 2009 gas deal between Gazprom and Naftohaz Ukrainy was made under duress both from the Russian side and from European countries who were being starved of gas at that time; Ukraine is a major transit route for Russian gas bound for European customers. This would be sufficient for the court to call for the deal to be renegotiated.

The problem for Yanukovych, of course, is that if the Arbitration Court were to rule in Ukraine's favour it would prove that Yulia Tymoshenko was forced into the deal under unacceptable duress - she could not then be accused of exceeding her powers for which she was sentenced to seven years in prison. The case against her would have been shown to be purely politically motivated.

Keeping Tymoshenko in prison is more important to Yanukovych that paying over-the-odds prices for Russian gas.

p.s. Some say Gazprom are unlikely to go to the Arbitration Court for their money [because they would lose?] and will try other methods....

P.s. If anyone has any doubts about the sadistic treatment being systematically being meted out to Yulia Tymoshenko and Yuriy Lutsenko they should listen to Lutsenko's wife Iryna's passionate, moving address in the Verkhovna Rada today...

Ukrainian authorites don't give a fig for European concerns about political prisoners

Former minister of the interior Yuriy Lutsenko has served over half his 4 year jail sentence which was the result of  highly suspect charges and trial. The European Court of Human Rights have ordered the Ukrainian authorities to pay him compensation for unllawful detention prior to the trial. Other ECHR rulings are currently being considered.

In many normal countries he would be either eligible for release on parole right now, or perhaps moved to an open prison with a less harsh regime that that observed in a penal colony.

Just a week ago he underwent a surgical operation to have a growth removed from his intestines at a Kyiv clinic.

He allegedly needs a second operation to treat stomach ulcers.

Today he was unceremoniously transferred back to the penal colony to serve the remainder of his sentence.

Senior officials in the EU who are monitoring his case are outraged by his treatment.

Ukrainian officials must be aware that Lutsenko's case is being very closely monitored - I have posted about this previously - but it is absolutely obvious they do not care about this. They are sadists. Lutsenko's treatment is a brazen signal: "Don't mess with us-  whoever you are ...we will crush you...whatever those smartarses in the west say..."

p.s. the British Ambassador has made his feelings known about this matter too... 

One law for Kuchma..and one for Tymoshenko

Today a Ukrainian court convicted the former police general Oleksiy Pukach for killing investigative journalist Heorgiy Gongadze over a decade ago. He was sentenced him to life imprisonment.

Pukach's final words to the court were: "I [will] accept [the sentence] when [ex-president] Kuchma, and [ex Verhkhovna Rada speaker] Lutvyn are in this cage with me." I have revealed everything during the investigation and trial, but only Fedur [the victim's lawyer] wanted to know about it."

One comment in response to the article at the link above:

"So much for Donetsk-style justice.

When the killer [Pukach] names the commissioners of the murder, Donetsk jurisprudence covers not only its eyes but its ears. But when not one of the [eight] co-conspirators who murdered [Yevhen] Shcherban [and were sentenced a decade ago] ever even mentioned that Tymoshenko [may have] ordered Shcherban's assassination, Donetsk prosecutors blare this [her guilt] out over the whole world...And these man-hunters are supposed to bring justice?"

Tymoshenko charges timed to damage EU-Ukraine integration process?

"The decision to press these [Shcherban murder F.N.] charges against Tymoshenko on this particular date seems to be a demonstration, before the EU-Ukraine summit on 25 February, that Kyiv will not make any concessions regarding the opposition leader, who has been accused of committing a felony.

The Ukrainian government seems to be hoping that this will convince the EU to stop defending Tymoshenko. However, the opposite reaction should be expected from the Western states, which will lead to a further deterioration of relations between the EU and Ukraine. [source ]

An interesting graphic in this 'Forbes.ua' article reveals that over the last year and half, pronouncements and developments in the prosecution of Yulia Tymoshenko have frequently, and most likely not coincidentally,  been timed to influence events significant to the development of  the EU-Ukraine relationship.

 According to Forbes: "The new charges against  Tymoshenko look like an insult to the EU. They (the leaders of the EU member states) have made it clear that they demand her release. Now it seems we deliberately ignoring this requirement. Obviously, the signing of this year, of the Association Agreement with the EU is now in question "- says a source close to one of the members of government.

"Our law enforcement officers  [siloviki] and judges have frequently put forward key decisions in the criminal cases against the former prime minister on the eve of important negotiations," concludes the Forbes article..

Support for Tymoshenko from an unexpected quarter

Ex-President Leonid Kuchma told an 'Ukrainska Pravda' reporter in Davos today that during his presidential terms the prosecutor's office had no evidence linking  Yulia Tymoshenko to the murder of Yevhen Shcherban.

"The Prosecutor-General Potebenko in his reports said at the time there were no grounds for legal action [against Tymoshenko] And that it,"said Kuchma.

"And against Lazarenko at that time there were.. [grounds for opening a case]" added Kuchma.

Yanukovych, who is also in Davos, has turned down the opportunity to attend the traditional 'Ukrainian Lunch' organised by Kuchma's son-in-law, Viktor Pinchuk.

The Shcherban murder case recently opened against Tymoshenko is considered by many observers to be a massive additional road-block against Ukraine's Euro-integration hopes and has been initiated at a particularly inopportune time ...so is particularly embarrassing to one of its proponents, Viktor Pinchuk.

Or maybe Yanukovych has become a 'Nobby No Mates'

p.s. The recent leak of Yevheniya Tymoshneko's emails posted on zhuzhaleaks.com may have been plugged [at the moment] However, some interesting spin-offs in the form of cached documents have come to light. E.g. a detailed essay describing the murderous events that took place in Donetsk in the mid-'90's and the men behind them. [In Russian here]

The information presented in these documents has been knocking around since those bloody times..and has been confirmed and repeated by many other sources. They provide a grim, but broadly true account of the background from which today's Ukrainian leaders emerged and exposes their involvement in these dirty deeds.

The prosecutor-general is crazy throwing all this sh*t around merely to besmirch Tymoshenko...It is landing on many other people already.. In Ukrainian here].  Similar files are being dusted off and examined in foreign ministries in capitals across the world...

p.p.s. Rinat Akhmetov, according to Bloomerg, is 26th richest man on the planet.

Case against Tymoshenko convinces no one

Some details of the Shcherban murder case with which the Ukrainian prosecutor's office intend to charge Yulia Tymoshenko with have come to light. The evidence so far presented is highly circumstantial and is based almost entirely on hearsay; there are many unanswered questions, and the evidence would probably not be deemed sufficient to bring such a case to court in most democratic countries.

If the intention of proceeding with the case is to convince western governments and observers of Tymoshenko's culpability, it will fail.

The Ukrainian prosecutor's office already has highly disreputable, if not to say laughable reputation. I posted about this in an earlier blog.

European Court of Human Rights may well be critical of the Ukrainian judicial system and its law enforcement agencies, when they present their judgements on the treatment of Yulia Tymoshenko and Yuriy Lutsenko in other cases in the next few months.

I would suggest the narrative described today by Tymoshenko of events in the Donbas region in the mid-nineties, a portion of which I've translated below, is the one generally accepted in the west.

"Yevhen Shcherban was one of five founders of ISD, [Industrial Union of Donbas], which owned hundreds of businesses illegally privatised in the 90's. Apart from Shcherban, the [other] owners of ISD were Alexander Momot, Akhat Bragin and Rinat Akhmetov. 

A fifth, shadow co-owner of the ISD corporation was a young politician - Viktor Yanukovych, who is now president of Ukraine. Shcherban was the undisputed leader of this group, and also deputy leader of the Liberal Party of Ukraine. Within a short time three owners ISD corporation  were tragically murdered. Shcherban and Momot were shot dead in Donetsk, and Akhat Bragin blown up at the Shakhtar stadium. The entire ISD corporation, then estimated to have a value of billions of U.S, dollars, was transferred to Yanukovych and Akhmetov. 

After the tragic murder of Scherban, Yanukovych could be appointed governor of Donetsk region. The leaders of the gang that killed Scherban were immediately eliminated in the Donetsk corrective penitentiary, over which current prosecutors Kuzmin and Pshonka had oversight. 

The kind of internecine criminal disputes that existed in the Donetsk region in the 90's, were not seen in any other region in Ukraine. 

Yuriy Lutsenko, when he became the Minister of the Interior  in 2005, exhumed more than 30 corpses of businessmen, judges, lawyers, investigators and others which had been liquidated in Donetsk in the 90's...Then, [president] Yushchenko ordered Lutsenko to stop digging up any more slag heaps in the Donetsk region..."

The west will not be convinced by the latest accusations against Tymoshenko. The aim of Ukrainian officials is primarily to discredit her before the Ukrainian electorate and prevent her taking an active part in Ukrainian politics ever again. Meanwhile the country's leaders' credibility abroad is plummeting to ever lower depths.

Background to Shcherban murder from 'Forbes.ua'

The authoritative 'Forbes.ua' have posted an enlightening article - "The rise and fall of Yevhen Shcherban's business empire" 

The article provides background to the conflict over gas between  ISD, Industrial Union of Donbas, and their business rivals, Yulia Tymoshenko's UESU, which allegedly culminated in Shcherban's murder in 1996.

Here is one portion of the article:

"Did Lazarenko and Tymoshenko have a motive to eliminate the Donetsk magnate [Shcherban]? 

There are significant reasons to doubt this. By the time of the murder the conflict between ISD and UESU had been settled. Most companies in the region had signed contracts for the supply of gas from ISD, which purchased a large portion of the fuel from UESU. "All conflicts and misunderstandings between UESU and ISD were resolved before the tragic death of Yevhen Shcherban," - confirms a former vice president of UESU, Oleh Bespalov. 

[Serhiy]Taruta [the former CEO of ISD and Shcherban's partner] is also sceptical about the involvement of Lazarenko and Tymoshenko in the murder. In his opinion, the prime minister/corruptioneer is being excessively demonised."

Tymoshenko's name has never figured in the murder of Shcherban since the dreadful events at Donetsk airport over a decade and a half ago. None of Shcherban's political or business associates from the early nineties have ever pointed the finger at her...

But last April Yevhen's son, Ruslan, during a hesitant and rather embarrassing press conference, for the first time publicly accused Tymoshenko of involvement in the death of his father. However, Ruslan was allegedly blackmailed to make such an allegation by prosecutors after a hunting accident during which a friend of his was shot dead. Despite denials by the Prosecutor-General's office, Ruslan's declarations, so late in the game, should be treated with great suspicion.

Who really ordered Yehven Shcherban's killing?

Yulia Tymoshenko has now been officially named as a suspect in the 1996 murder of  prominent Donetsk businessman, Yevhen Shcherban who was assassinated by a professional hit squad on November 3rd 1996 as he and his family were disembarking from his airplane at the city airport.

In 2002 eight men were arrested and tried for his murder - all were found guilty. No linkage to Yulia Tymoshenko was ever considered at that time even though she was still in opposition to the-then president, Leonid Kuchma, and even though she was being persecuted by the government of the day. It would have been very easy and convenient to charge her with Scherban's death at that time.

In Spring last year, when it became clear the case and trial against Tymoshenko for exceeding her powers in arranging a long-term gas deal with Russia would not be accepted or deemed sound by international observers and governments, another case had to constructed against her by Yanukovych and her enemies as 'back-up'.

At that time, deputy Prosecutor General Renat Kuzmin was dispatched on a tour of European capitals, bizarrely organised by the same PR agency employed by Party of Regions, to broadcast allegations that the P-G's office had details of payments linking Tymoshenko to the convicted killers.

Kuzmin claimed Shcherban's killers had been paid from an the intermediate account, that of an Antigua-registered company linked to former Ukrainian prime minister Pavlo Lazarenko,  Orphin S.A.

But in this TVi television documentary it is made very clear that many payments from many companies were made to  the Antiguan registered Orphin S.A. One of the payee companies was Somolli Enterprises - run at that time by Tymoshenko - they had paid Orphin S.A. nearly $3 million, six months after Shcherban's killing. The same allegations directed at Tymoshenko could therefore be made against any or all of the other companies who transferred cash to Orphin S.A.

The case against Tymoshenko is almost without substance. Furthermore, as I have posted previously, there is circumstantial evidence that Yevhen Shcherban was 'rubbed out' by his own people...those who ultimately inherited his business empire, and the business empires of other prominent businessmen murdered in the Donbas region in the early and mid nineties.

The spotlight will be shone on them and their murky past if any trial were ever to be staged.

My guess is this Shcherban scheme is one of a number of possible scenarios that could be employed to solve the Tymoshenko problem. Tymoshenko could be sent abroad for long-term treatment. The Shcherban case would then be used as a deterrent to discourage any return.

Yanukovych Family's boundless grab of assets meeting resistance

Lots of rumours are emerging, e.g. as in this most enlightening TVi television discussion, surrounding the bankruptcy of the major Ukrainian airline company, 'Aerosvit', which is owned by Ihor Kolomoysky,  Ukraine's second [or maybe third] richest man,

Yanukovych's 'Family' bulldozer has apparently been trying to get its grabs into Kolomoysky's businesses - allegedly forcing Kolomoysky to 'self-bankrupt' his own airline. [A procedure that is even considered  by some to be a national tradition - an easy way of clearing your debts.]

Kolomoysky also part-owns Ukraine's largest commercial bank, PrivatBank, but arguably, amongst Ukraine's billionaires, he is the one with the 'least pull' in government circles.

But 'The family' may be in for a fight, as described in this report: 

"A  scandal around the Ukraine airline “AeroSvit'' continues. The company’s  owner oligarch Igor Kolomoisky talks about the deliberate fight against the company and plans to close  offices of  its largest financial institution ''PrivatBank”, which will result in a significant shake in the currency market.

Ukrainian media reports Kolomoisky is getting ready to take  drastic measures to protect  his own business.

PR Conflict Management Agency «PR i Z» CEO  Zakhar Chistiakov states that  Kolomoisky’s this action will depreciate Ukrainian Hryvnia , because it is the largest financial institution in Ukraine and even small changes in its  functioning  will lead to social unrest,'' - Chistiakov says.

Along with offices closure, ATM may be also paralyzed, which would be a real social disaster. Chestiakov notes that  Kolomoisky’s businesses is under a deliberate attack from other oligarchic groups which resulted in serious damage of the oligarch. He is the only billionaire in Ukraine who is not represented in the Verkhovna Rada of Ukraine."

Bankruptcy procedures have also been launched on behalf of another Kolomoysky airline.

According to the above-mentioned television discussion, other major oligarchs whose businesses are under threat from 'the family's' immeasurable greed may be 'getting their heads together' to ward off the attacks of the 'Semya' .

Spiegel exposes bungling hackers

"Der Spiegel", one of the biggest-selling weekly magazines in the world, has run a story about the leaked 'Zhuzhaleaks' correspondence. Their piece is [loosely] entitled:

 'Doctored emails - hackers pursue Tymoshenko'

German doctors treating Tymoshenko are 'pissed off 'that they have been dragged into dirty Ukrainian politics because some of the leaked emails make it appear they have been signing off astronomically expensive 'sick notes' for Yulia T.. and have been 'trousering' the money.

In particular, one email, purporting to be from a doctor treating Tymoshenko and sent to her daughter Yevheniya, includes several invoice attachments. One of the invoices [probably legitimate] contains a detailed breakdown of all expenses incurred during one visit, even minor ones such as taxi fares. But another invoice, ostensibly for 'medical services' provided in May 2912, is for 680,000:00 Euro! That's it...no further details of treatment, no reference to other agreements, no breakdown at all.....it all looks embarrassingly crude..

The heavy-handed, brutal, many say misogynistic treatment of Yulia Tymoshenko since her arrest nearly a year and a half ago greatly discredits Yanukovych and the Ukrainian authorities. I agree with this group of  female Ukrainian parliamentary deputies - had Tymoshenko been a man, she would not have been treated anywhere near as badly.

These 'dodgy' leaked emails discredit Ukrainian authorities even further. Such amateurish manipulation of stolen emails by their enemies will only give heart to the Tymoshenko camp..

p.s. A birdie told me Yevheniya T. paid the doctor with a million Euro note...and told them to keep the change..

ECHR does Ukrainians a big favour

In 2010 Oleksandr Fedorovych Volkov, a former judge of the Ukrainian Supreme Court, was dismissed from this eminent position by a vote in the Verkhovna Rada.

He later filed a complaint to the European Court of Human Rights, claiming his rights had been violated.

A few days ago the ECHR ruled in his favour..because: "The Members of Parliament present [in the Verhovna Rada who voted for his dismissal] used voting cards which belonged to their absent peers. Statements of Members of Parliament about the misuse of voting cards and a video recording of the relevant part of the plenary meeting have been submitted to the Court."

[Full EHCR Ruling here ]

A precedent has now been set.

In future, if credible evidence can be presented to the ECHR of parliamentary vote fiddling which breaches an appellant's human rights, the court will rule in the appellant's favour.

 'U.P.' blogger, Mustafa Nayem, considers this could even turn out to be a good earner...Volkov could be in line for 20,000 Euros of compensation..

Similarly, if there is credible evidence that laws have been passed or appointments made, e.g. as was the case with the new chairman of the National Bank of Ukraine, Ihor Sorkin, by means of parliamentary vote fiddling, in future Ukrainian authorities can have no complaint if they are later deemed to be illegitimate.

Kleptomaniacs

After a failure yesterday, the new National Bank of Ukraine chairman, Ihor Sorkin, was 'voted into office' today by the Verkhovna Rada. As normal, votes were stolen. 

Sorkin was the president's nominee.

In order to get their man into the NBU chair many PoR deputies quite blatantly voted for absent colleagues - in strict contravention of the Ukrainian Constitution.

How can any bank be trusted if its chairman was illegitimately elected?

The men who run Ukraine steal everything. They stole their wealth, they stole electors' votes to gain power, they stole their high-flying positions...They will now steal what is left of the the NBU's reserves..

Big brother is watching..,,

Thousands of pages of electronic correspondence attributed to Yulia Tymoshenko's daughter, Yevhenia, have been posted on the internet at  http://zhuzhaleaks.com 

[Zhuzha is Yevhenia's pet name]

Lots of interesting angles will be spun in days to come....

SMS and email intercepts, even those pertaining to high-profile celebs can be obtained relatively inexpensively, according to Ukrainian 'politekhnolog' Taras Berezovets. This should not be a surprise to anyone. Over the last few years newspapers owned by one of the world's biggest press magnates, Rupert Murdoch, have systematically illegally hacked the 'phones and emails of dozens of famous celebrities'.

But it's so damn convenient to send an email...and to transfer funds electronically...

Ukrainian politicians of all colours must surely know that apart from  their electronic correspondence, all of their electronic banking correspondence is being monitored by somebody...somewhere ...

According to some sources, Swiss authorities have admitted they have blocked bank assets of some Russians suspected of participating in the death of Hermitage Capital fund lawyer Sergey Magnitsky..

Former pro-EU ministers will stay in background - for now

The excellent 'OdessaTalk' blog quite rightly points out that three of the most pro-EU ministers in the previous cabinet, Poroshenko, Khoroshkovsky and Tigipko, now find themselves adrift from the 'first circle' of political power.

'OdessaTalk' considers an ideological split within Party of Regions has already taken place and predicts: "Two very distinct camps will emerge, both with some serious money and very public figures within them championing their respective causes!"

Khoroshkovsky runs Ukraine's most watched television channel - Inter. He has pledged to to make its news coverage more balanced. And there are rumours he recently declined an risible offer to sell up his stake in his media holdings ..

The Yanukovych 'family' business empire has grown dramatically in the last two years...but, as yet does not include any major mass media broadcasters. Control of such assets would of course be highly desirable in the run-up to the 2015 presidential elections...However, 29% of Inter may already be in the hands of Russia's Gazprom. Could this be a factor in 'Mentadent', [as the Inter boss is sometimes called] no longer being the president's 'flavour of the month'?

Will any or all of these three characters ever openly turn against Yanukovych? As always timing is everything...And as for Euro-integration...whatever the wishful thinkers say, this all hinges on the fate of Yulia T.

What is behind the Metalist Kharkiv sale?

On December 24th last year it was announced one of Ukraine's biggest soccer clubs, Metalist Kharkiv, owned by one of the country's richest businessman, Oleksandr Yaroslavsky, had been unexpectedly sold to the little-known 27-year-old businessman and lawyer from Kharkiv, Serhiy Kurchenko.  Some journalists associate Kurchenko with a company called 'Gas Ukraine'....prosecutor-general of Ukraine, Viktor Pshonka's son Artem, and president Yanukovych's oldest son Oleksandr.

Yaroslavsky, or 'King of Kharkiv', as his is sometimes called, was idolised by the club's supporters,  because he had  built the club up to rival the best in Europe. Apart from investing large sums into the club and its stadium, he had also invested heavily in other projects in Kharkiv, Ukraine's second city.

The sale came as a surprise, even though Yaroslavsky had had many personal feuds with Kharkiv's odious mayor, Hennadiy Kernes who had striven to return the club to the municipal ownership. Even Shakhtar Donetsk owner Rinat Akhmetov expressed shock when he learned Yaroslavsky had sold up the club.

There has been tentative speculation why Yaroslavsky 'could not refuse the offer he was made' after his failure to provide any clarification to the media.

The Yanukovych family, may have been keen to follow the trend of other immensely wealthy oligarchs  and get their hands on the plaything of the super-rich - a big soccer club.

'Korresponden't blogger Aleksey Golobutsky criticises the sale claiming it to be a demonstration of the barbaric nature of Ukraine's investment climate. If a big player like Yaroslavsky with his connections cannot protect his investments, what chance has an outsider got?

Kernes is one of Party of Regions' biggest hitters in the region - his battles with Yaroslavsky have undoubtedly caused damage the party's image, but it would seem the Yanukovych clan calculate this is a price worth paying for the sake of expanding their business portfolio. It is unlikely than any other raider in Ukraine would be big enough to take away Yaroslavsky's pride and joy.