Sunday, March 03, 2013

Shcherban's murder - a Russian connection?

Several days ago Kyryl Kostenko, the mayor of Crimean seaside town Simeyiz, was shot dead.

In recent times, the mayors of other Crimea seaside towns - those of Novofedorivka, Malyi Mayak, and Vesele had all been assassinated or have died in peculiar circumstances. All their deaths were most likely connected to conflicts surrounding 'land distribution', and are a reminder of continuing lawlessness in Ukraine, where conflicts between 'criminal businessmen' are still from time to time resolved through the barrel of a gun.

The apogee of such lawlessness was the period of the early/mid nineties in Donbas. The current authorities are now trying to blame former PM Yulia Tymoshenko with one of the most most prominent murders of that time - that of Yevhen Shcherban.

Unbiassed observers such as Yulia Mostova in Dzerkalo Tyzhnya offers several possible versions for Shcherban's untimely end which has been manipulated by politicians to discredit their political or business opponents, be it Pavlo Lazarenko, Leonid Kuchma, former political high-flyer Yevhen Marchuk, oligarch Rinat Akhmetov, and so on. Most of these theories have major defect - lacks of motive and lack of any substantive evidence.

Tetyana Chornovol, in her latest well-researched Ukrainska Pravda blog proposes another, very credible scenario. It helps explain recollections made to your blogger  by people familiar with Eastern Ukraine about the tangible fear of Russian businessmen there, and also the mutual hatred felt between two parts of the steel town and port of Mariupol.

Her account also helps logically explain the chronology of the killings that took place in 1995 and 1996.

Tetyana Chornovol questions why the next witness in the trial of Yulia Tymoshenko, Volodymyr Shcherban [and many others] never mention gas war between The Industrial Union of Donbas' [IUD]  and rival gas trader "Itera".

Volodymyr Shcherban [about whom I have previously written], together with Yevhen Shcherban, and mafia capo Ahat Bragin  controlled the economic, political and criminal life of the region as a team.  Volymyr Shcherban provided a 'roof' for illegal activities in the region - this was noted in contemporary official reports in Kyiv.

These three began co-operating soon after the declaration of Ukrainian independence. On November 10 1992 prominent Donetsk businessman/mafia boss Yanosh Kranz, was shot dead. Akhat Bragin, his biggest rival, was suspected of commissioning the killing. Among the places regularly visited at that tine by Bragin, according to police records, where the offices of the "Aton" corporation whose co-founder was Yevhen Shcherban, and offices of the "Ukraina" department store run by Volodymyr Shcherban.

In the next few years, the trio had become wealthiest people in the region. Volodymyr Scherban won the elections for governor, and Yevhen Shcherban had formed a large faction in the Verkhovna Rada. Bragin, unsurprisingly, kept out of sight whilst still pulling the strings.

In early 1996 Yevhen Shcherban declared the next president of Ukraine would be a protege of Donbas - Volodymyr Shcherban. But by the summer of 1996 their relationship cooled considerably because Yevhen Shcherban had changed his position on his favoured presidential candidate, he decided to bet on Yevhen Marchuk [much to the disconcertment of the-then president Kuchma, who saw Marchuk as a major rival].

Volodymyr Shcherban's message when he appears a a witness in the Shcherban murder trial will be simple and clear - the motive for the murder Shcherban was the gas war with  UESU - ie. with Lazarenko and Tymoshenko. But this flies in the face of evidence - by the end of 1995, and during summer 1996, UESU was already working constructively with IUD - the latter had become the gas monopolist in the Donetsk region.  [IUD was the brainchild Shcherban, Akhmetov, Haiduk, and Momot]. By late 1995 UESU sold gas to IUD which in turn, supplied Donetsk companies, charging a small mark-up for themselves. Importantly, IUD could benefit from their strong position in the region by demanding barter payment for gas - products which they could 'turn around' themselves to make huge profits. If their customers failed to pay for gas, part or all of their assets could be grabbed by IUD in lieu of payment..

And it was Lazarenko's initiative that enabled the "Donetski" to create their gas monopoly.Until that time the gas market in Donetsk region was dominated by the Russian companies: "Gazprom" and "Itera". When Lazarenko and the-then Prime Minister Yevhen Marchuk agreed the new scheme of gas supply, the smarter heads in Donetsk realized this would give them a chance to create a monopoly under the government umbrella, enabling them to take full control of the gas market in the region.

How this was done was described in a newspaper interview given by the mayor of Mariupol, Mikhailo Pozhivanov who claimed Yevhen Shcherban even made death threats to secure the gas business of factories in his town.

Volodymyr Shcherban in February 12, 1996, signed a decree stating the only mediator between wholesale importers of natural gas and enterprises of the Donetsk region was the be IUD.

"Itera" fought for every company by offering a lower price and blackmailing directors, e.g. by withholding essential products from certain companies.

By early 1996, the Russians tried to organise a mutiny among the "red factory directors" of Donbas. "Itera" started negotiations with individual heads of Donbas companies who were willing to break contracts with IUD.  In March 1996, "Itera" appointed Donbas specialist Alexander Shvedchenko as its head in Ukraine. He was a man who had had close ties with the, by-then late Akhat Bragin.

Bragin had been blown up at the Shakhtar stadium in October 1995. But it has to be remembered Rinat Akhmetov, Bragin's right hand man, by then had also a big stake in IUD.

Ahat Bragin and Shvedchenko both loved sport: Bragin supported "Shakhtar"  football team and Shvedchenko a basketball team with the same name. Shvedchenko had a stake in the central market of Donetsk, which had been 'overseen' by Bragin; he also owned companies that imported then exotic fruits, bananas, oranges etc. His partner in this business were Sergei Roman and [later PM Azarov's former deputy] Boris Kolesnikov.

In 1996, there were no official successors to Bragin's empire following his murder. Alexander Shvedchenko may have thought the crown could be his if he used "Itera" as a lever. "Itera", according to Russian media were close to influential criminal circles in Russia. Bragin had in previous years almost destroyed the power of mafia from other parts of the former Soviet Union in his own 'backyard', but after his death perhaps the Russians thought they had the chance of restoring their influence with the help of someone who could be a potential heir to Bragin's crown.

In March 1996, three weeks  after starting to work as the chief Ukrainian representative of "Itera", Shvedchenko was shot dead. His partner Sergei Roman fled abroad and was also soon killed.

Lucky for him, the third and sole remaining partner of the Roman-Shvedchenko-Kolesnikov trio, was able to convince Rinat Akhmetov of his fidelity....

At the time of the murder of Shvedchenko it was not only the "Donetski" who were engaged in a war with "Itera" - so where the "Dnipropetrovski".

"Itera", which had ties to "Gazprom" has started to block the supplies of gas from "Gazprom" to "UESU." But the Ukrainian side has a powerful weapon too - "Gazprom" were desperate for large diameter  pipes for pipelines which were made exclusively at the   Khartsyzsk Pipe Plant in Donbas.

To increase the output of pipes at Khartsyzsk, Shcherban and Lazarenko worked to unite the Mariupol Azovstal plant with the neighbouring Mariupol Illich plant - these would provide more raw material for pipemaking. However, the management at "Azovstal" was against such an association. The head of "Azovstal", Alexander Bulanda even asked state security services for protection, as his life was under threat. In early June the deputy director of Azovstal, Fedor Buzhan was killed in a car smash. On June 13, the day of the funeral, Pavlo Lazarenko, by then prime minister, signed a decree to merge the steel giants. This was another example of Lazarenko - Yevhen Shcherban co-operation.

However, the author of this scheme, Alexander Momot, did not witness this victory. On May 16 1996 Momot was shot dead in the centre of Donetsk on his doorstep.

Volodymyr Shcherban today argues that Momot was killed on the orders of Tymoshenko and Lazarenko but can give no motive for this.

Chornovol describes how, when in Kyiv, top people from Donetsk would stay and dine at a ship-restaurant-sauna, the "Poseidon", moored near the Paton bridge over the Dnipro river. [Years later, in 2005 the ship was burned out.]

In 1996 it had been one of the favorite haunts for 'Donetski' because the ship had a Donetsk owner, and was very convenient to use. It even boasted several luxury hotel rooms.

A few days before his death, Alexander Momot met the head of "Itera",  Igor Makarov, on board the ship. The meeting was also attended by Vitaliy Haiduk [who later was a close and trusted associate of Yulia Tymoshenko.]

Yevhan Scherban was supposed to attend too but he refused at the last moment to demonstrate his disdain  toward the head of "Itera". The conversation on "Poseidon" was very bad tempered and rude. Momot was particularly animated and cursed at Makarov. According to criminal codes, this sort of thing was unacceptable. Igor Makarov, according to Russian sources, had been linked to top Russian underworld leaders. Less than a week after this conversation, Alexander Momot was buried.

Shortly before his death Momot had told a journalist that writing stories on the gas market in Ukraine was dangerous. "There are forces, including those in Russia, who want to grasp this market for themselves, to use the convoluted situation with payments for gas for their own interests," said Momot to the journalist.

After the death of Momot, Lazarenko quickly settled his differences with Itera who paid him off.  But the Donbas war with Itera continued

During the spring of 1996, "Itera" started worked with Victor Pinchuk's industrial group. Pinchuk later became son-in-law of president Kuchma, so it is not surprising that the investigation into the murder of Shcherban dried up.

Volodymyr Shcherban started to spend more time abroad after Momot's death. For many, many months Rinat Akhmetov virtually never left his private 'Lux' estate situated in the Donetsk Botanical Garden. Yevhen Shcherban tried to leave for the U.S. but did not because his son Ruslan had been refused a visa. [BTW, Ruslan to this day allegedly employs a phalanx of bodyguards. The had been an attempt on the life of his brother, Yevhen jr, in September 1997, almost a year after the death of his father at Donetsk airport.]

A former deputy parliamentary deputy, Anatoliy Motspan says on September 20 1996 he was approached by Yevhen Shcherban in order to give the Parliamentary Committee set up to fight corruption some incriminating material on the head of "Azovstal", Alexander Bulanda.

Throughout 1996 Alexander Bulanda had taken a highly negative attitude towards Sherban and made great efforts to wriggle out of the IUD gas diktats. His position was to try a get "Azovstal" to return to supplies of gas direct from Russia from which the company had benefited prior to 1996.

Anatoly Motspan said that Yevhen Shcherban introduced him to Serhiy Taruta, who was supposed to explain the documents. "But just don't tell the committee his name," warned Shcherban, "because they will kill him."

"I asked him [Yevhen Shcherban] what were his relationships with Lazarenko like", said Motspan "He told me: like this, and shown me a thumbs up."

Shortly before the murder of Yevhen Scherban, Alexandra Kuzhel [an old time acquainatance of his] met Shcherban at Borispol airport.

"He was flying to Donetsk. I reminded him that he was going to hand me, as a member of the parliamentary commission studying the energy market of Ukraine, documents regarding Itera's criminal behaviour. "He told me: I won't do this - I want you to live. "

Yevhen Shcherban was shot dead with other victims when his private aircraft landed at Donetsk airport having flown from Moscow. It is quite possible his killers had been tipped of when his plane took off. The killers were led by Vladimir Bolotskikh, a Russian.

p.s. IMO Tetyana Chornovol's scenario 'ticks more boxes' that most of the others proposed in this dirty business...It describes how this series of murders were connected to one another.

Where does Tymoshenko figure in all of this? .At the time of Yevhen Shcherban's death she was already actively campaigning for the V.R. - she successfully entered parliament just a few weeks after the killing, and resigned from UESU. 

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