Thursday, April 25, 2013

Insider dealing by Ukraine's ministers exposed at PACE

Testimony before the Parliamentary Assembly of the Council of Europe

March 19, 2013

"Ukraine’s proven reserves of natural gas are amongst the largest in the world. Tapping into the Black Sea’s reserves, given the politically delicate region, vast sums of money involved and insatiable global thirst for energy create opportunities for grand corruption.

According to reporting and documents published by Ukranian NGO Anticorruption ActionCentre, in March 2011, a subsidiary of the state owned Naftogaz bought an oil rig from a U.K.-registered company for $400 million, a 60% increase over the then market value of $250 million.

More than a year after the equipment should have been delivered, it has not. In questioning the cause for the $150 million premium, and failure to deliver the equipment, journalists and civil society investigators have uncovered a network of shell companies that obscured a purportedly competitive procurement process and masked a multi-million dollar assault on the Ukrainian Treasury allegedly perpetrated by a small group of individuals with close ties to high ranking public officials.The Anticorruption Action Centre reports that the two “competing” companies for the equipment sale share a common director. 

The same name appears as the director of the winning company and as the director of the parent company of the losing company. It appears as though there was no true competition at all.But even if the procurement process had been open and competitive, it is unclear what the Ukrainian government is getting for its money. Apparently, the rig has not yet been delivered.Ukrainian online newspaper Ukrayinska Pravda uncovered that an 80% down payment on therig was paid and deposited into the winning U.K.-registered company’s account at a small Latvian bank.

The site’s investigative reporting also revealed a set of close relationships that raise serious questions about how the transaction came about, including the commonality between management of Ukrainian state-owned natural resource companies, the involved banks, the winning-bidding company, Russian criminal organizations and Ukrainian public officials.

What has been uncovered in this and other transactions in Ukraine rig sales reeks of insider dealing at the expense of citizens who cannot afford the bleeding of their national wealth. 

It appears that Latvia has and the U.K. may have initiated criminal investigations into this matter."


Why should Europe's leaders have any dealings with such brazen crooks? Or sign any deal - these guys will probably steal the pens...and the toilet paper....
[Photo source]

p.s. Former interior minister spent over two years on the scandalously dubious charges.
In total his actions allegedly resulted in losses of $125,000 to the state.

1 comment:

Anonymous said...

And what was the value of the contract claim that resulted in Yulia Tymoshenko being arrested and jailed? Why have these people not faced the same rigour of judicial review?