Category Archives: Ukraine

Ukrainian arms exports falling short of lofty goals

In May 2015, with Russia’s war still going on against eastern Ukraine, five Oplot-M tanks rolled out of the Malyashev tank factory in Kharkiv, ready for service in the army.

The Thai army, that is.

The tanks were later shipped off to join five others already delivered to Thailand. The country in 2011 ordered a total of 49 Oplot-Ms for a sum that was not officially announced but reported to be $240 million.

However, the Kremlin’s war in the Donbas has delayed the fulfillment of the order, and the remaining 39 tanks aren’t scheduled for delivery until March, Ukrainian Ambassador to Thailand Andriy Beshta said in July, the Bangkok Post reported at the time.

That’s not good news for Ukraine’s arms industry, which occupied a stable 3 percent of the world arms market between 2010 and 2014, but which has been losing ground since the war started in the spring of 2014. Last year Ukrainian arms sales halved, to $323 million from $657 million in 2014, according to the Ukrainian Institute of Strategies of Global Development and Adaptation, a Brussels-based think tank.

That places Ukraine about 10th in the global ranking of arms exporters, which is not bad for a country with a beleaguered economy facing aggression from its neighbor, but is still far away from Ukrainian President Petro Poroshenko’s target, stated in May 2015, that Ukraine should be among the top-five arms exporters “in the nearest future.”

The drop in sales isn’t due to Ukraine diverting arms production to the war, however, as economics expert Igor Groznyi explained in a blog for the Institute of Strategies of Global Development and Adaptation this May.

“There are two main reasons,” Groznyi wrote. “Firstly, we don’t have enough facilities to manufacture products that are in demand in the market; secondly, reputation failures prevent us from expanding presence on the arms market – failures to fulfil contracts, attempts to supply products of low quality, and so on.”

So reputation failures such as the ones that have plagued the Thai tank order are going to have to be fixed if Ukraine is to use increased income from arms sales to boost its own defense capabilities. That, in turn, will require investment. But where would the money come from?

Once source could be revenues from sales of high-value weapons system, like the Oplot-M tank, to renovate Ukraine’s own force of T-64 tanks for service in the east, according to Sergei Pinkas, an executive at Ukroboronprom, the state holding company that produces the new tank.

“It’s more efficient to export the Oplot than to use it in the war,” Pinkas said in an interview with Bloomberg in June 2015. “It sells for $4.9 million overseas. It’s better to sell it and use the money to fix and modernize 10 T-64s.”

Innovative systems

Meanwhile, Ukraine continues to sell abroad those weapons systems that are not vital for the war effort at home (and amazingly, Ukraine in 2015 sold $72 million worth of military services to Russia, according to Groznyi.)

The weapons sold to other countries include armored personnel carriers, aircraft engines, missiles for MiG-29 fighter jets, and gas turbines for warships. Most of this kit was developed in Soviet times, and is a cheap but reasonably reliable option for countries with tight defense budgets. Ukraine also offers servicing and upgrade plans for previously purchased weapons.

But Ukraine is also developing its own higher-tech arms that it hopes will compete at the more expensive end of the market. Ukroboronprom, the state arms exporter, in September unveiled a high-tech combat module, named the Taipan, which can be fitted to armored personal carriers and even small armored cars (it weighs only 350 kilograms.) Remote controlled and fitted with heavy machine guns or grenade launchers, the Taipan can also be mounted on fixed defensive positions like checkpoints, and can operate under its own battery power for three hours.

Another Ukrainian innovation is the Phantom – an unmanned, remote-controlled military vehicle about the size of a small car that can be used in infantry support roles, delivering ammunition, evacuating wounded, and carrying out battlefield reconnaissance. Equipped with a heavy machine gun or anti-tank missiles, it can also offer fire support.

All the same, promising developments like these are still unproved and not in full production, and can’t be found in Ukroboronprom’s 2016-2017 catalogue, which instead mainly features upgraded versions of Soviet-era arms, along with maintenance and upgrading services for tried-and-tested, but old Soviet weapons.

Dwindling stocks

Ukroboronprom’s 2016-2017 catalogue also offers the types of weapons that Ukraine could well use itself, or has been appealing to Western countries to supply it with to defend against Russian aggression. These include R-2 anti-tank missiles (sold to Kazakhstan and an unnamed African country in 2014), counter-battery radars, and battlefield recovery vehicles for damaged tanks (sold to Azerbaijan).

Ukraine’s arms exports in recent years have been mainly of former Soviet materiel withdrawn from Eastern Europe after the fall of communism in the late 1980s and early 1990s, according to Viktor Plakhuta, who until recently was Director of the Department of Defense and Security at Ukraine’s Ministry of Economic Development and Trade.

However, those stocks won’t last forever, and much of it is significantly degraded.

“The explosives in ammunition only has a limited lifespan,” Plakhuta said, giving one example.

And because of this past reliance on exporting aging and obsolete Soviet-era arms, Dr. Gustav Gressel, a senior policy fellow at the European Council on Foreign Relations, doubts that Ukraine will hit its target of becoming a top-five arms exporter.

“In the past, Ukraine was one of the top arms exporters, but this was mainly due to exporting stocks of stored Soviet equipment and ammunition to all sorts of countries,” Gressel said. “And to be frank, a lot of that stock was sold illegally by corrupt officials. Furthermore, a lot of that stuff you need now for the war in the east, particularly munitions. There won’t be much capacity left to export.”

Indeed, ammunition is one thing Ukraine can’t afford to export in the midst of war. Amazingly, after over two years of conflict in the east, Ukraine has still not set up its own production of ammunition, and has been relying on old stocks, as Oleksandr Turychnov, the secretary of the National Security and Defense Council confirmed in June during a council meeting on the problem.

At the meeting, which was held at a factory Ukraine is considering retooling for munitions production, Turychnov said a significant amount of ammunition reserves inherited by the country from the Soviet army had been “thoughtlessly recycled or sold at a time when no one was thinking we would be engaged in a war.” He said the ammunition reserves had been used to protect Ukraine in recent years, including over the last two years of war.

Plakhuta confirmed that Ukraine currently has no capacity to produce munitions in calibers from 5.45 mm assault rifle cartridges all the way up to 155 mm artillery shells. The only factory that made them is in Luhansk, which is now controlled by Kremlin-backed anti-government armed groups.

“I don’t know why Ukroboronprom hasn’t arranged production of (this ammunition),” he said.

The country has now turned to its partners to help with ammunition supplies: Lithuania on Sept. 3 supplied Ukraine with 150 tons of ammunition – mainly 5.45 mm cartridges – according to a report by Reuters.

Development plans

Meanwhile, with the aim of attracting partners to develop Ukraine’s military-industrial complex, Ukroboronprom has developed what it calls the Ukrainian Shield program, which is to run from 2016 to 2020.

On offer is the chance to invest in Ukrainian innovative weapons systems and to develop new systems in partnership with Ukrainian companies, as well as the use of Ukrainian facilities for arms production.

Among the benefits of such cooperation, Ukroboronprom says, are Ukraine’s strong technical and science education system, and its low-cost workforce (at $1.20 per hour in the manufacturing sector, labor is cheaper even than in China ($2.20), according to Ukroboronprom).

Still, Ukraine has been able to offer such incentives in other areas of the economy for years now, and investment has only trickled in. On top of that, the legal status of the Ukrainian Shield program is shaky, according to Plakhuta, who said only the Ministry of Economic Development and Trade had the right to set state policy in the arms sector.

Before resigning from the ministry, Plakhuta was involved in drawing up a strategy paper on the development of the defense-industrial sector.

The proposed strategy, drawn up with the help of Western consultants according to Plakhuta, is the first one of its type in independent Ukraine’s 25-year history. However, it will take years to implement – it is proposed to run until 2025.

In the meantime, the country faces a tougher fight than ever to bring in investors amid ongoing military conflict and economic troubles. And even if it can attract investors, will they be the “right kind?” asks Gressel.

“Chinese enterprises would like to buy some Ukrainian enterprises like (military engine maker) MotorSich, and subsequently transfer the production to China. Is that the investment you need?”

“What Ukraine needs to do now is to strategize which key technological fields it can excel in in the future, and how, and with which partners and investors it can further develop them to be competitive at the global scale.”

From – https://www.kyivpost.com/ukraine-politics/ukrainian-arms-exports-falling-short-lofty-goals.html

Ihor Kolomoisky: Still Throwing His Weight Around

Whether out of honesty or arrogance, Ihor Kolomoisky has revealed the corrupt ways of Ukraine’s oligarchy, in which a tiny elite thrive at the nation’s expense. “His entire business…is based on a conflict of interest and a merger of business and government,” said lawmaker Mustafa Nayyem.

Editor’s Note: The following article is part of the Ukraine Oligarch Watch series of reports supported by Objective Investigative Reporting Program, a MYMEDIA project funded by the Danish government. All articles in this series can be republished freely with credit to their source. Content is independent of donor.

https://youtu.be/c3IgPGsdfG0

Story At A Glance

Ihor Kolomoisky, a pudgy jokester, is no laughing matter for Ukrainians. He is accused of corporate raidership – a polite term used in Ukraine to describe theft of other people’s businesses by exploiting corrupt courts and deficient legislation – and large-scale tax evasion. He denies all accusations.

He’s a perennial oligarch, thriving no matter who is in power, often in a top position behind Rinat Akhmetov in wealth. He clocks in with Forbes recently at No. 2 at $1.46 billion, slightly ahead of his business partner, Henadiy Boholyubov, and his rival, Victor Pinchuk.

He has dominant or monopolistic positions in many sectors — including banking, airlines and oil production.

Kolomoisky rallied the nation to the defense of Dnipropetrovsk Oblast after Russia’s invasion of Ukraine in 2014 – protecting the motherland and his businesses – by bankrolling volunteer battalions when Ukraine’s army was weak. But then he came into conflict with President Petro Poroshenko, who removed him as oblast governor on March 25, 2015.

Kolomoisky delivers personal insults, even to Russian President Vladimir Putin, whom he called “a schizophrenic of small height” who has “completely lost his mind.” Putin returned the insults, calling Kolomoisky “a unique con man.” In a Dec. 21 interview with Oliver Carroll in Politico, Kolomoisky also took aim at Poroshenko, saying the only difference between him and overthrown President Viktor Yanukovych is “a good education, good English and a lack of a criminal record.” Everything else is the same: “It’s the same blood, the same flesh reincarnated. If Yanukovych was a lumpen dictator, Poroshenko is the educated usurper, slave his absolute power, craven to absolute power.”

Ihor Kolomoisky

Date of birth: Feb. 13, 1963.
Place of birth: Dnipropetrovsk
Wealth: $1.46 billion, second richest person in Ukraine, according to a 2016 Forbes ranking.
Key Assets: PrivatBank, Ukrnafta, Ukraine International Airlines, 1+1 Media.
Personal: Married to Iryna Kolomoiska; one son and one daughter.
Praised for: Successfully stopping Russian aggression from spreading to Dnipropetrovsk Oblast during his stint as governor in 2014-2015; admitting that oligarchs got rich from assets “stolen from the state.”
Criticized for: Profiteering from his links to the government; blocking state oil company Ukrnafta’s tax and dividend payments; strong-arm tactics, including raidership.

STORY STARTS HERE:

For many years, he was one of Ukraine’s most camera-shy oligarchs, rarely appearing in public and giving almost no interviews.

In recent years, however, Ihor Kolomoisky has burst into the spotlight, revealing himself to be one of the country’s most colorful, comical — and confrontational billionaires.

For some, his bizarre behavior explains why he is nicknamed Benia, after a kind lion with a fluffy mane from an old Soviet cartoon. Seemingly proud at times of his reputation as a corporate raider, he has joked about being able to control a company after buying just a small stake. “Give me a 1 percent stake and I will take over the entire company,” he has been quoted as saying.

Sadly for Ukraine, Kolomoisky’s real behind-the-scenes antics are no laughing matter. He is not to be taken lightly by Ukraine or its citizens.

Kolomoisky has been accused of bleeding the state dry by not paying his fair share of taxes while profiteering through rent-seeking schemes at state enterprises by exploiting ties to government officials.

The Kyiv Post had conversations with Kolomoisky, but he refused to be interviewed for this story.

‘Political corruption’

“His entire business and everything he does is based on a conflict of interest and a merger of business and government,” said Mustafa Nayyem, a lawmaker from President Petro Poroshenko’s bloc in parliament. “Kolomoisky is one of the biggest factors of business influence on government… His business and the preferences he got would have never existed without the cooperation of state bodies, which is political corruption in the strict sense.”

One of the most notorious examples is unpaid dividends and tax evasion at majority state-owned oil production giant Ukrnafta, the management of which Kolomoisky and partners controlled for years.

Authorities say it cost the state $600 million of unpaid taxes.

Just over a year ago, Kolomoisky appeared to be on the defensive, losing the governorship of his native Dnipropetrovsk Oblast and effective control of Ukrnafta.

Poroshenko claimed back then that his crackdown on Kolomoisky was the beginning of a de-oligarchization drive that would, once and for all, break the country free of the grip of oligarchy and pervasive kleptocracy. But the promise by the president, who is himself an oligarch, was not kept.

Failed de-oligarchization

After a hiatus, Kolomoisky again started exploiting leverage for tradeoffs – to preserve and increase his influence, while other oligarchs also remain untouched.

He now holds the balance of power in parliament, with his loyal lawmakers helping to secure key votes for Poroshenko’s wafer-thin ruling majority. Political analysts said Kolomoisky played a major role in the appointment of Prime Minister Volodymyr Groysman in April and Prosecutor General Yuriy Lutsenko in May – both presidential loyalists.

‘Hello, anybody home?’

The billionaire looks like a comic character – a short, energetic man with a shaggy grey beard and a thick, wavy full head of hair.

Some of his quotes, such as “hello, anybody home?” or “wanna grab a coffee?” have become internet memes shared on social networks.

In contrast with conventional bureaucrats and tycoons, he has an informal, offhand and down-to-earth, sometimes coarse style.

“Kolomoisky wore a grey t-shirt and grey jeans, and didn’t resemble a governor in the classical sense,” said Borys Braginsky, who was a spokesperson under Kolomoisky.

The tycoon is notorious for impulsive outbursts of anger, which can transform in a flash into dry humor.

In October 2014, Kolomoisky admitted having Israeli and Cypriot citizenship, apart from his Ukrainian one. This is a violation of Ukrainian law, which bans dual citizenship. “The Constitution says that dual citizenship is banned. It doesn’t ban triple,” Kolomoisky told Serhiy Andrushko, a Radio Liberty journalist.

Threatening manner

On March 19, 2015 Kolomoisky rudely insulted the same journalist during a standoff with Poroshenko over control of oil producer Ukrnafta and oil pipeline operator Ukrtransnafta. Irritated with Andrushko’s previous reporting on him, Kolomoisky swore at the journalist and called him a “prostitute.” He also asked him whether he had “stuck” his tongue “up his ass.”

“You’re spying for me like a chick who’s spying on her cheating husband,” he yelled at Andrushko, who approached him for a comment.

In 2015 lawmaker Sergii Leshchenko published a recording of an alleged phone conversation between Kolomoisky and Andriy Kobolev, CEO of state oil and gas firm Naftogaz. In the conversation, which allegedly took place in September 2014, a man with a voice resembling Kolomoisky threatened to send loyal soldiers to capture a power plant and the office of the state’s gas pipeline operator Ukrtransgaz.

“Don’t provoke us to send people from the war zone. Don’t fuck with us,” said the voice that resembled that of Kolomoisky.

Then in May 2015, Kolomoisky called then-Economy Minister Aivaras Abromavicus a monkey at a meeting of Ukrnafta’s board of directors. Despite his explosive persona, Kolomoisky’s brain “works like that of an engineer,” Braginsky said. “He always calculates, and his brain functions at lightning speed.”

Ruthless competitor

Back in 2007, Kolomoisky turned to black humor in order to get rid of annoying neighbors – Russian oil company TNK-BP – which had an office next to him in the Millennium office building in Kyiv. One day in April, office workers were shocked to see an exhibition of expensive coffins in the Millennium’s lobby. Men in black suits were distributing leaflets promoting a funeral company whose abbreviation in Ukrainian was TNK-BP. A few months after that incident, TNK-BP moved to another office.

Although his business grouping has never held power on the national stage and was often sidelined by rivals in prized privatization auctions, Kolomoisky has developed a knack for survival and success no matter who is officially in power.

Known for his aggressive and litigious style, harking back to the “wild ‘90s” of gangster capitalism, Kolomoisky and partners in his so-called Privat business group control a diversified portfolio of business assets spanning from Ukraine and extending to an ore mining enterprise in Australia, all via a web of offshore companies.

Business and political savviness has helped him outlive all previous political regimes in Ukraine, said Svyatoslav Oliynyk, an ally of Kolomoisky who was a deputy Dnipropetrovsk Oblast governor under him.

To Ukraine’s defense

Prior to 2014, he and partners never directly got involved in politics. He broke that rule after the 2013-14 EuroMaidan Revolution that drove President Viktor Yanukovych from power.

When Russia started its war against Ukraine soon after the revolution, he was appointed governor and played a key role in fending off the Kremlin’s onslaught.

Kolomoisky burst out of the shadows and switched from being an oligarch who rarely appeared in public or gave interviews, to being the most outspoken one.

Oliynyk said Kolomoisky proposed that fellow oligarchs Rinat Akhmetov and Victor Pinchuk become governors of Donetsk and Zaporizhzhia oblasts, respectively, but they refused.

Kolomoisky also said that he had advised Kharkiv Mayor Hennady Kernes, a Yanukovych ally, to support the post-revolutionary government instead of siding with pro-Kremlin protesters, and that Kernes had agreed.

In some of his first comments as governor of Dnipropetrovsk, he dismissed claims by Russia that a coup by Nazi Ukrainian nationalists had seized power in Kyiv, claiming instead that Russia’s leadership itself was Nazi and fascist in its views and behavior.

“If Nazis made me a governor, then either they are not Nazis or I’m not a Jew,” Kolomoisky said.

Spars with Putin

Kolomoisky has also insulted Russian President Vladimir Putin on occasion, even though angering the Kremlin strongman has led to extremely unpleasant – even fatal – consequences for his enemies.

At his opening press conference as Dnipropetrovsk Oblast governor on March 3, 2014, Kolomoisky called Putin “a schizophrenic of small height.” “He is completely delusional. He lost his mind completely. His mission to recreate the Russian empire within the boundaries of 1913 or the Soviet Union within the boundaries of 1991 may bring the entire world to catastrophe,” he said.

Putin returned the favor, calling Kolomoisky a “unique con man,” claiming that he had defrauded Russian oligarch Roman Abramovich. “And now this scoundrel was appointed governor of Dnipropetrovsk Oblast,” he said. “… As a result of dishonest privatization, some people got rich, and now they’re joining the government.”

Kolomoisky kept up the feud in March 2015, telling the Financial Times he understands why Putin seized Crimea. “He was just taking advantage of the situation. He’s just as much a raider as we are.”

Dnipro’s protector

One of his first moves as governor was to prevent the spread of Russian-engineered separatism from the eastern Donetsk Oblast to his neighboring Dnipropetrovsk Oblast. He ordered checkpoints to be set up on the border to defend the region.

As the country’s financially starved army proved unable to fight in early days of the crisis, local self-defense units, sponsored by Kolomoisky’s entourage, proved crucial in manning checkpoints and fending off Russian and separatist forces.

Located between Kharkiv, where Russian-backed separatists took over the regional administration briefly in April 2014, and Donetsk, which remains a separatist stronghold to this day, Dnipropetrovsk became a bulwark of the pro-Ukrainian movement. A major hospital for wounded soldiers and a center for the release of prisoners of war were established.

‘There was no army…’

“Effectively there was no army and no police,” Kolomoisky’s ex-spokesman Braginsky said. Starting from late March, Kolomoisky’s team started creating the volunteer Dnipro-1 Battalion to help the weak and poorly equipped Ukrainian army to fight separatists.

Oliynyk, who was Kolomoisky’s deputy during his governorship, said the oligarch was funding the equipment, lodgings, food and logistics of the unit, but all the weapons and wages were provided by the government.

Dnipropetrovsk activist and blogger Vyacheslav Poyezdnik told the Kyiv Post that Kolomoisky was paying some Hr 5,000 to Hr 7,000 per month to Dnipro-1 fighters.

Oliynyk also said that Kolomoisky’s team had helped the Right Sector paramilitary group, which was comprised mostly of EuroMaidan Revolution activists, basing them at a former summer camp and supplying them with food.

Among other battalions supported by Kolomoisky were also Dnipro 2, Azov, Shakhtarsk, Poltava, Sicheslav, and several regular army battalions.
At the end of April 2014, Kolomoisky’s deputy Borys Filatov offered to pay $10,000 to anyone who captured a Russian mercenary fighting in eastern Ukraine.

‘Protecting business’

Poyezdnik said that, although Kolomoisky had not been seen often in Dnipropetrovsk, his team had been trying hard to get positive publicity by showing grenade launchers allegedly taken from enemy saboteurs and separatists supposedly captured on the war front.

“Their defense of Dnipropetrovsk was largely a publicity stunt,” Poyezdnik said. “Why did they start defending Dnipropetrovsk? They were protecting their business.”

Kolomoisky controls Ukraine’s largest commercial bank, Privatbank and, in Dnipropetrovsk Oblast, the local soccer team Dnipro, ore mines and many other businesses.

Kolomoisky also spread his influence to Odesa Oblast when his ally Ihor Palytsya served as governor of the region from May 6, 2014 into half of 2015.

In the course of the war, Kolomoisky and his allies gained more influence in southeastern regions and elsewhere in Ukraine and – critics say – started widely using it to advance their businesses.

Poroshenko conflict

As Kolomoisky’s clout grew nationwide, some observers say that he aspired to the role of Ukraine’s oligarch No. 1, similarly to Akhmetov, Ukraine’s richest man, under disgraced former President Viktor Yanukovych. But these ambitions appeared to set him on a collision course with Poroshenko in March 2015.

At that time, the Verkhovna Rada passed a bill curtailing Kolomoisky’s de facto management control of majority-state-owned oil and gas producer Ukrnafta, while a Kolomoisky protégé was fired from the CEO position at state oil transportation monopoly Ukrtransnafta. Kolomoisky responded by sending armed men to blockade both companies.

Kolomoisky accused Poroshenko’s business partner and “grey cardinal” Ihor Kononenko of being behind the takeover of Ukrnafta and Ukrtransnafta.
Eventually Kolomoisky was dismissed as governor of Dnipropetrovsk Oblast.

Political consultant Taras Berezovets said Kolomoisky had become too powerful and had started to irritate many with his rudeness to journalists and others. As a result, nobody supported him at a critical moment.

In an interview published Dec. 21 in Politico, Kolomoisky remained angry with Poroshenko, saying the only difference between him and overthrown President Viktor Yanukovych is “a good education, good English and a lack of a criminal record.”

Everything else is the same: “It’s the same blood, the same flesh reincarnated. If Yanukovych was a lumpen dictator, Poroshenko is the educated usurper, slave to his absolute power, craven to absolute power.”

‘Needed to be reined in’

“He completely lost it. He stopped taking into account that he is just one of Ukraine’s 27 governors and can’t be equal to the president,” Berezovets said.

Nayyem, the lawmaker from the Poroshenko Bloc, said that the oligarch probably had patriotic motives at the beginning of his governorship, but later his business interests prevailed. “Eventually his government post became an appendix to his business,” he said.

Oliynyk, a deputy governor under Kolomoisky and now a member of the Oblast’s legislature from the Vidrodzhennya Party, played down the conflict between the oligarch and Poroshenko saying Kolomoisky had not planned to stay in office for long. “We were planning to serve for six months at most.

But then the battle of Ilovaisk started. We couldn’t leave,” he said. “When the situation stabilized, Kolomoisky left. It just happened six months later than we initially planned.”

Political analyst Volodymyr Fesenko said that in 2014 to early 2015 Kolomoisky aspired to be “one of the key figures in the government.”
“But after the conflict with Poroshenko he decided to return to the his previous traditional tactics, when he reached agreements with (ex-President Leonid) Kuchma, (ex-President Viktor) Yushchenko, (ex-Prime Minister Yulia) Tymoshenko and (ex-President Viktor) Yanukovych,” he added.
Deal with Poroshenko?

Kolomoisky told online newspaper lb.ua in late 2015 that he had reached an agreement with Poroshenko in March on settling their dispute. The deal covered economic, political and media aspects. It also envisaged no legal troubles for his allies, he added.

One of them, ex-Ukrtransnafta CEO Oleksandr Lazorko, is wanted in Ukraine on embezzlement charges and has applied for political asylum in the United Kingdom.

But the conflict between the tycoon and the president flared up again after another Kolomoisky ally, Gennady Korban, set up Ukrop, an opposition party with staunch anti-Poroshenko rhetoric, in June 2015. Korban clashed with pro-presidential candidates in the Chernihiv parliamentary by-election in July 2015 and the Kyiv mayoral election in September 2015 and lost.

In October 2015 Korban was arrested on embezzlement, organized crime, kidnapping and hijacking charges in a case that he called a vendetta by Poroshenko for his political activities.

Both Korban’s defense and other lawyers say there were numerous procedural violations during his arrest.

Korban said that Pavlo Demchyna, a top state security official and a protege of Kononenko, was behind the operation.

A coup attempt?

Borys Lozhkin, Poroshenko’s former chief of staff, wrote in a book he published in early 2016 that there had been rumors that Kolomoisky was planning a coup against the government using the Ukrop party.

“Kolomoisky allegedly made a deal with ‘junior’ factions of the government coalition, Rinat Akhmetov and someone in the cabinet, and was aiming to replace the government,” Lozhkin wrote.

Oliynyk argued, however, that Korban’s political project was independent from Kolomoisky and that his arrest stemmed from his own personal conflict with the president, rather than from the Kolomoisky-Poroshenko dispute.

New deal

Analysts speculate that Kolomoisky’s team and Poroshenko reached another deal after Korban’s arrest.

Braginsky argued that Korban’s release from a detention center in March was part of the deal. Korban was put under house arrest and received a suspended sentence in the kidnapping case in April. Ukrainska Pravda reported on June 14 that he had fled to Israel.

Another part of the agreement is likely that Kolomoisky, his allies and lawyers should keep silent about Poroshenko’s policies, Braginsky said.
“Non-compliance with this deal could entail big problems,” he said. “That’s why this topic is just being bypassed.”

Korban’s press office told the Kyiv Post that he was not giving any comments for the time being, while a spokeswoman for Filatov, mayor of Dnipro and ex-deputy governor of Dnipropetrovsk Oblast under Kolomoisky, said he could only comment on municipal issues, not on political ones.

Supporting Poroshenko

Another aspect of the alleged deal with Kolomoisky concerns the support of his allies in parliament for Poroshenko’s agenda.

The governing coalition, which has a wafer-thin majority, desperately needs additional votes to pass laws and appoint officials. It makes it dependent on situational alliances and trade-offs with lawmakers and parties outside the ruling coalition.

The 23-member Vidrodzhennya group, which pundits have linked to Kolomoisky, voted for the appointment of Poroshenko loyalist Volodymyr Groysman as prime minister on April 14 and the selection of Yuriy Lutsenko as prosecutor general on May 12.

Both Fesenko and Braginsky said that Kolomoisky had played a major role in both appointments. “This wouldn’t have been done without Kolomoisky,” Fesenko said.

Despite the agreements, Braginsky compared the Kolomoisky-Poroshenko conflict with the Minsk ceasefire with Russia.
“This conflict is smoldering like a cigarette,” he said. “At any moment it can be re-ignited.”

Wild 1990s

Kolomoisky’s rebellious and conflict-prone spirit harks back to his youth.

He was born in 1963 to a Jewish family of engineers in Dnipropetrovsk, which is now known as Dnipro. In 1985 he received a degree in metallurgical engineering and started working at a state design bureau.

But he didn’t follow his parents’ career. Together with his friends, Kolomoisky started travelling by train to Moscow to purchase computers and other office equipment to re-sell them in Dnipropetrovsk, according to Forbes.

In the late 1980s, Soviet leader Mikhail Gorbachev started promoting small business initiatives known as co-operatives. Kolomoisky benefited from this, initially working at the Fianite co-operative together with Gennadiy Bogolyubov. In 1991, they co-founded Sentosa Ltd., naming it after an island resort in Singapore where they once spent a vacation, according to Forbes.

In the following years, Kolomoisky and Bogolyubov switched their attention to metal trading, and in 1992 they launched Privatbank, today Ukraine’s largest commercial bank with over 20 percent of the nation’s banking assets alone.

Supports Jewish causes

Calm, non-emotional and camera shy Bogolyubov, the complete opposite of the flamboyant Kolomoisky, is still a 50 percent partner with him in many businesses.

In 1995 Bogolyubov started actively practicing Judaism and now he is one of the main financiers of the influential global Chabad Jewish religious group.

Speaking in November 2010 in Brooklyn, New York, at a Chabad conference, Bogolyubov said his charity donations had grown in tandem with the growth of his business. While in 1995 he donated $10,000, in 2007 his donations had risen to $10 million. “Business was above the roof, it was a golden rain,” he said speaking in English about that period.

The Menorah Center, the world’s largest Jewish community center, a seven-story complex of some 50,000 square meters, opened in Dnipro in October 2012. Bogolyubov and Kolomoisky were the main sponsors of the project.

Corporate raiding

Sidelined from many lucrative privatization dealings, Kolomoisky’s Privat group allegedly built much of its wealth by acquiring companies through litigation and corporate raids. In Ukraine, a country with weak law enforcement and judicial systems, where underpaid and corrupt judges often issue rulings to the highest bidder, court rulings have readily been used to seize company shares and assets.

Korban, a business partner of Kolomoisky, is widely considered the group’s main specialist in corporate raiding. He argues, however, that there is nothing wrong with this.

“I didn’t offend a single honest or poor person,” Korban told the Kyiv Post last November. “These activities are called ‘mergers and acquisitions’ worldwide. There is no Criminal Code article for what I was doing, because many people do this around the world, for example George Soros.”

Korban is also known for his ruthless approach to business dealings and politics. In April he pleaded guilty to kidnapping Serhiy Rudyk, head of Ukraine’s land management agency, in 2014.

Privatization wars

In the early 2000s, Kolomoisky and Gennadiy Bogolyubov appeared to have cooperated with Victor Pinchuk, another native of Dnipro and son-in-law of then President Leonid Kuchma. Kolomoisky claims he and Bogolyubov were making deals with Pinchuk, who was using his government connections to acquire the most lucrative pieces of Ukraine’s industry.

The details of the murky privatizations of the early 2000s would have probably stayed secret if not for bitter arguments between participants years later, which led to several lawsuits being filed at the High Court of Justice in London.

In testimony given in September 2013, Kolomoisky claimed the Privat group had cooperated with Pinchuk in the privatization of several big plants.
According to Kolomoisky, Pinchuk was using his influence as the president’s son-in-law to buy assets at a lower price, while Kolomoisky with Bogolyubov had to pay bribes to Kuchma.

Kolomoisky mentioned a written agreement reached in January 2003 regarding the management of Ukrnafta. Kolomoisky claimed that he and Bogolyubov were obliged to make payments “of no less than $5 million per month until November 2004” into a fund intended to be used for Kuchma’s next presidential campaign.

The Constitutional Court allowed Kuchma to run for the presidency in the autumn of 2004 – a right that he didn’t use in the end. Kolomoisky said at the court that some $100 million accumulated in the fund had been used for Pinchuk’s personal needs instead.
‘Stolen from state’

Kolomoisky claimed to have been extorted by Pinchuk and Kuchma again when speaking at a parliament committee in March 2015. He called the privatization of iron ore producer Ukrrudprom, the Nikopol Ferroalloy Plant and steel producer Kryvorizhstal as “the most outrageous” cases of privatization, when some chosen oligarchs were able to buy the strategic businesses for next to nothing.

“Everybody plays soccer here but only Germany wins. Everybody takes part in privatization but only Akhmetov purchases,” Kolomoisky joked at the committee, referring to Ukraine’s richest oligarch.

In June 2005, the government cancelled the privatization of Kryvorizhstal, which had been sold in 2004 to Pinchuk and Akhmetov for $800 million. In October 2005 the Indian-owned Mittal Steel bought the steel mill in a repeat privatization for a record price of $4.81 billion.

Kolomoisky argued that other state companies bought by the oligarchs at lower prices should also be re-sold “through nationalization and expropriation.”

Ukrnafta

One of Kolomoisky’s key assets, a 40-plus percent stake in Ukrnafta, is currently at the center of a large-scale corporate conflict.

Viktoria Voytsitska, a lawmaker from the Samopomich Party, wrote in a Nov. 23, 2015 letter to the State Fiscal Service that Ukrnafta had received revenues worth Hr 20 billion from September 2014 through October 2015 and had enough cash to pay taxes. But Ukrnafta “deliberately” failed to pay taxes by hiding its cash and not showing it on its bank accounts, she added.

Last December the State Fiscal Service opened a tax evasion case against Ukrnafta. Ukrnafta’s tax debt amounted to Hr 12.2 billion (or $478 million) as of Sept. 30, according to investment bank Concorde Capital.

Kolomoisky has denied the accusations, blaming instead government officials for extorting his and other businesses in the country.

Moreover, Kolomoisky had blocked the payments of Ukrnafta’s dividends worth Hr 2.4 billion for 2011-2014 to state-owned Naftogaz, which holds 50 percent in Ukrnafta, before the government passed a law in March 2015 to prevent him from obstructing shareholder meetings. As a result, the dividends were paid later in 2015.

Timur Khromayev, head of the National Securities Commission, said in January that Ukrnafta’s management had also repeatedly failed to pay dividends to non-Privat minority shareholders since 2006.

But Kolomoisky argues that Ukrnafta can’t pay the tax debt and the dividends because it was crippled by Naftogaz, which he says illegally seized a big amount of gas from the company.

In early June, Kolomoisky filed a $4.67 billion lawsuit against the government, seeking compensation for the gas that was seized.

This amount exceeds Ukraine’s budget spending on security and defense in 2016, the third year of war in the country. Kolomoisky’s opponents say this is at odds with the tycoon’s claims to be a patriot.

Oleksiy Shalaisky, head of Nashi Groshi anti-corruption watchdog, said Kolomoisky was profiting for years thanks to his control over the majority state-owned Ukrnafta.

“For years it was the only company which could make all the purchases without tenders as they had a special law for that,” Shalaisky said. “As a partly state company it was also obliged to sell [hydrocarbons] at state-regulated prices but in fact they were selling it the way they wanted.”

PrivatBank dilemma

Kolomoisky also owns the country’s largest bank, a media empire and Ukraine’s near-monopoly passenger airliner. This leverage is enough to at least trigger a panic or even bring about the collapse of entire industries.

In June 2014, the National Bank of Ukraine started cleansing country’s banking system of insolvent banks, many of which were oligarchs’ “pocket banks,” used to plunder depositors, central bank refinancing and launder illicit proceeds.

Banks whose shareholders could not boost capital were shut down. But the biggest challenge to banking reform is PrivatBank, which needs to increase its capital by millions of dollars.

The situation at PrivatBank has led to months of arguments between its main shareholder Kolomoisky and Valeria Gontareva, the National Bank of Ukraine governor.

They couldn’t agree on how much the oligarch should invest in his bank to keep it afloat.

“The problem is that one day she (Gontareva) talks about 128 billion hryvnias ($5.7 billion) and then the next day she says it’s 15 billion ($678 million). And today she has her tongue stuck up her arse because she doesn’t know what to say next,” Kolomoisky said in an interview with Politico in December 2015.

Critics say Kolomoisky has used PrivatBank as leverage as part of a broader attempt to protect his business interests.

As of beginning of 2016, Privatbank accounted for 21 percent of the entire country’s banking system and 35 percent of Ukraine’s personal deposits, said Oleksandr Zholud, an analyst at the Center for Economic Strategy.

Oleksandr Savchenko, president of the International Institute of Business, said the entire banking system would collapse if Privatbank were shut down.
“The payments that had not come from PrivatBank would go to other banks, a series of bankruptcies would begin, and there would be panic,” he said.“Re-launching the system would take around one or two months; the loss to GDP would be around 2 to 3 percent.”

In early June, Gontareva said in an interview with Ukrainska Pravda that she had reached a deal with Kolomoisky on PrivatBank. “He has given personal guarantees on almost all of our refinancing,” she said. The restructuring plan requires the Privatbank to reduce a massive amount of related party loans and pledge assets belonging to Kolomoisky’s business group as collateral.

Media empire

Kolomoisky also owns one of the largest media groups in the country – 1+1 Media, whose main asset is the popular TV channel 1+1. Critics said the oligarch often uses his channel to defend his interests and provide positive coverage of political leaders in return for trade-offs or to attack his enemies.

An audio recording posted on a YouTube video in early July 2014 features a man with a voice resembling that of Kolomoisky allegedly giving instructions to Oleksandr Tkachenko, head of 1+1 media, to start a campaign against Radical Party leader Oleg Lyashko. In an interview with Novoye Vremya, Tkachenko claimed that Kolomoisky regularly meets the channel’s staff, but doesn’t directly influence the coverage.

Kolomoisky in his interview with lb.ua, gave a qualified denial to pressuring the channel. “In a primitive, vulgar sense, I definitely don’t,” he said.

Aviation monopoly

Another key asset is Kolomoisky’s control of the skies. Ukraine’s airline industry experienced a shock in 2013, when one of Ukraine’s two largest airlines, Aerosvit, went bankrupt. Aerosvit was co-owned by Kolomoisky.

Subsequently the market was monopolized by Aerosvit’s main competitor, Ukraine International Airlines, a company that Kolomoisky at the time took over.

People sit at Kyiv Boryspil airport on May 30, 2013 with a view of an airplane operated by Ihor Kolomoisky’s Ukrainian International Airlines. (UNIAN)

Andriy Guck, an aviation specialist and lawyer, said Kolomoisky’s aviation empire is believed to also include Dniproavia, Dnipro Airport and cargo handling services.

Kolomoisky’s proteges have also run Kyiv’s Boryspil Airport, giving rise to accusations of sweetheart deals for Ukraine International Airlines. “The industry is in one person’s hands now,” Guck said.

Big appetite

Even after acquiring large chunks of Ukraine’s economy, Kolomoisky still has an appetite for yet more acquisitions.

Parliament has approved a plan to privatize 450 state companies in 2016. Despite a failed auction in July at which no bids were submitted, the State Property Fund still hopes this year to auction off Odesa Portside Plant, the largest fertilizer manufacturer in Ukraine.

This is one of most lucrative subjects of privatization, and it may well be of interest to Kolomoisky, experts say. In 2009 he along with business associates won a privatization tender, offering $625 million for the plant, but the auction was cancelled by government officials, who sought a higher price.

Braginsky said the fairness of the Odesa Portside Plant’s future privatization would depend on whether the plant was sold to firms linked to Poroshenko’s ally Kononenko.

“(Kolomoisky) will not deny himself the pleasure of earning a few billions,” political analyst Viktor Nebozhenko said.

The next wave

Political analyst Vitaly Bala believes that Kolomoisky and Poroshenko would rather find peaceful and mutually beneficial co-existence. Evidence of an accord would include a situation where Kolomoisky keeps control of Ukrnafta, ownership of PrivatBank and secures an interest in Odesa Portside Plant.

Kolomoisky and Poroshenko “are survivors from the 1990s, where those who couldn’t come to an agreement did not stay in business. Those who found an agreement, stayed afloat,” Bala said. “Our so-called oligarchs kind of have some wars, but they don’t lead to any casualties.”

In 2016, Kolomoisky managed to secure his business interests and regain power using his political leverage. Unlike in 2014, however, the oligarch is now trying to keep a lower profile.

But being adventurous, he may soon get bored with staying in the shadows and try to openly challenge Poroshenko and his allies, Berezovets said.
“Kolomoisky catches the wave, he always uses opportunities – when his opponents allow it,” Berezovets said.

While Kolomoisky’s power peaked in 2014, “it doesn’t mean he won’t have new peaks in the future,” Berezovets added.

From – https://www.kyivpost.com/ukraine-politics/ihor-kolomoisky-still-throwing-his-weight-around.html

“The job was done to precision of second. He was blotted out under ‘curators’ order,”

“The job was done to precision of second. He was blotted out under ‘curators’ order,” – Donbas militants comment on murder of rebel leader ‘Motorola’

A number of Russian activists hostile towards Ukraine and supportive of separatists and militants of Donbas have said they are certain that Arsen ‘Motorola’ Pavlov was killed by his foes from the “Donetsk People’s Republic,” not by Ukrainian saboteurs. Source: http://en.censor.net.ua/n410846

“Those who knew how heavily guarded ‘Motorola’ was, realized immediately how absurd the version about a saboteur group sounds. Even if we presume that a recon group [of Ukraine – ed.] could penetrate into Donetsk, then how could the saboteurs manage to enter the heavily guarded building to which only a limited number of persons had access? Such tricks are only possible in poor-quality action movies,” the news outlet wrote quoting several pro-separatist activists of the Donbas.

“The following is clear as of now. The commander was killed by an explosion of a bomb attached inside a garbage disposal unit next to the elevator cabin. It was detonated exactly the moment when Arsen [Pavlov] entered the elevator and the doors closed but before it started to move up. This means the job was done to a precision of second. … It also required access to the house and ability to see when Arsen entered the building… as well as lengthy manipulations [of bomb implementation – ed.] that could not have been hidden from the guards.

“Thus the version of a “Ukrainian saboteur group” is untenable. Ukrainian saboteurs have no access to the building and ability to spend time there and do some manipulations without being noticed by the security. The murder was committed by some allies of the Kyiv junta who were able to disguise as ‘friends’ and prepare the terrorist attack,” a comment in a popular separatist public group reads. Source: http://en.censor.net.ua/n410846

Some other separatist ‘speakers’ expressed similar opinions.
Former militant commander Igor Strelkov, who fought alongside ‘Motorola’ in Sloviansk, wrote that the murdered militant’s security was top-level, including at his residence.

“No strangers could enter the building,” he commented.

Another “Strelkov” gang member Mikhail Polynkov wrote that he even knew call signs of people who murdered Pavlov. He said he was passing the names and call signs to Strelkov and asked Strelkov “to act honestly” with this information in case he is eliminated.
Source: http://en.censor.net.ua/n410846

Stalinist writer Maxim Kalashnikov in his LiveJournal post quotes Yevgeny Shabaev, official representative of the “Donetsk republic” in Moscow, as saying that “people’s leaders are being eliminated by orders of ‘curators.’ The latter want to stuff the Luhansk and Donetsk people’s republics into Ukraine as fast as possible.”
“It’s almost a fact that Russia is implementing a scenario of elimination of field commanders of the Donbas militants in its seized territories, those who were in this conflict since its beginning. Only a few of them are left, and they risk repeating the fate of ‘Motorola.’ …

“Idea-driven fighters were needed only at the beginning of the conflict. … Now their time is up. A stage of a long diplomatic struggle is taking off, during which the Russian leadership will attempt integrating the occupied areas of the Donbas back into Ukraine at the best conditions for the Kremlin. Freaky field commanders are not needed in this struggle,” the authors of the article sum up. Source: http://en.censor.net.ua/n410846

Killing of Motorola ups tensions in eastern Ukraine

The killing on Oct. 16 of Arseniy Pavlov, a Russian warlord who headed one of the armed gangs that have taken over parts of Ukraine’s Donetsk and Luhansk oblasts, has sparked fears of an escalation in the war in eastern Ukraine.

Pavlov, know widely by his nom de guerre Motorola, was killed by a remotely activated device that detonated as he entered the elevator in his nine-story block of flats in Donetsk, where Kremlin-backed militias have seized control from the local authorities.

The leaders of the Kremlin-backed armed groups are calling Pavlov’s death a “terrorist act,” and say it was carried out by Ukrainian special forces. Oleksandr Zakharchenko, a Kremlin-backed leader in Donetsk, lsays he will take revenge on Ukraine and accuses the country’s president, Petro Poroshenko, of declaring war.

But in Kyiv the message is radically different. No claims of responsibility are being made, with a spokesperson for Ukraine’s Interior Ministry, Artem Shevchenko, instead writing on his Facebook page that Pavlov had likely been killed by his fellow “partners in crime.”

Zorjan Shkirjak, an Interior Ministry adviser, posted on social media that he believes Russia’s security services, the FSB, killed Pavlov as part of a professional “clean-up” operation, and that other leaders of pro-Kremlin armed groups will come to the same end.

String of killings

Meanwhile, a video has surfaced on social media purporting to show four men from a far-right Ukrainian group admitting to Pavlov’s murder. The clip has, however, been widely labeled as a fake.

Pavlov, 33 at the time of his death, was a Russian citizen born in Ukhta, a town some 1,600 kilometers northwest of Moscow. He came to Ukraine in February 2014, declaring himself a volunteer and fighting against Ukrainian forces on a number of occasions. He was head of the Sparta Battalion armed group during the battle for Donetsk airport, one of the key confrontations in the Kremlin-backed war in the Donbas. He was on the wanted list in Ukraine, accused of committing crimes against the country’s territorial integrity. In an April 3, 2015 interview with the Kyiv Post, he claimed to have murdered prisoners of war.

Pavlov’s death is the latest in a string of killings of commanders of Kremlin-backed armed groups. These include that of Alexei Mozgovoi, who was killed in May 2015. At the time, Ukrainian authorities said Mozgovoi was likely murdered due to a power struggle between separatist groups. Officials in Russia suggested Mozgovoi was murdered with the help of the Western intelligence services, though without providing any evidence to back their claim.

As for Pavlov, one Russian MP has already suggested renaming a school in St. Petersburg in his honor. Should that step be taken, the information war over events in eastern Ukraine will surely resonate long after Russian President Vladimir Putin has left office.

Security fears

Ultimately, the truth behind who killed Motorola is unlikely to ever be definitively established. It remains to be seen if pronouncements of revenge from the leaders of armed groups who have survived him, like Zakharchenko, will translate into anything real. Their response has been aggressive, but this likely masks very real doubts that are now surfacing regarding their own security and the security of the territories they occupy as a whole. If the man they called Motorola can be killed just meters from his own home, then surely no one is safe.

The natural reaction of the Russian-backed leaders in such cases has been to make bombastic threats toward Ukraine. But the frequency of attacks on the lives of prominent Kremlin warriors suggests they would be better off spending time looking after their own safety – and making sure they stay useful to Moscow.

From – https://www.kyivpost.com/ukraine-politics/analysis-killing-motorola-ups-tensions-eastern-ukraine.html

Pro-Russia media star ‘Motorola’ killed by ‘Ukrainian Nazis,’ rebels claim

MOSCOW — He bragged about being a cold-blooded killer, and videotaped battles with his helmet cam.

And along the way, this former car wash worker became an unlikely, pro-Kremlin media star in rebel-held Ukraine – where he met his end late Sunday in a mysterious explosion that roared up the elevator shaft in his apartment building.

The death of Arsen Pavlov, 33, better known by his nom de guerre “Motorola,” brought blame-trading on both sides of the conflict between Ukraine’s Western-allied government and rebel factions with ties to Russia.

Many believed the blast was just the lasted in a series of killings that may be linked to a bitter internal purge of rebel leaders. Separatist officials, in turn claimed Ukraine’s government in Kiev was behind the attack in Donetsk, the largest rebel-held city.

“I understand that [Ukrainian President] Petro Poroshenko has violated the ceasefire and declared war against us,” said Alexander Zakharchenko, the leader of the separatists in Donetsk. “Now wait for it.”

A video surfaced Monday on social media purportedly from anti-rebel factions showing a self-proclaimed fighter saying he was in Donetsk and claiming they “just liquidated the famous terrorist Motorola.” He then lists two other pro-Moscow leaders as “next” on the hit list, and ends with a Nazi salute. The authenticity of the video could be independently verified, but separatists insisted it proved Kiev’s hand in the attack.

Pavlov, a native of the northern Russian Komi Republic and former car wash employee, arrived in Kiev during the 2013-2014 pro-European protests, and later joined anti-Western street demonstrations in Kharkiv and Donetsk. Reported to be a veteran of Russia’s Second Chechen War, he led teams of separatist fighters in the extended battles for the Ukrainian city of Slavyansk and at the Donetsk Airport.

Kiev has called Pavlov a war criminal. Asked by the Kyiv Post last April about allegations that he had executed a Ukrainian defender of the airport, Pavlov responded: “I don’t give a f*** about what I am accused of, believe it or not. I shot 15 prisoners dead. I don’t give a f***. No comment. I kill if I want to. I don’t if I don’t.”

Pavlov first became known for strapping a GoPro camera to his helmet and then passing the footage to pro-Kremlin media outlets including LifeNews and Komsomolskaya Pravda. He granted generous access to friendly journalists, producing some of the best-known, and most infamous, videotaped scenes from the war.

One showed his fighters capturing Ukrainian soldiers at the airport in Donetsk. The men were later paraded through Donetsk, where locals threw stones and beat them, which Kiev called a violation of the Geneva Convention. A longer cut of the video, which we won’t link to here, shows Pavlov dragging the bodies of Ukrainian soldiers out of the trunk of a car as another soldier covers his face in the background.

After the battle, he also brought captives to the airport to gather the bodies of their fallen comrades. According to a report by the Reuters news agency, he said they had been assigned the task because “it’s not our job to recover dead bodies, it’s our job to make them.”

He “was one of the first to understand that the information component of this war was perhaps just as important as the combat,” wrote Alexander Kots, a war reporter for the pro-government daily Komsomolskaya Pravda, adding that Pavlov liked “Russian rap and joking around” and that his friends called him “Motik.”

In July 2014, he arranged one of the most bizarre events of the war up to that point: His own wedding, attended by members of Russian and Western media, that highlighted the manic, tragicomic (and highly media-sensitive) atmosphere of Donetsk in early 2014.

One week later, a Malaysian airliner carrying 298 passengers and crew was shot from the sky. A two-year, Dutch-led investigation last month said that the missile-launcher “came from Russia” and was fired from territory held by the separatists.

On Monday, an 11-second video appeared in which men who said they are members of the neo-Nazi “Misanthropic Division,” claimed responsibility for the attack. The claim could not immediately be verified.

On Monday, Russian state television aired glowing obituaries to Pavlov and his role in the breakaway Donetsk People’s Republic, or DNR. Others responded with gallows humor.

“The DNR fighter has changed his codename from “Motorola” to Samsung Galaxy Note 7,” joked one anti-Kremlin account, in reference to the Samsung’s exploding telephones.

From – https://www.washingtonpost.com/news/worldviews/wp/2016/10/17/pro-russia-media-star-motorola-killed-by-ukrainian-nazis-rebels-claim/

How one woman tried to save Ukraine from economic collapse

Natalie Jaresko, the former Minister of Finance, was handed an impossible task

A couple of times I thought Natalie Jaresko was going to cry. But she did not. It was twilight in May 2015, and we sat on the terrace of her house just outside Kiev. As we talked, all the emotion of trying to save Ukraine from economic oblivion bubbled to the surface. Each time, though, the Minister of Finance regained her composure. Her two daughters, aged 17 and 11, drifted in and out asking homework questions. “I just feel incredible pressure,” said her mother. Ukraine’s very “existence as a country” was under threat, and “we have no choice but to succeed.”
The figures were dire. In 2014 industrial production declined by 21% and the hyrvnia had lost 69% of its value against the dollar. The country had lost territory, resources, industries, people and markets. Between 40 and 60% of economic activity is in the gray economy. In the first quarter of 2015 the economy was 17.6% smaller than a year before. The war, which was costing between $5 and $7 million a day, was being fought with guns, but securing the home front meant saving the economy too. After 23 years of poor and often literally criminal management, making sure that the country did not implode under the weight of its debts and generalized corruption was a responsibility which fell, out of the blue, onto Natalie’s shoulders.

Natalie was born in 1965 in Chicago, and her progression from diaspora girl to minister was not obvious. When, after the general election of October 2014, she was asked to take the post, she recalled thinking, “if I had not tried to help, I would never have forgiven myself.”

When Natalie arrived in Ukraine in 1992, it was clear that the country had already been in decline for years even before the post-Soviet economic nosedive that was now beginning. But, as the difficult period of settling in began to pass, she found herself becoming ever more excited about “the Ukraine that could be.” It was close to the rest of Europe, rich in various resources, had an educated population, ports and so on. “What more could you ask for?”

The big story of Ukraine since independence is one of lost opportunities. We talked of how road builders and other contractors stole vast amounts, leaving the country with third-world roads. We talked of how few paid income tax. “It is a vicious circle. People say, ‘Why should I pay tax if the government does not provide me with good schools and hospitals as it is supposed to?’ And the government in turn does not have the money to provide them as they are not paying tax.”

When President Yanukovych said he would not sign a deal with the E.U. and demonstrations began in 2013, Natalie began to help the demonstrators. Her children’s nanny cooked up fatty meat stews to take to the men in the square, explaining that they needed the fat to protect them from the cold.

Then, nine months after the protests were over, she was visited by headhunters taken on by the incoming Ukrainian government. Within days she was offered the post of Minister of Finance and was granted citizenship when she took office. When she began work, one of her two assistants asked if they would be getting the usual cash bonus. It turned out that the minister was expected to bribe them not to accept bribes from others who were keen to find out the minister’s schedule and other interesting bits of information. As the answer was “no,” one left, but the other remained.

Negotiating with the IMF and Ukraine’s debtors was one thing, but trying to get the system under her to work was quite another. The Soviet-inherited system was designed, she said, so that the person at the top got to shoulder all the responsibility, so that absolutely no one lower down had to take any. The civil servants have been taught to check if anything that comes before them has a consequence for the budget, and if it is legal, but not how to solve problems.

On the plus side, she believed that Ukraine had never been a more tolerant place. She recalled meeting the finance minister from an E.U. country who told her he wanted to talk about Ukraine’s “discrimination” against Russian-speakers. In her office, Russian, English and Ukrainian are used interchangeably. At last, she said, “the definition of being a Ukrainian is being a member of this society and not being ethnically Ukrainian.” And this, having grown up as an American, is something she was very happy to see.

From – https://www.kyivpost.com/article/opinion/op-ed/tim-judah-one-woman-tried-save-ukraine-economic-collapse.html

THE REALISM WE NEED

Realism is in the air. Not the realism we need—not a clear-eyed appreciation of the dangers facing our hitherto safe, free, and comfortable lives, of own weakness and of the strengths of our adversaries. This is inverted realism—a realism that says that to try to defend ourselves is unrealistic, that our enemies are not really our enemies and our allies not really our allies.

It comes to us from many quarters, on the left (German Social Democrats) and on the populist right (Donald Trump). Perhaps the most lucid recent exposition is a piece in First Things by my friend Peter Hitchens.

Hitchens argues that we have needlessly soured our relations with Russia by expanding into territories that the Kremlin abandoned after the collapse of communism. We have unfairly demonized Vladimir Putin, who though a “sinister tyrant” (Hitchens’s words) is certainly no worse and perhaps better than our supposed allies in Turkey or Saudi Arabia. Russia is not the Soviet Union. Nor is it an expansionist power: Crimea was a justifiable one-off response to Ukrainian (and Western) provocation. So instead of fighting a new cold war, we should recognize the traumas the Russian people have been through and allow them to get on with restoring their “glorious” (his word) Christian and European heritage.

This argument is expressed with formidable eloquence and what looks like expertise. Hitchens is a former Moscow correspondent and knows his European history. Many Russians, and their friends in the West, believe it.

But it is mostly mistaken. For starters, the article is largely attacking a straw man: Those of us who believe we are indeed in a new cold war do not argue that Russia is the Soviet Union or is trying to recreate it. Russia is not a global power in any respect apart from nuclear weapons and land-mass. Its ideology, if one can call it that, is a crude and contradictory mixture of anti-Westernism, nationalist bombast, and Soviet nostalgia. It does not bear comparison with the grim but sophisticated edifice of Marxism-Leninism. The latter involved, for example, the compulsory study over many years of Dialectical Materialism (known unfondly to Soviet-era students as diamat). Nothing of the kind exists in Putin’s Russia.

What Hitchens fails to spot is that the Soviet Union was not just about Communism, or about Russia. It was an empire. One hundred twenty million-plus of the Soviet Union’s two hundred eighty-six-million population were non-Russians. Almost none of them were Soviet by choice, any more than the one hundred million people in the other Warsaw Pact countries wanted to be under Soviet tutelage. To view the collapse of the evil empire solely from a Russian point of view is therefore misleading. It would be like writing about Irish history solely from the point of the view of the British. Estonians, Latvians, Lithuanians, Ukrainians, and other captive nations are real people, too. They have real languages, real histories, real dreams, and memories of statehood.

They suffered real traumas, too, both under Stalin’s repressions and by paying the greatest price in World War II (or the Great Patriotic War, as the Soviets misnamed it, and as modern Russia still does). If we fail to acknowledge the infamy of the Hitler-Stalin pact, which consigned these countries to the meat-grinder, and fail to note that most of the casualties and destruction of World War II involved these countries’ peoples and their territories, then our picture of the Soviet Union is incomplete—and so is our understanding of what happened in 1989–91.

For the Soviet Union and Russia did not “withdraw” from these countries and the Warsaw Pact. The Kremlin’s power collapsed along with its empire. Unlike Nazi Germany, the Soviet Union did not suffer a military defeat. It suffered the ultimate political and economic one: The Russians, the supposed masters of the whole system, revolted against the lies, brutality, and incompetence with which they were being governed. Many of them revolted against the idea of empire, too.

The collapse of empires is always messy and poses great dilemmas. How do you balance the interests of the guiltless victims—the honest, hardworking, conscientious foot-soldiers of the imperial power, whose lives are being upturned—against the former subject peoples, newly freed and yearning for restitution, dignity, and sovereignty? There’s no pleasing everyone. Maximum humiliation of the kind imposed by Versailles on imperial Germany is wrong. But it is also wrong to take the privileges and constraints of imperial days as if they were the natural order of things.

This is the problem we have with Russia. It feels the itch of amputated limbs—Kiev, the Baltics, Berlin, the Caucasus. But what about the limbs themselves? These countries—all smaller than Russia—have their own historical traumas, too. They fear invasion. They crave security. They might even expect modern Russia—the legal successor, by its own choice, of the Soviet Union’s assets and liabilities—to pay compensation, just as Germany paid Israel, Poland, and other victims. In fact, victims of Stalinism both in Russia and abroad died waiting for any sort of real recognition of what they had suffered.

The ex-captive nations’ interests and Russia’s, therefore, are irreconcilable. Somehow they have to be balanced. Nobody is going to be satisfied.

Hitchens does not deal with this dilemma. He dismisses it, by saying that it is “baseless” to liken Russia to the Soviet Union. He takes Russia’s feeling of insecurity, and its fears of the loss of historic trophies such as the Sevastopol naval base in Crimea, at face value. These feelings are real. But there is another side to the story. The Crimean Tatars, who have a better claim to the peninsula than do the Soviet-era military pensioners and dependents who moved there after the war, see Ukraine as their only hope. Ukrainians—who appear only once in Hitchens’s essay, in a dismissive aside—want the same liberty, decency, dignity, and justice in their country that we enjoy in the West. Why shouldn’t they have it? The Estonians, Latvians, Lithuanians, Poles, Czechs, Slovaks, Hungarians, Romanians, Bulgarians, and others have been allowed into these Western clubs—and have benefited mightily from it.

Hitchens sees just one power bloc expanding into the area another bloc has vacated. But this view fundamentally mischaracterizes the enlargement of NATO and the EU. The member countries of these blocs joined by choice. They had to argue hard to be let in; initially, they were regarded by many in Brussels as too backward and volatile. To equate the Russian pull-out from the Baltic states, say, with those countries’ subsequent membership in the EU and NATO is to regard kidnapping and marriage as fundamentally the same thing.

In addition to ignoring the non-Russian point of view, Hitchens sentimentalizes Russia itself. He downplays the growth of a secret-police state in Russia, the return of Soviet-style coercive psychiatry, the rising numbers of political prisoners, the falsification of history, the loss of academic freedom, the ubiquitous hate machine, the use of beatings and assassinations. He hankers for a return of pre-revolutionary Russia’s “glorious” past. Yet for many people in the years before 1917, the Russian empire was anything but glorious. The appalling rule of the Romanovs, the grotesque privileges of the aristocrats, the obscurantism of the church, the harshness of the courts, the systematic attempts to wipe out other languages and cultures—none of that seems very encouraging. True, other places may be worse. But we don’t live next door to them.

In particular, Hitchens underplays Russian foreign policy and the threat it poses to its neighbors. Of course the geopolitics of the post–Soviet Union is complicated. But it is clear that from the early 1990s onwards, Russia has taken upon itself the role of protector and arbiter in conflicts across the former empire. This is not the dark fantasy of an old cold warrior. It is stated again and again by senior Russians, who use terms such as “the near abroad” and “sphere of privileged interests.”

Russia did not have to adopt this revisionist, revanchist approach. It could have decided that its top foreign-policy priority was good relations with the former captive nations. That is the way Germany has treated countries such as the Netherlands, Denmark, Poland, and France. It has worked rather well. But Russia—it soon became clear in the 1990s to anyone who was paying attention—was approaching its former empire differently. It did not regard these “former Soviet republics” (as it termed them) as real countries. It blasted them with propaganda, twisted their arms with energy supplies, channelled money into their politics, and sponsored subversion. We in the West had to decide whether we were going to acquiesce in this or try to prevent it by accepting these countries’ desires for closer integration. Fortunately, we chose the latter course, accepting Estonia, Latvia and Lithuania into the European Union and NATO, along with the former Warsaw Pact countries of central Europe and two of the ex-Yugoslav republics.

This was not a reckless or ill-considered move. It was made in full knowledge that Russia would not like it—but was also, therefore, accompanied by careful diplomacy meant to alleviate, as far as possible, Russian worries. Russia was brought into the heart of NATO, through the NATO-Russia founding act and the NATO-Russia council. It was, officially, a partner and a friend.

Had Russia wanted, it could have had close and friendly ties with NATO. It was certainly able to see, at the time both big rounds of expansion were happening, that the alliance was not putting extra troops in the new frontline states, nor holding warlike exercises in these countries. Moreover, NATO was so eager to show that it did not regard Russia as an adversary that it explicitly excluded Russia from its threat assessment and it did not even make contingency plans for defending its member countries from a Russian attack.

For years, this approach worked. Russia did not welcome NATO enlargement, but it accepted it. NATO enlargement became an issue only with Putin’s Munich speech of 2007, when Russia suddenly started claiming that promises had been broken and the West was expanding an aggressive military alliance to its borders.

In truth, NATO has always been on those borders—Turkey bordered the Soviet Union during the Cold War, and Norway borders Russia to this day. More importantly, it was only in April 2009, under pressure from President Barack Obama, that NATO decided to make even outline reinforcement plans for the Baltic states and Poland. Even now, NATO does not have a standing defense plan—the core of its deterrent against the Soviet Union.

Hitchens privileges big countries over small ones, and he assumes that all big countries have equal moral weight. Just as the United States would not like it if Canada became friendly to China, so Russians don’t like it that Ukraine is friendly with the West. But these arguments cut both ways: If the US had been a bloodthirsty dictatorship and had treated Canada the way Russia has (for centuries) treated Ukraine, then freedom-loving Canadians, given the chance, might indeed seek a friendly and democratic protector against American revanchism.

Hitchens is quite right that some of our allies are unpleasant. We had this problem during the Cold War, too, when fascist Spain and Portugal, and militarily-ruled Greece and Turkey, were members of NATO. Far worse things happened in Africa, Asia, and Latin America. This is nasty, but not new. Is China a worse threat than Russia? Maybe, but it is farther away. The main thing about a war is not to lose it. That was our guiding principle in Europe during the Cold War. It remains a good one now.

Hitchens writes: “Nobody who understands history, geography, or, come to that, arithmetic can possibly accept” the portrayal of Russia as expansionist. It is true that Russia does not want to recreate the Soviet empire by military conquest. But Russia can and does pose other kinds of threats. The old cold war is indeed over. But Hitchens’s thinking is frozen in that era. The new cold war—the title of a book I wrote amid considerable skepticism in 2007—is fought on different fronts, for different aims. Russia uses money, propaganda, cyber-subversion, and other tactics to disrupt and weaken its neighbors and the West generally.

Many people are aware of this. They include millions in the countries concerned, and many (I would venture now, most) seasoned Russia-watchers in Britain, America, the Nordic states, and increasingly Germany. We are worried about, even frightened of, Russia. We may be wrong—facts and arguments, please—but we are not “nobody.”

From – https://www.firstthings.com/web-exclusives/2016/10/the-realism-we-need

Vilify and Amplify: How the Kremlin’s Disinformation Machine is Attacking the MH17 Probe

The Kremlin has turned its disinformation machine on those who are investigating the shoot-down of Malaysia Airlines Flight MH17 over Ukraine in July of 2014, using state employees, state-run media, and the state-run, though unacknowledged, “troll factory” of fake Internet accounts.

The primary goal of the media attacks has been to undermine the credibility of citizen journalist group Bellingcat, an independent researcher into the crash. [Editor’s note: Eliot Higgins, the founder of Bellingcat, is a nonresident senior fellow for Digital Forensic Research Lab with the Atlantic Council’s Future Europe program.] The Dutch Safety Board (DSB), which conducted an official investigation in 2015 and concluded that MH17 was downed by a surface-to-air missile, has also been targeted.

The attacks have followed a pattern that could be termed “vilify and amplify.” They come just before the publication on September 28 of the results of a criminal investigation into the crash by an international team led by the Dutch prosecutor’s office.

These attacks reveal how the Kremlin public-relations machine works. They also reveal the extent of the Kremlin’s concern ahead of the publication of the criminal investigation. Going by the attacks on Bellingcat, the criminal investigation itself can anticipate a similarly aggressive response, should its findings be unfavorable to the Kremlin.

The leak

On September 14, independent Russian newspaper Novaya Gazeta published a leaked document from state-owned arms manufacturer Almaz-Antey. This document claimed to disprove Western theories of how MH17 was downed, including both the DSB findings and evidence advanced by Bellingcat that Russia provided the weapon used. Mikhail Malyshevsky, an Almaz-Antey expert, signed the document.

Novaya’s reporting focused on the political implications of the leak. Citing its own lack of technical expertise, the paper published the leaked document alongside a response from Bellingcat, which addressed and dismissed many of Almaz-Antey’s claims.

In contrast, the Kremlin-funded Internet outlet Sputnik failed to show either restraint or balance in its reporting on the leaked document and its contents.

Only a few hours after Novaya published its article, Sputnik ran articles on the Novaya report in English, French, German, and Polish. A Spanish version followed. Not one of these articles mentioned the Bellingcat response published by Novaya, and each added hostile language.

The English version accused Bellingcat of “systematic lying” in its presentation of evidence about the causes of the crash. The French article said that Bellingcat had been “unable to furnish objective proof to support its accusations against Russia,” while the German account deemed Bellingcat “tireless in their attempts to prove Russia guilty.”

None of these comments was attributed to an external source; they were interpretations added by Sputnik. These articles cherry-picked information in the Novaya article, and amplified parts of the article that challenged Bellingcat’s credibility.

The blog

Simultaneously, a document was published by segodnia.ru, a Russian nationalist site. Written by a group of analysts calling themselves “anti-Bellingcat,” but unsigned, this document has a number of troubling features. The first is the anonymity with which it was published. The second is the tone of vilification. The introduction called Bellingcat “pro-Ukrainian (pro-American?)” and “sofa experts,” accused the group of a selection of “fakes and falsifications,” and called them, strikingly, “our opponents.”

This adversarial tone raises doubts about the group’s objectivity.

Despite this, Kremlin-funded media amplified and proliferated the document unquestioningly. Sputnik’s English-language edition, for example, ran one article about the document immediately after the blog post emerged, and a separate article two days later. These articles were one-sided, adding editorial comments such as “the authors of the ‘Anti-Belligcat (sic) Report’ will continue their work to debunk the myths and falsifications being spread by the Bellingcat ‘experts.’”

Sputnik’s Italian edition published an even more biased article, claiming that Bellingcat’s objective is “to prepare public opinion for the fact that the pro-Russian militias of the Donbass, Russia and its armed forces are to blame for the disaster.” This article turned out to be a translation of a segodnia.ru report, without attribution.

Thus the unnamed bloggers vilified Bellingcat; Sputnik amplified them. This “vilify and amplify” technique cannot be qualified as journalism. It can only realistically be considered a smear campaign.

The bloggers

On September 16, Russian tabloid Komsomolskaya Pravda (KP) ran an interview which revealed the names and occupations of two of the “anti-Bellingcat” document’s authors. Their identities shed further light on the Kremlin’s methods.

One of the authors is Malyshevsky, the man who drafted the Almaz-Antey report leaked to Novaya. Malyshevsky is a technical expert, but he is also a high-ranking employee in a state-owned company set up by order of Russian President Vladimir Putin in 2002. His independence and objectivity are, therefore, open to question.

The second author was Yury Kotenok, editor of segodnia.ru and head of the press office at the Russian Institute for Strategic Studies, a think tank also created on Putin’s orders. According to the New York Times, RISS has ties to Russian intelligence. Its director, Leonid Reshetnikov, is a former lieutenant-general in Russia’s intelligence service, the SVR.

Kotenok regularly publishes video blogs supporting the separatists in Ukraine. He also comments for Russian far-right outlets, including Den TV and Zavtra, which combine nationalism with conspiracy theories. He cannot be viewed as impartial.

At no point in Sputnik’s subsequent reporting was Kotenok’s affiliation made clear. One article described him simply as a “leading author” of the “anti-Bellingcat” report. Later articles did not name him at all, whether in English, German, French, or Spanish. A sister TV station, RT, named both Kotenok and Malyshevsky and accurately identified Malyshevsky, but referred to Kotenok only as the editor of segodnia.ru, not mentioning his other affiliations.

This use of the Kremlin media to amplify criticism of perceived opponents regardless of the credibility of the critic is consistent with earlier practice, such as RT’s biased reporting on Ukraine and Turkey.

Send in the trolls

The final piece in the machine is the Kremlin’s “troll factory.” This is an organization whose employees are paid to post fake content on the Internet. A number of websites purporting to be news agencies have been traced to the factory. These include riafan.ru, nahnews.org, fapnews.ru and nation.news.ru, all of which amplified the anti-Bellingcat reports.

Riafan.ru, for example, published an article that set out the key anti-Bellingcat arguments as if they were its own. Fapnews.ru attributed its article to anti-Bellingcat, but called the authors “enthusiast bloggers” and “activists.” The same article, haphazardly translated into English, was run by a hitherto-unknown site, Z-news.xyz.

Nation-news.ru called Bellingcat’s work a “vinaigrette of fakes,” and followed up with a headline stating that Almaz-Antey’s account had been “confirmed.” Nahnews.org was equally definitive, headlining that Bellingcat had been “smashed to pieces.”

Conclusion: Vilify and amplify

This behavior sheds light on Kremlin propaganda practices. The system uses state employees to vilify “opponents,” then uses state-owned media and the “troll network” to amplify them.

So far, the campaign does not appear to have penetrated the Western media. Its significance lies more in the fact that, given the manpower and resources dedicated to condemning those who would tie the Kremlin to the crash, it reveals the Kremlin’s disquiet about the criminal probe’s likely findings.

As Novaya Gazeta indicated, these attacks could be a precursor to the arguments the Kremlin will use if it deems the findings of the inquiry into the MH17 crash to be unfavorable. That, however, will only emerge after September 28.

From – http://www.atlanticcouncil.org/blogs/new-atlanticist/vilify-and-amplify-how-the-kremlin-s-disinformation-machine-is-attacking-the-mh17-probe