Eastern Europe I 53
bne November 2015
But Lozhkin’s past as a pro-Russian print media tycoon may now be catching up with him, if Leschenko’s information proves valid. Lozhkin made his fortune as owner of the Ukrainian franchises for Russia’s leading tabloid titles, such as Konsolmskaya Pravda – Ukraine’s best-selling paper with a print run of 230,000. In 2013, only weeks before pro-EU demonstrations kicked off in Kyiv against the regime of then-president Viktor Yanukoyvch, Lozhkin sold his entire holdings to a corrupt Yanukovych crony, the notorious ‘Wizard of Gas’ Serhiy Kurchenko. Lozhkin cashed in at least €160mn for his media holding – the size of a loan Kurchenko got from a state bank to fund the overpriced acquisition. The collateral for the loan is now worth a fraction of the loan value. Meanwhile Lozhkin was decorated in 2013 by Russia’s State Federation Council for his outstanding contribution to RussiaUkraine business relations. Now, as Austria launches a sweeping asset retrieval effort on behalf of Ukraine, including recovery of money allegedly stolen by Kurchenko, Lozhkin may get caught in the net. Leshchenko argues that Lozhkin is now under investigation in Austria for money laundering after accepting Kurchenko’s tainted funds. Austrian News Agency (ANA) reported Lozhkin’s involvement on September 24, citing a spokesman for the country’s anticorruption prosecution office. “Neither Ukraine nor Austrian law enforcement agencies have asked me for information on investigations regarding myself,” Lozhkin told ANA in reply. “In public, Boris Lozhkin stays mum over the criminal investigation in Austria, “Leshchenko tells bne IntelliNews.” But offstage there is a hive of activity: Lozhkin’s lawyer dealing with the sale to Kurchenko of UMH [Lozhkin’s media holding] and the deputy head of the presidential administration are now both in Vienna. They are trying to put out the fire while it is still on the roof, before the whole house catches fire.”
Leshchenko says Lozhkin has confirmed the money-laundering investigation to him in a private conversation. The presidential secretariat did not reply to a bne IntelliNews request for clarification. Atomic decay Lozhkin is not the only core member of Ukraine’s ‘shadow government’ reportedly facing a money-laundering investigation in Europe, says Leshchenko. Swiss authorities are investigating Prime Minister Arseny Yatsenyuk’s chief fixer, Mykola Martnynenko, deputy head of the parliamentary group of Yatsenyuk’s People’s Front party, on suspicion of taking a $30mn bribe from a Russian stateowned company, according to multiple reports. Martynenko started out as a businessman supplying Ukraine’s colossal, crumbling and corrupt nuclear power sector in the 1990s, before moving into politics. He has headed the parliamentary energy and nuclear power committee for over 10 years, irrespective of frequently changing prime ministers and presidents. He is regarded as the unofficial ‘watcher’ over the sector that supplies Ukraine with over half of its electric power, as well as a fundraiser and sponsor of the PM’s People’s Front. According to political scientist André Haertel, associate professor at the Kyiv-Mohyla Academy, Martynenko is, with the protection of president and prime minister, expanding his personal
Swiss journalists report that authorities suspect Skoda JS, a Czech nuclear engineering company owned indirectly by Kremlin-run Gazprombank, of having paid as much as $30mn in bribes to Martynenko’s Swiss bank account in 2013, to win a contract for the upkeep of Ukrainian nuclear reactors. Swiss prosecutors have confirmed that they opened a bribery case against Martynenko in 2013. Martynenko acknowledges as much, but says the case is fabricated by “lies concocted in the imagination of oligarchs”, in a message posted on Facebook. Army buddy shoots up the ranks Ihor Kononenko, deputy head and unofficial chief whip for the president’s Petro Poroshenko Bloc, is another key member of the ‘shadow government’, according to Leshchenko’s analysis, and the closest to Poroshenko himself. Kononenko has known the president since the two performed army service together in the 1980s. Kononenko then partnered Poroshenko and Oleh Gladkovsky, now first deputy secretary of the National Security and Defence Council, in setting up the industrial holding Ukrprominvest (UPI), which included the once mighty automotive concern Bogdan Motors among its divisions. In August 2014, Kononenko took on a new role: as the unofficial organisational force behind the creation of Poroshenko’s eponymous
"We essentially have a shadow government – a parallel government" influence over the broad network of state energy companies. “While Martynenko in Switzerland is already under investigation for taking millions [of francs] worth of bribes, he is also suspected of deploying corrupt schemes to relieve state companies of millions of dollars,” says Haertel.
party, only two months before parliamentary elections in October 2014. With Kononenko at the helm, the party has grown rapidly into a well-funded political machine, which took just under a third of the seats in parliament in the elections, and which has largely maintained its standing in