Gas king

Ukraine’s upheaval could result in a US prison stint for an energy oligarch

April 3, 2014
April 3, 2014

A little over three years ago, Ukraine industrialist Dmytro Firtash was a key beneficiary of president Viktor Yanukovych’s politically charged prosecution of his blood rival, former prime minister Yulia Tymoshenko, whom he imprisoned for abuse of power.

Now that Yanukovych has been ousted and Tymoshenko sprung from prison in the Ukraine uprising, it may be Firtash’s turn. Only this time, it is not the Ukraine government leading the prosecution, but the United States.

In an indictment unsealed yesterday in Chicago, Firtash was charged with bribery and racketeering involving $18.5 million allegedly paid to secure a titanium supply in India for Boeing. KVP Ramacharandra Rao, a member of the Indian parliament, was also indicted in the case, along with four others.

Firtash was arrested March 12 in Austria at the request of the US, and he is currently free on $174 million in bail. In a statement released at the time, he called his detention politically motivated and “as bewildering as it was unfair.” Mark MacDougall, a Washington lawyer who in the past has represented Firtash, did not respond immediately to an email. An official with Group DF, Firtash’s company, also denied the allegations against him.

The irony is that Firtash is now on the receiving end of the treatment that was once similarly meted out by Yanukovych, his closest political ally. Firtash earned hundreds of millions of dollars as a partner in Rosurkenergo, a go-between company that supplied Ukraine’s natural gas—at allegedly inflated prices—from 2006-2009.

When Tymoshenko came to power, she did away with Rosurkenergo’s sweetheart deal in a new natural gas arrangement with Russia. It is that transaction for which she was imprisoned—in a scripted trial, she was accused of cutting a bad deal for Ukraine. Once Yanukovych won the 2010 presidential election, Firtash was back in a powerful, behind-the-scenes role in charge of the country’s natural gas industry.

It is not certain that Austria will agree to Firtash’s extradition. But if he does face trial, he will not be the first powerful Ukrainian to face prison in the United States. In 2012, former Ukraine prime minister Pavlo Lazarenko was released after serving nine years in the US for alleged extortion and money laundering. As for Tymoshenko, she is running for president yet again.

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