On March 13, 2014, Dmitry Vasilyevich Firtash, a gas tycoon who is considered one of the richest people in Ukraine and the country's most influential oligarch, was arrested in one of his offices in Vienna, the capital of Austria. He was released on March 21 with a record bail of € 125 million, but still faces possible extradition to the United States, where he is wanted by the FBI on suspicion of corruption and the creation of a criminal organization. According to the Federal Bureau, the charges were the result of an investigation into an international corruption conspiracy that it had been waging for several years and was not related to events in Ukraine. Firtash’s legal representatives issued a statement stating that he was confident of the political motivation for the arrest and its complete groundlessness. All this raised questions about who he is and why the FBI needs him.
Dmitry Firtash: biography
Few people heard about this man before his arrest in Austria. According to the information on the businessman’s website, he was born on 02.05.65 in s. Bogdanovka (now Sinkov) Zaleshchitsky district, Ternopol region. Ukraine. Parents of Dmitry Firtash are Vasily Dmitrievich, a driver, and Maria Grigoryevna, who worked as an accountant at a sugar factory. The family received the main income from their plot on which tomatoes were grown. After harvesting, the father and son hired GAZ and transported vegetables to Belarus and the Baltic states. Dmitry learned to drive in his teens.
He graduated from the Krasnolimansk railway vocational school, directly from which he went into the army, where he served from 1984 to 1986. Upon his return, he began to think about getting married. Dmitry Firtash met his first wife back in the 3rd grade. Ludmila Grabovetskaya was the daughter of a school principal, and her mother taught mathematics. After the wedding, Firtash decided to get into the depot as an electric locomotive driver, but only diesels were available. Having bought equipment for greenhouses with the money of his parents, he again began to grow tomatoes, and when it became unprofitable, he began to breed arctic foxes, which brought large incomes. During perestroika, things became unprofitable, and Firtash moved to Chernivtsi, where his uncle made a fireman of his acquaintance. In his free time he was engaged in trade.
In 1989, he became seriously ill and after 2 years, Firtash's father died. The head of the fire department, a family friend, recommended him to his partners - Zinovy and Marina Kalinovsky and Peter Moskal. Biography Firtash received a new vector. They opened the company "KMIL", which became the basis of the future RosUkrEnergo. Traded in canned goods, juices, sugar. But the biggest profit came from the sale of 4 thousand tons of milk powder to Uzbekistan. Firtash and Marina Kalinovskaya went to negotiate. They paid them with wool, the implementation of which brought 200-250 thousand dollars.
Then Firtash moved to Moscow, where representatives of all the former republics of the Soviet Union sought to exchange their products for essential goods. There he settled in the largest in Europe (before its demolition in 2006) hotel "Russia". Located at Red Square, it was an urban business center. Here he met a representative of the Ministry of Trade of Turkmenistan, who was responsible for organizing food supplies in exchange for gas. They managed to organize the trade after meeting Igor Bakay (Naftogaz Ukrainy NJSC), which had a quota for the supply of blue fuel to Ukraine. Later Bakaya was replaced by Itera, which was replaced by Eural Transgas, created in 2002.
In 1995, Firtash was suspected of smuggling a large consignment of alcohol. He started selling vodka after meeting with an entrepreneur from the Russian Federation Oleg Palchikov. He was arrested but later released. And in 1996, after he received a gunshot wound in the European restaurant in Chernivtsi and miraculously survived, Firtash and Kalinovskaya decided to take their families to Germany for permanent residence. We traveled along the "Jewish line". This required documentary evidence of their nationality. Dmitry Firtash and Marina Kalinovskaya lived in Germany until 1999, where they established the freight transport company MDF Transspeditions and established ties with influential Turkmen entrepreneurs and officials.
Gas baron
Many Ukrainian and Russian oligarchs, who suddenly appeared on the economic scene after the collapse of the USSR and the declaration of independence of Ukraine in the early 1990s, started almost from scratch and quickly gained wealth and influence during the country's transition to a market economy. Firtash’s biography was no exception. He founded his own trading company, established commercial relations in Central Asia, and organized barter food trade with the region in exchange for natural gas.
In May 2000, KMIL received a license to supply blue fuel to Ukraine, and soon Firtash and Kalinovskaya were offered cooperation by the largest gas trader of Itera at that time. In 2001, the Cyprus company Highrock Holding Ltd. was established to supply food to Turkmenistan. Firtash and Kalinovskaya owned 34%, and the same belonged to Agatheas Trading, which in 2001-2003. led by Galina Telesh, the former wife of Semyon Mogilevich. Later, Firtash himself replaced her. In addition, they were connected with Mogilevich by lawyer Zeev Gordon, who is also Vladimir Averbukh, who represented the personal and business interests of both.
In 2003, Ukrainian businessman Dmitry Firtash acquired the only ammonia fertilizer plant in Estonia, established the Emfesz gas and energy company in Hungary, and became one of the shareholders of Rovnoazot, the largest producer of nitrogen fertilizers in western Ukraine.
In 2004, Firtash and the Russian state-controlled monopoly Gazprom together established the company RosUkrEnergo, which sold natural gas to the EU and Ukraine. Then he became the owner of the Austrian Zangas Hoch und Tiefbau GmbH, whose specialization is the construction of gas pipelines, and also gained control of the Crimean Titan in Armyansk and the Krasnoperekopsky Crimean Soda Plant.
Later in 2007, in order to consolidate management, Firtash created the international group Group DF, whose main area of activity is the production of fertilizers and titanium, gas distribution, banking, agricultural production, the media, energy infrastructure and real estate. The holding operates in Austria, Ukraine, Germany, Hungary, Italy, Switzerland, Tajikistan and Estonia.
Firtash began to gain influence outside the country in 2006, when RosUkrEnergo gained a monopoly on all gas sold from Russia to Ukraine. The agreement was canceled in 2009 after a scandalous contract signed by Prime Ministers Yulia Tymoshenko and Vladimir Putin, whose goal was to eliminate intermediaries in gas trade between the two countries. Tymoshenko was later sentenced to 7 years on charges of abuse of power in connection with this agreement.
In addition to business, the Ukrainian oligarch also does charity work. In 2008, he received $ 6.7 million from Cambridge University to launch a research program "aimed at popularizing the study of the rich cultural heritage of Ukraine in the United Kingdom and beyond." In 2010, thanks to his donations, 2 scientific positions were opened: a teacher of Ukrainian studies and the Ukrainian language.
Does he have political interests?
Although Dmitry Firtash claims that he is not a member of any political party or movement, he is believed to be close to the ousted president of Ukraine Viktor Yanukovych. He was also one of the main lobbyists of Russian interests. This explains the move that surprised many. In October 2013, the Russian Federation offered Kiev a discount on gas sold directly to the Osthem company owned by Firtash, bypassing the state-owned Naftogaz. This was interpreted as an attempt to convince Ukraine not to sign the Association Agreement with the EU at the summit in Vilnius.
Due to its geographical location between oil and natural gas producing Russia and the European countries that consume them, Ukraine really has strategic importance in the world of energy. According to 2010 EU statistics, a large percentage of energy imported into the EU is of Russian origin, including 35% of oil and 32% of gas. And most of them pass through Ukraine. In other words, the energy security of the European Union is heavily dependent on these two states. Twice in the past decade (in 2006 and 2009), the Russian Federation cut off gas supplies in the course of price disputes, which also affected some European countries. Thus, the gas agreement between Ukraine and Russia ensures the security of energy supply in Europe.
Compromising connections
However, all this does not explain the arrest of Dmitry Firtash. In the warrant, the FBI mentions an “international corruption conspiracy” without specifying more precise details. The only specific information is reports of his ties with the leader of the Russian organized criminal group, Semen Mogilevich. According to diplomatic dispatches released by WikiLeaks, in 2008 Firtash admitted this during negotiations with US Ambassador to Kiev William Taylor, to whom he said that he had asked Mogilevich’s permission to set up his own business. The oligarch explained that in the early 1990s it was impossible to come into contact with government officials without first meeting with members of the organized crime group because of the lawlessness that reigned in Ukraine after the collapse of the USSR. He denied any close relations with Mogilevich, but admitted that he needed, and he received Mogilevich’s permission to create various enterprises, since otherwise it would be impossible to do.
The United States considers Mogilevich to be the leader of the mafia - he is on the list of the 10 most wanted criminals and is related to the "multi-million dollar scheme of deceiving thousands of investors in shares of a public company incorporated in Canada, headquartered in Newtown, PA, between 1993 and 1998, ”but there is no reference to Firtash’s participation.
Offshore "UK"
After the fall of the Soviet Union, Russian and Ukrainian oligarchs acquired their wealth mainly through corruption. Due to this method of enrichment, their conditions are not entirely legal. In this sense, Firtash is no exception. Many oligarchs are free to travel and live as they please. Some have even invested heavily abroad, especially in the United Kingdom. According to the journal Economist, because of the huge amounts that oligarchs pump into this country, the UK government will have a hard time cracking down on them. Until they commit too obvious crimes in Western jurisdiction or directly threaten European or American interests, they are relatively safe. Perhaps that is why Firtash is not included in the list of persons compiled by the EU after the annexation of Crimea, whose assets were frozen on suspicions of abuse of public funds or violation of human rights.
Why is the FBI looking for him?
Firtash’s bodyguards in Vienna did not prevent his arrest by Austrian police. The FBI has been following the oligarch’s trail for almost 8 years, investigating his possible involvement in an organized crime syndicate. A Swiss-based DF group has confirmed that his arrest was triggered by an investment project he started in India in 2006. The oligarch is accused of paying 18.5 million to get a license out of competition for titanium deposits $.
Threatened with extradition
The court in Austria in the case of Dmitry Firtash 02/21/2017 granted the request for his extradition to the United States, where he is awaiting a process whose consequences could affect both Washington and Moscow. Vienna’s prosecutor’s office subsequently arrested the oligarch after deciding to satisfy an arrest warrant issued in Spain on charges of money laundering. The Minister of Justice of the Republic of Austria may now have to choose between American and Spanish inquiries.
Authorities detained him in March 2014, a few days after his political patron, pro-Russian politician Viktor Yanukovych, was ousted from the post of president of Ukraine as a result of street protests. Since then, he has remained in Austria, having paid a record sum of bail of € 125 million thanks to a loan given to him by a Russian businessman close to the circle of President Putin.
The Spanish media, meanwhile, earlier this year reported that local authorities had filed a request for the extradition of Dmitry Firtash, claiming that he headed a network of companies involved in money laundering in Catalonia. With two entrepreneurs of Syrian descent, Hares Youssef and his son, he is suspected of legalizing 10 million euros through transactions with real estate and through a restaurant business owned by firms based on the Virgin Islands and Cyprus. Law enforcement agencies came to the organization thanks to documents found during a search of the son of the ex-mayor of Kiev L. Chernovetsky Stepan, who was arrested as part of the Variola operation in July 2016.
Link to Trump
According to media reports and court records, 10 years ago, Firtash’s biography was supplemented by operations with American property with the participation of American political consultant Paul Manafort, who led the Trump campaign for some time. Manafort moved away from the role of the head of the campaign amid questions about his business and political relations in Ukraine and Russia. Prior to that, he advised Yanukovych, helping twice the prime minister become president in 2010. Dmitry Firtash stubbornly denied and argued that the United States, which supported the pro-Western post-revolutionary leadership, was fabricating a politically motivated case against him.
Unexpected verdict
A court in Vienna overturned last year's decision of an Austrian court to reject an extradition request. According to the judge who granted the appeal against the decision of the lower court, this does not mean that someone is declared guilty without a court, just the question of guilt or innocence will be decided in another country. This came as a complete surprise to Firtash and his entourage. Now the extradition of the oligarch to the United States is a simple formality. The final decision on the extradition of Dmitry Firtash must be made by the Minister of Justice, who can “take into account the interests and legal duties of Austria”.
Grim prospects
Even if a refusal follows a United States request, Vienna may be required to deport the Ukrainian oligarch to Spain as part of a European warrant issued in Madrid.
Dmitry Firtash’s condition declined significantly after the post-revolutionary government tightened the gas market. Some of its chemical plants in eastern Ukraine were closed due to more than 3 years of hostilities waged by Russian-backed separatists. Forbes estimates Dmitry Firtash's assets at $ 251 million, although in 2012, according to the same publication, their value reached $ 673 million. The magazine Focus calls the amount of $ 623 million, although in 2014 it reached $ 2.7 billion.
The Ukrainian citizenship and nationality of Dmitry Firtash will not help him either. The oligarch is also risky to return to his homeland, especially after the closure of his bank and the allegations that his past actions as a partner of Russia in the domestic gas market are being investigated, and an arrest warrant may be issued.
