Valentyn Nalyvaichenko, the former head of the Security Service of Ukraine, is now the leader of Our Ukraine, the political party of his close ally, former President Viktor Yushchenko.
The Kyiv Post sat down with the 44-year old politician on Dec. 7 to get his reaction to leaked U.S. State Department cables and allegations of links among organized crime, gas traders and top government officials.
In confidential or secret U.S. Embassy cables released by WikiLeaks this month, U.S. officials repeatedly discussed the alleged ties between Moscow-based Semyon Mogilevich, who is wanted by the U.S. Federal Bureau of Investigation, and Ukrainian billionaire Dmytro Firtash, a co-owner of RosUkrEnergo gas trader.
Firtash is close to the inner circle of President Viktor Yanukovych. According to a report by former U.S. Ambassador to Ukraine William Taylor, during a Dec. 8, 2008 conversation he had with Firtash, the gas tycoon also claimed to be close to Yushchenko as well.
Firtash has been a big player in the supply of gas to Ukraine and Europe via Swiss-registered RosUkrEnergo, which he co-owns with Russia’s Gazprom. Taylor wrote that Firtash acknowledged needing Mogilevich’s permission to open businesses.
In response to the leak, Firtash denied ties with Mogilevich in a strongly worded statement on Dec. 2.
The WikiLeaks-released documents also show heightened concern about organized crime in Eastern Europe, including Ukraine. A Spanish prosecutor was, for example, quoted in the WikiLeaks documents as describing Ukraine as in danger of becoming one of the “mafia states” arising on Europe’s eastern border.
But the former head of the Security Service of Ukraine, known as the SBU, repeatedly disputed the assertion that Ukraine had degenerated into a “mafia state.” Nalyvaichenko also stressed that during his years at the helm of Ukraine’s security agency, he found no ties linking Mogilevich with Firtash, or RosUkrEnergo.
Kyiv Post: How much have the WikiLeaks leaks shaken up Ukraine?
Nalyvaichenko: As someone who worked as a diplomat for more than a decade, three years in the security service, then as the head of a non-government organization and now leading a political party, my response to this question may not be typical.
Put simply, in this day and age, it is almost impossible for politicians, bureaucrats to keep secrets. Moreover, most of the information I was privy to as head of the SBU [from May 2006 – January 2010] is today accessible globally to anyone. The Internet has changed everything. People these days have access to any document posted to the Internet and the ability to hold its authors to account. And this is a good thing.
I recall [former presidential guard Mykola] Melnychenko and his recordings. Former President Leonid Kuchma (1994-2005) threatened to dismiss me for failing to arrest him when he showed up [in 2003] at the Ukrainian Embassy in Washington. Kuchma and [then former Presidential Administration chief Viktor] Medvedchuk wanted him arrested. Then, as consul, I welcomed him, as I would any other citizen of Ukraine.
That experience, the recordings scandal and today’s WikiLeaks revelations, have only deepened my conviction that individuals who make information available publicly are not the criminals. The criminals are those, including politicians who conspire to commit illegal acts, behind closed doors and lie to the public.
Ukrainians today should sleep soundly. They have access to the same information the head of the State Security Service was privy to during my tenure. The activities of former governments have been exposed forever, along with the people who headed them.
KP: Are you worried that conversations you may have had with U.S. officials could be the subject of subsequent leaks?
VN: Quite the opposite. I have already spoken out publicly about the issue because some have misconstrued deliberately information contained in the cables already posted to the Internet. Even if my conversations with U.S. officials are published in their entirety, they won’t differ from what we are talking about now.
The SBU worked with its American partners. The last two U.S. ambassadors to Ukraine were fully aware of the extent of our cooperation. I am not worried.
KP: In the WikiLeaks documents, Ukraine and other countries on Europe’s eastern borders have been described by a Spanish foreign diplomat who was talking with U.S. officials as “mafia states.” Do you see it this way?
VN: I do not think Ukraine is a mafia state. Endemic corruption among state officials and bureaucrats today is the biggest threat to Ukraine, just as when I headed the SBU.
The Soviet-style type of graft afflicts the entire bureaucracy and prevents implementing the changes required for Ukraine to integrate with Europe. I think it’s going too far to call Ukraine a mafia state because criminals are not in charge of running the county.
KP: But we see in the WikiLeaks cables that U.S. officials were very curious about the relationship between organized crime groups and Ukrainian officials in the super lucrative natural gas business, where geopolitical interests among Kyiv, Moscow and Europe are also at play. In your talks with U.S. officials, did you experience a strong interest in this specific issue?
VN: This was one of our priorities my priorities as acting head of the SBU for three years. [Former President Viktor] Yushchenko instructed me from the start to ensure [reputed organized crime boss Semen] Mogilevich was in no way involved in Ukraine’s natural gas business.
U.S. officials, as well as other governments, were very interested in Mogilevich and his possible involvement in the gas business. This was an issue that we, first and foremost, were interested in.
KP: Did you find any evidence that Mogilevich was involved?
VN: Records containing operational and technical information about Mogilevich were destroyed unfortunately before I came to the SBU. Yushchenko instructed me to reconstruct the dossier when I took charge of the SBU in December 2006.
And we did so, presuming upon ourselves and with the help of foreign intelligence agencies, especially the U.S. Federal Bureau of Investigation. We established that no one in Yushchenko’s inner circle had any connection with Mogilevich.
KP: But according to WikiLeaks, former U.S. Ambassador to Ukraine William Taylor wrote [on Dec. 8, 2008] in his cable to Washington that upon meeting with billionaire Dmytro Firtash, head of RosUkrEnergo, Firtash admitted to seeking permission from Mogilevich to do business. Moreover, Firtash described himself as a “close friend” of Yushchenko. Firtash is also reported to have said that he was working to form a political alliance between the president’s [Our Ukraine] party and [Viktor] Yanukovych’s Party of Regions.
VN: I am talking about what I did from 2007 to 2010. During this period, none of the individuals you mentioned was in contact with Mogilevich, including Firtash. And Yushchenko knew this. I can’t speak about what transpired before 2007. I think the order to destroy the Mogilevich dossier was a mistake, if not a criminal offense. But this is not the end of the story.
The SBU’s foreign partners, including U.S law enforcement, went as far as to ask that individuals involved in Ukraine’s gas trade, intermediaries, including representatives of [ex-prime minister] Yulia Tymoshenko’s [gas trading company from the 1990s] United Energy Systems of Ukraine. There was summoning and questioning.
I think the reason why the Mogilevich dossier was destroyed in 2005 [when Tymoshenko’s right hand man Oleksandr Turchynov was head of the SBU] is because the files contained information about intermediaries, namely United Energy Systems of Ukraine and Ukrainian government officials and their role in the gas trade.
KP: Such as Ihor Fisherman, who the FBI considers to be Mogilevich’s close associate and who worked as an adviser to Prime Minister Pavlo Lazarenko in the late 1990s when Tymoshenko was a political ally of Lazarenko and head of a very lucrative gas trading business called United Energy Systems of Ukraine?
VN: Exactly. [Petro] Kirichenko, Lazarenko, etcetera.
Endemic corruption among state officials and bureaucrats today is the biggest threat to Ukraine, just as when I headed the SBU.”
KP: So, then is there evidence to show that Mogilevich has been deeply involved in natural gas sales to Ukraine and other countries in the region?
VN: I can only say that Mogilevich was not involved when I headed the SBU from 2007-2010. No one with ties to Mogilevich was involved in Ukraine’s gas sector during this time.
KP: But according to US Embassy cables leaked by WikiLeaks, former U.S. Ambassador to Ukraine William Taylor says that, in late 2008, when he met with Firtash, that Firtash admitted that he met Mogilevich in Kyiv in prior years, and feared that he would not walk out of the meeting alive.
VN: That’s a question you should ask him. I was not in charge of the SBU at the time and don’t have reliable information.
KP: You must have had information as head of the SBU that such a meeting took place, no?
VN: Not necessarily. We carried out Yushchenko’s order to report any involvement by Mogilevich in the gas sector. The president also directed us to find out who, namely, was behind RosUkrEnergo and we complied.
We received and reported information at the end of 2008 that a new gas intermediary company was being incorporated in Zug, Switzerland, to replace RosUkrEnergo. Top government officials at the end of 2008 with ties to ex-President Leonid Kuchma administration were involved.
KP: Who?
VN: Let’s see. Maybe the information will come out on WikiLeaks.
KP: But isn’t this one of the biggest problems with the country, that politicians are repeatedly making empty accusations without revealing the full details. And no one gets prosecuted in court. So, at the end of the day, accusations are flying in all directions, but no one reveals all their cards. Maybe they are all involved, all have something to hide?
VN: Perhaps. But if the Mogilevich dossier had not been destroyed, and if the SBU had continued its cooperation with the FBI and intelligence agencies, the investigation would have resulted in subpoenas and a court trial.
Believe me. The case would have been under the purview of the General Prosecutor’s Office, headed by Sviatoslav Pyskun. I was present at meetings when he said people should be called in for questioning because the Mogilevich dossier was destroyed.
KP: Why do you think your predecessor, Oleksandr Turchynov, Yulia Tymoshenko’s right-hand man, destroyed those documents?
VN: Isn’t it obvious? I was a diplomat at the time. What we found most disturbing was that documents relating to United Energy Systems of Ukraine and government officials were destroyed before I took the helm at the SBU in 2007. The documents showed how funds for gas purchases were sucked out of the budget and transferred abroad. We call it money laundering.
KP: Why do you think Tymoshenko wanted these documents destroyed?
VN: This is a question you should ask her.
KP: Was the destruction of the Mogilevich dossier a crime?
VN: Oleksandr Turchynov and [his deputy] Andriy Kozhemyakin did not personally destroy the documents. They gave the order for them to be destroyed.
Prosecutor General Oleksandr Medvedko at the time opened a criminal investigation, but nothing ever came of it. The files destroyed contained operational information [relating to Mogilevich’s and United Energy Systems, as well as top government officials’ role in the gas trade].
KP: Were the files compiled during former Leonid Derkach’s time as SBU chief [1998-2001]?
VN: No. I think most information came from when Ihor Smeshko headed the agency [2003-2005].
KP: Could it be that former SBU chiefs were gathering information on the gas sector when Kuchma was president to show that Tymoshenko was engaged in criminal activities?
VN: You would have to ask them. When I headed the agency, the focus was on money laundering and Mogilevich. These were the priorities in our oversight of the gas sector. We also were instructed to make sure that officials from government were not connected with shady gas trade.
KP: Were U.S. authorities inquiring more about Tymoshenko’s involvement in the gas trade, or about Firtash’s role?
VN: They were most interested in money laundering allegations and Mogilevich. We were prepared to arrest him if he set foot on Ukrainian territory.
KP: Was Yushchenko a close friend of Firtash?
VN: I don’t know.
KP: Did you ever ask Yushchenko?
VN: I never saw Firtash during my tenure at any government meeting or private meeting with Yushchenko, whom we briefed fully on all participants in Ukraine’s gas sector.
KP: U.S. officials who authored the cables published by WikiLeaks noted that Mogilevich reportedly controlled Russian gas exports to Ukraine and the region. If true, and if Mogilevich was acting in this capacity with Moscow’s permission, wouldn’t this be a threat to Ukraine’s national security?
VN: Of course.
KP: Wouldn’t it also be a threat if the proceeds from the gas trade were being funneled to pro-Moscow parties in Ukraine, those friendly with the Kremlin?
VN: This is something we were very concerned about. There were such organizations, one in the Crimea with only a dozen members, which received hundreds of thousands of dollars in financing.
The case would have never come to trial if Ukraine was a mafia state.”
KP: As head of the SBU, or now as a politician and a Ukrainian citizen, don’t you find it suspicious that Firtash, who made big profits in the gas business, had ties to Mogilevich and reportedly backed Yanukovych’s Moscow-friendly Party of Regions?
VN: I don’t know that Firtash has funded the Party of Regions. As for what Putin said, I refer to what I said earlier: that the SBU learned in late 2008 of an attempt by former top government officials in Kuchma’s administration to incorporate a successor to RosUkrEnergo. And we did our best not to let it happen.
KP: What would have been corrupt about that intermediary?
VN: The same thing as before: the lack of transparency.
KP: Are you saying that the arrangement involving RosUkrEnergo is not transparent?
VN: Russia and Ukraine should strive to come up with a more transparent arrangement for purchasing natural gas and do everything to limit the involvement of intermediary companies in the gas trade. The arrangement with RosUkrEnergo was not as transparent as it should have been, both from the Ukrainian and Russian sides.
KP: What’s the difference between being not transparent and corrupt?
VN: It’s important who the founders of any intermediary company are, where the money comes to found the enterprise, how it is structured, the gas price, and the formula for deriving it.
Reputed Russian organized crime boss Semyon Mogilevich in a 2002 file photo. (UNIAN)
KP: And who in Ukraine decides which gas intermediary to use?
VN: In Ukraine, the decision is taken by the prime minister.
KP: How much does the Russian side have in who the intermediary is?
VN: As far as RosUkrEnergo goes, Vladimir Putin and Kuchma in July of 2004 agreed on using this intermediary.
KP: Many top officials in the Yanukovych’s inner circle have close ties with RosUkrEnergo, including Presidential Administration chief Serhiy Lyovochkin, who admits to being close friends with Firtash and Igor Fursin, another co-owner of RosUkrEnergo, and Energy Minister Yuriy Boyko, who was on the coordination committee of RosUkrEnergo. Do you see any conflicts of interest here?
VN: That’s a question you should address to Ukraine’s currently law-enforcement authorities. I can only tell you what I knew as SBU chief from 2007-2010, working without the Mogilevich dossier. Our efforts were directed at preventing money laundering and reconstructing the dossier. I didn’t know who was partnering with whom.
KP: You didn’t know about Firtash and his connections?
VN: From 2007-2010, Firtash and Mogilevich were not in contact with one another and were not business partners. We would have found out if they were.
KP: Did you know that Firtash and Mogilevich were de facto business partners through associates before 2007. Did you know that they were joint shareholders – through wives and associates – in firms such as Rinvey and HighRock properties? These connections were reported in detail by the Financial Times some years ago.
VN: No comment.
KP: If it’s the case that Firtash was indeed a business partner of Mogilevich, it couldn’t have been by chance, could it?
VN: Maybe. I can only talk about subjects where I can be helpful, that is, about my role as SBU chief from 2007-2010 … about money laundering and reconstructing the Mogilevich dossier. I can’t comment on everything.
Businessman Dmytro Firtash (L) in Kyiv on Dec. 1, 2007. (UNIAN)
KP: Wasn’t it a concern that an individual who was linked via companies with Mogilevich controlled so much of the supply of gas to Ukraine?
VN: I don’t think that Firtash controlled so much. I think this might be an exaggeration. I don’t know how the gas trade worked under Kuchma. I would have to consult people who do. I can just answer for what it was like under my watch.
KP: But you believe the dossier destroyed by Turchynov showed links between United Energy Systems of Ukraine and Mogilevich.
I don’t see evidence that the country’s top leaders have left the gas trade.”
KP: Let’s go back to the beginning of the interview when I asked whether you think Ukraine is a mafia state. Someone seems to not be telling the truth here. Was Mogilevich close to Tymoshenko’s gas trading company from the late 1990s, or RosUkrEnergo, or with both? You say that Mogilevich was linked to Tymoshenko’s firm. If true, then this alone suggests that organized crime has played a leading role in the past with connections to the highest of officials and most import sectors of the economy, such as energy and gas.
VN: Yes. It points to corruption at the highest levels of government. This is why I say that trade in gas and energy should be completely separated from politics. Political parties and politicians should not be engaged in the trade of natural gas. This is one of the reasons I joined Our Ukraine, a political party that has nothing to do with gas.
The temptation is so great, the profits are so huge, and the gas schemes are so complicated that no one from the European Union wants to get involved. The gas trade must be completely removed from politics.
KP: Do you think the country’s current top leadership, President Viktor Yanukovych’s team, shares this view? Are they separating the gas trade from politics?
VN: I don’t know. You should ask them. I don’t see evidence that the country’s top leaders have left the gas trade.
KP: So, I’m asking you again: do you think Ukraine is a mafia state?
VN: No. Various political forces compete against one another. There is an opposition, non-governmental organizations, and several independent media. That’s why my answer – no.
Individuals who make information available publicly are not the criminals. The criminals are those, including politicians who conspire to commit illegal acts, behind closed doors and lie to the public.”
KP: As a citizen or as a politician, do you think there is enough evidence to charge former Ukrainian President Leonid Kuchma and current Parliament Speaker Volodymyr Lytvyn (presidential chief of staff under Kuchma) in the murder and/or cover-up of the murder of journalist Georgiy Gongadze?
VN: As head of the SBU, I spent a lot of time and effort to locate and arrest [former police general] Oleksiy Pukach for carrying out the murder. We found Pukach, incarcerated him, and I am very happy the case is finally coming to trial. As a citizen, I demand that he has his day in court in a public trial.
When we captured Pukach, one of the first things he said was, “I am ready to name the people who ordered me to carry out the killing.” I want an open trial and for Ukrainians to hear from the militia general who, namely, ordered him to carry out the killing. The people he says gave him the orders to commit the crime should be questioned by state prosecutors.
KP: The lawyer for Gongadze widow, Valentyna Telychenko, says Pukach implicated Lytvyn and Kuchma in the murder and cover-up. Secret recordings made in Kuchma’s office, the so-called Melnychenko tapes, appear to support the allegation. And there was obviously a cover-up, no? So, I’m asking you again, do you think there is enough evidence to charge Kuchma and Lytvyn?
VN: It depends what Pukach says during the trial and whether the judge presiding over the case agrees to admit the recordings as evidence. What prevented [former presidential security guard Mykola] Melnychenko from turning over his recordings as evidence and properly demonstrating their authenticity?
Why didn’t he turn them over to the U.S. Justice Department as agreed in 2003? These are big questions that require answers. Also, it’s important to keep in mind that the trial will be influenced by politics.
I agree that our system of justice leaves much to be desired.”
KP: Why aren’t Pukach’s allegations and other existing evidence that Kuchma and Lytvyn were involved enough to bring charges upon them?
VN: I don’t know what Pukach has told prosecutors investigating the case. If he testifies during the trial that Kuchma and Lytvyn were involved, both men should be brought in for questioning. What’s important is that the trial is public and Ukrainians see it as fair.
KP: Is not the fact that this case has come to trial 10 years after the murder – and the truth still seems far away – more evidence that Ukraine is a mafia state?
VN: No. The case would have never come to trial if Ukraine was a mafia state.
Verkovna Rada speaker Volodymyr Lytvyn shakes hand with ex-President Leonid Kuchma in this June 11, 2009, file photo. (UNIAN)
KP: When you headed the SBU, you said several times that authorities were very close to solving the case of the 2004 poisoning of presidential candidate Viktor Yushchenko. Why is it still not solved?
VN: That’s a question you have to ask the General Prosecutor’s Office. I said and still maintain that there is enough evidence to charge the individuals involved in the crime and seek their extradition to Ukraine.
State prosecutors should formally ask their colleagues abroad to assist by bringing in the suspects for questioning. My position is that prosecutors should send cases to court, even if they are unable to gather all the evidence they want. A court of law should establish the fact that Yushchenko was poisoned in order to quash speculation to the contrary, identify the primary suspects and their whereabouts.
KP: Many Ukrainian citizens probably look at all these unsolved crimes involving top officials and the widespread corruption and make a conclusion: that Ukraine is a mafia state. They see how top officials are all connected to one another and part of a fight of power and wealth, but despite all the allegations of corruption, they all have de facto impunity from prosecution. None of them end up in jail. Don’t you see why many Ukrainians could see the country as being a mafia state?
VN: I think holding speedy public trials would help rectify the situation. High profile cases, such as the one involving the Lviv appellate court judge Ihor Zvarych [who is accused of taking bribes], are often bogged down for years with the accused eventually set free. This is blow against the country. I agree that our system of justice leaves much to be desired.
KP: You are now the new de facto head of the Our Ukraine party, replacing Yushchenko. The party is not very popular. How do you plan to rebuild trust in the party?
VN: I’ve already touched on how in the interview. It is necessary to separate business from the affairs of the party and to recruit young Ukrainians as party members. Many former members, especially businessmen, have left the party. Good riddance! We propose reducing corruption in our country by reducing the authority of government officials.
KP: Yushchenko said the same things before he became president in 2005. But he failed to deliver. How can you convince Ukrainians that you are different?
VN: We will focus on young people and put them in positions of authority. I did this when I was the head of the SBU, putting young people from NGOs in charge of a project to unclassify information about crimes committed against Ukrainians during Soviet times.
KP: If less than 5 percent of all Ukrainians are members of any political party, how can political parties operate without the backing of big business? Average citizens will not donate their money to parties. Who is paying for this office?
VN: We collect dues from party members. Yes, we are short of money for conducting political campaigns. There 256,000 members of Our Ukraine, with less than 1 percent representing big business. Members of the Our Ukraine council pay Hr 200 per month, while ordinary party members contribute Hr 10 per month.
Valentyn Nalyvaichenko sews a Ukrainian flag symbolizing the unity of the nation during flag day in Kyiv on Aug. 23, (Ukrainian photo)
KP: But Yushchenko is still active in the party, as the symbolic head if you will, while you head the politburo of the party. Do you think the party can still succeed with him, and his low popularity, dragging down on the party’s rating?
VN: I think his role and place in this party is very important because he was the leader of the Orange Revolution. He recently launched a new project, a new non-government organization, which will operate as sort of a think tank. It will be involved in national and international projects.
KP: So you don’t think he is damaging the popularity of the party, as indicated by sociological surveys.
VN: Professionally speaking, polls gauge the attitude of the people, which changes from day to day. Our popularity exclusively depends on us.
