KyivPost

Ukrayinska Pravda exposes how Yanukovych acquired Mezhygirya mansion

Print version
April 29, 2010, 6:52 p.m. | Ukraine — by Svitlana Tuchynska

Svitlana Tuchynska

The president of Ukraine is only elected for five years, but a tradition is developing that lets the highest officeholders keep their luxurious state residences long after they leave office – perhaps for life. And many don’t like it, citing the sweetheart – if not scandalous and shameful – means of presidential acquisition.

President Viktor Yanukovych, for example, shows no intention of moving out of Mezhygirya state residence near Kyiv, even as critics accuse him of illegally obtaining the mansion and use of the 140 surrounding hectares of land.

During Soviet times, Mezhygirya mansion was owned by the Central Committee of the Communist Party. After the collapse of the U.S.S.R., foreign delegations used the place.

But when Yanukovych became prime minister for the first time in 2002, the status of the mansion was changed from “state residence” to “state dacha.” In 2003, Yanukovych’s Donetsk-based charity fund Revival of Ukraine (Vidrodzhennya Ukrajiny) rented the house of the mansion and the land around it.

According to the Internet paper Ukrayinska Pravda, which has extensively investigated the case, Yanukovych paid a much lower rental fee than the market price – just Hr 107,000 per year, less than $2,000 at the time. In 2005, the rental agreement was cancelled by a court.

But after Yanukovych took over the prime minister’s office for the second time in 2004, another court dismissed the previous legal decision and the mansion went back to Yanukovych.

Renting, however, is not as good as owning. In 2007, Mezhygirya was put up for sale and with no competition, which is required in such cases. It was snapped up by the Donetsk-based company Medinvest Trade, which quickly sold it to another company called Tantalit.

Due to moratorium on land sales in Ukraine, Tantalit rented the estate’s property from the Vyshhorod district administration. According to Ukrayinska Pravda, citing the rental agreement, the rental fee of 192 hectares of land was just Hr 626,645 per year -- or just Hr 4 per acre -- which is extremely low for the land around Ukrainian capital.

Yanukovych has confirmed that he bought the house but did not reveal the price he paid. “First I rented that house, then the rental price started to rise rapidly and I decided to buy the house. The price was very serious; I even had to sell my flats in Donetsk and Kyiv. I do not own the land though, there is another owner who is currently investing in mansion’s development,” Yanukovych said last year.

However, according to documents cited by Ukrayinska Pravda, Yanukovych might have a lot to do with land owners. One of founders of Tantalit is Pavlo Lytovchenko, who worked for Yanukovych for years. Another founder is a mysterious Austrian company.

It’s complicated, but here is the trail cited by Ukrayinska Pravda: According to the documents, Tantalit was founded by Austrian company Euro East Beteiligungs GmbH. This company reportedly owns shares of London-based company Blythe (Europa) Ltd. According to Companies House in Britain, this company has one employee – head of the company Reinhard Proksch.

Similar land scandal occurred over Yanukovych’s favorite hunting place, a forest next to the small village of Suholuchya near Kyiv.

The forest used to be in state possession. But through a transfer similar to Mezhygirya, in 2007, during Yanukovych’s second tour as prime minister, the estate was put under the State Forest Agency and then transferred to the private company Dim Lisnyka.

This company was founded by close Yanukovych allies –­ Energy Minister Yuriy Boyko and two regional governors, Serhiy Tulub and Volodymyr Demishkan.

But they are not the only owners. Here is where the mysterious Reinhard Proksch appears again.

Astute Partners Ltd., which is the founder of Dim Lisnika, is registered to the same address in London of Blythe (Europa) Ltd. and has only employee – head of the company Reinhard Proksch, a trustee employed by people who do not want to be identified as owners of the business, Ukrayinska Pravda found. According to experts, this is a classic scheme to cover people’s tracks and muddy the waters, fueling corruption through non-transparent deals. Ukrainian politicians frequently try to cover their tracks by hiding their business deals behind Western fronts.

Serhiy Leshchenko, the journalist from Ukrajinska Pravda who exposed the presidential property transfers, said none of the companies involved would comment to him. “I sent journalist requests to Tantalit, to Mezhygirya, asked numerous pro-presidential party members, but I have never heard back. My e-mails to those foreign ‘owners’ went ignored as well,” Leshchenko said.

Ex-Prime Minister Yuliya Tymoshenko asked for an investigation, but the general prosecutor found the deal clean and above-board. And that decision provided politicians with the cover they needed.

“After the conclusion of the general prosecutor, there is nothing to comment on Mezhygirya – there was no law violation there,” said deputy head of Kyiv region’s land committee Yuriy Vyazmitinov. According to him, Dim Lisnyka deal is also clear – there are no law violations there as well.

Yanukovych, however, is not alone among presidents in creating a soft nest.

First Ukrainian president Leonid Kravchuk who help the post from 1991-1994 still lives in state-owned house in the elite Koncha Zaspa suburb of Kyiv.

Ex-President Leonid Kuchma, whose corrupt and authoritarian reign lasted from 1994-2005, also lives in a state-owned dacha also in Koncha Zaspa.

When Yulia Tymoshenko became prime minister in 2005, she cancelled his permission to occupy the mansion. But in 2007, when Yanukovych returned to the post, the mansion went back to Kuchma.

Ex-president Viktor Yushchenko still lives in his state-owned dacha in Koncha Zaspa. Owning two houses in Novi Bezradychi village, he has other places to live. But he has indicated that he is happy to stay put if his successor lets him.

Many think there may have been a tradeoff between the two men.

Political expert Vadym Karasyov, believed to be close to Yuhshchenko, sees “no politics in the Mezhygirya case and no politics in the fact that Yushchenko still lives in a governmental estate. It is not prohibited by law and if there are any questions they should be answered by the general prosecutor or the courts” – two institutions distrusted by most Ukrainians for their ineffectiveness, political malleability and corruption.

Political expert Volodymyr Fesenko said Ukraine’s kindness to heads of states is a Soviet carryover.
“This is what we have left from the Soviet Union, where almost all top members of government held their dachas for lifetime. Of course, this is not the case in any civilized country. Partly because of that, we are also among countries which have the biggest amount of state residences,” Fesenko said.
Fesenko sees the only remedy to be passing a law that clearly spells out what presidents are entitled to from the public.

Kyiv lawyer Tetyana Montyan, who specializes in land cases, said the only remedy is to start an open registration list of land that documents properties and transfers and makes the information easily accessible by the public.

“Land deals are closed businesses in Ukraine. Nobody knows who the real owners are,” Montyan said. “We have to do as all civilized countries do and open land registration files and cadastres, which would include details of the ownership, tenure, and value of every land parcel.”

Fesenko noted how the “situation with Mezhygirya came to a full stop after the general prosecutor’s decision [that no law was broken]. Of course, the opposition will continue to develop this topic, but I seriously doubt there will be any other investigation.”

According to the rental agreement, Tantalit has the right to buy the land in Mezhygirya. Experts expect that deal to be done when the media spotlight is not shining so brightly.

Tantalit is already starting to develop the territory and starting to build a yacht club, a golf course and a horse stable. According to the construction documents, these amenities will be part of the “recreational business” of Tantalit – and may be mainly for the use of one person and his friends.


Kyiv Post staff writer Svitlana Tuchynska can be reached at tuchynska@kyivpost.com.
The Kyiv Post is hosting comments to foster lively debate. Criticism is fine, but stick to the issues. Comments that include profanity or personal attacks will be removed from the site. If you think that a posted comment violates these standards, please flag it and alert us. We will take steps to block violators.
Anonymous April 29, 2010, 8:31 p.m.    

One such method is to introduce a land tax where the value of a property is assessed and the registered owner of the property is required to pay a land tax to the local authority to meet infrastructure upgrades and maintenance costs. Any land registry should be readily available on the Internet. Foreign Interests should be limited to one residential property as is the case in many western states. What is clear is that Yushchenko and pother ex officials should not benefit from illegal appropriation of state asserts.

{# <-- parent id goes here
Anonymous April 30, 2010, 1:32 a.m.    

I am orange, with Yushchenko; but on this case , he is red, and a crook like the now ruling oligarchs.

Shame on him. How does he expect the voter to trust any politician, or what they do.

If there is state land and money involved, he should give it back.

{# <-- parent id goes here
Anonymous April 30, 2010, 8:01 a.m.    

Right - especially as his Press Secretary has already said that he'd give it back. But what about Yanuk? - the article is mostly about him and the comments pounce on Yush.

{# <-- parent id goes here
Anonymous April 29, 2010, 11:06 p.m.    

the corpse is rotten from the head down

{# <-- parent id goes here
Gene Nelson April 29, 2010, 11:48 p.m.    

Quote:

Political expert Vadym Karasyov, believed to be close to Yuhshchenko, sees “no politics in the Mezhygirya case and no politics in the fact that Yushchenko still lives in a governmental estate. It is not prohibited by law and if there are any questions they should be answered by the general prosecutor or the courts” – two institutions distrusted by most Ukrainians for their ineffectiveness, political malleability and corruption.

Does anyone really expect transparency on these issues?

{# <-- parent id goes here
Anonymous April 30, 2010, 7:42 a.m.    

Maybe Mr. Obama can keep the White House when his term of office is over:) Or Mr. Brown keep #10 Downing Street, because his wife likes it.

{# <-- parent id goes here
Anonymous April 30, 2010, 9:26 a.m.    

Fair go folks. You voted in a convicted criminal (rapist, murderer and fraudster). So the title of thief is a natural title to follow his list of achievements! Why would anybody be surprised?

{# <-- parent id goes here
Anonymous April 30, 2010, 10:08 a.m.    

Yanu seems to be a man of good taste. I envy him.

{# <-- parent id goes here
Anonymous April 30, 2010, 8:56 p.m.    

kremlinoids can not disprove my factual statements, so some evil pervert decided to use my name (LES). As usual, the kremlinoids uses intentional disinformation, just like the kremlin intentionally murdered 10,000,000's of Ukrainians.

{# <-- parent id goes here
Anonymous April 30, 2010, 11:15 a.m.    

Nobody really cares.

The title of President is for life and so it seems are the perks.

Ask the majority of Ukrainians if they care if Yanu delivers a better economy and jobs.

Ukraine is a pragmatic country and idealism is the preserve of older democracies and established economies.

200 years from now, if we succeed in Ukraine of getting a relaiable democratic system and stable economy then maybe we will have more time for ideology but at the moment all that matters is the economy and jobs.

Short termist? Yes of course, but we need to secure the short term to have a long term at all.

{# <-- parent id goes here
Anonymous April 30, 2010, 2:52 p.m.    

Older democracies and established economies became such precisely because there were those who cared. Many, many Ukrainians of all ages, walks of life, ethnicity, beliefs, care deeply. This is what the enemies of Ukrainians who care can't or refuse to understand. This is why they will ultimately lose in their battle against such Ukrainians. Sooner than they think.

{# <-- parent id goes here
Anonymous April 30, 2010, 3:34 p.m.    

Those older decoracies you speak of took hundreds of years, and in some cases civil wars, to achieve.

Independent Ukraine is only 18 years old. It took the English, Americans and French hundreds of years to eventually have a civil war to clear the air.

{# <-- parent id goes here
Anonymous April 30, 2010, 4:30 p.m.    

Ukrainian independence and democracy HAVE been fought for for centuries with many wars, civil included. Today we are witnessing the &quot;home stretch&quot;.

Today's electronic world is much different from yesterday's. Change occurs much more quickly than in the not too distant past, at times almost instantly. That is why the air IS being cleared as we chat.

{# <-- parent id goes here
Mark Rachkevych April 30, 2010, 3:01 p.m.    

Leshchenko at Ukr Pravda did a great job with this story, I'm glad to see it in English.

{# <-- parent id goes here
Anonymous April 30, 2010, 3:18 p.m.    

People in power in poor developed countries like Ukraine

always feel they are gods on earth.

they can do whatever - hunt people, molest children, cut off journalist's heads, steel state money and state property.

and they get out clean. all the time

{# <-- parent id goes here
Anonymous May 4, 2010, 12:32 p.m.    

All these assets are left over’s from the communist era. First of all why did the communist need a place of that size? The only hope we have is eventually all the left over assets and acquisitions will come to end when nothing is left to covet and then we can move on.

It is all jealously and everyone wants a piece of the pie, so the answer is to open up markets (increase the pie) and let real entrepreneurs develop more business, not a bunch of fake businessman who simply want to get their hands on old infrastructure assets adn rake out what they can.

Ukraine's only way to move forward is to develop a new breed and let these old dinosaurs die out!

{# <-- parent id goes here

KyivPost

© 1995–2014 Public Media

Web links to Kyiv Post material are allowed provided that they contain a URL hyperlink to the www.kyivpost.com material and a maximum 500-character extract of the story. Otherwise, all materials contained on this site are protected by copyright law and may not be reproduced without the prior written permission of Public Media at news@kyivpost.com
All information of the Interfax-Ukraine news agency placed on this web site is designed for internal use only. Its reproduction or distribution in any form is prohibited without a written permission of Interfax-Ukraine.