Another batch of confidential U.S. diplomatic cables released on Dec. 1 by WikiLeaks disclosed concerns that one of Austria’s largest banks took bribes to disguise the business interests of a wanted Russian mobster and a Ukrainian billionaire gas trader.
The previously confidential messages, written by America’s former deputy head of mission in Austria Scott F. Kilner, also described the Austrian authorities as feeling “uncomfortable” with the bank’s role in Ukraine’s gas deal with Russia.
Dated December 2005 and February 2006, the messages said that Vienna-based Raiffeisen Investment AG, and its parent company Raiffeisen Group, was probably “a front to provide legitimacy to the gas company that we suspect he [U.S.-indicted Russian crime boss Semyon Mogilevich] controls, RosUkrEnergo.”
The Austrian investment bank was the authorized representative of RosUkrEnergo when it was first formed as the monopoly gas intermediary that supplied billions of dollars of Turkmen gas to Ukraine until former Prime Minister Yulia Tymoshenko removed it as an intermediary in January 2009.
The [Austrian] foreign ministry is ‘uncomfortable’ that an Austrian bank is in the middle of the [Ukrainian-Russian gas] controversy.”
- A cable on WikiLeaks.
However, Raiffeisen Investment then said it only managed RosUkrEnergo and that its beneficiaries were “unknown businessmen.”
They were later revealed to be Ukrainian billionaire Dmytro Firtash and Ivan Fursin, a close associate of Serhiy Lyovochkin, President Viktor Yanukovych’s chief of staff, who hold 45 percent and 5 percent ownership, respectively, through Centragas.
RosUkrEnergo ”makes direct payments of $360,000 annually to each of two Raiffeisen Investment executives in ‘consulting fees.’ We assess that the payments probably are bribes for RIAG to maintain the front for Mogilevich,” reads one of the cables.
The Austrian banking group could not immediately respond to inquiries.
Other secret diplomat cables have quoted Firtash saying he needed and received permission from Mogilevich to enter the gas trading business.
Also, the cables said Firtash and Mogilevich were linked through ostensible offshore company vehicles either by joint ownership through former spouses or through Firtash heading companies in which Mogilevich’s former spouse was the shareholder.
In turn, one cable said the Austrian authorities were “uncomfortable” with Raiffeisen Investment’s involvement in RosUkrEnergo and that company’s role in the Ukrainian-Russian gas deal.
“The [Austrian] foreign ministry is ‘uncomfortable’ that an Austrian bank is in the middle of the [Ukrainian-Russian gas] controversy,” read one cable.
Russian state-owned oil and gas company Gazprom is the remaining 50 percent shareholder of RosUkrEnergo.
However, the cables said the Austrian authorities had investigated Raiffeisen for wrong doing and said they “didn’t uncover any improprieties”.
Neither Raiffeisen Investment’s internal due diligence nor an independent due diligence by the U.S. risk consulting firm Kroll had revealed derogatory information or links to criminal activity, including to Seymon Mogilevich.”
- A cable on WikiLeaks.
“Raiffeisen Investment AG also conducted a strenuous due diligence review of the unnamed RosUkrEnergo investors. Neither Raiffeisen Investment’s internal due diligence nor an independent due diligence by the U.S. risk consulting firm Kroll had revealed derogatory information or links to criminal activity, including to Seymon Mogilevich,” one cable stated.
U.S. risk consulting firm Kroll was recently hired by the current Ukrainian government under President Viktor Yanukovych to investigate embezzlement by the previous government, headed by ex-Prime Minister Yulia Tymoshenko.
In 2001, Kroll was hired by the Labor Ukraine Party, then backed by billionaire Viktor Pinchuk, the son-in-law of then-President Kuchma.
The investigation was supposed to focus on who killed journalist Georgy Gongadze on Sept. 16, 2000. Its results were widely dismissed as an attempt to whitewash the case and absolve Kuchma from suspicion.
Kyiv Post staff writer Mark Rachkevych can be reached at email@example.com.