You're reading: Law enforcement raid on prestigious law firm sparks more fears of persecution

Authorities have not explained why they conducted a Feb. 3 raid on Magisters law firm, but its lawyers represented state-owned Naftogaz before President Viktor Yanukovych came to power.

A platoon of state prosecutors and armed police on Feb. 3 swooped on the offices of Magisters, one of Ukraine’s largest and most prominent law firms, conducting a 14-hour search and seizing records about the firm’s past legal work for Naftogaz Ukraine, the state-run oil and gas monopoly.

Magisters advised Naftogaz in the notorious international arbitration case in Stockholm during the previous government of ex-Prime Minister Yulia Tymoshenko. In the dispute, RosUkrEnergo and its co-owner, Ukrainian billionaire Dmytro Firtash, challenged Tymoshenko’s acquisition on Naftogaz’s behalf of 11 billion cubic meters of gas that had belonged to RosUkrEnergo.

After President Viktor Yanukovych took power, Magisters was removed from the Stockholm case and Naftogaz reportedly dropped its claim to the gas – resulting in a multi-billion dollar windfall for RosUkrEnergo after the Stockholm arbitration judge ruled in Firtash’s favor on June 8.

Tymoshenko had justified the state’s acquisition of the gas by saying it was part of an agreement with Russia on Jan. 19, 2009 that ended a nearly three-week shutoff of gas. Russia’s state-controlled Gazprom also owns 50 percent of RosUkrEnergo, the gas-trading intermediary that Tymoshenko and others have criticized as unnecessary and harmful to national interests.

Over the years, we have provided thousands and thousands of documents about our work for Naftogaz. … Prosecutors spent a considerable amount of time at our offices during 2009, but not in the guerrilla-style fashion we saw on Feb. 3.”

– Andy Hunder, Magisters’ London-based director for international development.

Firtash successfully argued that she had no right to acquire the gas, and found renewed clout as his close associates took positions of power in the Yanukovych administration. Those include Serhiy Lyovochkin, the president’s chief of staff, and Energy Minister Yuriy Boyko, who served on the RosUkrEnergo coordinating committee.

After the Stockholm ruling, many people involved in Tymoshenko’s seizure of the gas have been jailed, arrested or come under criminal investigation for their role in removing the disputed gas from RosUkrEnergo.

Currently, seven former Naftogaz and State Customs officials involved in the dispute remain in jail or under investigation. The probes into all seven suspects are led by the Security Service of Ukraine, or SBU, the law enforcement agency headed by Firtash associate Valeriy Khoroshkovsky.

Prosecutors said the search of Magisters’ offices is linked to a criminal case, but refused to specify which one. Yuriy Boichenko, spokesman for the General Prosecutor’s Office, said: “State prosecutors followed routine procedures for search and seizure operations pursuant to a criminal case.”

Magisters management and political analysts said the raid appears part of a pattern of intimidation of those who are not openly supportive of the government.

Andrew Mac, a managing partner who heads Magisters’ Kyiv office, said the show of force reminded him of intimidating law enforcement practices that were prevalent in Ukraine more than a decade ago during the authoritarian rule of then-President Leonid Kuchma.

Volodymyr Fesenko, director of Kyiv-based think tank Penta, said the use of armed officers made the raid “look like an orchestrated exercise in harassment.”

However, even those not connected to Tymoshenko or the gas dispute are complaining of renewed heavy-handed tactics by law enforcement.

Dozens of businesses – foreign and Ukrainian – have complained to Kyiv Post staff in recent months about pressure from state authorities, including tax inspectors and customs officials. All spoke on condition of anonymity for fear of retribution.

Bullying lawyers?

Around 30 prosecutors and armed police barreled past security at the entrance to Magisters’ two-story office headquarters on downtown Kyiv on Feb. 3 at 1:30 p.m. Law enforcement officers in blue camouflage fatigues forced lawyers to wait in the lobby and began searching for evidence.

Magisters’ employees said they were denied access to communications for six hours. One pregnant employee was urgently rushed to hospital by ambulance during the raid.

The officers also prevented Kyiv Post journalists from talking with employees of the firm.

Andy Hunder, Magisters’ London-based director for international development, said that prosecutors have refused to explain what they were looking for.

“We have always assisted them in any way we could with their investigations,” Hunder said. “Over the years, we have provided thousands and thousands of documents about our work for Naftogaz. … Prosecutors spent a considerable amount of time at our offices during 2009, but not in the guerrilla-style fashion we saw on Feb. 3.”


A family affair

Lawyers at Magisters said the firm acted as counsel to Naftogaz (alongside White & Case) for many years until February 2010. White & Case continues to represent the state-owned gas company.

State prosecutors in recent months have expressed interest in the activities of Yevhen Korniychuk, a partner at the firm during the early 2000s. Elected to parliament in 2006 as a political ally of Tymoshenko, Korniychuk went on to serve as deputy justice minister in her cabinet from December 2007 until March 2010. He was arrested on Dec. 22 for allegedly backing the choice of Magisters in early 2009 to advise Naftogaz in the case without considering competitive bids.

Korniychuk – one of a dozen or so Tymoshenko allies to have been jailed since Yanukovych took office on Feb. 25, 2010 – has denied wrongdoing.

The 45-year old lawyer is also the son-in-law of Supreme Court Chief Justice Vasyl Onopenko. A former political ally of Tymoshenko, Onopenko is one of the last non-Yanukovych allies to retain a position of power in Ukraine. Earlier this month, prosecutors launched an investigation into one of Onopenko’s daughters for failure to pay back a loan.

Kyiv Post staff writer Peter Byrne can be reached at [email protected].