In late September, prosecutors began a pre-trial investigation against Dynamo Kyiv, Ukraine’s top soccer club, owned by businessman Ihor Surkis and his brother Hryhoriy, a lawmaker from the pro-Russian Opposition Bloc party.
The prosecution alleges that the club’s officials were paying off-the-book salaries to players and staff through a Cyprus-based offshore company owned by the Surkis brothers.
According to the Novoye Vremya news outlet, the Surkis brothers have a combined net worth of $234 million. The two have also been involved in multiple scandals and accused of corruption by investigative journalists.
Dynamo Kyiv, Ukraine’s most decorated soccer club, has won 13 Soviet championships, 15 Ukrainian titles and three European cups, and has long been accused of cooking its books by declaring deflated salaries.
In January 2018, the Ukrainska Pravda news outlet published Dynamo Kyiv’s official payroll, where the club declares players and staff each earned between $500 and $1,000 a month.
The leaked payroll report states that Dynamo Kyiv’s star player, Viktor Tsygankov, officially earned Hr 19,000 ($740) a month, Rezo Chohonelidze, the club’s director who was lured from AC Milan earned Hr 9,000 ($350) a month and Ihor Surkis, the club’s president, officially received a Hr 40,000 ($1,500) monthly salary.
Journalists and the prosecution in the case against the soccer club allege that the official numbers do not match actual salaries. The salaries are paid through Dynamo Kiev Ltd., a Cyprus based offshore company that does not publish official information.
According to sportswriters, Dynamo Kyiv’s star players actually earn between $500,000 and $1 million a year, and salaries are covered both by the club’s owners and through participation in European soccer competitions. The club received more than $18 million in September 2018 – April 2019 from UEFA, Europe’s soccer governing body.
Dynamo Kyiv issued a written response to the allegations, saying that the club paid Hr 85 million ($3 million) in taxes in 2017, including Hr 10 million ($385,000) in income taxes. By comparison, Shakhtar Donetsk, Dynamo Kyiv’s main rival with a similar budget, publishes a more detailed annual report and declared Hr 512.5 million ($20 million) in taxes in 2018, including Hr 313 million ($12 million) in income taxes paid from player and staff salaries.
Dynamo Kyiv has said it never had problems with the State Fiscal Service, and after a 2018 investigation, the Service did not find any violations in Dynamo Kyiv’s tax declarations.
The Surkis brothers made their fortune through control of regional energy companies supplying electricity to households and factories.
They have previously been implicated in other scandals. In March, Radio Free Europe/Radio Liberty’s investigative show Schemes published alleged audio recordings of conversations between the Surkis brothers, businessman Dmytro Kryuchkov and Igor Kononenko, a lawmaker close to then-President Petro Poroshenko. They discussed the distribution of income from the power companies and ways to disrupt shareholder meetings to ensure their loyalists ran the companies.
The conversations were about state-controlled power companies Zaporizhzhyaoblenergo, Cherkasyoblenergo and Kharkivoblenergo. The Surkis brothers have minority shares in all three companies, but exert significant influence over them.
Hryhoriy Surkis was later elected to parliament on the ticket of the pro-Russian Opposition Platform – For Life party, run by Viktor Medvedchuk, whose daughter’s godfather is Russian President Vladimir Putin. Medvedchuk often flies to Moscow on his own private plane to meet with Russian leaders.
The Surkis brothers have other powerful friends, too. On Sept. 4, Radio Free Europe/Radio Liberty journalists filmed multiple officials and known oligarchs gathering for Hryhoriy Surkis’ birthday party. The guests included the current chief of Ukraine’s Security Service, Ivan Bakanov, and President Volodymyr Zelensky’s adviser, Serhii Shefir.
Also in attendance were oligarch Ihor Kolomoisky, Medvedchuk, the wife of oligarch Dmytro Firtash, who is currently fighting U.S. extradition charges in Vienna, and three former Ukrainian presidents.
