Dmytro Firtash: Who Is The Ukrainian Tycoon Wanted By The U.S. On Bribery Charges?
By Todd Prince June 25, 2019
Dmytro Firtash, the Ukrainian power-broker that the United States is seeking to put on trial, built his massive fortune on opaque gas trading with a Kremlin-controlled company.
Austria's Supreme Court on June 25 upheld a lower court decision to extradite him to the United States to face bribery charges filed six years ago.
The final word is up to Austria's justice minister, who did not indicate when a decision would be made. Firtash's U.S. lawyer has said in court filing that he could be in the United States by early July once final approval is given.
The 54-year Firtash, with reported ties to mobsters, owns a wide range of key Ukrainian assets, including about 70 percent of the nation's gas distribution. He is widely considered to have many people in Kyiv's halls of power beholden to him despite being held under house arrest in Austria since 2014.
U.S. officials have for years warned of the danger that some of Ukraine's wealthiest businessmen pose to the country.
Kurt Volker, the U.S. special envoy for Ukraine, told a U.S. Senate hearing in June that it was "essential" for Ukraine to "break free" of the oligarch system. He recommended Kyiv push through legislation to break up their holdings to reduce their influence.
Last year, Republican Senator Roger Wicker wrote a letter to then-U.S. Attorney General Jeff Sessions, singling out Firtash as a particular threat to Ukraine.
If Firtash does end up on trial in the United States, it could send a message to oligarchs that Washington is serious about pursuing those politically connected businessmen -- particularly those interfering with its efforts to bolster the East European nation.
Here's a look at Firtash and why he's attracted so much attention.
A little-known businessman from western Ukraine, Firtash got involved in the business of trading natural gas in the 1990s, shortly after the collapse of the Soviet Union.
A U.S. diplomatic cable, published in 2010 by the anti-secrecy organization Wikileaks, cited Firtash as saying that he got his start with the help of Semyon Mogilevich, a renowned Russian mob boss who was later put on the FBI's most-wanted list.
Firtash finally hit the jackpot in 2004 when he set up a venture with Russian state-owned gas giant Gazprom to exclusively import Central Asian gas to Ukraine.
The company that he helped found, RosUkrEnergo, would buy billions of dollars' worth of natural gas mainly from Turkmenistan and resell it at significantly marked-up prices inside Ukraine.
Critics said there was no reason for Gazprom to use the services of a middle man in the lucrative gas trade between the former Soviet states. RosUkrEnergo was nothing more than a shell to siphon off profits, they claimed.
RosUkrEnergo earned about $2 billion from 2005-2007. Firtash and his partner owned 50 percent in the venture.
Given that Gazprom is controlled by the Russia government, observers speculated Firtash had cultivated strong ties to Russian President Vladimir Putin's inner circle in order to make RosUkrEnergo operational.
UKRAINE BUYING SPREE
Firtash used the profits from RosUkrEnergo to scoop up Ukrainian industrial assets in the fertilizer and titanium industry -- both of which depend heavily on gas as an input. He quickly became one of the Ukraine's wealthiest and most influential businessmen.
Firtash later expanded his commercial empire into agriculture, banking, real estate, and media. His net worth was estimated at more than $500 million earlier this decade, according to a 2014 Forbes publication.
Firtash's growing power and hold over the Ukraine's gas industry put him on a collision course with then-Prime Minister Yulia Tymoshenko.
In 2009, she reached an agreement with Putin to cut RosUkrEnergo out of Ukraine's gas import business, depriving Firtash of significant profits. He claimed Tymoshenko made political concessions to Putin to achieve her aim.
Firtash, meanwhile, had supported a Russian-leaning political party, Party of Regions, for years. When Tymoshenko ran for president in 2010, Firtash supported her challenger, Party of Regions chief Viktor Yanukovych.
As part of that effort, he backed hiring the U.S. political consultant and Republican lobbyist Paul Manafort to oversee Yanukovych's 2010 election bid.
Yanukovych ultimately prevailed over Tymoshenko in the election. And the following year, in 2011, she was jailed on criminal charges that many saw as being political motivated. She was released in 2014.
Tymoshenko later sued Firtash, accusing him of laundering gas money to pay Yanukovych supporters. Her case was thrown out by a U.S. judge.
Six years later, Manafort went on to serve as U.S. President Donald Trump's presidential campaign chairman -- until outrage over his work for Ukrainian politicians prompted his firing. He was later charged with bank and tax fraud, and foreign-agent violations, due to his work for Party of Regions politicians and connected businessmen.
MAIDAN & EXILE
Under Yanukovych, Firtash's business thrived. When Firtash acquired a major TV station in 2013, it was viewed by some as his tool to help Yanukovych get reelected.
But Firtash never got the chance to use it in that capacity.
Yanukovych was ousted from power in February 2014 amid mass protests known as Euromaidan. His ouster prompted Russia to annex the Black Sea peninsula of Crimea and sparked a conflict in eastern Ukraine that rages to this day.
Firtash, meanwhile, was arrested by Austrian police weeks after Yanukovych fled, at the request of U.S. law enforcement. The charges were that he had attempted to bribe Indian officials to facilitate a titanium investment.
Firtash's business partners in Russia include Arkady Rotenberg, a decades-long friend of Putin.
Despite being under house arrest in Austria since March 2014 as extradition hearings have gone on, he has continued to run his businesses in Ukraine, including oversight of the natural-gas distribution network to the country's regions.
That has angered U.S. officials who say Firtash has a detrimental impact on the country's economy.
"Firtash still controls intermediaries in the Ukrainian gas industry," Wicker wrote in his letter to the U.S. attorney general in 2008. "Firtash accepts the gas and sells to end-users, but he refuses to pay Naftogaz and pockets the revenue. This scheme is estimated to have cost Ukraine $2 billion thus far."
Firtash's lawyers have denied the charges and claim the U.S. case against their client is politically motivated.
If he is extradited to the United States, the trial in Chicago could get under way shortly before Ukraine's newly elected president, Volodymyr Zelenskiy, pays his first visit to the White House.
Copyright (c) 2019. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.
|Join the GlobalSecurity.org mailing list|