A suspect Gazprom deal

Jan 22, 2003 01:00 AM

Russian gas monopoly Gazprom signed a contract for the delivery of natural gas from Turkmenistan to the border of Ukraine and Russia on 5 December with a company that was registered on 6 December in Budapest called Eural Trans Gas. According to a Russian-language website on 9 January, Eural (not to be confused with the Russian company with a similar name, URAL Trans Gas) is owned by Tel Aviv resident Zeev Gordon.
The website alleges that Gordon has ties to organized crime through a transnational group headed by Ukrainian-born Semen Mogilevich. According to them, another Mogilevich-related company called Highrock Properties -- run by Dimitrii Firtash and Igor Fisherman, both of whom the website claims are connected to the Mogilevich organization -- is registered at Gordon's residential address in Tel Aviv.

Fisherman was described by Robert Friedman in his book "Red Mafia" as a onetime associate of former Ukrainian Prime Minister Pavlo Lazarenko, who is awaiting trial in San Francisco. Fisherman was also a paid consultant to Chase Manhattan Bank in New York. Fisherman is alleged by Friedman and other journalists to be a key manager of Arigon, one of Mogilevich's main companies involved in the oil and gas business.
Highrock Properties was registered in Limassol, Cyprus, on 15 January 2001 with founding capital of $ 10,000. The company has offices in Ukraine, Russia, Turkmenistan, Switzerland, Israel, the United States, and Cyprus. The financial director of the Israeli branch of Highrock is Igor Fisherman. The company has been active in Turkmenistan and Moldova in the energy business and in the delivery of barter goods as payment for Turkmen gas bought by Ukraine.

The Eural-Gazprom contract (number ITCP-03) was signed on Eural's behalf by Andras Knopp, a former executive of tobacco company Reemtsma, and by A. Riazanov for Gazprom. Soon afterward, Ukrainian state-owned gas company Naftogas Ukrayiny signed a contract with Gazprom for gas deliveries in 2003. When asked about the Eural Trans Gas contract, Gazprom officials refused to comment.
The telephone number given for Eural in Hungary was answered by a Hungarian-speaking individual who claimed to know nothing. Officials from Itera International referred inquiries to Gazprom. Itera had been responsible for the transit of natural gas from Turkmenistan prior to the Eural contract.

Gazprom has come under criticism for a lack of transparency in the past. At last year's meeting of the company's board of directors, a number of minority shareholders unsuccessfully sought election to the board on a pledge of cleaning up the company. One of them, former Russian Finance Minister Boris Fedorov, estimated that some "$ 2-3 bn disappears from Gazprom each year through corruption, nepotism and simple theft," according to a Russian newspaper.
Another website has also published a number of articles highlighting alleged nepotism in the company in which the sons and daughters of highly placed Gazprom executives were given substantial assets in the company for nominal payments of 40 roubles. Former Gazprom head Viktor Chernomyrdin, currently Russia's ambassador to Ukraine, has been linked to massive corruption by the US administration of George W. Bush.
His son, Vitalii, was among those who benefited from a division of assets in the company. Yurii Vyakhirev, the son of former Gazprom head Rem Vyakhirev, lived for a period in Budapest, where he was sent by his father to serve as deputy manager of Panruzgas, a joint venture between Gazprom and Hungarian gas monopoly MOL to supply $ 23 bn worth of gas to Hungary through 2015.

According to the first article, Naftogaz Ukrayiny, headed by Igor Bakaj before he was prompted to resign in 2001 in the wake of allegations that millions of dollars was stolen by siphoning off Russian gas bound for Europe through a Ukrainian pipeline, is involved. Naftogaz Ukrayiny is actively looking to form a joint venture with Highrock Properties that would be headed by one Lidiya Syzranova, who heads a Swiss-Ukrainian joint venture called BARI. Bakaj is a key player in BARI. Bakaj is barred from entering the United States on suspicion of money laundering and owns a home in Naples, Florida, worth an estimated $ 10 mm.
According to other sources, Semen Mogilevich, born in Ukraine in 1946, has maintained good relations with the Ukrainian leadership. He has met a number of times with Leonid Derkach, the former head of the Ukrainian Security Service (SBU). He also met with Ukrainian President Leonid Kuchma in early 2000, according to a recorded transcript of a conversation between Derkach and Kuchma from February 2000. At the time, Mogilevich reportedly entered Ukraine in disguise with the aim of finalizing a deal he had made earlier with Kuchma.

Source: RK Crime and Corruption Watch volume 3, number 2
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