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Friday 06.12.2019 | Name days: Niklāvs, Niks, Nikolajs

Document leak: what ties Latvia’s ex-president, Biden’s son and PrivatBank together?

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Raimonds Vējonis

The money Ukrainian gas and oil company Burisma Holdings transferred to Rosemont Seneca company owned by US Vice-President Joe Biden’s son Hunter Biden, which is involved in the growing scandal that has already lead to an impeachment procedure for US President Donald Trump, went through Latvia’s PrivatBank, according to Rosemont Seneca’s account lists leaked to the internet.

Last year, the now ex-President of Latvia Raimonds Vējonis had attended a forum in Monaco organized by an associate of Ukraine’s ex-president Viktor Yanukovich and owner of Burisma Holdings – Mykola Zlochevsky.

The Hill reports that in the period of time between spring 2014 and autumn 2015, Rosemont Seneca was receiving more than USD 166 000 a month from Burisma Holdings.

Rosemont Seneca’s leaked account reports from Morgan Stanley bank in New York mention that money transfer operations were performed using PrivatBank. USD 83 333.33 was transferred in a single operation.

Hunter Biden was Burisma Holdings supervisory council member in a time when his father was the US Vice-President and was in charge of diplomatic relations with Ukraine during Barack Obama’s presidential term.

Hunter, who is a lawyer by trade, agreed to become a member of Burisma Holdings supervisory council in April 2014, a couple of months after the so-called Maidan revolution. He left his post five years later – at the beginning of 2019.

Donald Trump’s personal lawyer, ex-Mayor of New York Rudy Giuliani, who accuses the Bidens of corruption, has implied in one of his Tweets that Burisma Holdings may have laundered USD 3 million by transferring this amount from Ukraine through Latvia and Cyprus to USA.

«Today though it’s the USD 3 million laundered payment, classical proof of guilty knowledge and intent, that was kept from you by Swamp Media. Ukraine-Latvia-Cyprus-US is a usual route for laundering money. […]» Giuliani tweeted.

In a telephone conversation with Ukraine’s President Volodymir Zelensky on 25 July, US President Donald Trump urged his colleagues multiple times to investigate Burisma Holdings. He [Donald Trump] mentioned he suspects Biden may have succeeded halting the investigation. Donald Trump’s requests to his Ukrainian counterpart were allegedly the reason why the US Congress has commenced an impeachment investigation against the president.

Although Biden’s possible involvement in a conflict of interests has caused some concern among anti-corruption activists, there is no proof of Biden or his son committing illegalities.

In an interview to NV Radio, Ukraine’s Specialized Anti-Corruption Prosecutor’s Office head Nazar Holodnitsky said the Bidens were not the objects of any of the prosecutor office’s investigations. Nevertheless, he confirmed that the investigation against Burisma Holdings was terminated in 2017 due to the lack of evidence. Hunter Biden was still an employee at the time. The court in Kyiv later overturned this decision. However, in spite of the court’s ruling, the case remains inactive and no investigation is performed.

Giuliani also claims Joe Biden, hoping to protect his son, had influenced Ukrainian authorities to fire Ukraine’s Prosecutor General Viktor Shokin.

Latvia’s Finance and Capital Market Commission (FKTK) senior public relations specialist Dace Jansone says the commission is not allowed to reveal any names and specific preventive measures. FKTK is also not allowed to comment on any findings. Nevertheless, she says FKTK performs regular supervision over banks. Upon finding violations or deviations, banks are applied with sanctions and specific duties, which usually involve improving internal control measures to prevent money laundering schemes and terrorism financing.

Jansone reminds that as a result of inspections in 2015, 2017 and 2019, PrivatBank was applied with sanctions for poor internal control system, client evaluation and supervision of clients’ operations.

According to data from FKTK, the commission had applied a fine of EUR 2 016 830 on PrivatBank in 2015. The bank was also ordered to replace its management board. Individual fines were also applied to the bank’s board members.

So far it has not been possible to get a comment from PrivatBank about operations involving Burisma Holdings.

Burisma Holdings is one of the largest gas production companies in Ukraine. The company was founded in 2002 by Zlochevsky, who is considered a friend and associate of Ukraine’s ex-president Viktor Yanukovich. Burisma Holdings owner is Cyprus offshore company Brociti Investments Limited owned by Zlochevsky.

In 2010, Zlochevsky was appointed as Ukraine’s Ecology Minister in Yanukovich’s administration. Four years after Euro-Maidan he was forced to leave the country, when the Office of the Prosecutor General launched criminal cases against him and his companies over suspicions of tax avoidance.

In 2014, as part of anti-corruption efforts British authorities arrested USD 23 million on Zlochevsky’s accounts, as reported by Guardian. British journalist and writer Oliver Bullough wrote in his book «Money Land» that this money came from Latvia and investigators took notice of this, because Zlochevsky had worked in government structures prior to Euro-Maidan.

Nevertheless, Zlochevsky’s lawyers managed to save him from arrest. According to Ukrainian magazine Novoje vremja, corruption researchers are confident Ukrainian law enforcement had assisted him in this. The criminal case against Zlochevsky ended with payment of taxes performed by his company’s accountants.

Novoje vremja writes that Zlochevsky has not only managed to terminate the case against him but also continues developing his business in Ukraine in spite of ongoing investigations of his activities there. In 2018 Zlochevsky held 11th place on the list of Ukraine’s wealthiest people, which is compiled by Novoje vremja together with Dragon Capital. His asset value is estimated at USD 636 million, which is 2.5 times more when compared to 2013, when he was first put on this list.

Hunter Biden was appointed to Burisma Holdings supervisory council in April 2014 – two months after Yanukovich was overthrown.

After fleeing Ukraine, Zlochevsky together with his partners founded Energy Security Forum, which is organized in Monaco every year. Officials and experts from Western Ukraine are invited to attend. In 2017 this forum was attended by two people close to then the President of Ukraine Petro Poroshenko. This, however, caused a scandal in Ukraine. Ukrainian officials have not attended the forum since then. The 2018 forum was, however, attended by then the President of Latvia Raimonds Vējonis, as reported by Novoje vremja. LETA had reported that Vējonis read a speech at the opening of the forum.

Latvia’s ex-president remains tight-lipped as to the identity of the person who invited him to the forum and why he decided to participate.

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