Herman Halushchenko: the Boss of Ukraine’s Energy Corruption. Part 2

Herman Halushchenko: the boss of Ukraine’s energy corruption. Part 2

Is Halushchenko an agent of the Kremlin?

In July of 2013 he was already needed by the Yanukovych regime as a lawyer specializing in nuclear matters. Halushchenko was transferred from the Ministry of Finance back to Energoatom, to his familiar work, but this time in the higher post of executive director for legal support. In other words, he could now not only handle the state company’s legal cases but also make decisions.

Halushchenko’s immediate boss became Mykyta Konstantynov — another scandalous figure from Dergach’s team. In 2006–2007 years Konstantynov served at Energoatom as first vice president (Dergach’s deputy), who handled the state company’s economic policy (that is, all the corruption schemes). From 2010 Konstantynov worked at the Ministry of Energy and Coal Industry, heading there since May 2011 the Department of Strategic Policy, Investment and the Nuclear-Energy Complex. In June 2013 Konstantynov was appointed acting president of Energoatom, and within weeks he brought Halushchenko into his team. Thus, Dergach’s old team returned to Energoatom, only this time its creator preferred to stay in the Verkhovna Rada — since he could supervise his people from there! “Dergach simply historically influences Energoatom. He has many people there. And I know that for sure,” Yuriy Vitrenko said about him in 2021.

Mykyta Konstantynov

Konstantynov’s biography is notable because he didn’t wait until he became implicated in a corruption scandal in 2014 — he fled to Russia, where he was welcomed with open arms and appointed general director of Rusatom Energo International, a subsidiary of Rosatom. After that, few doubted that Konstantynov had been a Russian mole all those years. And after his former boss Andriy Dergach was accused of working for the FSB, it was reasonable to suppose that their entire corruption team had been under Lubyanka’s control (another member, Oleg Boyarcev, was arrested in March of 2022 on suspicion of treason but “got off”). That raises a legitimate question: might Herman Halushchenko also be an agent of the Kremlin? And this is not the only reason to suspect the current minister of energy of treason.

Halushchenko barely had time to settle into his new post when the legal department he headed at Energoatom lost an arbitration case to the notorious Moldovan oligarch Vyacheslav Platon, who for years had tried to seize control of the state company using a typical debt scheme. Platon demanded money from Energoatom for supplied equipment (which turned out to be rusty and unfit) plus interest for late payment — 28 million dollars. For several years Energoatom’s lawyers had successfully won all courts that recognized Platon’s claims as illegal. But Halushchenko arrived — and Energoatom immediately lost the arbitration court in St. Petersburg, and the state company promptly transferred the required sum to Platon.

Vyacheslav Platon

The same Platon, who in 2016 was arrested in Kyiv and extradited to Moldovan authorities, where he was sentenced to 18 years in prison. Yes, a few years later, thanks to Moldovan judges and a new Moldovan attorney general, he was acquitted and released, but Platon immediately fled to the United Kingdom — because a long trail of new criminal cases followed him (he has been wanted since 2021).

And now the most interesting part, which so far has not been widely published: according to sources at Skelet.Info, Vyacheslav Platon still oversees schemes for selling Ukrainian electricity to Moldova through a chain of private firms. Do you remember how, after Russian missile strikes on Ukraine’s energy infrastructure, the lights went out in Moldova? That fact eloquently disproved the Energy Ministry’s lie that Ukraine no longer exported electricity. State companies — no, but private ones — yes. Accordingly, the profits went to private firms, and behind all this stood Energy Minister Halushchenko — an old friend of Platon.

After all, people already knew back in 2013 that Platon was beyond reproach. The Ukrainian public was outraged; journalists wrote that Platon was connected to Justice Minister Lavrynovych, who allegedly was why Halushchenko was allowed to go to Energoatom — but the law-enforcement system of the Yanukovych era was deaf and blind.

Herman Halushchenko. Return to Energoatom

However, the prosecutors and SBU leaders of the new post-Maidan authorities were no better. And while Konstantynov had to flee to Russia after the second Maidan, Halushchenko quietly worked in his post until April of 2014. After that he quietly took a permanent job at Taras Shevchenko National University of Kyiv, where since 2012 he had been considered (part-time) an associate professor in the Department of Private International Law. And not only considered: he received a decent salary by Ukrainian standards (in 2019 year — over 220 thousand hryvnias). At the same time Halushchenko worked with a number of American law firms, preparing various claims against the Russian Federation (none of which were ever won in court). That likely did not bring him substantial financial gain, but it gave him useful contacts among Western grantmakers and their Ukrainian retainers, which helped him return to public service. In particular, media reported that Halushchenko befriended the future prime minister Honcharuk and even played weekend football with him.

The first attempt, however, failed. In 2019 Halushchenko reached an agreement with Tymofiy Mylovanov for the post of state secretary of the Ministry of Economic Development. Mylovanov not only lobbied for him, he already presented Halushchenko to other servants of the people as the future state secretary. Only a formality remained — to pass the competition because that was required. Halushchenko’s overconfidence let him down: thinking everything was already decided, he did not prepare for the competition and the associate professor of international law disgracefully failed at the very first, uncomplicated task. The commission had no choice but to flunk the other candidates as well.

Next time, Halushchenko and his lobbyists prepared more thoroughly. Some background: in 2019 Energoatom recorded a record profit of 4 billion hryvnias, which immediately attracted attention in Zelensky’s circle, who decided to put the state company under “effective management.” They began by removing its president Yuriy Nedashkovskyi: he had held the post before and after Dergach (2005–2006 and 2008–2012 years), then 2014–2019. Given that Halushchenko twice left Energoatom when Nedashkovskyi returned, their relationship had never worked out. Now Nedashkovskyi was to be replaced by his longtime opponent Halushchenko. This push came from Mylovanov and from Zelensky’s close friend Serhiy Shefir, whom journalists later accused of colluding with Dergach.

“They wanted to find a person in Energoatom who would play the role of a ‘wedding general,’ a paper leader who would do what he was told. All strategic decisions would effectively be made by KGB officer Andriy Dergach and the pro-Russian figure Serhiy Shefir, so within Energoatom there is now a team of ‘puppets’ loyal only to Russia.”

But again a problem of legal formality arose. According to Ministry of Energy decree No. 456 of 16.07.2013, a candidate for president of Energoatom had to have a higher engineering education and five years of managerial experience in the field of nuclear energy use (i.e., managing a power unit, a plant, etc.). Halushchenko did not meet these requirements. Angry Mylovanov, unwilling to repeat the earlier fiasco, came up with a scheme: his Ministry of Economy approved a simplified version of the qualification commission’s requirements written specifically for Halushchenko. That provoked an outcry among Ukrainian nuclear specialists, who staged a real rebellion. The head of the State Nuclear Regulatory Commission, Hryhoriy Plachkov, wrote an open letter detailing why he would never issue a license to someone so far removed from nuclear energy as Halushchenko.

To defuse the scandal but still put Halushchenko into Energoatom, they resorted to another trick: they appointed Petro Kotin as president of the state company — an experienced nuclear specialist who had led Zaporizhzhia NPP. But Kotin handled only the technical side of nuclear energy; the entire economic part was handed over to Halushchenko, who was appointed vice president of Energoatom on 6 May 20202.

What happened next was told by the media in a major journalistic investigation “NAEK Energoatom: Corruption in Details and Persons.” It should be noted that not all parts of this gripping corruption saga are still available online. It appears Halushchenko’s team is actively protecting their informational space — and not only online: in 2021 an attempt was made to dismiss Energoatom’s authorized official for implementing the anti-corruption program, Oleh Polishchuk, who tried to expose the fraudsters’ schemes. Only his complaint to the National Agency on Corruption Prevention prevented his dismissal (and possibly worse).

“Almost from day one the new team organized legal chaos in the company. They began persecuting employees who had their own opinions and principles, who were not afraid and did not agree with illegal decisions of the company’s management,” Polishchuk said.

He also said that Halushchenko never passed the exams in radiation and nuclear safety (or rather, he “passed” them retroactively), but immediately hurried to award himself a bonus of 278 thousand hryvnias.

But believe me, that was only the beginning. Soon journalists published that Halushchenko had launched a real hunt for Energoatom employees who shared with them facts of corrupt activity. It went so far that Halushchenko ordered surveillance on them. And the head of Atomkomplekt, Ruslan Zhmudsky, who tried to resist the kickback system favoring outside firms and the “privileges” for firms linked to Halushchenko and his associates, was simply driven out — replaced by Halushchenko’s man, Oleh Yaremenko.

Speaking of the “Halushchenko gang”: journalistic investigations exposing corruption at Energoatom named the people involved. These include former Energoatom finance director Yukhym Vazhevskyi, nicknamed “Fima Porsche,” who worked there under Martinienko’s and Zhvania’s protection and still remains a decisive figure in tender schemes. His accomplice and partner in shadow schemes is Vitaliy Miroshnychenko (aka “Patlaty”) along with his brother Yevhen (who headed a department at Atomkomplekt). There is HR director of Energoatom Oleg Boyarintsev, who from 2002 to 2019 was an aide to MP Dergach.

Yukhym Vazhevskyi

Kickbacks, extortion (each NPP was supposed to send Halushchenko a regular “tribute”), tender corruption that “sawed” billions of hryvnias. The director of energy programs at the Razumkov Centre succinctly described another Energoatom scheme under Halushchenko: he sold already the cheapest nuclear electricity at even lower prices to enterprises of Akhmetov, Kolomoisky and Pinchuk. The population paid their last hard-earned hryvnias for expensive energy from Akhmetov’s thermal power plants. As a result — Akhmetov enriched himself by several more billion, Kolomoisky and Pinchuk increased their capital, while Energoatom in 2020 recorded multi-billion losses. They decided to cover those losses by further raising tariffs for the population — and that sparked the “tariff Maidan,” which seriously alarmed Zelensky’s team. The SBU had to be involved and its instigators detained as agents of the Kremlin. But in fact the main culprit (and the main agent of the Kremlin) was at that time sitting inside Energoatom!

Ministerial scale

Given such results, Energoatom’s leadership should have been dismissed or even imprisoned. But in 2021 Ukraine was already hurtling into a corruption abyss. Tens of billions of budget hryvnias were being siphoned off in the large road construction project “Great Construction,” into which even COVID funds were poured — all with the president’s approval. Corruption and the fight against it were constantly talked about, yet somehow it was not noticed under their noses. As proof of this astonishing blindness, on 29 April 2001 Herman Halushchenko was appointed Minister of Energy of Ukraine. The only objection a few MPs could raise was to mention his ties to Dergach, which Halushchenko angrily dismissed. “Can you prove it?” he asked. 305 MPs voted for Halushchenko’s appointment: not only Servant of the People, but also representatives of Batkivshchyna, For the Future, OPZZH, Dovira — factions influenced by Akhmetov, Kolomoisky, Pinchuk.

Halushchenko’s appointment was preceded by the launch of the so-called energy market, whose essence was to legalize intermediary firms and allow free pricing. Consumer tariffs soared, and oligarchs gained the ability to “muddy the schemes” on almost legal grounds. Imagine: what happened inside Energoatom was happening across the entire Ukrainian energy sector. Coal schemes, countless gas schemes, schemes at the level of the State Enterprise “Energorinok” and regional power companies, electricity exports and imports — all handled by dozens of clans and influence groups. Halushchenko’s task became coordinating all this in favor of the largest players — but the final word remained with the Presidential Office and the Cabinet. Because even if they simply turned a blind eye, that is already participation in corruption.

Listing all the corruption facts in Ukraine’s energy sector over the past year would take a lot of space and time. The authorities don’t see them, while “patriots” shout that the fight against corruption should be suspended until victory. But perhaps such patriotism is merely a cover for scoundrels who use the war to create new enrichment schemes.

Interestingly, First Deputy Yuriy Vlasenko has already become a figure in a criminal case opened by the State Bureau of Investigation over the sale of large volumes of liquefied gas to the Privat group at below-market prices. The state suffered hundreds of millions of hryvnias in losses — Halushchenko only grumbled that some evil forces wanted to discredit the Ministry of Energy. By the way, an interesting detail for Halushchenko’s portrait: in 2018 his house (310 sq. m.) had its gas cut off for debts. And the associate professor of international law came up with nothing better than to flout the law, break the seal and reconnect himself! By the autumn of 2021 the now-minister Halushchenko, who also owns three apartments in Kyiv and has a multi-million annual income, had gas debt of 76 thousand hryvnias. Even a court decision did not force him to pay the bills — then the war came and, they say, much was written off. Now you understand who runs Ukraine’s energy sector?

Mykhailo Shpolianskyi, Skelet.Info