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Automatically translated version. May contain inaccuracies compared to the original.
Offshores and Real Estate in Crimea: Zelensky’s SBU Commissioner Becomes a “New Semochko” for Zelensky
The wife of the President’s Commissioner for Oversight of the Security Service of Ukraine (SBU), Roman Semenchenko, amassed a substantial business while her husband worked at the SBU. She also became the owner of apartments in occupied Crimea.
This was discovered by analysts from the Pep.org.ua project.
In October last year, Volodymyr Zelensky appointed Roman Semenchenko, an SBU officer from the Yanukovych era, as Commissioner on SBU matters. The president was not alarmed by the Semenchenko family’s wealth, the expensive real estate of the career SBU officer, or the questionable business ties.
It turned out that before his appointment as Zelensky’s commissioner, Semenchenko held a stake in the firm “Financial Company ‘Tolkfin’,” which appears in a criminal proceeding concerning tax evasion and abuse of office. The co-founder of the firm is Pavlo Zhytetsky — a figure in the Onyshchenko “gas case,” who under a plea deal with the prosecutor admitted guilt and received 5 years imprisonment with a probationary period of 3 years.
Another co-owner is one Yevhen Astion. He is the son-in-law of the former assistant to the mayor of Dnipro, Borys Filatov, and of the former head of the security bloc of the Privat group of companies, Mykhailo Koshliak. By the way, both Astion and Koshliak are today business partners of Semenchenko’s wife.
In Semenchenko’s own declaration for the year 2019 there was no mention of a stake in the company Tolkfin. Nor is there information about the sale of a stake for 499 thousand UAH. This is a violation of the law, so the Anti-Corruption Center (CPC) will file a complaint with the National Agency on Corruption Prevention.
As for Semenchenko’s wife, Olena, her business indicators are much more successful. Her biggest “rise” coincided with her husband’s career advancement: after two years as deputy head of the SBU Department in Dnipropetrovsk region he was appointed head of the Zhytomyr SBU Department in 2013. Incidentally, in 2014 he left the service and did not hold positions until 2019.
According to Semenchenko’s latest declaration, Olena owns the Cypriot company FINANCE ALLIANCE ASG LTD. That company invested 5,2 million dollars in LLC “Soloma” and owns 26% of that company. The co-owners are the previously mentioned partners of Semenchenko, Yevhen Astion and Mykhailo Koshliak. Another 3,1 million dollars was invested by Semenchenko’s company in another Cypriot firm, Ovaro Holdings Limited.
By the way, the company Ovaro is not reflected in Semenchenko’s declaration, but it is fairly well known in Ukraine. It controls the developer “21st Century,” which in January 2020 bought land in Kyiv for the construction of the Vyrlytsia shopping center.
“We have a classic Ukrainian scenario: a former SBU officer supposedly no longer does business, while his wife reaches the heights of business. Her partners are the same as those of the husband-officer. Millions of dollars are circulating there. And Zelensky was not in the least alarmed by such coincidences,” comments Andriy Savin, lawyer at the Anti-Corruption Center.
But that is not all. Semenchenko indicated in his declaration for 2019 that his wife became the owner of two apartments in Yevpatoria, occupied by Russia. In Ukrainian registers this real estate is not listed under Semenchenko, but it is present in the Russian register. That means the property is registered under Russian law. Moreover, the property was acquired in 2018, and Semenchenko stated that 2019.
Semenchenko also benefited from wealthy relatives. Thus, in 2018 his wife declared a cash gift of 4,59 million UAH from a probable relative, Halyna Kosovska, born in 1947, originally from Yevpatoria. Registry data show Halyna Volodymyrivna did not own a business, so the source of the funds remains unknown. Incidentally, Kosovska previously owned the Yevpatoria apartments that became the property of Semenchenko’s wife.
Semenchenko is far from the only officer casting doubt on the SBU’s reputation. Pressure on business, fabricated statistics, and failed cases have become normal for the security service. But the desire to reform the SBU and strip it of inappropriate functions seems to be absent, including from the president. The problem is described in detail by CPC board member Olena Shcherban: “Painted numbers, terrorizing business, and failed cases: the SBU Zelensky wants to strengthen.”
Anti-Corruption Center
Painted numbers, terrorizing business, and failed cases: the SBU Zelensky wants to strengthen
OLENA SHCHERBAN
lawyer and deputy executive director of the Anti-Corruption Center
In March, President Volodymyr Zelensky submitted an urgent draft law on reforming the Security Service of Ukraine. Calling it a reform is overstating it, since under the president’s version the SBU retains all its inappropriate functions and gains even more.
Besides the public, the proposal to cement the Soviet-era features in the SBU was criticized by the International Advisory Group, which includes the EU Advisory Mission, the NATO Liaison Office, and the U.S. Embassy.
In his draft law, Zelensky, under the cover of national security, wants to give the SBU the ability to investigate the crimes it chooses.
What is the danger? For example, it will be easier for SBU head Ivan Bakanov to resolve oligarch Ihor Kolomoisky’s problems in the National Anti-Corruption Bureau (NABU). What Bakanov can and does do now is block key expertise in the NABU case concerning PrivatBank.
However, with the president’s pseudo-reform initiative, the head of the SBU will be able to take Kolomoisky’s cases from NABU and close them after staging investigations involving mask-show raids and loud arrests with a “happy ending” for the figures involved.
After that, Bakanov will once again report to the Rada about the Service’s nonexistent achievements with fabricated compensation figures for the budget.
Does Zelensky understand what kind of Security Service he wants to give more powers to? And why, after loud pre-election promises, is he turning the reform by 360 degrees? As early as January 2019, Zelensky promised that the Security Service of Ukraine would be stripped of inappropriate functions.
It seems the president does not grasp the danger he is subjecting the country to. We decided to outline some of the SBU’s “achievements” to understand what monster Zelensky and his deputies want to strengthen. After all, the deputies will decide on the reform and must choose what kind of service the country will live with.
Artificial PR
The official SBU website is full of announcements about their achievements. At first glance impressive, but then it becomes clear these are simply fabricated PR figures.
From SBU responses to requests it became clear they do not keep records and cannot confirm any of the figures on their website or in Bakanov’s speeches.
So the question is: how can one report results with numbers without keeping statistics?
Meanwhile, Zelensky says about Bakanov that “we have never had such an honest head of the SBU.”
The SBU report for 2019 year contains very serious indicators. For example, it states that materials from the special unit “K” led to the conviction of 472 persons for various crimes. We asked the SBU who these hundreds of convicted people are and for what crimes.
In response, the Service assured that people indeed went to jail; however, they did not respond as to who exactly and for which crimes: such data are not recorded.
It turns out the Service keeps statistics without statistics? Effectively, the SBU only has a number that is impossible to verify, and they provide no other information.
Over the 2019–2020 years the SBU allegedly prevented more than 25 billion hryvnias in damage to the state. But in our query the SBU did not specify what role the Service actually played in preventing such damage.
Moreover, their response mentions cooperation with other bodies, meaning the SBU may have had only a formal role in preventing the damages while taking the credit.
The SBU also reported that during counterintelligence protection of the economy they restored state ownership rights to financial-material assets worth 4,3 billion UAH. Again, no clarity.
The logical conclusion is that the SBU invents result indicators that do not actually exist.
The traditional terrorizing of business
Judging by the president’s initiative, Department “K,” known for terrorizing business, remains. So businesses will continue to live with schemes, extortion, and kickbacks for a long time.
Likewise, Ukraine will have to wait a long time for investments, because who wants a “friend” who can show up any day with a mask-show, searches, and asset seizures.
A standard harassment scheme: the SBU opens a criminal proceeding, then conducts a search in the office, seizes documents, computers, and laptops — the company’s work is blocked.
Such actions push the business owner to “understand” that they have serious problems. If those problems are not “resolved” after the searches, the second phase of the takeover begins. SBU officers constantly pull in the business’s partners and contractors to make them file claims.
Publicly, the SBU denies such actions and says unlawful proceedings and cases are opened by other pre-trial investigation bodies. The SBU claims it ends up in scandals only because their operatives are obligatorily involved in such investigative actions.
But that is at least manipulation, because we found many examples of suspicious cases where the investigation was conducted by the SBU itself.
For example, last year the SBU visited the large company with foreign investments ArcelorMittal several times. Even Ivan Bakanov said he had complaints about the company’s management, claiming they were performing poorly. But poor management is not a matter for the SBU.
After this circus, the company even began to move currency out of Ukraine. Nevertheless, that did not stop the SBU from continuing its “investigation.” As a result, no charges were brought.
This is the kind of fruitless “result” the SBU can offer the country.
In April this year, the SBU reported exposing misappropriation of 110 thousand UAH allocated to combat coronavirus. The agency emphasized it had identified a “mechanism of embezzlement,” i.e., a scheme under which someone allegedly stole budget funds.
However, the case is being investigated under the article “official negligence,” meaning someone improperly performed their duties. The SBU contradicts itself — saying one thing and doing another.
Failed anti-corruption cases
The anti-corruption direction is a great resource for SBU officers to “make money.” Many journalistic investigations have revealed the luxurious lifestyles of heads of the SBU’s anti-corruption and economic units.
In all these stories there is an unspoken similarity: SBU officials have wealthy retired parents or successful businesswomen wives. Their successes and wealth increase exponentially after starting work at the SBU.
The effectiveness of the “fight against corruption” can be judged by concrete examples. They “catch” ordinary perpetrators on bribes, but such cases collapse in court. Perhaps these are the discoveries the SBU flaunts in its statistics?
A simple case about a bribe of 600 dollars, with 5 defendants, ended with their acquittal in court. The court rejected all evidence collected by the SBU because it did not confirm the facts of solicitation and receipt of money.
The court also acquitted two border guards whom the SBU accused of a bribe of 2 thousand dollars for transporting tobacco products across the border. In court it became known they were not transporting tobacco products, and that story was a legend concocted by SBU officers.
In another case over a bribe of 30 thousand hryvnias, tax officers were acquitted. It turned out the accusations were based on witness testimony given at the direction of SBU officers.
Similarly, the court sided with the head of a village council in Kyiv region accused of a bribe of 12 thousand hryvnias. SBU officers failed to obtain evidence of solicitation, so the court believed the money was planted.
An interesting fact emerged in court: during the search the SBU investigator even accidentally left pre-prepared search and interrogation protocols at the village head’s office. This points to fabrication: how can one know in advance what testimony a witness will give or write a search protocol beforehand without conducting the search?
The SBU’s anti-corruption units are also often used as an instrument to persecute certain officials, which is hardly a fight against corruption.
In April there was a splashy news story about the SBU catching Kyiv deputy mayor Mykola Povoroznyk on a million-hryvnia bribe. Searches were conducted in the Kyiv City State Administration building and an intermediary carrying the bribe was detained.
However, Povoroznyk himself was not detained nor charged. Without a charge, such SBU statements mean nothing — there is no result, only the use of powerful SBU resources in political games.
In May the SBU visited a former head of the tax service. The corruption case in the tax service is being investigated by Zhytomyr SBU, whose leaders were complained about by one judge for interfering in his work. The judge recused himself to avoid considering the arrest of assets and funds in this case.
At the same time, Department “K” now handles organized crime in addition to corruption. The SBU wants to strengthen this function, which is reflected in the president’s draft. It is very convenient under the guise of fighting crime to package any activities.
In August last year, under Bakanov’s leadership, the unit’s officers became notorious for letting a world-class drug baron go free at the airport.
Although the criminal was later recaptured, the inactivity of SBU officers during his escape shocked the public. It is not excluded that he was caught only because the case gained wide publicity.
Is Zelensky willing to accept such results in top corruption cases that SBU officers will be able to take from NABU? Even ordinary clerks do not receive punishment, and loud searches and arrests end in nothing.
Kremlin mouthpieces have no problems
During a March trip to Poltava region, President Zelensky said that the SBU has better results compared to former Prosecutor General Ruslan Ryaboshapka. Apparently the president bases such assessments not on objective statistics but on personal feelings toward the heads of these bodies.
But for some reason no one recalled an interesting case the president himself publicly mentioned. Zelensky announced a “very loud story that will end badly.” He referred to Viktor Medvedchuk, a deputy from OPZZh (and godfather of Russian President Vladimir Putin).
“Mr. Medvedchuk’s party. There are still big questions whether that’s his party, whether it’s a temporary union, and who they are. There are big questions where they get the money to finance the party and the channels. We have answers, amounts of cash, where and from which country they receive all this…” Zelensky complained in August last year.
However, no Ukrainian has yet heard the answers the president and SBU head Bakanov claim to have. Questions about Russian influence through Medvedchuk’s TV channels have been at the center of scandals. So we are very interested in who this story will end badly for: the Kremlin mouthpieces or Ukrainians?
Meanwhile, SBU head Bakanov, “with better results,” does not hesitate to accept gifts from OPZZh deputy Hryhoriy Surkis when attending his anniversary. In turn, the OPZZh deputies submitted their own draft law on SBU reform, which also proposes increasing the Service’s powers and preserving the notorious Department “K” instead of reform.
***
The only chance to somehow fix the draft law and save the reform is the parliament. Right now all the cards are in the hands of deputies, who can either significantly strengthen the SBU monster or limit its appetites by fulfilling both election promises and commitments to Western partners. After all, visa-free travel for Ukraine was granted in good faith, trusting our intentions to reform the SBU.
Olena Shcherban, for Ukrainska Pravda
Document: PDF proof of the original version of the news item "Офшори та нерухомість у Криму: уповноважений Зеленського по СБУ стає “новим Семочком” для Зеленського". It records the publication content at the moment of the first scan, the preservation date and the source: ANTIKOR.
