Dmytro Firtash goes free.

Photographer: Simon Dawson/Bloomberg

Ukrainian Oligarch Dodges U.S. Justice

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website
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The Russian propaganda narrative about U.S. meddling in Ukraine has a hard time penetrating mainstream thinking about the Ukraine crisis: The U.S., after all, isn't sending tanks or troops to stoke a war in the country, while Russia is. Even so, a judge in Vienna has refused a U.S. request to extradite a Ukrainian oligarch on grounds that it was politically motivated.

The trial and its outcome are important for those who want to understand the Ukrainian situation's complexity rather than accept its black-and-white depictions by both sides. 

The oligarch's name is Dmytro Firtash. He emerged from secrecy in 2004 as the owner, with a junior partner, of a 50 percent stake in Rosukrenergo -- an intermediary set up to sell Russian and Central Asian gas to Ukraine; Russia's Gazprom controlled the other half of the company. Suspicion was widespread that the company's function was to funnel cash to powerful figures in both Kiev and Moscow. Yulia Tymoshenko, who became Ukrainian prime minister in 2005, fought the scheme, and Firtash fought Tymoshenko.

In 2008, Firtash went to see the U.S. ambassador in Kiev, William Taylor, to tell him that Tymoshenko wanted to set up her own gas middleman for her personal enrichment and was flirting with Russia to do so, while he, as a Ukrainian patriot, was determined to thwart her. The ambassador didn't buy it. 

In 2009, Tymoshenko finally succeeded in displacing Rosukrenergo, signing a direct contract with Gazprom, albeit at the cost of much higher gas prices for Ukraine. By that time, however, Firtash had set himself up as one of the country's most powerful oligarchs, whose investments in the chemical industry and agriculture allowed him to maintain a lavish lifestyle and wield influence on both then President Viktor Yanukovych's administration and the political opposition. The center of his business empire was in Austria, where a number of Yanukovych allies and relatives had also set up companies.

The U.S. never trusted Firtash, especially since, in the conversation with Taylor, he admitted to dealings with Semyon Mogilevich, a notorious Russian-Ukrainian mobster with interests throughout eastern Europe. In 2013, a U.S. grand jury indicted the oligarch in a case involving the bribing of an Indian state governor to start a lucrative titanium project. The U.S. made a request for Firtash's arrest in October of that year, but withdrew it five days later.

The U.S. request was revived less than a week after Yanukovych fled Kiev at the denouement of Ukraine's "revolution of dignity," in February 2014. The U.S. demanded that Austria extradite him, and he was duly arrested in Vienna but released on 125 million euros ($141 million) bail. Russian businessman Vasily Anisimov, a business partner of Putin's close friend Arkady Rotenberg, loaned him the money.

No expense was spared on Firtash's legal defense. The New York Times named a number of top U.S. lawyers he retained, including a former special council to President Bill Clinton. In the trial that ended on Thursday, former Austrian Justice Minister Dieter Boehmdorfer represented the oligarch arguing that the U.S. was out to get Firtash because it wanted Tymoshenko and another opposition leader, Arseniy Yatsenyuk, to run Ukraine after Yanukovych's escape. Firtash, Tymoshenko's old nemesis, was getting in the way.

Firtash appeared in court to tell his version of the story on Thursday. He said he'd become disaffected with Yanukovych in 2012, and began building up former boxing champion Vitaly Klitschko as an alternative. Klitschko was one of the political leaders who backed the Maidan protests that ultimately led to Yanukovych's ouster, and Firtash was heavily involved in the negotiations between the embattled president and the political opposition. But Yanukovich fled. "I think he is a coward," Firtash told the Austrian court.

Before Ukraine's May 2014 presidential election, Klitschko and the billionaire businessman Petro Poroshenko, who had declared his intention to run, flew to Vienna. They met with Firtash, who brokered a union between them. "I can say we have achieved what we wanted," Firtash told the court. "Poroshenko became president and Klitschko became mayor" of Kiev. Tymoshenko, Firtash's nemesis, was marginalized. 

One might wonder why Judge Christoph Bauer even listened to all this when Firtash was wanted for corrupting an Indian official. A possible answer is that he had nothing else to listen to: The U.S. case against the Ukrainian oligarch was based on the testimony of two anonymous witnesses, but that testimony was not handed over to the court. Besides, the U.S. failed to provide a satisfactory answer to why it hadn't pursued Firtash earlier. Bauer said, according to the Ukrainian news site, which had a reporter in the courtroom:

I could not but pay attention to the fact that the U.S. demands the extradition of one of the most influential and politically active entrepreneurs. I could not understand why the Americans held back the 2008 case so they could grab Firtash at a later date. All these considerations led me to conclude that, apart from everything else, this case has a political background.

The U.S. is appealing Bauer's decision, but seems unlikely to get the ruling reversed after botching the prosecution so badly. That may be unfair, given Firtash's history with Mogilevich and Rosukrenergo, a dodgy company if there ever was one. Yet the justice of Firtash walking free is far from the most interesting feature of his case.

Firtash is a billionaire closely allied with Putin's friends, and a vocal advocate of including Russia in any talks to integrate Ukraine with the European Union. At the same time, he served as a kingmaker in a Ukraine doing its best to break away from Russia. So Poroshenko may now say his country is at war with Russia, but he is not entirely free from political obligations to the shadiest element of the Putin regime. Official Kiev has not cooperated with the U.S. in seeking Firtash's extradition. 

To change, Ukraine needs to get rid of the influence of Firtash and his fellow oligarchs. Poroshenko, being one of them, is probably not the man to lead the fight. Under him, all that Ukraine can hope for is an oligarch-brokered, shady deal with Russia that may or may not give the country a chance at further reform and, someday, deliverance from its infestation of oligarchs. 

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Leonid Bershidsky at

To contact the editor on this story:
Marc Champion at