Stop! Thief! Stop! — The Looting of Ukraine

by | Jul 30, 2014


Kiev’s hastily assembled, post-coup coalitions couldn’t hold, and Ukrainian PM Arseniy Yatsenyuk threw in the towel last Thursday. On his way out, news stories said, the PM expressed his “disappointment with Ukrainian parliament’s decision to reject a bill that allows the government to hand over up to 49 percent of the country’s gas transport system to investors from the European Union and the United States.”

In other words, what the US and the EU have got themselves up to in Ukraine isn’t so much a demented, madhouse mirror set of policies built on bluster and gross deceit as it is a high-powered burglary.

Ukraine should craft attractive terms to facilitate foreign investment, especially of those technologically-advanced energy companies capable of locating and developing whatever energy assets Ukraine does enjoy. But what does foreign ownership of 49% of the nation’s functioning gas transport system have to do with energy exploration and development?

For 23 years, succeeding Ukrainian governments have survived in large part by playing off EU-US and Russian interests. A fickle electorate has repeatedly endorsed whichever political players appeared to have the greatest potential as extortionists. (In 2009, then Prime Minister Yulia Timoshenko cut an underappreciated gas deal with the Russians and was rewarded with imprisonment.)

But now, we learn favored US and EU interests intend to snatch away for their own pockets the single card the Ukrainians have had to play, i.e. 100% ownership of the national gas transport system. Without full control of the gas transport structure the country inherited from the defunct Soviet Union in national hands, Ukraine will be of no particular interest except to Nato, which majorities amongst all Ukrainians have repeatedly stated they do not wish to join.

The 2% advantage Ukraine would retain under the proposed sale will easily be finessed over time by the many billions in initial and future IMF loans any Ukrainian government will need to retain power. Trading the impairment of Ukraine’s single asset of multinational interest for $17 billion in loans now, an ongoing infestation of IMF and associated multilateral parasites, a trade deal of no consequence, since Europe has no need for Ukrainian manufacturing, and logistical support for a bellicose military alliance’s misadventures from the frontline is not much of a deal. But it was no improvisation. It was, instead, a carefully planned EU-US double-cross.

The urgency that inspired Yatsenyuk to place this particular legislation at the top of his to-do list lies in the fact that foreign ownership of even a minority interest in the country’s energy transport system is critical to the success of the US-EU’s true goal, which is to undermine the Russian economy using Ukraine as a lever.

Throughout the 1990s, what Europe had thought to be a benefit – a neighbor with affordable gas to spare and eager to sell – was, the US said, in fact a threat. Cold war warrior Ronald Reagan had repeatedly warned Europe that by relying upon the Russians for the transport and supply of 30% of their energy needs would one day enable the Russians to hold their economies hostage.

In fact, the only disruptions to Europe’s energy supply from Russia have been on account of Ukraine. Ever since the nation’s 1992 independence, Ukraine has been siphoning Russian gas for its own needs without paying for it. And throughout those 23 years, Russia not only bore Ukraine’s thievery in order to fulfill its European contracts, but continuously offered Ukraine low rates for gas so that the country might actually be in a position to pay its bills.

Exceptions occurred in 2006 and 2009 when Russia locked horns with Ukraine over billions in arrears to Gazprom and reduced the flow for a handful of days in January of those years, thus temporarily putting the chill on Europe. It was the hiatus of supply during these two disputes, which allowed the US to mount an effective public clamor regarding EU vulnerability.

There was no mention of a deadbeat Ukraine’s thievery of gas meant for Europe as being the source of the problem. Instead, Russia was portrayed as a bully, demanding billions from a sadly impoverished Ukraine. Western media was far too polite to mention that Ukraine’s energy arrears were accumulating while their government officials grew fat and sleek by buying Russian gas cheap and selling it dear, pocketing the difference.

Nobody commented that it was actually U.S sanctions on Iran which prevented the subservient EU from pursuing contracts with a competing supplier of gas; except Vladimir Putin that is, who did observe dryly that an independent EU could organize an additional supplier. Some years later, during the US assault on Libya, no EU voices of concern were raised regarding those particular energy contracts with European nations, just one of which was to deliver a 50-year supply to Switzerland.

Once the EU absorbed the geostrategic message the US was sending, Brussels developed a legislative and regulatory attack on Russia’s Nord Stream pipeline and the proposed South Stream pipeline. Both pipelines’ routing was designed to avoid the Ukrainian problem.

The EU response to Russia’s pipeline resolution has been three measures: the 2006 Energy Community declaration, the 2020 Climate and Energy Package (CEP) and the Third Energy Package (TEP). The effect of those measures is to force all of Europe, nations both inside and outside of the EU, into a single energy market subservient to EU policy, which is one of reverse economic blackmail against Russia.

A perverse consequence of the TEP, for instance, would be to permit the EU’s anti-monopoly initiatives against Gazprom to kill Russia’s hefty investment in the South Stream and Nord Stream projects and even theoretically allow the EU to expropriate Russian assets to non-Russian companies. (For a thorough discussion of the EU initiatives and their likely consequences, see here.)

Once Ukraine’s elected government was eliminated, the US went right to work developing further its contribution to the scam.

Hunter Biden’s earlier March appointment to the board of Burisma Holdings Ltd, Ukraine’s largest natural gas producer, at first appeared to be a garden variety example of nepotism involving a US vice-president improperly arranging a no-work cash flow for his son. But, to the contrary, it turns out Hunter Biden has a full plate, insuring that the anticipated spoils of the US-led intrusion into Ukraine fall into the correct hands; big pairs of which will belong to the Biden family’s and the heist’s other multinational and congressional key players’ supporters.

In fact, Hunter Biden is an old Ukrainian hand. Prior to his appointment to Burisma’s board, Biden fils was a director of the US State Department’s National Endowment for Democracy subsidiary National Democratic Institute, where he built up opposition parties first for the 2004 US-engineered “Orange Revolution” and, later, the 2014 US-engineered “Euromaidan” protests.

In the course of those ten years, Hunter Biden would have gotten to know steel and pipeline billionaire Victor Pinchuk, an enthusiastic supporter and financier of the Maidan protests earlier this year, who is also former Ukrainian President Leonid Kuchma’s son-in-law and is well-known for sponsoring an annual gabfest for international political and financial elite at a Tsarist-era palace on the Black Sea. Despite being a generous multimillion dollar donor to the Clinton Foundation, Pinchuk was smart enough to acquire allies on both sides of the aisle, developing a relationship with Senator Bob Corker (R-TN) when he was mayor of Nashville. Pinchuk then parlayed his Corker relationship into ones with various top shelf neocons, including Karl Rove and that ever present spitball of American imperialism, Senator John McCain.

This spring Corker rounded-up Senators McCain, Marco Rubio and Lamar Alexander and 23 others in support of Senate Bill 2277, the Russian Aggression Prevention Act of 2014. The bill is a veritable cornucopia of imperial dreaming, imposing as it does travel bans on and asset freezes of Russian officials, including Vladimir Putin and Sergei Medvedev, and corporate officers of prominent Russian banks and energy firms. It provides for a stepped-up program of broadcasting propaganda into countries of the former Soviet Union, including Russia, along with the transfer of US intelligence to Ukraine.

The bill further targets Ukraine, Georgia, and Moldava for de facto if not de jure Nato membership with $100 million in lethal military equipment and assistance, which means Nato bases and joint military exercises. It increases funding for NGO fifth-column cover operations in targeted FSU countries and former “captive nations.” The bill also provides for a stop to nuclear arms reductions authorized by the 2010 New START treaty between the US and Russia. And, of course, the bill bestows further gifts on the US fracking and liquefied natural gas industries, the latter being a somewhat fanciful substitution for Russian energy in that decades of FedGov energy policies have insured that the US has no liquid gas export terminals.

Global suggests the bill targets “former officials of its Nato allies, including Germany and the Netherlands.” The heads of BASF AG, Wintershall AG, E.ON AG, E.ON Ruhrgas AG, Gasunie of the Netherlands, along with officials connected to the South Stream pipeline project hailing from Italy, France, Bulgaria, Slovenia, Greece, Germany, Bulgaria and Hungary, all Nato members, as well as Austria, Serbia, and Bosnia-Herzegovina.

The most remarkable figure the bill might target for a travel and asset freeze is former German Chancellor Gerhard Schroder for his chairmanship of the board of North Stream AG, which is 51% owned by Gazprom and whose pipe insures Germany’s energy needs.

Last week’s brawl in the Ukrainian Rada (legislature), which foreshadowed our man Yats’s no doubt temporary departure from government, indicates that Senate Bill 2277 may perhaps be somewhat premature if not the high water mark of neocon lunacy.

The worry is that it’s not the latter, and that Ukraine’s future lies in becoming one big, super-sized military base and a super-wide, multilane expressway transporting wealth sucked from Eurasia to Europe.

The Ukrainian people will, of course, be left stumbling along the highway’s soft shoulders as mere pedestrians.

Reprinted from