Ukraine’s Made-in-USA Finance Minister

Exclusive: A top problem of Ukraine has been corruption and cronyism, so it may raise eyebrows that new Finance Minister Natalie Jaresko, an ex-U.S. diplomat and newly minted Ukrainian citizen, was involved in insider dealings while managing a $150 million U.S. AID-backed investment fund, writes Robert Parry.

By Robert Parry

Ukraine’s new Finance Minister Natalie Jaresko, a former U.S. State Department officer who was granted Ukrainian citizenship only this week, headed a U.S. government-funded investment project for Ukraine that involved substantial insider dealings, including $1 million-plus fees to a management company that she also controlled.

Jaresko served as president and chief executive officer of Western NIS Enterprise Fund (WNISEF), which was created by the U.S. Agency for International Development (U.S. AID) with $150 million to spur business activity in Ukraine. She also was cofounder and managing partner of Horizon Capital which managed WNISEF’s investments at a rate of 2 to 2.5 percent of committed capital, fees exceeding $1 million in recent years, according to WNISEF’s 2012 annual report.

Ukraine's new Finance Minister Natalie Jaresko.

Ukraine’s new Finance Minister Natalie Jaresko.

The growth of that insider dealing at the U.S.-taxpayer-funded WNISEF is further underscored by the number of paragraphs committed to listing the “related party transactions,” i.e., potential conflicts of interest, between an early annual report from 2003 and the one a decade later.

In the 2003 report, the “related party transactions” were summed up in two paragraphs, with the major item a $189,700 payment to a struggling computer management company where WNISEF had an investment.

In the 2012 report, the section on “related party transactions” covered some two pages and included not only the management fees to Jaresko’s Horizon Capital ($1,037,603 in 2011 and $1,023,689 in 2012) but also WNISEF’s co-investments in projects with the Emerging Europe Growth Fund [EEGF], where Jaresko was founding partner and chief executive officer. Jaresko’s Horizon Capital also managed EEGF.

From 2007 to 2011, WNISEF co-invested $4.25 million with EEGF in Kerameya LLC, a Ukrainian brick manufacturer, and WNISEF sold EEGF 15.63 percent of Moldova’s Fincombank for $5 million, the report said. It also listed extensive exchanges of personnel and equipment between WNISEF and Horizon Capital.

Though it’s difficult for an outsider to ascertain the relative merits of these insider deals, they could reflect negatively on Jaresko’s role as Ukraine’s new finance minister given the country’s reputation for corruption and cronyism, a principal argument for the U.S.-backed “regime change” that ousted elected President Viktor Yanukovych last February.

Declining Investments

Based on the data from WNISEF’s 2012 annual report, it also appeared that the U.S. taxpayers had lost about one-third of their investment in WNISEF, with the fund’s balance at $98,074,030, compared to the initial U.S. government grant of $150 million.

Given the collapsing Ukrainian economy since the Feb. 22 coup, the value of the fund is likely to have slipped even further. (Efforts to get more recent data from WNISEF’s and Horizon Capital’s Web sites were impossible Friday because the sites were down.)

Beyond the long list of “related party transactions” in the annual report, there also have been vague allegations of improprieties involving Jaresko from one company insider, her ex-husband, Ihor Figlus. But his whistle-blowing was shut down by a court order issued at Jaresko’s insistence.

John Helmer, a longtime foreign correspondent in Russia, disclosed the outlines of this dispute in an article examining Jaresko’s history as a recipient of U.S. AID’s largesse and how it enabled her to become an investment banker via WNISEF, Horizon Capital and Emerging Europe Growth Fund.

Helmer wrote: “Exactly what happened when Jaresko left the State Department to go into her government-paid business in Ukraine has been spelled out by her ex-husband in papers filed in the Chancery Court of Delaware in 2012 and 2013.

“Without Figlus and without the US Government, Jaresko would not have had an investment business in Ukraine. The money to finance the business, and their partnership stakes, turns out to have been loaned to Figlus and Jaresko from Washington.”

According to Helmer’s article, Figlus had reviewed company records in 2011 and concluded that some loans were “improper,” but he lacked the money to investigate so he turned to Mark Rachkevych, a reporter for the Kyiv Post, and gave him information to investigate the propriety of the loans.

“When Jaresko realized the beans were spilling, she sent Figlus a reminder that he had signed a non-disclosure agreement” and secured a temporary injunction in Delaware on behalf of Horizon Capital and EEGF to prevent Figlus from further revealing company secrets, Helmer wrote.

“It hasn’t been rare for American spouses to go into the asset management business in the former Soviet Union, and make profits underwritten by the US Government with information supplied from their US Government positions or contacts,” Helmer continued. “It is exceptional for them to fall out over the loot.”

Jaresko, who served in the U.S. Embassy in Kiev after the collapse of the Soviet Union, has said that Western NIS Enterprise Fund was “funded by the U.S. government to invest in small and medium-sized businesses in Ukraine and Moldova in essence, to ‘kick-start’ the private equity industry in the region.”

While the ultimate success of that U.S.-funded endeavor may still be unknown, it is clear that the U.S. AID money did “kick-start” Jaresko’s career in equity investments and put her on the path that has now taken her to the job of Ukraine’s new finance minister. Ukrainian President Petro Poroshenko cited her experience in these investment fields to explain his unusual decision to bring in an American to run Ukraine’s finances and grant her citizenship.

A Big Investment

The substantial U.S. government sum invested in Jaresko’s WNISEF-based equity fund also sheds new light on how it was possible for Assistant Secretary of State for European Affairs Victoria Nuland to tally up U.S. spending on Ukraine since it became independent in 1991 and reach the astounding figure of “more than $5 billion,” which she announced to a meeting of U.S.-Ukrainian business leaders last December as she was pushing for “regime change” in Kiev.

The figure was so high that it surprised some of Nuland’s State Department colleagues. Several months later after a U.S.-backed coup had overthrown Yanukovych and pitched Ukraine into a nasty civil war Under Secretary of State for Public Affairs Richard Stengel cited the $5 billion figure as “ludicrous” Russian disinformation after hearing the number on Russia’s RT network.

Stengel, a former Time magazine editor, didn’t seem to know that the figure had come from a fellow senior State Department official.

Nuland’s “more than $5 billion” figure did seem high, even if one counted the many millions of dollars spent over the past couple of decades by U.S. AID (which puts its contributions to Ukraine at $1.8 billion) and the U.S.-funded National Endowment for Democracy, which has financed hundreds of projects for supporting Ukrainian political activists, media operatives and non-governmental organizations.

But if one looks at the $150 million largesse bestowed on Natalie Jaresko, you can begin to understand the old adage that a hundred million dollars here and a hundred million dollars there soon adds up to real money.

Those payments over more than two decades to various people and entities in Ukraine also constitute a major investment in Ukrainian operatives who are now inclined to do the U.S. government’s bidding.

Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and For a limited time, you also can order Robert Parry’s trilogy on the Bush Family and its connections to various right-wing operatives for only $34. The trilogy includes America’s Stolen Narrative. For details on this offer, click here.

25 comments for “Ukraine’s Made-in-USA Finance Minister

  1. BaldurDasche
    December 9, 2014 at 12:32

    Jaresko is going to ‘fit in’ great. She speaks the language, not Ukrainian perhaps, but the international language of money and how to get more for yourself.
    For the mission isn’t about restoring Ukraine, or even getting it balanced, it’s about exploiting the country and its people for the benefit of the wealthy in other places.

    Interesting to note that she’ll be ‘working’ under the direction of the finance minister of the deposed regime (and ‘America’s choice’ for leader of the Ukraine) Arsenic Yatseniuk, ‘the incorruptible’, who ‘watched the others stealing’ and knows not to keep his wealth where ‘the Maidan’ might lay hold of it – but safe in New York.

    Slave EUkrainia!

  2. December 8, 2014 at 14:42

    That these corrupt neocons are irresponsible lunatics gambling with a nuclear war showdown is beyond doubt to any rational observer.

  3. Hillary
    December 7, 2014 at 09:41

    Georgia was the prototype but now “Obama Leads Republicans”War Against Russia”.

  4. Loosi4
    December 6, 2014 at 17:01

    We already have a 51st state.

    • Joe Tedesky
      December 6, 2014 at 17:44

      Darn it I forgot Israel…well then 52nd will have to do…thanks Loosi4

    • Gregory Kruse
      December 7, 2014 at 21:58

      Actually, I think Israel has 51 states.

  5. John Gilberts
    December 6, 2014 at 16:46

    One of the founders of Minister Jaresko’s Horizon Capital, Lenna Koszarny, is the Canadian Chair of the Advisory Committee of the Ukrainian Canadian Congress, a right wing lobby close to Canadian Prime Minister Stephen Harper.

  6. Brendan
    December 6, 2014 at 15:19

    Former U.S. State Department official Natalie Jaresko isn’t the first person with good connections with that department to get a top Ukrainian government job. Arseniy Yatsenyuk went on to become the Ukrainian prime minister after senior State Department official Victoria Nuland said in a leaked phone call “Yats is the guy who’s got the economic experience”.

    That was yet another appointment that had some connection with US Vice-President Biden. Nuland’s last words in that conversation were “Biden’s willing”.

    • Joe Tedesky
      December 6, 2014 at 16:19

      Brendan, at this rate I am wondering how soon will it be before Ukraine becomes our 51st state.

  7. Abe
    December 6, 2014 at 11:40

    America is on a “Hot War Footing”:
    House Legislation Paves the Way for War with Russia?
    By Prof Michel Chossudovsky

    H. Res. 758 not only accuses Russia of having invaded Ukraine, it also invokes article 5 of the Washington Treaty, namely NATO’s doctrine of collective security.

    “An attack on one member of the Atlantic alliance is an attack on all members of the Alliance.”

    The underlying narrative is supported by a string of baseless accusations directed against the Russian Federation. It accuses Russia of having invaded Ukraine. It states without evidence that Russia was behind the downing of Malaysian Airlines MH17, it accuses Russia of military aggression.

    Ironically, it also accuses the Russian Federation of having imposed economic sanctions not only on Ukraine, Georgia, Moldova but also on several unnamed member states of the European Union. The resolution accuses the Russian Federation of having used “the supply of energy for political and economic coercion.”

    In essence, House Resolution 758 were it to become law would provide a de facto green light to the President of the United States to declare war on the Russian Federation, without the formal permission of the US Congress.

    In this regard, it could be interpreted as “mildly unconstitutional” in that it contravenes the substance of Article 1, Section 8, of the US Constitution which vests in the Congress “the Power to declare war…”

    The resolution urges the President of the United States in consultation with the US Congress to:

    “conduct a review of the force posture, readiness, and responsibilities of the United States Armed Forces and the forces of other members of NATO to determine if the contributions and actions of each is sufficient to meet the obligations of collective self defence under article 5 of the North Atlantic Treaty and to specify the measures needed to remedy any deficiencies” .

    What the above paragraph suggests is that the US is contemplating the use of NATO’s collective security doctrine under article 5 with a views to triggering a process of military confrontation with the Russian Federation.

    The structure of military alliances is of crucial significance. Washington’s intent is to isolate Russia. Article 5 is a convenient mechanism imposed by the US on Western Europe. It forces NATO member states, most of which are members of the European Union, to act wage war on Washington’s behalf.

    Moreover, a referendum on Ukraine’s membership in NATO is contemplated. In case Ukraine becomes a member of NATO and/or redefines its security agreement with NATO, article 5 could be invoked as a justification to wage a NATO sponsored war on Russia.

    • Joe Tedesky
      December 6, 2014 at 13:02

      Thanks Abe, your research is valuable. I am attaching another article, whereas JohnMcCain is attempting to take land away from Native Americans in order to allow a mining company to mine in these Arizona areas. What I heard, and have yet to find out is whether this mining would be authorized inside bill HR758. Read the attached article, and see if this mining deal was tucked inside bill HR758. Oh, Rio Tento mining is said to be partnered with Iran in regard to uranium exploration.

    • Abe
      December 6, 2014 at 16:23

      Here are the Members who voted “NO” on HR758.

      If you don’t see your own Representative on this list call and ask why they are voting to bring us closer to war with Russia!

      If you do see your Representative on the below list, call and thank him or her for standing up to the warmongers.

      Voting “NO” on H. Res. 758:
      1) Justin Amash (R-MI)
      2) John Duncan (R-TN)
      3) Alan Grayson, (D-FL)
      4) Alcee Hastings (D-FL)
      5) Walter Jones (R-NC)
      6) Thomas Massie (R-KY)
      7) Jim McDermott (D-WA)
      8) George Miller (D-CA)
      9) Beto O’Rourke (D-TX)
      10) Dana Rohrabacher (R-CA)

    • Joe Tedesky
      December 6, 2014 at 16:52

      Abe I apologize for asking you to verify whether McCain slide this Native American land deal into HR758. Earlier this past week I read something to the effect that McCain was doing what I have mentioned, in regard to the Rio Tento mining scheme.

      Yes, we should support the no votes on HR758, since this is nothing more than a vicious warmongering effort, to be sure.

      My hope is that Germany will pivot away from this NATO invasion upon the Russian border. There are articles out there suggesting Germany’s unrest with NATO’s anti-Russian efforts, but so far nothing official has come down on this.

  8. Abe
    December 6, 2014 at 11:33

    Since the February US-backed coup in Ukraine, the State Department has made one accusation after another about Russian military actions in Eastern Ukraine without presenting any kind of satellite imagery or other visual or documentary evidence; or they present something that’s very unclear and wholly inconclusive, such as unmarked vehicles, or unsourced reports, or citing “social media”; what we’re left with is often no more than just an accusation. The Ukrainian government has matched them.

    On top of all this we should keep in mind that if Moscow decided to invade Ukraine they’d certainly provide air cover for their ground forces. There has been no mention of air cover.

    This is all reminiscent of the numerous stories in the past three years of “Syrian planes bombing defenseless citizens”. Have you ever seen a photo or video of a Syrian government plane dropping bombs? Or of the bombs exploding? When the source of the story is mentioned, it’s almost invariably the rebels who are fighting against the Syrian government. Then there’s the “chemical weapon” attacks by the same evil Assad government. When a photo or video has accompanied the story I’ve never once seen grieving loved ones or media present; not one person can be seen wearing a gas mask. Is it only children killed or suffering? No rebels?

    And then there’s the July 17 shootdown of Malaysia Flight MH17, over eastern Ukraine, taking 298 lives, which Washington would love to pin on Russia or the pro-Russian rebels. The US government – and therefore the US media, the EU, and NATO – want us all to believe it was the rebels and/or Russia behind it. The world is still waiting for any evidence. Or even a motivation. Anything at all. President Obama is not waiting. In a talk on November 15 in Australia, he spoke of “opposing Russia’s aggression against Ukraine – which is a threat to the world, as we saw in the appalling shoot-down of MH17”. […]

    Can it be said with certainty that all the above accusations were lies? No, but the burden of proof is on the accusers, and the world is still waiting. The accusers would like to create the impression that there are two sides to each question without actually having to supply one of them.

    Russia invades Ukraine. Again. And again. And yet again … using Saddam’s WMD
    By William Blum

  9. deschutes
    December 6, 2014 at 09:52

    The brazenness of the State Department and the Obama administration is noted: I mean, why waste time with messy military coups like we did in Iraq and Afghanistan when you can simply insert American business people directly into key government positions? Mission accomplished, Ukraine is now in the sphere of Washington power elites, not Russia any longer. They’ll next try to force Russia out of Crimea, and that will prove to be erm…interesting. They are also having Saudi Arabia flood the oil market to ravage Russia’s economy–and it’s really working. Iraq was just an appetizer. Next victim please!…and the next, etc, etc.

  10. Brendan
    December 6, 2014 at 06:42

    As Robert Parry points out, a big chunk of Victoria Nuland’s $5 bn went to USAid for political purposes:
    “Over the last 20 years USAID has provided $1.8 billion in critical development assistance in support of the Ukrainian people. Much of this development assistance has helped Ukrainians experience increased political freedoms, stronger transparency guarantees, and more economic and social opportunities. ”

    No wonder Nuland said “F*** the EU” even though a major aim of all western governments was supposed to be the integration of Ukraine into Europe. What she meant by that comment was “Ukraine is our goddam little country, we paid for it!”.

  11. Brendan
    December 6, 2014 at 06:31

    It’s only a few months since Hunter Biden was given a job on the board of Burisma Holdings. That appointment of the Vice President’s son to one of Ukraine’s biggest gas companies, even though he appears to have had no previous connection with Ukraine or the energy industry, was seen as blatant and shameless croneyism.

    The latest appointment of American Natalie Jaresko as Finance Minister is an example of far worse corruption and outside interference because it goes to the heart of government.

    Interestingly, the appointments of both Hunter Biden and Natalie Jaresko were both announced a couple of weeks after trips by Joe Biden to Kiev.

  12. Tristan
    December 6, 2014 at 02:56

    Thank you for very informative article. It reveals the deep nature of the corruption of free market capitalism in its most basic form. And the evil which will be propagated in order to win the zero sum game.

  13. Abe
    December 6, 2014 at 00:04

    the condition of U.S. ‘democracy’ itself comes into question when 98% of the U.S. House of Representatives vote to donate U.S.-made weapons to the world’s only nazi regime — one right on the border of Russia, moreover — and when 67% of the American public (including the vast majority of the American public who don’t even know that the Ukrainian Government is nazi) oppose not only the donating of these weapons, but even any sort of transmittal or “sending” of them, including selling of them, to that Government.

    So, the U.S. House vote about this on December 4th was a reflection of today’s U.S. ‘democracy,’ whatever that is. It displays a pervasive and profound alienation between the U.S. Government and the U.S. people, and this is something that’s impossible in a democracy. It cannot happen in a democracy; it disproves a ‘democracy’; but it’s the case in the United States.

    This House vote is one crucial step along the path toward a nuclear war with Russia. Many more steps are yet to go, but now the direction is clear and incontrovertible, and we are on it.

    How can the Russian Government stand by and merely watch while Russia’s supporters right next door to them in Ukraine are being exterminated? However, now clearly, the U.S. Government seems to be overwhelmingly committed to exterminating them. There are even cluster-bombs, and white phosphorous, and also more-advanced forms of incendiary munitions, that are being used to get rid of the residents there. But mostly, it’s just the routine type of military mass-murder. (Those are the ‘terrorists’ that Ukraine and its sponsors are constantly referring to including in their standard phrase for the extermination-campaign: “Anti-Terrorist Operation,” or ATO for short. That’s the sales-phrase by which they market it to suckers everywhere. And these are the ‘terrorists.’)

    The U.S. is laying down the gauntlet to Russia. Perhaps the idea is that if Russia sends in their army and publicly commits to the defense of these people, the U.S. aristocracy and the ones who are in its pay will proclaim this to be a cause by ‘the West’ to attack Russia for its ‘aggression.’ Things could get out of control. But, maybe they already are.

    On the positive side, member-nations of NATO could quit the alliance, which would considerably reduce the U.S. threat. NATO was supposed to have been set up in order to defend against communism. However, now that communism is all but dead, yet NATO has expanded and especially surrounds Russia, NATO is more clearly shown as being instead the international marketing-organization for U.S.-made weapons. It’s not only for invading Syria, etc., but especially for weakening and isolating Russia and all of its allies. Even a third world war could be highly profitable to their financial backers. And perhaps those financial backers have more clout in the U.S. Government now than the American people do. However, if that’s the case, then arms-makers wouldn’t be the only industry — there’s also banking, oil, corporate agriculture, and others, who would also be at the feast — and perhaps Ukraine isn’t more corrupt than the United States after all.

    Perhaps Ukraine is America’s future, unless America’s future is World War III. The odd thing is that this time we would be leading the fascist nations, instead of leading their enemies. It could be called “Hitler’s revenge.” In case it seems not possible, consider America’s vote for nazism at the U.N., and the House’s vote for war against Russia. Hitler’s revenge is a possibility. It is not an impossibility. However, this time, the first target is Russia, not Jews. But the conflagration could be world-wide, and far worse than last time.

    The December 4th House vote to finance the “ATO,” and the November 21st U.N. vote for nazism, are just two steps along the path toward that conflagration, but they are both steps that are of historical magnitude in that they indicate not just that America’s aristocracy are determined to do everything to destroy Russia, but that they don’t care what the American people think or feel about that, and they have the overwhelming support of the U.S. Government in doing it.

    U.S. House Votes 98% to Donate U.S. Weapons to Ukraine; U.S. Public Is 67% Against. Is This Democracy?
    By Eric Zuesse

    • Tristan
      December 6, 2014 at 02:52

      Mr. Zuesse,
      Your comments, on Mr. Parry’s important article where he further reveals the nature of the U.S.’s aggression, are disturbingly on point. I’ve been growing more and more frightened by the insane policies of the U.S. imperial hegemony. Any student of history should be seriously concerned.


    • Eileen K.
      December 9, 2014 at 18:54

      Abe, one important fact you omitted from your post is that Ukraine’s illegal coup regime consists of plenty of Jews, among them Prime Minister Arseniy Yatsenyuk and President Petro Poroshenko. These two are mainly in charge of Kiev’s junta. None of the top officials (including Hitler) of the Third Reich were Jewish. Ukraine is a puppet, mainly of the Jews, who also control the US, NATO, and the EU.

  14. Abe
    December 5, 2014 at 23:57

    Claims that the new government in Ukraine is nothing more than a Western puppet Parliament have been swirling around consistently since February. Nevertheless, I think it’s very significant that the takeover is now overt, undeniable and completely out in the open. Nothing proves this fact more clearly than the recent and sudden granting of citizenship to three foreigners so that they can take top posts in the government.

  15. Zachary Smith
    December 5, 2014 at 21:26

    I made a search for New Ukraine Citizens, and found this:

    Natalie Jaresko, a former U.S. citizen and co-founder and CEO of a private-equity fund, is at the helm of the Ministry of Finance.
    Aivaras Abromavicius, a partner in a Swedish emerging-market asset-management company, who is originally Lithuanian, has been appointed as minister of Economic Development and Trade.
    And Aleksandre Kvitashvili, a former Georgian minister of health, is taking over a similar position in Ukraine.

    Stories abound about the mysterious disappearance of Ukraine’s gold immediately after the US-sponsored coup. After examining Mr. Parry’s essay, it’s a safe bet that everything else which isn’t nailed down in the Ukraine will soon turn up missing as well.

    • -
      December 6, 2014 at 00:13

      It will be interesting to see what Americas end game is with Ukraine. It seemed originally that there plan was to make it into another western partner but now they seem less sure. Almost seems now there simply looting. Maybe to make back the money they threw into “convincing” them to join the western cause.

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