Carpetbagging ‘Crony Capitalism’ in Ukraine

Exclusive: Ukraine’s Finance Minister Natalie Jaresko and other key officials were given overnight Ukrainian citizenship — with the law requiring them to renounce their old allegiances — but the American-born Jaresko has balked at that mandate, raising questions about her true motives, reports Robert Parry.

By Robert Parry

Last December, before being named Ukraine’s Finance Minister, American-born Natalie Jaresko accepted Ukrainian citizenship as a prerequisite for getting the job, but in almost one year since she has not renounced her U.S. citizenship, according to U.S. records and a Ukrainian official.

The Ukrainian Constitution allows for only “single citizenship,” meaning that a foreigner who is granted Ukrainian citizenship must terminate his or her previous citizenship and must submit a document attesting to that renunciation “within two years from the date of granting of Ukrainian citizenship,” said Mariia Budiakova, press secretary of the Ukraine Embassy in Washington.

Ukrainian Finance Minister Natalie Jaresko.

Ukrainian Finance Minister Natalie Jaresko.

The U.S. government publishes quarterly the names of Americans who have renounced their U.S. citizenship and those names — printed in the Federal Register since last December — do not include Jaresko, who has chosen to remain a U.S. citizen, a fact confirmed by Budiakova.

Jaresko appears to be exploiting the two-year period for submitting proof of renouncing her prior citizenship so she can hold her powerful Ukrainian position for two years with the option of then dropping her Ukrainian citizenship and keeping her U.S. citizenship.

But that manipulation of the process creates the appearance of a carpetbagger with dual loyalties and reinforces the image, highlighted by Russian media, of a Ukrainian government being run behind the scenes by the United States and other outsiders.

There’s also the possibility that Jaresko is exploiting this opportunity to learn all she can about the inner workings of the Ukrainian government to position herself to quit her post after two years, drop her temporary Ukrainian citizenship, and become a well-paid consultant with valuable contacts inside Ukraine’s Finance Ministry.

Such opportunism would fit with Jaresko’s history. Though hailed as the face of Ukrainian “reform,” Jaresko has long used her official connections to enrich herself, an inconvenient truth that undercuts the U.S. government’s desired image for the regime in Kiev as committed to the fight against corruption.

Prior to her appointment as Finance Minister, Jaresko, a former U.S. diplomat, headed the U.S.-taxpayer-financed Western NIS Enterprise Fund (WNISEF), created in the 1990s to help jump-start an investment economy for Ukraine and Moldova. WNISEF was overseen by the U.S. Agency for International Development (USAID).

WNISEF officials were limited to $150,000 in compensation a year, but Jaresko maneuvered to exceed that total, ultimately collecting more than $2 million a year by shifting management of WNISEF to her own private company, Horizon Capital, and arranging to get lucrative bonuses when selling off investments, even as the overall WNISEF fund was losing money, according to official records.

For instance, Jaresko collected $1.77 million in bonuses in 2013, according to WNISEF’s latest available filing with the Internal Revenue Service. In her financial disclosure forms with the Ukrainian government, she reported earning $2.66 million in 2013 and $2.05 million in 2014, thus amassing a sizeable personal fortune while investing U.S. taxpayers’ money supposedly to benefit the Ukrainian people.

Meanwhile, WNISEF continued to hemorrhage money, shrinking from its original $150 million to $89.8 million in the 2013 tax year, according to the IRS filing. WNISEF reported that the bonuses to Jaresko and other corporate officers were based on profitable exits from some investments even if the overall fund was losing money. [See’s “How Ukraine’s Finance Minister Got Rich.”]

Hailed as ‘Reformer’

Still, Jaresko and other foreigners who were brought in to fill key positions in the current Ukrainian regime were described as “technocrats” whose only interest was to bring good government to Ukraine, a country long saddled with institutionalized corruption. Jaresko was hailed as a Ukrainian “reformer” who in the words of New York Times’ columnist Thomas L. Friedman “shares our values.”

But Jaresko’s business history offers little reason for optimism about Ukraine rooting out official self-interest. Indeed, Jaresko would seem to fit the bill as a classic “crony capitalist,” someone who takes advantage of government connections to line his or her own pockets. Her failure to expeditiously comply with the Ukrainian Constitution and renounce her U.S. citizenship reinforces the view that she is more opportunist than reformer.

According to recent accounts from Ukraine, official corruption remains a deep-seated problem more than a year-and-a-half after the February 2014 overthrow of President Viktor Yanukovych, who was lambasted by the Western media for having a sauna in his official residence, the sauna becoming emblematic of his alleged abuse of power.

Ousted Ukrainian President Viktor Yanukovych.

Ousted Ukrainian President Viktor Yanukovych.

Prior to his ouster, Yanukovych and his government were targeted by the Organized Crime and Corruption Reporting Project (OCCRP), which is funded by USAID, the same organization that hired Jaresko to run WNISEF, and Open Society, a foundation headed by George Soros, a hedge-fund billionaire who has profited off the financial destabilization of fragile governments.

OCCRP’s selective outrage over “corruption” raises questions as to whether it is a genuinely journalistic operation or a propaganda front for the U.S. government and Western business interests targeting regimes that don’t play ball. After all, Jaresko’s multi-million-dollar profiting off her relationship with the U.S.-taxpayer-funded WNISEF would seem to be a starker example of corruption than Yanukovych’s sauna.

The new U.S.-backed regime in Kiev also has enacted “reforms” that slash pensions, energy subsidies and other social programs (reducing the living standards of average Ukrainians) while moving to privatize Ukraine’s economy and encouraging large Western corporations to exploit the country’s resources including “fracking” for shale gas in eastern Ukraine.

According to the U.S. Energy Information Administration, Ukraine has Europe’s third-largest shale gas reserves at 42 trillion cubic feet, an inviting target especially since other European nations, such as Great Britain, Poland, France and Bulgaria, have resisted fracking technology because of environmental concerns. An economically supine Ukraine is presumably less able to say no. [See’s “Beneath the Ukraine Crisis: Shale Gas.”]

This process in Ukraine also appears to have benefited from some greasing of the skids by hiring well-connected Americans besides Jaresko. Just three months after Yanukovych’s ouster, Ukraine’s largest private gas firm, Burisma Holdings, appointed Vice President Joe Biden’s son, Hunter Biden, to its board of directors. Burisma a shadowy Cyprus-based company also lined up well-connected lobbyists, some with ties to Secretary of State John Kerry, including Kerry’s former Senate chief of staff David Leiter, according to lobbying disclosures.

As Time magazine reported, “Leiter’s involvement in the firm rounds out a power-packed team of politically-connected Americans that also includes a second new board member, Devon Archer, a Democratic bundler and former adviser to John Kerry’s 2004 presidential campaign. Both Archer and Hunter Biden have worked as business partners with Kerry’s son-in-law, Christopher Heinz, the founding partner of Rosemont Capital, a private-equity company.”

According to investigative journalism inside Ukraine, the ownership of Burisma has been traced to Privat Bank, which is controlled by the thuggish billionaire oligarch Ihor Kolomoysky, who was appointed by the U.S.-backed “reform” regime to be governor of Dnipropetrovsk Oblast, a south-central province of Ukraine (though Kolomoisky was eventually ousted from that post in a power struggle over control of UkrTransNafta, Ukraine’s state-owned oil pipeline operator).

Also, regarding Western energy interests, on Dec. 13, 2013, when neocon Assistant Secretary of State for European Affairs Victoria Nuland was pushing for Yanukovych’s ouster, she reminded Ukrainian business leaders that the United States had invested $5 billion in their “European aspirations” at a conference sponsored by Chevron. She even stood next to the company’s logo.

Assistant Secretary of State for European Affairs Victoria Nuland, speaking to Ukrainian and other business leaders at the National Press Club in Washington on Dec. 13, 2013, at a meeting sponsored by Chevron.

Assistant Secretary of State for European Affairs Victoria Nuland, speaking to Ukrainian and other business leaders at the National Press Club in Washington on Dec. 13, 2013, at a meeting sponsored by Chevron.

The Carpetbaggers

Jaresko was only one of several foreigners recruited by President Petro Poroshenko to fill key positions in the Ukrainian government, with these officials also granted instant Ukrainian citizenship. Along with Jaresko’s appointment last December, Poroshenko brought onboard Lithuanian Aivaras Abromavicius, a partner in investment firm East Capital, as Economy Minister and Georgian Aleksander Kvitashvili, who had served as Georgia’s health minister and labor minister, as Health Minister.

Last May, Poroshenko appointed ex-Georgian President Mikheil Saaskashvili to be governor of Ukraine’s restive Odessa region. Saaskashvili, who faces charges in Georgia for alleged abuse of power during his presidency, also received overnight Ukrainian citizenship but — unlike Jaresko — he announced that he had dropped his Georgian citizenship, a move that short-circuited his possible extradition back to Georgia.

Another foreigner whose appointment raised eyebrows was the choice of Estonian Jaanika Merilo to be put in charge of attracting foreign investments. Merilo was a Jaresko associate known more for her personal ties to wealthy business tycoons, such as English businessman and investor Richard Branson, and kinky online photos than her skills as a technocrat.

Janika Merilo, an Estonian brought into the Ukrainian government to oversee foreign investments. (From her Facebook page via Zero Hedge)

Janika Merilo, an Estonian brought into the Ukrainian government to oversee foreign investments. (From her Facebook page via Zero Hedge)

The message from the new regime in Kiev may be that Ukraine is open for Western investment, but a less charitable interpretation is that Ukraine is open for unbridled exploitation led by foreign operatives with a history of self-dealing who are overseeing another — and possibly far grander — era of official corruption.

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 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.

24 comments for “Carpetbagging ‘Crony Capitalism’ in Ukraine

  1. Joe L.
    November 23, 2015 at 00:10

    It is funny to see “Drew Sullivan” show up on Consortium News to complain about Mr. Parry when the OCCRP is funded by USAID which is an organization which always seems to be funding opposition protesters and politicians in many different countries which results in “regime change” or “attempted regime change” – Cuba 2010 (ZunZuneo as reported by AP), Egypt where USAID funded Morsi opposition government officials and protesters which resulted in a coup (as reported by Al Jazeera), USAID was also present in Venezuela in 2002 where I believe it funded opposition government officials (Carmona) along with the National Endowment for Democracy which resulted in a temporary coup against Hugo Chavez and now we have Natalie Jaresko, a former USAID employee, an American no doubt, becoming Ukraine’s new Finance Minister. Yet “Drew Sullivan” who is, I believe, a co-founder of the OCCRP and is funded by USAID claims that Mr. Parry is out of touch? Sorry Drew but I would say the fact that USAID is seemingly present in country after country where “regime change” occurs and funding opposition within the country makes anyone or any publication funded by USAID less than trustworthy.

  2. Drew Sullivan
    November 14, 2015 at 18:25

    Wow. What a completely misinformed group of arm chair analysts. There appears to be no conspiracy theory too crazy for your readers who reinforce your odd and misplaced view of the world. Got to get back to reality. Get out of your basements more.

    • Mark
      November 15, 2015 at 17:31


      ad hominem attacks do nothing for your side of the argument. Include facts, thoughtful analysis, point out where and how your opponents are wrong, or simply stay out of the discussion.

      • Joe L.
        November 22, 2015 at 23:50

        Mark… Here is a little write-up on our friend “Drew Sullivan” from the OCCRP. I just wonder if Drew’s pot-shots at Mr. Parry are not simply anger at Mr. Parry drawing connections to the OCCRP through USAID (which Natalie Jaresko worked for) along with the George Soros Foundation and OCCRP experts such as the “discredited” Bellingcat. What I find interesting “Drew” is that where US NGO’s show up, such as the National Endowment for Democracy or USAID (who I believe I read partially funds the OCCRP), then “regime change” or “attempted regime change” is sure to follow. Case in point, USAID trying to encourage “regime change” in Cuba in I believe 2010 by creating a Cuban Twitter (reported by the AP) OR the National Endowment for Democracy and USAID funding opposition government and protesters in Egypt against Morsi where a coup occurred (reported by Al Jazeera) OR the National Endowment for Democracy and USAID funding opposition in Venezuela in 2002 which ousted Hugo Chavez temporarily in coup (I believe the Guardian reported on links to the US Government) OR now we have a former USAID worker, an American no doubt, becoming Ukraine’s new Finance Minister (and ironically a coup occurred in Ukraine as well)… of course, nothing shady there!

        Drew Sullivan (OCCRP):

        Drew Sullivan is a veteran journalist and media development specialist who has worked for almost a decade in Eastern Europe and Eurasia. He founded the Center for Investigative Reporting in Bosnia-Herzegovina in 2004 and served as director, editor and now advising editor to the organization. He co-founded and served as the first director of the Organized Crime and Corruption Reporting Program, a regional consortium of investigative centers, where he now serves as advising editor. He founded the Journalism Development Network, an innovative media development organization with programs worldwide. As a journalist, he led a team of reporters looking at corruption by the Bosnian prime minister which led to his eventual indictment and resignation. His work has been awarded the Daniel Pearl Award, the Online Journalism Award for investigative reporting, the Global Shining Light Award for reporting under duress, the Tom Renner award for Crime Reporting and many other international awards. He worked as an investigative reporter for the Tennessean newspaper in Nashville and for the Special Assignment Team of the Associated Press in New York. He has served on the board of directors of Investigative Reporters and Editors and the National Institute for Computer Assisted Reporting. Before becoming a journalist, he was an aerospace engineer on the Space Shuttle Project for Rockwell International Space Systems.

    • Abe
      November 16, 2015 at 12:30

      Nice ‘splainin’, Drew. Hasbara much?

  3. JC
    November 14, 2015 at 13:16

    Maybe Jaresko is just taking a page out of Kolomoisky’s playbook and has gotten a third citizenship. From TASS:

    “In an interview on the Ukrainian television Channel One, Kolomoisky said that along with the Ukrainian passport he has passports of Israel and Cyprus. When asked how his holding three passports fitted Ukrainian laws, he said: ‘The constitution prohibits double citizenship but triple citizenship is not forbidden.'”

  4. onno
    November 14, 2015 at 09:09

    Mr. Parry, Having worked in UA for more than 12 years I can confirm your report, but we also know that UA is the most corrupt nation on the European continent, nr. 144 of the world next to Zaire. So anything is for sale today more so than under former president Yanukovich who was removed by a US/NATO instigated Coup. Corruption in UA – under a fascist Kiev government – today is worse then under any former president and the UA people are suffering from 45% inflation and increased unemployment.
    Ukraine has become a US vassal and a personal protectorate of US VP Biden and John Kerry since their son Hunter and. stepson Devon Archer are both working for oligarch, criminal and former governor of Dnepropetrovsk Kolomoisky’s company Burisma Holdins, Ltd of Cyprus that is major owner of shale gas properties in East Ukraine or Donbass. Kolomoisky’s Private Sector headed by Yarosh is fighting and murdering Donbass civilians mostly women and children (8000 sofar) All financed by CIA taxpayers money shuttled on Biden’s or Kerry’s aircrafts to Kiev.
    Ultimately Washington expects a return on its investment of $ 5 billion (according to Nuland) but just like Jaresko’s US fraud. Biden and Kerry hope that the UA shale pay-off will secure a handsome windfall profit for Hunter Biden and Devon Archer. In addition it shows the truth in Washington’s anti-Russia smear campaign and the neocons behind it.

    • Bob Van Noy
      November 14, 2015 at 11:46

      “Ukraine has become a US vassal” Sad to say onno, but that is what the us state department does; prepares other countries for us style fascism. I’ve been reading about the Dulles brothers for some time now, and that is how they viewed the world. Time for a Reset?

  5. Brendan
    November 14, 2015 at 06:43

    A far greater figure than Jaresko’s couple of millions in bonuses is the $60 million that her WNISEF fund had lost by 2013. It would be interesting to know what happened to that sum of money. Was it distributed openly as financial aid (with little or no expectation by anyone that it would be repaid), or did it disappear due to incompetence or corruption?

  6. paul wichmann
    November 14, 2015 at 03:51

    If the infallible Dick Cheney didn’t HAVE to get out of Halliburton to be VP, Jaresko can point to precident. The objection that the Ukraine isn’t america is quashed by the reality of the globalization of exceptionalism.

  7. JC
    November 14, 2015 at 03:46

    Maybe Jaresko is just doing what Kolomoisyy did — get a third citizenship:

    “In an interview on the Ukrainian television Channel One, Kolomoisky said that along with the Ukrainian passport he has passports of Israel and Cyprus. When asked how his holding three passports fitted Ukrainian laws, he said: ‘The constitution prohibits double citizenship but triple citizenship is not forbidden.'”

    And Devon Archer? He sits on the board of directors for Diamondback Tactical. Chairman of Diamondback? Stephen Kappes, past Deputy Director of the CIA.

    Oh, what a tangled web…

  8. November 14, 2015 at 03:35

    Oh, and by the way, Parry, you dismiss OCCRP as a US government tool and then you quote our story (republished by an NGO) as proof of your conspiracy. Seems like we are on both sides of proving and disproving your conspiracy. Stick to DC and leave the complex world of Ukrainian and Russian politics to the experts.

    • F. G. Sanford
      November 14, 2015 at 07:25

      RED ALERT-WARNING-WARNING: Propaganda Professionals Proffering Semantic Strategies Structured to Obfuscate Oligarchical Objectives!

      COMPLEX: The issues are COMPLEX. Leave it to the EXPERTS. They created the MESS!

      The Ukraine is COMPLEX. Victoria Nuland inserted a Neo-Nazi regime to permit privatization, resource extraction, vulture capitalism, debt restructuring, IMF derivative schemes, usury and reduction of the standard of living. It’s too COMPLEX, so just shut up.

      Palestinian sovereignty is COMPLEX. Their land is being steadily dispossessed and their livelihoods destroyed to build “settlements” for foreign immigrants based on mythological claims to entitlement. But the situation is very COMPLEX, and must be left to the EXPERTS.

      Syria is COMPLEX. There are 1,300 different factions, and according to crypto-Zionist Phyllis Bennis, there are eight different wars being simultaneously fought. It is very COMPLEX. Even retired General John Allen aggress that it is COMPLEX, and could go on forever. Most of the anti-Assad fighters are foreign mercenaries trained by the CIA and funded by Turkey and Saudi Arabia. But it is too COMPLEX for us to understand. It’s a “civil war” that doesn’t fit any rational definition of a “civil war”, because it’s a proxy war, which is why it’s so COMPLEX.

      In American propaganda lingo, any time you hear the word COMPLEX, it’s a call to justify maintaining the status quo or to deflect attention away from the real objectives. Get it? Got it? Good.

      • art guerrilla
        November 14, 2015 at 09:00

        @ what fred said:
        excellent send-up, absolutely nails that aspect of the situation…
        what is -of course- both hypocritical and demeaning, is that *supposedly* (don’t laugh, now) our precious small-dee democracy is to be run by the ‘well-informed citizenry’; whilst The They ™ simultaneously do everything imaginable to deceive, distract, misinform, lie to, and propagandize said ‘well-informed citizenry’…
        much as the *supposed* ‘invisible hands’ of the so-called ‘free market’ are guided by the self-interested, but equally well-informed decisions of all the players; said free-ness and equal access to the same information is a myth…

        • Bob Van Noy
          November 14, 2015 at 11:24

          Great summary art guerrilla…

      • Abe
        November 16, 2015 at 12:28


      • Abe
        November 16, 2015 at 13:34

        COMPLEX MESS EXPERTS convene at the crypto-Zionist Real News Network.

        Very, very, very rarely, the Real News allows Robert Parry to appear in order to add a smidgen of deniability to their project.

        When it became utterly impossible to obfuscate the oligarchical objectives of the new regime in Kiev, the Real News abandoned reporting on Ukraine to focus on… Baltimore.

        Come to think of it, Ukraine looks a lot like Baltimore. Or maybe it’s the other way around.

        I dunno. Watching the Real News, it’s all so COMPLEX, my brain hurts.

    • Gregory Kruse
      November 14, 2015 at 12:44

      So is he supposed to get out and about more or stick to DC?

    • Cassandra
      November 16, 2015 at 05:02

      There’s no conflict here at all. Credibility is not judged exclusively by the character or lack thereof of the speaker but also by what is said.

      “I never, Your Honour. Some other dude done it” has no credibility because there is an obvious and compelling motive for lying. (It’s known as the ‘SODDI defense.’)

      For exactly the same reason, exactly the same speaker gains credibility if he says “You’ve got me dead to rights, Your Honour. I dunnit.” (It’s known as an ‘admission against interest.’)

    • Joe L.
      November 22, 2015 at 23:30

      Drew Sullivan… I just wonder who the “experts” of the OCCRP are – Bellingcat? If so, you are calling a “blogger” an expert who I believe was completely “discredited” by an MIT professor and UN weapons inspector in his claims on Syria (you know, the real experts) which were also touted from another “real expert” Seymour Hersh which is a Pulitzer Prize winning journalist. I would also say that Mr. Parry is also an “real expert” in his field when he also is a Pulitzer Prize finalist, George Polk winner, and recently won the I.F. Stone Medal. So who are the “experts” of the OCCRP? I would also be curious to see what these “experts” had to say about the Iraq War and WMD’s? Experts… pfft…

  9. November 14, 2015 at 03:26

    You are completely out of touch Parry, again. You need to get out more. You can’t write about Ukraine from the US. Still with your silly DC conspiracy theories. You are out of your depth here. Too bad you can’t read Ukrainian.

  10. November 14, 2015 at 03:25

    You are completely out of touch Parry, again. You need to get out more. You can’t write about Ukraine from the US. Still with your silly DC conspiracy theories. You are out of your depth here.

  11. Douglas Baker
    November 13, 2015 at 23:55

    11/13/2015 Cleptocapitalist “Ukraine” Finance Minister Natalie Jaresko was given a two year window to occupy the Ukraine as an improvisational citizen before become one with the Ukraine or not. In any case her time in the Ukraine has destroyed the Ukraine for its own people as the continued colonization of this great country continues while she stays the course as a bag lady for handing out state treasures from her stuffed carpet bag and bringing back financial terror to its real citizens.

  12. Bill Bodden
    November 13, 2015 at 19:26

    If Thomas Friedman gave Ms. Jaresko his seal of approval we know what to expect. How many Friedman Units did he suggest we give her to balance the books?

Comments are closed.