A Hawk from the Cage of Victor Yanukovych

"And they got married in the end.." This epic finale of many soap operas found its place in the Ukrainian politics. In the middle of the standoff and four years after the inauguration of Yanukovych, the dream of Andriy Kluyev became a reality – finally he became the Head of Administration of the President. To be more precise, of an institution, which currently appears to be the headquarters of introducing dictatorship in the country.

Kluyev, who wanted this position for many years, appeared to be the only suitable candidate, since before that he was appointed as the Head of the Electoral Office of Yanukovych for 2015. Accordingly, in order to effectively falsify the elections, he had to bring under control the vertical of the regional and district administrations, which have to produce the much needed result. The problem was that the events started developing very unpredictably, and now instead of elections Kluyev has to head something between the Gestapo and NKVD (the People’s Commissariat for Internal Affairs).

Even though Andriy Klyuev became the Head of Administration of the President, it is that very case when you "buy one get one free". Basically, Andriy and his younger brother Sergiy, a People’s Deputy, do not exist separately. They are united. They even live together in their own mini-Mezhygirya — on the territory of approximately 42 acres next to Rudyky village close to Kyiv, which Berkut police has taken under protection after sporadic demonstrations by the Maidan protesters.

Yanukovych is not ready to compromise. A person, responsible for the bloody dispersal of Maidan on 30 November 2013 did not only secure his position, but was promoted to the second in command in the country. It means that Yanukovych is in solidarity with those events at night when students were brutally beaten while he was enjoying himself at the hunting exercise.

The history of the relationship between these people dates back to 1990s. Kluyev got acquainted with Yanukovych in the end of 1994 when they were still in different weight categories: the former was working as a Deputy Head of the Regional Council and ran his own business while the latter was the director of "Donetskavtotrans". Then they swapped the positions: Yanukovych became the regional governor and Kluyev became his deputy. Kluyev continued running his own business having these two positions in parallel. In 1990s he almost became the victim of the attempted murder in Donetsk which made him to hire professional security guards and move around exclusively in the armoured Mercedes since then.

Kluyev went into big politics in 2002, when he was elected in the Parliament through the district in Donetsk region. The parliamentary correspondents remember his provincial look in a suite with a huge Brioni logo on every button of his jacket.

Kluyev is a part of the entourage helping Yanukovych to launder his reputation. In 2008 when Yanukovych was in opposition and needed legal money for the first construction of ‘Mezhygirya’, a younger brother of Andriy Kluyev bought Yanukovych’ apartment for the incredible price of USD 7 mln, a price higher than that for the palace of Lazarenko in California consisting of 10 bedrooms, that brought him in prison. Last year Kluyev also helped Yanukovych – his younger brother became the owner of ‘Mezhygirya’ according to registration documents. He bought property for USD 20 mln, whereas according to the most modest estimation it costs USD 200 mln. As such, we have a unique situation in the world politics, where the President of the country has to live in a residence belonging to his Head of Administration.

Russian producers of the Ukrainian blockbuster

The appointment of Kluyev is a de-facto integration of the author of the ‘war’ concept, Viktor Medvedchuk, in the presidential team. Five years ago, Kluyev said in an interview to the Ukrainska Pravda that he was friends with Medvedchuk. "Medvedchuk is my friend, he is one of the best specialists in Constitutional Law. Thus, he consulted me on this issue (during the negotiations to create a wider coalition between the Party of the Regions and Timoshenko’s block), - Kluyev stated. Interestingly, during the verification of the interview text, he took these words out.

Despite the fact that in 2004 Kluyev was the leader of the ‘shadow cabinet’ of Yanukovych, he was in touch with the representatives of the Orange team. According to his own confession, he heard the news on Yanukovych becoming the President when he was in a car with Yulia Tymoshenko. Kluyev always considered that Yanukovych had honestly won the elections: "There were no falsifications. Yanukovych won the elections in a civilized way, in a difficult competitive struggle. Naturally, the court under the pressure of people could take any decision about the third, fourth and even fifth round". At the same time Kluyev was accused of massive ballot stuffing, "carousel", and other technologies of vote accumulation.

Kluyev was the one who introduced the phenomenon of ‘titushky’ in the Ukrainian politics. In 2004, one week before the presidential elections, the Central Electoral Commission (CEC) had to vote on the opening of 620 fictional voting registers on the territory of Russia that should have served for the uncontrolled falsification of the elections. As the opposition was blocking the meeting of the CEC, the Party of Regions was looking for ways to get the Deputies out of the meeting room. As a result, sportsmen armed with hammers and bats started attacking the demonstrators in front of the CEC’s entrance. Investigation implicated Sergiy Kluyev into that, but he has managed to escape from justice.

However, it seems that Kluyev uses people with ‘titushka’ psychology as his personal security as well. Just listen to this dialogue between the author of this article and Kluyev’s security guard.

Despite the fact that Kluyev is integrated into the Austrian life, his world outlook is deformed by the Soviet past. In the same interview to the Ukrainska Pravda he was asked how he voted at the 1991 referendum on the Ukrainian independence. "I didn’t participate in the voting. I was not really interested in politics", - Kluyev acknowledged. It is an interesting situation: the biggest empire in the world is living its last days, the State Committee on Extraordinary Situations is taking place in Moscow, followed by sovereignty parades, and 27 years old Kluyev does not pay any attention to these events. "I am proud to earn PhD in the USSR", - he added.

The Vienna legaliser of Kluyev’s money

Approximately from the beginning of 2000s Austria became the second motherland for Kluyev brothers. The current Ambassador in Vienna is their person. The family of Sergiy Kluyev has a residence permit and owns real estate in Austria. Brothers own several assets: the Slav AG company, which owns a part of the Gasometer office building, as well as Activ Solar company, involved in the construction of the solar power plants in Ukraine, and CEE Clean Economic Energy, which is a formal owner of these power plants. Kluyev brothers reject their ownership of the latter two companies, but their rejections are hardly convincing. The methods of their business development do not leave any doubt in the companies’ belonging to the senior civil servants of Ukraine.

Kluyev is not against an open use of his power to use the budget money in his personal interest. The Commission on Coordination of Investment Projects, headed by Kluyev at that time, granted UAH 200 mln of the state aid to the "Semiconductor plant", owned by Kluyev’s Activ Solar company.

Kluyev, who basically monopolised the solar energy market, lobbied an incredibly high "green tariff". The Ukrainian state is required to buy electricity from his power plants at a price 8 times higher (!), than in Austria where Kluyev’s parent company is based. In order to build business, they took credit in the state owned UkrEximBank using illiquid collateral in the form of the equipment for the solar power plants that would be impossible to use in case of the borrower’s bankruptcy.

Besides, import taxes for this equipment were annulled. Even the European Commission’s aid for the ‘energy saving’ was used for the construction of the transmission lines that connected Kluyev’s power plants with the grid, resulting in the programme shutdown by Brussels because of the misuse of public funds.

According to the investigation of the Ukrainska Pravda, Kluyev brothers provided false data when filling in the form at the VorArlberg Landes – und Hypothekenbank AG. Contrary to the Austrian legislation, they refused to identify themselves as ‘politically exposed persons’, though they should have done so since they were MPs at that moment.

According to the Ukrainska Pravda sources, the Central Prosecutor’s Office on criminal economic offences and corruption is currently investigating the activity of Kluyev brothers after having received a number of requests from Ukraine.

Are Yanukovych and Kluyev partners ?

Other Donetsk tycoons, Sergiy Taruta and Vitaliy Haiduk, gave a detailed account of the relationship between Yanukovych and Kluyev. The Ambassador William Taylor reports on his meeting with them to Washington in a secret cable of the US Embassy in Kyiv, posted at Wikileaks website and dated as of September 2007. During the three hour long conversation, Taruta and Haiduk told the diplomat, among other things, about the leaders of the Party of Regions.

"Haiduk and Andriy Kluyev worked as the Vice-Governors when Yanukovych was the Head of the Donetsk region. Then Kluyev provoked changes in this relationship, having made Yanukovych his business partner, so that he would receive preferences. Taruta did not know whether Kluyev and Yanukovych remained business partners. However, according to Taruta, they had a special relationship. Taruta thinks that Kluyev is smart enough to implement reforms. Unfortunately, he quickly learnt that he could make money from holding a senior position, and now he was abusing his office for self-enrichment. For example, according to Taruta, Kluyev smuggled a big quantity of chicken via the Free Economic Zone (that existed in Donetsk region during the presidency of Kuchma – Ukrainska Pravda), Taruta thinks that Yanukovych could receive a part of income from chicken smuggling, although he was not certain."

The statement that ‘Kluyev and Yanukovych have a common business’ is confirmed by the scheme of the ownership registration of the Activ Solar, active in building a network of solar power plants in Kluyev’s interest. The ultimate owner of this Vienna based company is a Liechtenstein based trust, which has also been the ultimate owner of ‘Mezhygirya’ residence for many years.

Kluyev brothers reject their links to Activ Solar, even despite the fact that apart from the documents, there exist also other facts: the general manager of the enterprise is a son-in-law of Sergiy Kluyev, Kave Ertefay. The son of the current Head of the Administration of the President, Bogdan Kluyev, and his Mexican wife Maryna Castilla have also been working there (at least until now); the Vienna office of Activ Solar is located in the same box and has the same phone number as Kluyevs’ Slav AG company, while their Kyiv office is located in the headquarters of Kluyevs’ "Ukrpidshypnyk" company.

Apart from Austria and Russia, Kluyev brothers have a big interest in this country. The younger brother got appointed the Head of the group of friendship with the US Congress. Last year he visited the US twice, and the European Center for Modern Ukraine, based in Belgium and controlled by Kluyev, paid USD 1,5 mln to the US lobbyists.

But now all efforts in forming the image of the brothers are destroyed. Not a single consultant can save their reputation in the US. According to the sources, visa sanctions would be imposed on Kluyev brothers: they will be denied entry to the US territory, and the financial sanctions may follow as well. Together with troubles waiting for them in Austria and regular raids on their palaces close to Kyiv, the brothers are rapidly losing chances of a successful future beyond the Donetsk region.

Having appointed Kluyev as a Head of Administration, Yanukovych tied him tightly. Either they will both jump out of this mess, or they will sink in the name of the unrealised dream of rampant self-enrichment and dictatorship building.