Bird’s Eye View On: Ukraine
An In-Depth Series by Back to Facts

Part II: Billions in, billions out

Ukraine is still the second poorest country in Europe in wealth per capita, so where does U.S. aid go?

By Tatiana Prophet

From a large American think tank to scads of non-governmental organizations to the American embassy in Kyiv, the “concern trolls” have been working overtime in Ukraine. Time and again, when you look at the last two decades, these always well-meaning outsiders have been laying out action plans and guiding principles for Ukrainians to end corruption and enact “market reforms” – and yet, money is still being laundered, oligarchs have continued living abroad to avoid prosecution, and almost half of Ukrainian citizens admitted in 2017 to giving petty bribes to doctors and universities, often for convenience.

One might wonder how, with three separate federal agencies empowered to investigate graft, and with non-governmental agencies providing best practices and demanding reforms, a huge chunk of an IMF bailout loan went missing in 2015 from Ukraine’s largest bank, Privat Bank, as part of a lending scheme by offshore shell companies to purchase goods that were never delivered – to the tune of $1.8 billion according to multiple media accounts. Most of those reports on that episode blame oligarch Igor Kolomoiskyi, owner of the TV station that carried President Zelenskyy’s “Servant of the People” show, since he was also the owner of Privat Bank until it was nationalized after the scandal.

By the end of 2016, the Privat Bank losses had reached a $4.5 billion shortfall, which Reuters described as due to “risky loans.” That was when the government of Petro Poroshenko, Zelensky’s predecessor, assumed control over Privat Bank. But the underlying loss of taxpayer money didn’t get much press stateside. The Obama Administration was on its way out and wanted to make sure the President’s chosen successor, Hillary Clinton, would be handily elected.

And the craziest part is that this hemorrhage happened under the watch of a former state department employee who in late 2014 had renounced her U.S. citizenship so that she could serve as Ukraine’s finance minister with the blessing of loyal U.S. friend President Petro Poroshenko. Natalie Jaresko is now managing the bankruptcy of Puerto Rico. . (In September 2019, the IMF announced they were about to drop another $5 billion on Ukraine once again, with the familiar call to implement “market reforms,” as if they had made any difference before.)

Natalie Jaresko is a Ukrainian-American CPA who went to DePaul and Harvard, worked at the U.S. embassy in Kyiv in the 1990s, then headed up two investment funds using American taxpayer money from USAID to bring dollars to the region. In 2014, she renounced her U.S. citizenship to comply with Ukrainian law a mere days before taking office in December 2014. She is now the chief executive of the federal bankruptcy agency for Puerto Rico. Yes, the person overseeing the financial restructuring of Puerto Rico is a Ukrainian citizen.

What’s more, Consortium News, the place where investigative journalists go to stay honest, looked into the financial records of Jaresko’s investment fund, and it appears she had paid herself almost $2 million in bonuses, with annual expenses in the double digits, with taxpayer money from government aid agency USAID.

“The purpose cited by the U.S. Congress in starting the non-profit WNISEF [Western NIS Enterprise Fund] with $150 million in the 1990s was to help jumpstart an investment economy in Ukraine and Moldova for the benefit of the people of those countries. The project was administered by the U.S. Agency for International Development (USAID), which selected Jaresko, a former U.S. diplomat of Ukrainian heritage, to run the project,” wrote Consortium News founder Robert Parry, who died unexpectedly in 2017.

”According to WNISEF’s filing for the 2013 tax year, submitted to the IRS on Aug. 11, 2015, the value of the investment fund had shrunk from $150 million at its start to $93.9 million in the fund’s 2012 tax year and to $89.8 million in the 2013 tax year,” Parry wrote. “(WNISEF’s tax years end on Sept. 30.) So, Jaresko’s arrangement was something like taking someone else’s money to a roulette table, placing it on black, and claiming a share of the winnings if the ball stopped on black. However, if the ball landed on red, then the someone else absorbed the loss, except in this case the winners were Jaresko and her associates and the losers were the American taxpayers.”