Home / US / Sondland supported efforts to "shake up" the leadership of Ukraine's state energy company

Sondland supported efforts to "shake up" the leadership of Ukraine's state energy company

US Ambassador to the European Union, Gordon Sondland, supported a Trump administration effort to change leadership at Ukraine's main energy company, despite objections from career diplomats who saw the move undermining anti-corruption efforts, three sources familiar with the matter told NBC News.

The press coincided with efforts by President Donald Trump's personal lawyer, Rudy Giuliani, to pressure Ukraine's newly elected President, Volodymyr Zelenskiy, to conduct investigations by Democrats to help the president's re-election campaign.

The US diplomats in Kiev and Washington were blinded and confused by the new position of Ukraine's state energy company, Naftogaz, as they saw the new CEO and the Independent Regulatory Board for cleaning up much of the company's corrupt practices, sources said. [1

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The Government of Ukraine, who already heard from Giuliani that the White House wanted to see investigations conducted against former Vice President Joe Biden and his family, Naftogaz interpreted the request as part of a broader push by the Trump administration to exert influence, sources said.

Given the company's positive trajectory in recent years, it is still unclear why Sondland pushed for change in the board, although some US energy leaders have argued to liberalize Ukraine's energy market and privatize parts of Naftogaz's usiness.

Sondland "were generally dissatisfied with their governance (at Naftogaz) and encouraged them to shake up the board, but not necessarily replace specific individuals," said a source familiar with the ambassador's opinion.

"Sondland was generally pushing Naftogaz to adopt more Western corporate governance and an independent board," the source said, and he saw "endemic corruption and weak governance as a barrier to US investment, which he strongly supported." [19659009] Sondland declined to comment, Naftogaz representatives also declined to comment.

The topic of Ukraine's state gas company, Naftogaz, came up in May meetings with Zelenskiy and Sondland, Energy Secretary Rick Perry and US Special Envoy to Ukraine, Kurt Volker, who flew to Kiev for the Ukrainian president's inauguration, the sources said.

Perry clarified the need for a "fundamental change" in the leadership of Naftogaz, said two former US officials with knowledge of the meeting.

An administrative official denies Perry proposed any change to the board, which includes four international members, and instead shared a list with four names – plus government experts – to advise Zelensky's energy office.

Perry "did not recommend that these persons be placed on any board," said a Department of Energy official.

The House Democrats conducting the investigation into impeachment of Trump's cooperation with Ukraine have called a US embassy offi to testify next week, Suriya Jayanti, who is expected to provide important insights on what happened to Naftogaz and how Trump's team tried to change the company's leadership.

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The Associated Press first reported on the meetings, but Sondland's support for the effort to remove the Naftogaz leadership has not been previously reported.

The method from Sondland and Perry seemed to fly ahead of the long-standing policy of the United States, which had seen the new leadership of Naftogaz as a relative success story. After the May meeting, an internal debate took place among diplomats from the State Department, National Security Council officials and assistants to Sondland and Perry, sources said.

Focus on Naftogaz's board also raised alarm among Ukrainian officials as the effort came at the same time, Giuliani's co-workers, Lev Parnas and Igor Fruman, pushed for the abolition of the company's reform-oriented CEO, as NBC News previously reported. The two wanted new management as part of a system for selling liquefied natural gas to the company, according to two industry sources familiar with the proposal.

Parnas and Fruman were arrested last week on campaign finance charges for pushing foreign money to US political candidates.

Even if they had succeeded in expelling the CEO, the Parnas and Fruman plan could only have succeeded in changes to the Board, which has the power to veto a project that it considers to be suspicious. Any weakening of the board's independence would also play into the hands of Ukraine's corrupt actors, who for several years previously siphoned off huge sums of money from the company, according to former US officials and regional experts.

It is not clear if Sondland's bid to make changes to Naftogaz's leadership was in any way coordinated with Giuliani or his co-workers, and no evidence has emerged to show a direct link. But whether it was intentional or not, the result could have benefited the Parnas and Fruman and corrupt elements in Ukraine trying to abolish the company's independence.

Giuliani has denied any commitment to efforts directed at Naftogaz.

An oligarch made much of his use by exploiting Naftogaz's loophole, Dmytro Firtash, which the US authorities have claimed is at the top of "Russian organized crime."

The Parnas and Fruman mentioned Firtash, who is now in Vienna fighting extradition to the United States on bribes and challenges, when they made their way to a gas deal with a Naftogaz CEO, according to Dale Perry, an energy manager with many years of experience in the Ukraine market. The pair suggested that the gas company pay Firtash an alleged $ 200 million debt that the oligarch believes the company owes him, NBC News has reported.

Firtash has also played an important role in Giuliani's pursuit of dirt on Trump's political opponents. Firtash's legal team has provided documents to Giuliani who make unproven allegations against Biden. The documents include a pledge from a dismissed Ukrainian prosecutor, Viktor Shokin, accused of corruption.

Firtash continues to serve on an extraordinary arrangement that no Ukrainian government has been willing to touch, despite repeated appeals from Naftogaz and Western officials. A decree from the Ukrainian government allows Firtash to buy gas at a cheap discount and then sell it through intermediaries for big profits.

Secretary of Energy Perry has defended his role in Ukraine, saying that he was focused on opening up the energy market in Ukraine to promote US and Western investment. "What he did not do is advocate the business interests of any individual or company," Perry's spokesman Shaylyn Hynes said in an email.

Among the names proposed by Perry as energy advisers were Michael Bleyzer, a Ukrainian-American based in Texas who has made extensive investments in Ukraine and has donated to Perry's campaign, and Robert Bensh, who had worked at various energy companies with interests in Ukraine. Bensh also worked as an adviser to a former Ukrainian energy minister, Yuri Boyko, in the pro-Russian government led by Viktor Yanukovych who was thrown down after street demonstrations in 2014.

Boyko was a pro-Russian presidential candidate and has long been a political ally by Firtash. Their former political party once advised Trump's one-time campaign manager, Paul Manafort, who is now behind bars after being convicted of financial fraud.

Bleyzer said he was never contacted to serve on the board of Naftogaz. Bensh declined to comment. A source who knows Bensh's thinking said he was never called on by US officials to serve on the Naftogaz board.

Sondland's effort to seek a possible change in leadership for Naftogaz began with a proposal to replace all four international members of the seven members, but eventually focused on replacing an American who had been appointed in 2018, Amos Hochstein, who had worked at the State Department. during the Obama administration, sources said.

Bensh's name was among those cited as a possible replacement, sources said, despite his previous business operations in Ukraine and his work with the former Yanukovych government that would have raised possible conflict of interest issues. Bensh accompanied Zelenskiy & # 39; s help, Andriy Yermak, in mid-July as he met with legislators in Washington, two sources familiar with the discussions said.

A new AP report, confirmed by NBC News, revealed that Bensh exaggerated his military service on his online profile claiming he had been in elite military units including Army Rangers and Delta Force, but data shows he had been in the National Guard and just short on active duty.

Bensh has been a strong advocate for liberalizing Ukraine's energy market and privatizing parts of Naftogaz. “Do you want to earn revenue? Again, you sell Naftogaz, "Bensh said in a speech in 2015." Do you want to earn revenue? You lose taxes; We will drill the shit out of this place. "

Bensh's name remained in the game as late as last month, before whistleblower complaints came from a White House official who expressed alarm at Trump's request to Ukraine to launch investigations into his personal political gain, sources said.

However, the proposal by Trump's envoy to change the board did not seem to follow previous practice. Nominees for the international board members will come after consultation between the IMF and the European Bank for Reconstruction and Development, which in turn submits a list to the Government of Ukraine. But the Trump team simply raised the issue directly with the Ukrainian government, sources said.

The IMF and the European Bank for Reconstruction and Development did not respond to the request for comment.

Former US officials and industry sources said that it was not clear that Perry fully grasped the potential implications of shaking the board and that the Zelenskiy government in Kiev would perceive it as linked to other efforts by Giuliani to find derogatory information about Trump's political opponents.

"From the United States perspective, these were separate things," said a former US official.

"But if you are a Ukrainian, how do you not connect the dots?"

"They are very familiar with this style of behavior. This is how the oligarchs work," said the official. "The only difference is that we told them not to do it, and now we are doing it. "

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