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    December 23, 2016

    The main question after the nationalization of Privat-Bank: Will USA pay back what Kolomoisky has stolen?

    The main question after the nationalization of Privat-Bank: Will USA pay back what Kolomoisky has stolen?
    Your own bank is the easiest one to rob.

    Fort Russ, December 22, 2016
    Translated by L. Gimalieva, edited by Tatzhit Mihailovich

    [pictured: Kolomoyski and Gontareva (head of NBU). source]

    The nationalization of "Privat-Bank" was expected after the "CyberBerkut" hackers exposed Poroshenko/Biden talks on the conditions for further IMF loans. Once it became clear that the nationalization of Kolomoisky’s bank would be one of IMF’s requirements, the future was obvious. The US government and the IMF had closely monitored the situation with "Privat-Bank" for a while now. I remember seeing the calculations on Privat’s nationalization about a year ago, with the expected cost of about 100 billion UAH.

    Why did the Americans believe that nationalization was necessary? Because Kolomoisky was using "Privat-Bank" to constantly siphon money from the Ukrainian budget. The method was simple and elegant: By giving high interest rates on deposits, "Privat" became the №1 bank in terms of money deposited by the [Ukrainian] population. 

    [Privat-bank branch with an ad, promising best rates in the country - 20% yearly interest in hryvna, 10% yearly interest in dollars]

    Privat opened those accounts, even if it meant operating at a loss - because this enabled Kolomoisky to pressure the government, threatening the collapse of the banking system if the National Bank of Ukraine (NBU) does not bail out Privat [time after time]. He used essentially the same kind of financial blackmail back in the days of Yanukovych, too. So, under both governments, NBU was repeatedly forced to print additional money and give it to Kolomoisky.

    As you may recall, the first collapse of the UAH/dollar exchange rate happened when Kolomoisky received his first “refinancing” (bailout – ed.) after the Maidan. And note that he received this additional money using his assets in Crimea as collateral, even though it was already obvious that these assets would be nationalized by the Russian government. He even had the gall to inflate the value of this “collateral” about tenfold. Kolomoyski then used the billions of hryvna that he received from the National Bank to purchase huge amounts of dollars and euros, which in turn collapsed the UAH exchange rate.

    (Also, I would be quite surprised if the Kiev bunch doesn’t try to sue Russia for the inflated value of those Crimean “assets” that Kolomoisky used as a smokescreen to steal the National Bank money – ed.).

    As Kolomoisky kept on “milking” the National Bank on a regular basis, Americans grew tired of sending money to NBU, knowing that it would be used to line Kolomoisky’s pockets instead of serving its purpose. If we analyze the capital of our oligarchs, the balance between assets and liabilities of Kolomoisky looks radically different from the other oligarchs. All Ukrainian oligarchs are bankrupt - they all have much more liabilities (i.e. debts) than assets. Oligarchs are essentially owned by commercial banks, mainly foreign. Why were they forced to support the Maidan? Because they were all deeply in debt to foreign banks. But Kolomoisky’s situation is different –all his debts are owned by the Ukrainian population.

    “Forbes” often publishes rankings of the oligarchs. When they write that the fortune of one or the other billionaire is X number of $billions, this is the cost of entities which he/she owns. But no one reveals the amount of loans that they have. Because if they did reveal this amount, it would turn out that they were bankrupt. Kolomoisky would also be bankrupt if he was forced to return all the money he stole from the population through "Privat-Bank", but he had no wish to return this money himself. So, for many years, Kolomoisky would siphon money from his financial enterprises, then his own firms would pump these funds abroad, [and then he would demand a bailout]. Over the years, over a billion dollars were pumped out of the Ukrainian budget that way.

    However, Kolomoisky did not resist the nationalization of "Privat-Bank" too strongly. Why? Because the possession of "Privat" is no longer a priority for him. Of course, he would like to continue using it as means of siphoning off money from the government, but government does not want to continue giving money. And the bank itself has no money left in it. So there is no point for Kolomoisky to fight hard over a bankrupt bank. On the contrary, this presents a good opportunity to pass off Privat, and all its debts, to the government.

    Therefore, the main mystery related to the nationalization of “Privat” is not in the nationalization itself, but rather what will happen next. Will the Ukrainian government (at the orders of the American “curators”), or the Americans themselves, try to shake down Kolomoisky for the money that he has stolen? The IMF money, which was given to UA National Bank and was then siphoned into Kolomoisky’s pocket – that ultimately belongs to the Americans, so it is quite possible that they will start looking for Kolomoisky’s money themselves. I doubt that the corrupt Ukrainian government is capable of finding the stolen money on their own. I repeat: the main question in the nationalization of "Privat-Bank" is in whether the Americans will successfully recover the stolen money from Kolomoisky.

    So, for the past several years, Kolomoisky was siphoning the money [from the government and the people] via “Privat-Bank” and moving it from one offshore account to the next. But today, the only places where money can be hidden from the Americans are Russia and China. And China will not hide Kolomoisky’s money without consulting Russia first. Therefore, if the Americans do start searching for Kolomoisky’s money, his only recourse may be to appeal to Russia. And then Russia may remember Kolomoisky's financing of nazi battalions and his involvement in the Odessa Massacre.

    One more question remains unanswered. Kolomoisky is not only a  high-profile player in the financial sector,  but also a prominent figure in the European Jewish movement, being a member of many prestigious Jewish organizations and a leader in several of them. So why aren’t his fellow Jews supporting him? Basically, because no one wants to see IMF money being shamelessly stolen. Furthermore, Kolomoisky is currently involved in several court cases in the US; the plaintiff is another Jewish entrepreneur who is successfully seizing Kolomoisky’s properties in the United States. Kolomoisky has also lost a case against Pinchuk[1] in London. There is also a legal case against "Tatneft"[2].

    Will Kolomoisky be able to evade the investigation over the stolen money, or will this be the beginning of the end? If the world's financial authorities are instructed to "seize" Kolomoisky’s money, he is finished. If Kolomoisky manages to get away with it, then he has done very well for himself, having squeezed out all the money that he could from “Privat”. In fact, he robbed “Privat” several times - both by stealing the people’s deposits, and by stealing the bailouts that the government repeatedly gave him. And in the end, he passed off the bank with no money in it to the government!  [That same government which will now have to rob the people even harder, to stabilize “Privat” and pay off the IMF loans that Kolomoisky stole]!

    If I had a deposit in  "Privat-Bank", I would try to take my money out as quickly as possible, the sooner the better. The government will now have to print money again[3], which may very well lead to another collapse of the hryvna. Therefore, dollars or euros are a much more secure investment than UAH.

    In the meantime, Kolomoisky will be doing everything he can to look like the victim in this situation. He will be the one shouting "Stop the thief!" the loudest, whilst pointing at the Kiev government.

    Further reading:

     1. Earlier article on the subject on banking machinations in Ukraine -

     2. Older piece from an outside source, specifically describing Kolomoisky’s stealing of IMF loans -

    Notes from the editor:
    [1] Another Ukrainian oligarch. Pinchuk has widely reported ties to the Clinton Foundation
    [2] Russian oil company
    [3] There are hints from the head of National Bank that Kiev government will be releasing 1,000 hryvna bills in early 2017 (previously, the largest denomination was 500 hryvna). 

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