Cable Viewer

Currently released so far... 3371 / 251,287

### Articles

Brazil Sri Lanka United Kingdom Sweden Editorial United States Latin America Egypt

### Browse latest releases

2010/11 2010/12 2011/01 2011/02
2010/11/28 2010/11/29 2010/11/30
2010/12/01 2010/12/02 2010/12/03 2010/12/04 2010/12/05 2010/12/06 2010/12/07 2010/12/08 2010/12/09 2010/12/10 2010/12/11 2010/12/12 2010/12/13 2010/12/14 2010/12/15 2010/12/16 2010/12/17 2010/12/18 2010/12/19 2010/12/20 2010/12/21 2010/12/22 2010/12/23 2010/12/24 2010/12/25 2010/12/26 2010/12/27 2010/12/28 2010/12/29 2010/12/30
2011/01/01 2011/01/02 2011/01/04 2011/01/05 2011/01/07 2011/01/09 2011/01/10 2011/01/11 2011/01/12 2011/01/13 2011/01/14 2011/01/15 2011/01/16 2011/01/17 2011/01/18 2011/01/19 2011/01/20 2011/01/21 2011/01/22 2011/01/23 2011/01/24 2011/01/25 2011/01/26 2011/01/27 2011/01/28 2011/01/29 2011/01/30 2011/01/31
2011/02/01

### Browse by creation date

66 72 73 75 79 86 88 89 90 00 01 02 03 04 05 06 07 08 09 10
1966/12
1972/02 1972/08
1973/04
1975/03
1979/08
1986/05
1988/01
1989/12
1990/01 1990/07 1990/08
2000/09 2000/11
2001/02 2001/03 2001/07 2001/10
2002/02 2002/03 2002/11
2003/03 2003/04 2003/05 2003/06 2003/07 2003/08 2003/09 2003/10 2003/11 2003/12
2004/01 2004/02 2004/03 2004/04 2004/05 2004/06 2004/07 2004/08 2004/09 2004/10 2004/11 2004/12
2005/01 2005/02 2005/03 2005/04 2005/05 2005/06 2005/07 2005/08 2005/09 2005/10 2005/11 2005/12
2006/01 2006/02 2006/03 2006/04 2006/05 2006/06 2006/07 2006/08 2006/09 2006/10 2006/11 2006/12
2007/01 2007/02 2007/03 2007/04 2007/05 2007/06 2007/07 2007/08 2007/09 2007/10 2007/11 2007/12
2008/01 2008/02 2008/03 2008/04 2008/05 2008/06 2008/07 2008/08 2008/09 2008/10 2008/11 2008/12
2009/01 2009/02 2009/03 2009/04 2009/05 2009/06 2009/07 2009/08 2009/09 2009/10 2009/11 2009/12
2010/01 2010/02

### Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z
Embassy Athens Embassy Asuncion Embassy Astana Embassy Asmara Embassy Ashgabat Embassy Ankara Embassy Amman Embassy Algiers Embassy Addis Ababa Embassy Accra Embassy Abuja Embassy Abu Dhabi Embassy Abidjan Consulate Amsterdam American Institute Taiwan, Taipei
Embassy Bujumbura Embassy Buenos Aires Embassy Budapest Embassy Bucharest Embassy Brussels Embassy Bridgetown Embassy Bratislava Embassy Brasilia Embassy Bogota Embassy Bishkek Embassy Bern Embassy Berlin Embassy Belgrade Embassy Beirut Embassy Beijing Embassy Bangkok Embassy Bandar Seri Begawan Embassy Bamako Embassy Baku Embassy Baghdad Consulate Barcelona
Embassy Copenhagen Embassy Conakry Embassy Colombo Embassy Chisinau Embassy Caracas Embassy Canberra Embassy Cairo Consulate Curacao Consulate Casablanca Consulate Cape Town
Embassy Dushanbe Embassy Dublin Embassy Doha Embassy Djibouti Embassy Dhaka Embassy Dar Es Salaam Embassy Damascus Embassy Dakar Consulate Dubai
Embassy Freetown
Embassy Guatemala Embassy Gaborone
Embassy Harare Embassy Hanoi Consulate Hamburg
Iran RPO Dubai Embassy Islamabad Consulate Istanbul
Embassy Jakarta Consulate Jerusalem Consulate Jeddah
Embassy Kyiv Embassy Kuwait Embassy Kuala Lumpur Embassy Kinshasa Embassy Kigali Embassy Khartoum Embassy Kampala Embassy Kabul
Embassy Luxembourg Embassy Luanda Embassy London Embassy Lisbon Embassy Lima Embassy La Paz Consulate Lagos
Mission USNATO Embassy Muscat Embassy Moscow Embassy Montevideo Embassy Monrovia Embassy Minsk Embassy Mexico Embassy Maputo Embassy Manama Embassy Managua Embassy Madrid Consulate Munich Consulate Montreal Consulate Monterrey
Embassy New Delhi Embassy Nassau Embassy Nairobi Consulate Naples
Embassy Ouagadougou Embassy Ottawa Embassy Oslo
Embassy Pristina Embassy Pretoria Embassy Prague Embassy Port Au Prince Embassy Phnom Penh Embassy Paris Embassy Paramaribo Embassy Panama Consulate Peshawar
Embassy Quito
REO Basrah Embassy Rome Embassy Riyadh Embassy Riga Embassy Reykjavik Embassy Rangoon Embassy Rabat Consulate Rio De Janeiro Consulate Recife
Secretary of State Embassy Stockholm Embassy Sofia Embassy Skopje Embassy Singapore Embassy Seoul Embassy Sarajevo Embassy Santo Domingo Embassy Santiago Embassy Sanaa Embassy San Salvador Embassy San Jose Consulate Strasbourg Consulate Shenyang Consulate Shanghai Consulate Sao Paulo
Embassy Tunis Embassy Tripoli Embassy Tokyo Embassy The Hague Embassy Tel Aviv Embassy Tehran Embassy Tegucigalpa Embassy Tbilisi Embassy Tashkent Embassy Tallinn
USUN New York USEU Brussels US Mission Geneva US Interests Section Havana US Delegation, Secretary UNVIE Embassy Ulaanbaatar
Embassy Vilnius Embassy Vienna Embassy Vatican Consulate Vladivostok
Embassy Windhoek Embassy Wellington Embassy Warsaw
Embassy Yerevan Embassy Yaounde
Embassy Zagreb

### Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
AO AF AL AE ASEC AORC AJ AM AR AEMR AMGT APER AG AS AU AGMT AFIN ABUD ATRN ACOA AEC AX AMED ADCO AODE AFFAIRS AC ASIG ABLD AA AFU ASUP
BM BIDEN BO BR BU BEXP BRUSSELS BL BK BA BILAT BTIO BH BE BX BY BG BF BB BC BBSR
CU CH CO CI COUNTERTERRORISM CA CY CVIS CMGT CASC CJAN CE COUNTER CBW CG CLINTON CDG CIA CACM CDB CS CD CV CF CN CAN CIS CM CONDOLEEZZA COE CR CTM COUNTRY CLEARANCE CPAS CWC CT CKGR CB CACS
DOD DJ DA DEAX DR DHS DOE DEA DK DISENGAGEMENT
ETRD EFIN EAID ES ECON EWWT EINVEFIN ELAB EU ETTC ENRG EUN EC EG EINV EXTERNAL ER ECIN EPET EAGR EIND ECPS EMIN ECIP EINDETRD EN EZ ET EUC EI EAIR ELTN EREL EFIS EINT ENVR ECA EINVETC ENIV EINN ENGR EUR ELECTIONS ECUN
FR FMLN FARC FJ FINR FAO FTAA FREEDOM FI FBI
GG GM GOI GZ GTMO GV GH GA GE GT GR GTIP GCC GAZA
HO HURI HILLARY HA HU HR HUMAN HYMPSK
IR IZ IN IS IMO INTERPOL IT INRB IAEA ID IV ICTY IQ ICAO IPR IRAJ INRA INRO IC IIP ITPHUM IWC IO ISRAELI IRAQI ICRC IF ILC IEFIN INTELSAT ITALY ITALIAN
JO JA JOSEPH JAMES JUS
KDEM KIRF KNNP KN KISL KJUS KTFN KWBG KPAL KPKO KSCA KCRM KR KWMN KU KV KE KCOR KPAO KG KTIP KICC KBCT KSPR KHLS KTIA KMDR KGHG KUNR KS KFRD KIPR KAWC KPWR KCIP KSUM KWAC KMIG KOLY KZ KAWK KSEC KIFR KDRG KDEMAF KFIN KGCC KPIN KBIO KHIV KNUC KPLS KIRC KACT KGIC KRAD KCOM KMCA KHDP KVPR KDEV KPRP KCFE KOCI KTDB KMRS KLIG KGIT KSTC KPAK KNEI KSEP KPOA KFLU KNUP KNNPMNUC KOMC KO KTER KHUM KRFD KBTR KDDG KWWMN KFLO KSAF KBTS KPRV KMPI KNPP
LY LG LE LH LU LI LO LOG
MTCRE MOPS MARR MO MASS MNUC MY MX MCAP MPOS MAR MD MZ MEPP MA MR ML MIL MOPPS MTCR MAPP MU MG MASC MCC MK MTRE MP MDC MEPI MRCRE MI MT MQADHAFI
NATO NL NI NZ NG NU NO NIPP NE NS NAR NPT NPG NK NSG NA NT NASA NATIONAL
OVIP OTRA OPRC OSCI OTR OVP OREP ODIP OPDC OIIP OFFICIALS OSAC OAS OEXC OFDP OSCE OPIC OECD OPCW
PREL PHUM PGOV PINR PARM PBTS PHSA PTER PK PINS PSI PA PE PO PINT PL PSOE PU POL POLITICAL PARTIES PROP PBIO PECON PM PREF PAK POGOV PINL PKFK PGOF PMIL PTERE PF PALESTINIAN PY PGGV PNR POV PAO PFOR PHALANAGE PARTY POLITICS PEPR
QA
RS RU RW RO REGION RP RIGHTS RICE ROBERT RF RFE
SP SCUL SA SNAR SOCI SMIG SY SU SR SENV STEINBERG SN SO SF SG SW SL SHUM SZ SYR ST SANC SC SAN SIPRS SI
TW TU TSPA TRGY TI TX TS TC TERRORISM TPHY TIP TBIO TH TR TT TO TFIN TD TSPL TZ TK TNGD
UK UNGA UN UP UNO UZ UNMIK US UG UNSC USEU UV UY USUN UE UNESCO UAE UNEP USTR UNHCR UNDP UNHRC USAID UNCHS
VE VZ VT VTPREL VN VM
WI WTRO WTO WA WMO WTRQ WHO WWARD
XY XW XF XA XG XT XM XR XS XL XK XH XC XZ
YM YI YE
ZP ZR ZI ZU ZB ZK ZF ZANU ZOELLICK

### Browse by classification

CONFIDENTIAL CONFIDENTIAL//NOFORN SECRET SECRET//NOFORN UNCLASSIFIED UNCLASSIFIED//FOR OFFICIAL USE ONLY

### Community resources

Follow us on Twitter Check our Reddit Twitter this Digg this page

courage is contagious

### Viewing cable 08KYIV2294, UKRAINE: FIRTASH USES CRISIS TO EXPAND INTO BANKING

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:

- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.

To understand the justification used for the classification of each cable, please use this WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08KYIV2294.

Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
08KYIV2294 | 2008-11-21 14:02 | 2010-12-01 23:11 | CONFIDENTIAL | Embassy Kyiv

`

    VZCZCXYZ0005
    RR RUEHWEB

    DE RUEHKV #2294/01 3261448
    ZNY CCCCC ZZH
    R 211448Z NOV 08
    FM AMEMBASSY KYIV
    TO RUEHC/SECSTATE WASHDC 6757
    INFO RUCNCIS/CIS COLLECTIVE
    RUEHZG/NATO EU COLLECTIVE

` `

    C O N F I D E N T I A L KYIV 002294

    SENSITIVE
    SIPDIS

    DEPT FOR EUR, EUR/UMB, EEB/OMA
    TREASURY PASS TO TTORGERSON

    EO 12958 DECL: 11/21/2018
    TAGS EFIN, EREL, ETRD, PGOV, PREL, XH, UP
    SUBJECT: UKRAINE: FIRTASH USES CRISIS TO EXPAND INTO BANKING
    REF: A. A) KYIV 02080  B. B) KYIV 02207

    Classified By: Acting Economic Counselor William Klein for reasons 1.4 (b) and (d)

    ¶1. (C) Summary. Dmitry Firtash, one of Ukraine’s most wealthy and notorious oligarchs, plans to buy a controlling stake in Nadra Bank, Ukraine’s seventh largest bank. The acquisition of Nadra, which will join Firtash’s international holding company (Group DF) when the deal is final, would be Firtash’s first foray into Ukraine’s banking sector. The purchase of Nadra Bank continues a recent trend on Firtash’s part to diversify his asset base beyond Ukraine’s politically risky energy sector. He may also hope to use Nadra to service Group DF subsidiaries, or he may simply see the bank as a financial investment, bought on the cheap in a time of crisis, that can be sold once economic conditions improve. Before establishing himself as a billionaire gas trader in the late 1990s, Firtash managed a failing food processing company. He later broke into the gas trade and established himself as an intermediary through connections to key Ukrainian officials and reportedly to Russian organized crime figure Semyon Mogilevich. As co-owner of gas intermediary RosUkrEnergo (RUE), Firtash is widely believed to be serving as a front man for far broader interests. In the case of Nadra, Firtash is sufficiently cash-rich to finance the purchase on his own, but the suspicion remains that in his major business dealings he remains at least politically indebted to the forces that helped him rise so quickly. End Summary.

    Despite Crisis, Firtash Moves Into Banking
    ------------------------------------------

    ¶2. (C) Firtash’s international holding company Group Dmitry Firtash, or Group DF, in early November announced intentions to acquire a controlling stake in Nadra Bank, marking Firtash’s first bank acquisition. The National Bank of Ukraine (NBU) propped up Nadra with a UAH 3.6 billion ($609 million) loan after a run on its deposits ostensibly caused a liquidity crisis at the bank. Various explanations as to the cause of Nadra’s problems have circulated in the media, but an Embassy contact told us on November 17 that Nadra Bank did not actually have any liquidity problems until its competitors began spreading rumors about Nadra’s financial stability. In any case, a liquidity crunch at Nadra ensued and the NBU pressured Nadra to sell a controlling stake of its shares. No final terms of the Group DF deal have been concluded -- it is scheduled to be completed within the next few weeks -- but Group DF reportedly could pay as little as $50 million for an 86.7 percent stake in Nadra. According to one Nadra Bank stakeholder, Nadra Bank could have been sold for UAH 21.3 billion ($4.23 billion) before Ukraine’s recent financial problems began.

    ¶3. (SBU) Nadra is the second Ukrainian bank after Prominvestbank (Ref B) to change hands in the weeks since the financial crisis erupted in Ukraine. In both cases, stakeholders in the banks and many other market participants claim that the runs on the banks were orchestrated. In addition, in both cases cash-rich Ukrainian business interests with no significant banking holders got the NBU nod to take a controlling stake in the bank (brothers and Party of Regions deputies Sergei and Andriy Kluyev are universally assumed to have bought Prominvestbank, although they have yet to openly acknowledge the purchase.) While many market commentators question whether such investors are ideally suited to introduce the management and banking know-how that the banks need to restructure in difficult times, it is acknowledged that the NBU did not have much choice if it wanted to sell the banks quickly. Other banks, both foreign and domestic, are struggling with their own problems, and foreign banks in particular would have needed far more time to conduct a thorough due diligence. Many of our banking contacts also criticize what they say is the non-transparant manner in which the NBU sold off the two banks.

    ¶4. (SBU) Group DF’s CEO, Robert Shelter-Jones, has said that Nadra Bank complements Group DF’s strategy to diversify its asset base and that Group DF’s businesses probably will become important Nadra Bank customers. Nadra Bank could also help Firtash develop his Ukrainian businesses. Although Nadra mainly is geared toward retail business, it could be restructured to service corporate clients, such as Group DF’s current subsidiaries, according to some experts. Others, however, contend that because Nadra specializes in servicing small clients, Group DF is unlikely to use Nadra for Group DF subsidiaries. It is also possible that Firtash sees Nadra Bank as a pure financial investment, bought on the cheap at a time of crisis in the hope of reselling it once conditions in Ukraine’s banking sector improve.

    What Exactly is Group DF?
    -------------------------

    ¶5. (C) Established in June 2007, Group DF is an international holding company comprising energy, chemicals, real estate, and construction firms in Eastern and Central Europe. Combined revenues of Group DF’s subsidiaries in 2006 totaled $4.6 billion. The most infamous of Group DF’s assets is RosUkrEnergo (RUE), the non-transparent natural gas intermediary that handles gas transactions for Russia and Ukraine. Gas intermediaries, such as RUE and its predecessors EuralTransGas (ETG) and Itera, have benefited well-connected businessmen such as Firtash and have not always served an obvious economic purpose. (Note: In 2002, ETG was established with four employees in a Hungarian village. ETG that same year replaced Itera and secured exclusive rights to supply Turkmen gas to Ukraine, reportedly clearing $760 million in profits in 2003; Firtash later claimed to be ETG’s founder. RUE replaced ETG and reportedly generated more than $7 billion in 2006. End note.)
    ¶6. (C) Gazprom owns 50 percent of RUE, while Firtash and fellow Ukrainian businessman Ivan Fursin -- through Group DF company Centragas Holding AG -- control 45 and 5 percent stakes, respectively. Ukrainian media have reported, however, that Semyon Mogilevich, a Russian organized crime (ROC) figure wanted by the FBI and currently in custody in Russia, has long been linked to Firtash’s business activities.

    Firtash’s Ascent, the Mogilevich Connection
    -------------------------------------------

    ¶7. (C) The Ukrainian media have reported widely on how Firtash got his start in energy through a network of personal connections to some of the biggest players in Ukraine’s gas sector. These included Ihor Bakay, founder and former Chairman of Naftohaz Ukrainy, Yuriy Boyko, the Party of Regions deputy and former Fuel and Energy Minister, and Oleksandr Volkov, a former Prime Minister and Kuchma advisor.  Before entering the gas trade business Firtash with his spouse reportedly owned a canned food company called KMIL. By the end of the 1990s KMIL was in deep financial trouble. Firtash subsequently broke into the gas trade business as “food for gas” barter schemes between Ukraine and Turkmenistan increased when Ukraine did not have sufficient foreign exchange to pay for its gas imports. Firtash’s firms delivered food products to Central Asian suppliers and received gas in return. They subsequently sold the gas on Ukraine’s domestic market for domestic currency, or through other, often complex barter schemes.

    ¶8. (SBU) This barter business established Firtash as a gas trader, and the subsequent growth in the business brought to light his reported ties with Mogilevich. The two have been linked through ostensible joint holdings in off-shore vehicles, and through mutual personal relationships. In May 2000, for example, Firtash’s KMIL received a license to sell natural gas at unregulated prices. A company called Highrock Holding Ltd was registered in Cyprus in 2001 to facilitate this business. Firtash and his spouse together reportedly owned 33 percent of Highrock. About 34 percent of Highrock was owned by a firm called Agatheas Trading Ltd. Semyon Mogilevich’s ex-wife, Galina Telesh, reportedly was the director of Agatheas Trading from 2001 to 2003. Firtash in 2003 became the director of Agatheas Trading. In addition, Firtash and Mogilevich also have shared the same lawyer, Zeev Gordon, also known as Vladimir Averbukh, to represent their business and personal interests. Moreover, Ukrainian media report that former Hungarian Minister of Culture Andras Knopp XXXXXXXXXXXX became business partners with the Firtashs when Dmitry Firtash periodically resided in Germany during the 1990s. Knopp reportedly is the managing director of EuralTransGas.

    Group DF’s Assets, Besides RUE
    ------------------------------

    ¶9. (C) After establishing a presence in Ukraine’s non-transparent gas trade, Firtash and his associates began acquiring assets outside of Ukraine’s energy sector. Group DF probably recognized that while the gas intermediary business is very lucrative, the need for diversification in Ukraine is key, given that the political risks involved are very high. Prime Minister Yuliya Tymoshenko, for example, has called for the elimination of all gas middlemen and Gazprom Press Secretary Sergei Kuprianov on November 17 said that Gazprom next year would supply gas to Ukraine directly, suggesting gas intermediaries could be on their way out.

    ¶10. (C) In Ukraine’s chemicals sector, Group DF subsidiary OstChem Holding AG owns a little less than half of Crimean Titan, one of Europe’s largest titanium dioxide producers that has distributors throughout the world, including Iran, Russia, Belarus, Kazakhstan, and the U.S. OstChem this year has struggled with the Ukrainian State Property Fund -- the owner of the controlling stake in Crimean Titan -- for management control. In August, however, OstChem on Crimean Titan’s behalf successfully secured a 31 million euro ($45.7 million) loan from Commerzbank (with a guarantee from the German state export insurance agency) to build a new sulfuric acid plant. Firtash also reportedly owns the Kyiv Basketball Club and television channels K1, K2, and Megasport; his real estate assets in central Kyiv alone include the Arena business complex and the Mandarin shopping center, both high-end commercial objects in prime locations.

    ¶11. (C) Comment. Like other Ukrainian oligarchs, Firtash’s holdings are doubtless suffering from the severe economic downturn. The purchase of Nadra Bank, however, indicates that he remains sufficiently cash rich to expand in spite of Ukraine’s economic and financial troubles. The extent to which Kyiv powerbrokers or underworld figures benefit from Firtash’s business empire is unclear, but Embassy interlocutors have told us that Party of Regions recently has turned to close Firtash associates, instead of Ukrainian oligarch and Regions deputy Rinat Akhmetov, to finance Regions’ political campaigns (Ref A). Given Firtash’s swift ascent from failing canned foods company manager to multi-billionaire dollar gas magnate, he might still be beholden to the forces that helped him rise so quickly. End comment. TAYLOR

`