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The Globe and Mail’s interview with Dmitry Firtash in Vienna included a bodyguard, lawyer and various PR officials. (HERWIG PRAMMER FOR THE GLOBE AND MAIL)
The Globe and Mail’s interview with Dmitry Firtash in Vienna included a bodyguard, lawyer and various PR officials. (HERWIG PRAMMER FOR THE GLOBE AND MAIL)

The rise and fall of Ukrainian oligarch Dmitry Firtash Add to ...

Then it was off to the military, after which he joined the fire brigade in his home town, got married, had a kid and realized he would face a life of near poverty unless he boosted his income. As luck would have it, the political and economic reforms under perestroika in the mid-1980s, and the collapse of the Soviet Union a few years later, meant a capitalism free-for-all was about to be unleashed. Mr. Firtash became a trader, selling everything from bed sheets to dried fruit. With a partner, he once made a small fortune by selling dried milk to Uzbekistan and taking cotton in return. “My job was to ensure the cotton got to the port of Odessa, then was sold into Europe,” he said. “I made on the deal somewhere between $200,000 and $250,000. I was 24.”

Hooked on trading, he moved to Moscow, which was operating as an enormous souk at the time as representatives of the former Soviet republics came to town to barter and beg for life’s essential products. His big break came when he based himself in the Rossiya hotel, Europe’s biggest hotel until it was demolished in 2006. Located near Red Square, it was the city’s deal-making hub. There, he met a trade official from Turkmenistan. The country desperately needed food and Mr. Firtash raised money from acquaintances (some of whom are now famous oligarchs, he said) and delivered enough flour, oils and other products to fill entire warehouses. But the bill went unpaid for three months and his backers were getting surly. So he flew to Ashgabat and learned the government had no money. “The only product I could take in return was gas,” Mr. Firtash said. “It was effectively a barter trade. … Eventually, we contracted for almost the entire volume of central Asian gas.”

Rather suddenly, Mr. Firtash found himself in the unlikely role of gas tycoon. From the late-1990s, he was supplying Ukraine with almost all its imported gas, some of which was in turn sold into European spot markets, where he earned fortunes. In 2004, Mr. Firtash formed a joint venture in Switzerland with Russia’s Gazprom called RosUkrEnergo (RUE). The deal: Gazprom would get access to central Asian gas and the Ukrainian market and Mr. Firtash would gain access to Gazprom’s pipeline network, which extended into Europe. “Gazprom made no investment in the [joint venture] but got in return an awful lot,” he said.

Hints of criminal connections

This is where Mr. Firtash’s often murky investments became even murkier. While RUE was ostensibly more or less an equal joint venture, more than a few officials in the Ukrainian government believed the true power behind it was not Mr. Firtash, but Mr. Mogilevich, the mob boss. In 2005, Oleksandr Turchynov, now acting president, then head of Ukraine’s secret service, the SBU, told the Financial Times that “The name Mogilevich isn’t in the [gas trade] agreements or the ownership documents but there are many indications that a group of people under his control could be involved.”

Ms. Tymoshenko, the former prime minister, made the same accusation a year later on BBC’s Panorama program. Mr. Firtash denies the allegations. “He was not involved in the business and not associated with the business,” he said.

But a curious and widely reported story, first published by Wikileaks in 2010, suggested that Mr. Firtash did have some sort of relationship with Mr. Mogilevich. In 2008, Mr. Firtash requested a meeting with Gordon Taylor, then the U.S. ambassador in Ukraine. A cable sent to the U.S. State Department after the meeting stated: “Firtash’s bottom line was that he did not deny having links to those associated with organized crime. Instead, he argued that he was forced into dealing with organized crime members, including Mogilevich, or he would never have been able to build a business.”

Mr. Shetler-Jones, Mr. Firtash’s deputy chairman, confirmed that the meeting with the ambassador did happen, and that Mr. Firtash did on one occasion meet Mr. Mogilevich. “But the comments [reported in the cable] in reference to Mogilevich were not made by Dmitry Firtash,” he said.

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