09/02/15 – Andrew Cockburn – The Scott Horton Show

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All right, you guys, welcome back to the show.
I'm Scott Horton on the line.
I got Andrew Coburn.
I love me some Coburns, man.
Used to love Alex.
He's gone now.
But Patrick, of course, is the greatest war reporter in the world.
And his brother, Andrew, does incredible work on the national security state here in the United States and how it works and operates at those levels.
Welcome back to the show, Andrew.
How are you, sir?
Hey, Scott.
Good to be with you.
Very happy to have you back here on the show.
Undelivered goods, how $1.8 billion in aid to Ukraine was funneled to the outposts of the international finance galaxy.
What fun.
Tell us, first of all, you do a good job in the intro to the article here, giving us kind of the rundown, the catch up.
Pretend nobody in the audience ever heard of American intervention in Ukraine.
Let us know, you know, I don't know, as you do here, kind of late 2013 through now.
What's the crisis in the context?
So then we can get to where all the money went.
OK, fine.
Well, Ukraine, the country of Ukraine, is unfortunately kind of an economic basket case.
Maybe mostly because all of the place is really controlled by these so-called oligarchs who, you know, basically control the economy.
You know, help themselves to big chunks of what was the Soviet economy there.
So that being the case.
Well, let me say, in 2013, it was decided that we should, that the IMF should give a huge amount of money to Ukraine.
Because, you know, to save a guy younger, to save the currency and all those good things.
So they announced that they were going to send $17 billion altogether and they were sending $4 billion immediately.
Now, the most important destination for this money was the country's banks, which are all going belly up.
And most specifically, the largest bank, which is called Privatbank.
And as it so happens, Privatbank is owned by a character called Igor Kolomoisky.
Or Igor, if you go by the Ukrainian spelling.
And Mr. Kolomoisky is quite well liked in Washington, or was quite well liked.
Because he, when the Ukrainian, the eastern Ukrainians sort of decided they didn't care much for this sort of right wing government of this very nationalist government that appeared in Kiev.
And they started to sort of agitate for separatism and separation and being backed by Putin's Russia.
And were advancing westward.
Mr. Kolomoisky, who controlled the big powerful economic region of Dnepropetrovsk, told all these workers to stop work and enlist in his private army, which he'd set up.
And so the Kolomoisky private army kind of stopped the westward advance of the separatists.
So OK, so got it so far.
Kolomoisky, popular in Washington, owns the biggest bank in the country.
Biggest bank is in big trouble, is going under huge international loan money, $4 billion wired to the Ukrainian National Bank.
And half of that goes to Mr. Kolomoisky's bank.
And indeed, it was sorely needed.
You know, the economy is going butt and all these people, people going without wages and so on, so forth.
So what happened then?
Well, the money, $1.8 billion of that didn't go to really to prop up the Ukrainian economy.
It went by a fairly magical process or not very magical process, fairly straightforward process.
It went offshore first to Cyprus and then off to the British Virgin Islands and to Antigua and to Belize and all those sort of big financial hotspots and disappeared.
So we have a situation where our guy in Ukraine or one of our guys in Ukraine basically presides over an operation that swipes $1.8 billion.
And that's, I think, the piece we're discussing today.
Yeah.
So, well, we can get back to how we got into this mess and all that in a minute.
But I like the way you describe the scam.
And, you know, it's very interesting to those of us who have never had those kinds of large amounts of money to move around in business or personally or any other way to just see how these kinds of things are done.
So the U.S. government basically prints the money or conjures it up in a computer with their magic police power.
And then they give it to the IMF and then the IMF gives it to this guy's bank.
And then how is it that he doesn't just put it straight in his pocket?
He's got to bounce it off the roofs of a couple of places first and then it goes back in his pocket.
How's that?
OK, well, here's a primer for anyone who wants to steal $1.8 billion from the IMF owns a bank.
So basically what he did was he, the bank, lent, made big loans to a series of Ukrainian companies, which as it so happened, seemed to be controlled indirectly by Mr. Kolomoisky, who owned the bank.
And this money, these companies in turn ordered big, made big orders to overseas firms to import goods like, I don't know, cranes and there was a ice processing, a refrigeration plant, all sorts of stuff like that.
And oddly enough, these companies seemed also to be controlled indirectly by entities which were in turn controlled by Mr. Kolomoisky.
And the Ukrainian firms that had ordered these goods to the total value of $1.8 billion made advance payments pending the arrival of these goods of 100 percent.
So if they'd ordered $100 million, you know, refrigeration plant, they sent $100 million into the bank accounts of the companies they were buying the stuff from, which as it so happened, these accounts were in the Cyprus branch of Privatbank, Mr. Kolomoisky's bank.
So if you follow me so far, the bank that's owned by Kolomoisky lends money, gets the money from the IMF, from the central bank, which has got it from the IMF, they lend the money to companies which are owned by Kolomoisky.
The companies then send advance payments, orders goods and send advance payments to other companies that are owned by Kolomoisky.
And the money goes into the bank, the branch of the bank that's also owned by Kolomoisky.
And then the money goes off into other entities, you know, as I say, as we said, in the far reaches of the financial galaxy and mostly in the Caribbean and hasn't been seen since.
So okay, now, how do you make this legal?
This is the important thing.
Anyone who wants to try and do this should know this is an important twist.
As time went by, and no goods, of course, were arriving, the companies that had ordered the machinery and other stuff from abroad, they sued in the local court in the city that's controlled by Mr. Kolomoisky, where he was the governor, and said, oh, you know, we've ordered all these goods and they haven't arrived, we want our money back.
And by the way, we also want to be let out of the loan, you know, relieved from the obligation to pay back the loan we got from PrivatBank.
So and in 42 out of 42 cases where these suits were brought, the court said, A, no, you're still on the hook for the loan.
And B, no, you can't, you can't get the money, you're not, you're not getting the money back from abroad.
In other words, legally, the loan is still on the books.
So PrivatBank can say, well, you know, we're still owed these goods, we're still owed this money, and it's all guaranteed by these goods that have been ordered from abroad, which have yet to turn up.
In other words, there were legal fig leaves over the whole thing.
And this was first uncovered by a group of very plucky people's investigators in Ukraine.
Yeah, he said they just read it right in the court records.
There's nothing secret about it, whole scams right there.
I'm sorry, I got to interrupt you and stop you here and go out to this break.
But we'll be right back, everybody, with Andrew Coburn, author of Kill Chain, and this book, pardon me, this blog at Harper's, Undelivered Goods, about the theft of your tax money by Ukrainian oligarchs.
Hey, Al, Scott Horton here to tell you about this great new book by Michael Swanson, The War State.
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All right, you all, welcome back here.
I'm Scott Horton.
This is my show, The Scott Horton Show.
All right, Andrew Coburn, he wrote the book Rumsfeld, His Rise, Fall, and Catastrophic Legacy.
You should read that thing, man.
I'm telling you what, it'll blow your mind.
There's so much stuff in there.
Anyway, that's just the stuff I can remember.
There's even more stuff than that.
And then his new book is Kill Chain, The Rise of the High Tech Assassins.
But here he is writing about the corruption in post-coup d'etat Ukraine, and this guy, Kolomaisky, there you go, let him say it.
So you said he got in good with the Americans because after the coup, when the rebels in the East were really winning, he raised up a private army with his billions that put a halt to their advance.
And so that was what won him the, I guess, friendship and loyalty of Victoria Nuland and the crew, huh?
Correct.
Victoria Nuland, for those, you know, to remind people, she's the Assistant Secretary of State for Eastern Europe.
And she's really been running our Ukraine policy.
And it's amazing.
I mean, she's had an amazing career.
She was an important person in the Clinton State Department, Chief of Staff to Strobe Talbot, who was Deputy Secretary of State.
Then she was Dick Cheney's foreign policy advisor.
Then she was ambassador to NATO.
Then she was Hillary Clinton's spokesperson.
Now she's got this job running Eastern Europe.
And she is married to Robert Kagan, who's like the sort of most fanatical of the neocon ideologues.
In other words, this is a dyed-in-the-wool neocon who has been stoking up the tensions in Ukraine for many years now.
And, you know, it's very dangerous.
Ukraine goes in and out of the news.
And yet, you know, here we are confronting what is still a major power.
I guess you can call Russia a superpower still.
It's got lots of nuclear weapons.
And no one seems to be paying much attention.
And I tell this story of how basically one of our guys ripped off almost $2 billion and has now been given shelter in this country, by the way.
He's living happily, I think, in Milwaukee at the moment.
So it's a pretty shocking state of affairs.
Yeah, the whole thing is ridiculous.
And by the way, if anybody wants to read about Victoria Nuland, there's a great old article from, I don't know, 10 years ago or something by Jim Loeb called All in the Neocon Family.
And it begins with a little bit of a profile of her.
But it's really about how all of the worst neocons, you could basically fit at one Thanksgiving dinner.
It's all the axis of Midge Dechter or whatever, you know, like the Podhoretses and the Crystals and their relatives, you know, down at Elliott Abrams and whatever.
It's a very, very tightly knit group there.
And in fact...
Oh, go ahead.
Well, I was just gonna say, it's amazing.
Yeah, as you say, there's so few of them and how, you know, they retain their grip on power.
You know, Nuland's a good example.
But I mean, maybe they had their nose a little bit put out of joint with this Iran business.
But I mean, basically, they've, you know, administrations come and go, but they're still there.
It's just incredible.
Well, and yeah, I mean, they completely set the agenda for the entire argument about virtually every policy on TV and in the discussions, and it's just because they don't quit.
Bill Kristol, he never stopped smiling.
He always seems like a nice guy, kind, if you don't listen to what he's actually saying.
And people just, I think in D.C., I mean, I don't live there.
Maybe you could help me.
But it seems like people figure, well, at least we know he'll have a very informed comment to say about whatever it is.
So they just bring him on and he just gets to set the agenda to such a degree.
It's crazy.
It's outrageous.
I just want to go back to this.
The money being stolen.
I mean, you know, it's fairly complicated, but, you know, that they basically, there's this legal mechanism and they swipe, you know, almost $2 billion.
No one's making the slightest effort to, you know, either indict anyone or to get the money back.
And I want to contrast that with the IMF.
I mean, the IMF certainly isn't.
Meanwhile, the IMF is part of the gang that's screwing the poor old Greeks to the wall and forcing them to sort of, you know, you know, this mad sort of austerity program that they've got to endure for years and decades to come because the Greeks were, you know, committed the crime of electing us a left wing populist government.
Meanwhile, we got this bunch of criminals in Ukraine who get, you know, pretty much our wholehearted support.
It's completely, you know, I think it's important to look at this, look at this story to see how the world really works.
Yeah, absolutely.
Well, and tell me this.
Do you know whether the Kiev government, the coup d'etat junta there, do they even mean to implement the Minsk two agreement?
Because it seems like they've been, you know, still fighting in the east this whole time.
And they're supposed to recognize this newly granted amount of autonomy for the east so that they wouldn't have anything to fight about anymore.
And yet the fighting continues.
Well, you know, it's been noticed in the past that every time they need, they run out of money because it's all been stolen.
They announced that the easterners have broken the ceasefire.
And so everyone in the West throws up their hands and rushes money and aid to Kiev.
And, you know, suddenly there's plenty of people who'll tell you that they're the ones who break the ceasefire.
So I don't know.
It could be maybe sanity is breaking out in defiance of Newland.
And maybe this Minsk, the Minsk agreement, Minsk two will be observed and, you know, the easterners will get their semi autonomy.
And but I don't think so.
I think there's such a head of steam up behind the sort of get Russia clique that they're not going to stop now.
I mean, you know, we have I mean, we have now I think I could be wrong on the numbers.
Something getting close to a thousand NATO troops now in Ukraine training, you know, the Ukrainian forces.
The pressure, as I mentioned in my article in Harper's on the Harper's website, you know, ever all the time, the rhetoric in Washington about we must send military aid to Ukraine.
We we you know, we really, you know, Tom Daschle, important Democratic lobbyist, former majority leader, says we should send three to three million dollars, three billion, excuse me, three billion dollars in aid, military aid to Ukraine.
So it's being jacked up all the time.
I think it's really sinister.
I think it's you know, it's I'd like to think that everyone's going to observe the Minsk agreement and we can all be happy, but I'm not not hopeful.
Yeah, I mean, I guess it was just week before last they announced that they're not just training up the National Guard, which is a nice euphemism for a bunch of Nazis.
But now they're going to go ahead and train up the entire army.
And apparently there's thousands of Canadians and Australians and British and and I guess, you know, that that whole Anglophone alliance there.
And, you know, I don't know if this is really relevant or not, but I was reading a couple of stories about Hillary Clinton's emails and about while there's this one in Politico about how there's this one lady who ever talks to her like a peer and tells her no, disagrees with her about anything.
Where everyone else is the lowest, most pathetic form of sycophant you can imagine, right?
To make Smithers look like Burns.
And and so, I mean, what comes out of that is that no one ever tells her she's wrong about nothing.
So therefore she doesn't know nothing.
She starts out wrong about everything.
No one ever informs her opinion whatsoever.
So she's basically, you know, deaf, blind and stupid up there as bad as George W. Bush, it seems like.
And I just wonder whether you think like that's really what's going on.
Kind of you said the head of steam behind this hate Russia thing.
It's that stupid, isn't it?
Well, geez, John McCain and Hillary Clinton agree that Vladimir Putin is a really bad guy.
So let's just jump on this bandwagon.
And and there's no one really saying, come on, guys, we all know we're lying, right?
Like it was we did the coup and they're just reacting as long as as long as we know we're lying.
It's OK.
But let's let's make sure we don't really believe our own stupid slogans here.
But I'm not so sure that it's really like that, you know?
Yeah, exactly.
So exactly.
So, I mean, the best, most terrifying word, you know, in the Washington context is consensus.
And once you've got the consensus on something, you know, you know, we're in for trouble.
And now they're all agreeing, you know, they absolutely agree that, as you say, you know, Putin bad, you know, gallant little Ukraine, you know, has to be saved.
And, you know, I think I think that I've had people, you know, important people in Washington say it's time we have to send a lethal, lethal, defensive weapons to Ukraine to kill more Russians.
I mean, I swear to God, I've actually I've actually heard sort of high level State Department people say that.
Yeah.
And in fact, that's kind of the the the talking point, like weapons of mass destruction kill Russians.
That's what they're saying.
In fact, when when they had the Brookings report that came out and they had man, I'm sorry, I'm forgetting the name of the ambassador who had it was Michelle Flournoy and a few others had had done this report, I guess, about a year ago now saying that we needed to send all these weapons.
And I and I remember the guy was interviewed on National Public Radio, the head ambassador.
Man, if chat room guys, if you know the name of the guy I'm thinking of, help me out here.
But you call Herbst or something, the former ambassador to Ukraine.
No, no.
Anyway, but his argument was that if we kill Russians, if the war in Ukraine gets worse and we're sending we're killing more Russians and sending more Russians home in body bags, then that will upset the mothers of the dead soldiers.
And that will cause the debate to go up in Russia.
That was how he said it.
The debate to go up that we're going to make the debate go up.
Well, so by killing Russians and sending Russians home in body bags, their so-called calculus is that it will become politically impossible for Putin and everybody to his right to wage a war to avenge those deaths.
Oh, hell no.
That's not even possible in this universe.
It will.
After the debate goes up, they'll decide to just let America screw them in Ukraine as bad as we want.
And they'll no longer do anything about it.
What a brilliant policy.
Yeah.
By the way, I think it is.
I think we are talking about John Herbst.
He's a complete maniac.
It could be.
Ambassador to Ukraine.
I was thinking it was a longer like three syllable name with an A at the beginning somewhere, but I'd have to look at it.
But anyway, I mean, all these I mean, but that's kind of the level of argument here.
We're going to send dead Russians home when they're kind of pretending that there's been this, you know, giant invasion by the Russian infantry anyway.
But assuming that there are some special forces there, which I guess is a safe assumption that I mean, is that really what passes for an argument?
Is that by killing them, that's going to make them want to bow down to us rather than make them angry enough to want to fight even more?
I mean, this is a country that lost 20 million people killing the Germans in World War Two.
They're just going to bow down and take this from the U.S. right now.
Exactly.
So, I mean, you know, it's it's it's completely insane.
And, you know, it's like, you know, it's like all the other arguments, you know, that like sanctions.
I mean, it's a whole other story why the why we have we've had these negotiations, the Iranians.
But in my belief, it's not because of sanctions.
You know, there's always this belief if you inflict pain on people, they'll do what they do.
They'll do what you tell them.
But actually, history shows that's not what happens.
And it's certainly true what you're saying here.
I mean, it's it's obscene anyway.
And what they're what they're really talking about is killing more Ukrainians, by the way.
I mean, you know, we're going to kill another 50,000 Ukrainians.
You know, the people we supposedly love in pursuit of this, you know, lunatic policy.
And in the meantime, you know, we smile as, you know, as these criminals.
I mean, it's just, you know, this is just one little story.
There's so much more you could say about the looting of Ukraine.
But I just told this story on this blog just to show this is what's really going on.
You know, we we smile as these people get completely ripped off.
And meanwhile, we're planning to kill another tens of thousands of them.
And all in the name of love.
Yep.
Well, it's good journalism.
I'm sure glad you're doing it.
Thank you very much, Andrew.
Hey, thank you, Scott.
Always a pleasure.
All right, y'all.
That is Andrew Coburn.
He's the author of Rumsfeld, his rise, fall and catastrophic legacy.
Got that right.
Kill Chain, the rise of the high tech assassins, which is great.
You really got to read that and check him out over at Harper's.
Heart of Empire is his blog, their undelivered goods.
How one point eight billion dollars in aid to Ukraine was funneled to the outposts of the international finance galaxy.
Hey, I'll Scott here.
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