Biden, Shokin, and Zlochevsky: How the Burisma Case Unfolded

27 September 2019 12:31

Former U.S. Vice President Joe Biden (left) with granddaughter and son Hunter Biden at the Beijing Airport, China, December 4, 2013EPA / NG HAN GUAN / POOL

A transcript of a telephone conversation between Donald Trump and Volodymyr Zelenskyy is the biggest news of the week. The main topic of this conversation is an investigation into the Ukrainian company Burisma, with which Hunter Biden, the son of Joe Biden – who is probably the main rival of Trump in the next election – was involved. So how did this story develop?

What Is Burisma?

One of the largest private gas producers in Ukraine. It is owned by Mykola Zlochevsky, the former Minister of Ecology during the presidency of Viktor Yanukovych. Licenses for the development of gas fields to Zlochevsky’s firms, in particular to Burisma, were coordinated by the ministry, which he himself headed.

Burisma’s board of directors boasts former Polish President Aleksander Kwaśniewski, and until April 2019, according to The New York Times, it included the youngest son of former U.S. Vice President Joe Biden. The publication notes that Hunter Biden’s salary at Burisma was up to $50,000 per month.

What Was Burisma Suspected of?

Tax evasion, money laundering, and misappropriation of public funds.

In January 2015, the Prosecutor General’s Office, led by Vitaliy Yarema, placed Zlochevsky on the wanted list.

On July 7, 2016, the new Prosecutor General Yuriy Lutsenko announced that the Prosecutor General’s Office was investigating a new scheme for embezzlement of Ukrainian gas, in which Zlochevsky might be involved. Then Kyiv’s Pechersk district court seized 20 gas wells of the Esco-Pivnich gas production company, associated with the ex-minister.

Burisma board member, ex-president of Poland Aleksander Kwaśniewski (second from right) and Burisma owner Mykola Zlochevsky (left), June 2, 2017. Photo credit: Burisma Group

How Did It End?

On September 13, 2016, the Pechersk District Court ordered the Prosecutor General to approve termination of the search for Zlochevsky.

The Prosecutor General's Office closed the case of tax evasion. “I believe that we have had success with this case: Burisma has paid the largest amount of taxes and penalties based on the results of examinations at that time – 180 million hryvnias ($7.46 million),” Lutsenko commented.

The money laundering case was lost by Zlochevsky in a London court. And the case of misappropriation of public funds – for actually issuing licenses to himself – was transferred to the National Anti-Corruption Bureau of Ukraine (NABU) where it was subsequently closed, the Prosecutor General said.

Zlochevsky himself said that the completion of all procedural actions around the Burisma Group “will allow a more intensive increase in production, increase investment in production, and attract international companies to Ukraine”.

Burisma also stated that over the past two years the company had paid more than 5 billion hryvnias ($207 million) of taxes to budgets of all levels.

Why Didn’t the Story End There?

On January 23, 2018, the former U.S. Vice President Joe Biden spoke of how in 2016 he demanded that Kyiv dismiss the former Prosecutor General Viktor Shokin at the discussion panel of the Council on Foreign Relations in Washington.

“I told them: we will not give you a billion dollars. They tell me: ‘But you do not have such authority, you are not the president, but the president said he would.’ I replied: ‘Call him. I tell you that you are not getting a billion dollars.’ I looked at them and said: ‘I’m leaving in six hours. If the prosecutor’s not fired, you’re not getting the money. Well, son of a bitch, he got fired, And they appointed the one who was befitting at that moment.”

On March 29, 2016, the Ukrainian Parliament dismissed the Prosecutor General of Ukraine Shokin. Shokin tried to reinstate himself through courts but lost the case.

It was probably Shokin who was recalled by Trump in a telephone conversation with Zelenskyy, where he described him as "a very good prosecutor."

Ex-Prosecutor General of Ukraine Viktor Shokin during a press conference, Kyiv, November 2, 2015. Photo credit: EPA / ROMAN PILIPEY

Why Does Trump Need All This?

In July 2019, a joint investigation was published by BuzzFeed and the OCCRP corruption and organized crime investigation project. It said that Shokin and Lutsenko offered information to an American lawyer that could help Trump's team in the informational campaign against Joe Biden, Trump's likely opponent in the 2020 presidential election.

Journalists referred to the testimony of Lev Parnas, an emigrant from the former USSR. Parnas claimed that together with his friend Igor Fruman, he had acted as a mediator between the attorney of the U.S. president, Rudolph Giuliani on the one side and Lutsenko and Shokin on the other.

READ MORE: What Trump’s New Scandal Means for Ukraine

It was about the fact that Biden’s son, Hunter, had earned $3 million over several years at Burisma. Shokin claimed that the Prosecutor General’s Office was investigating the activities of this company, and that’s why Biden insisted in 2016 that President Petro Poroshenko should dismiss him.

Oliver Bullough, a British investigative journalist specializing in Ukrainian oligarchs, among other things, cites another possible reason for Trump's interest in this story: it is a way to overshadow the scandal about Russian interference in U.S. elections: “ They are looking for some kind of appropriate scandal. Such a scandal that would show that Trump may be bad, but Biden is just the same. Probably, for these people, Russia and Ukraine are almost one place, somewhere out there. If Trump has a scandal with Russia, then Biden should have a scandal with Ukraine. And they found Hunter Biden and Zlochevsky – they managed to find Joe Biden’s interference in Shokin’s career.”

On May 7, 2019, Bloomberg reported that Trump's lawyer accused former Vice President Joe Biden of pressure on the Ukrainian government – allegedly he sought to close criminal cases against Burisma.

Giuliani also planned a visit to Ukraine. Sergii Leshchenko, then MP, said Trump’s lawyer was going to come to gather incriminating evidence on Biden. Leshchenko also demonstrated a document that, according to him, was passed by Lutsenko’s entourage to Trump’s lawyer.

It read that in March 2014, through lobbying channels, the former Minister of Ecology Zlochevsky allegedly invited U.S. Secretary of State John Kerry and Vice President Joe Biden to distribute profits at Burisma. This money was allegedly paid to Biden's son and a friend of Kerry’s adopted son, Devon Archer.

But on May 10, Giuliani announced that he was canceling his visit to Ukraine. According to The New York Times, Trump's attorney wanted to convince Zelenskyy to resume the investigation against Burisma.

What Happened to Burisma and Zlochevsky?

In 2018, at the “Charitable Ukraine–2017” competition, the Burisma Group won the Big Business’s Charity nomination.

In May 2019, Zlochevsky held the fourth Energy Security Forum in Monte Carlo.