Talking Points Memo: Why Russian oligarch was furious with Paul Manafort

The following article is an excerpt from investigative journalist Seth Hettena’s new book, “Trump / Russia: A Definitive History.” This chapter delves deep into Paul Manafort’s work for Viktor Yanukovych, the Putin-aligned former President of Ukraine, and his other business dealings in the region. Hettena’s book was out on May 8, 2018 from Melville House. 

Although he was earning millions for his political consulting work in Ukraine, Paul Manafort began using his connections to make even more money. He met Dmitry Firtash, a wealthy Ukrainian businessman involved in the natural gas trade who had friends in top posts in Yanukovych’s administration, and pitched him on his grand vision for Bulgari Tower, a $1.5 billion skyscraper project in midtown Manhattan on the corner of Park Avenue and Fifty-Sixth Street. It was said to be one of the most valuable development sites in North America.

The Ukrainian natural gas tycoon had millions to invest because Gazprom, the natural gas giant controlled by the Kremlin, had given his unpronounceable company, RosUkrEnergo, a monopoly on all gas trades between Russia and Ukraine. This incredibly lucrative deal was widely viewed as a partnership with organized crime. Firtash was believed to be a front man for Semion Mogilevich. In court papers in Chicago, where Firtash was indicted in a separate international racketeering conspiracy, prosecutors described him as an “upper-echelon” associate of Russian organized crime. In 2008 Firtash agreed to commit $112 million to Manafort’s Bulgari Tower project and wired in a $25 million deposit. The deposit came from Raiffeisen Zentralbank, the Austrian bank that U.S. officials believed served as a Mogilevich front. The tower deal later collapsed.

While he was lining up investments from Firtash, Manafort proposed to Oleg Deripaska that they go into business together. The resulting company was Pericles Emerging Market Partners LP, a private equity fund in the Cayman Islands. Manafort described it to Deripaska as a vehicle to pursue investments that “leverage [our] business and political relationships” in Ukraine. Pericles sought to achieve an impressive compound annual return rate of 30 percent by investing in Ukraine, as well as other areas of interest to Deripaska — Russia, the former Soviet republics, Montenegro, and eastern and southern Europe. The offering memorandum touted Davis and Manafort’s experience with political campaigns “at the highest level.” The Russian oligarch gave Manafort a tentative commitment to invest $200 million in the fund.

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