On Tuesday, Serhiy Klyuyev, a multimillionaire pro-presidential lawmaker, revealed that he had agreed to spend some $18m to buy into a controversial 127 hectare luxury estate within which his long time political boss, President Viktor Yanukovich, resides. It’s a situation that would be mind-boggling in any normal country.
Located just north of Ukraine’s capital on a reservoir known as the Kiev Sea, the vast and heavily guarded Mezhyhiria compound includes all the amenities dictators in developing countries typically have within their reach. The main building is a purpose built, five-story log dacha, loaded with pompous furniture. There is a golf course and horses, an indoor tennis court and shooting range, swimming pools, fountains and a marina. (For more details and photos, see this blog post.)
It’s not quite clear how this once-state-owned government dacha was privatised, nor who paid for the development in the years since Yanukovich took over as president in 2010. And despite all the luxury, it has become a constant headache for Yanukovich. Local journalists have hammered him with allegations of cronyism, comparing the cost of such an estate with his tax declarations, questioning how he could afford living in such luxury.
Yanukovich has admitted to owning a small house and plot of land within the integrated estate.
Documents revealed by local journalists have shown that the rest of the compound – the lion’s share of it – was legally owned and invested into by a web of companies, including offshore entities. Some of these companies have been linked by journalists to Yanukovich’s eldest son, Oleksander. He has in recent years established himself as one of Ukraine’s 100 richest individuals.
Various oligarch backers of Yanukovich and his Party of Regions, including Serhiy Klyuyev and his brother Andriy, who currently serves as national security advisor, have also been linked to companies that own the estate.
For many in Ukraine, Serhiy Klyuyev’s Tuesday announcement was viewed as an attempt to bring the matter of the estate’s ownership and finance to a close. At a press conference, Klyuyev said he confided with Yanukovich before agreeing to the purchase. In Klyuyev’s words, Yanukovich said “he will be happy to have such a neighbour”.
Explaining the arrangement, Klyuyev said: “Viktor Fedorovych lives on his territory. I will be glad if Viktor Fedorovich makes use of the infrastructure. I will only be glad. I am buying shares in a company which has its balance. There are debts there. We will solve these issues.”
He went on to describe the transaction as a solid investment, saying: “It’s a good location, close to the Kiev Sea.”
The official line still seems to be that Yanukovich does not himself own the Mezhyhiria estate, but lives there on the tab of at least one oligarch backer.
And so the long-running saga of Mezhyhiria goes on. Meanwhile, Yanukovich has brushed aside rising Russian pressure by reaffirming – most recently on Tuesday – Kiev’s hope to sign a trade pact with the EU this autumn instead of joining the Moscow-led Customs Union. Yet he looks further than ever from the standards you might expect from the leader of a European country.
Russia’s relations with its neighbours become increasingly chilly, FT
Russia accused of triggering trade war with Ukraine, FT
Ukraine: taking the EU for a bad ride, beyondbrics