The article titled The Vicious Circle: How Financing from IMF And Other Financial Institutes Feeds Corruption in Ukrainian Agricultural Sector authored by Robert Lewis was surprisingly a hit as it caught significant amount of readers attention. In a state with high agricultural output such as Wisconsin it is clearly apprehensible: farmers are generally interested in the farming business abroad to gain some expertise from the other’s highs and lows. It was a honor to us to serve not only domestic audience, but the international one though.
As the article is exposing the situation unknown to our farming communities the questions followed. Some of them are at the uncomfortable side, for example «Isn’t all this kitsch [yachts, mansions etc.] paid by the IMF? Isn’t US sponsoring the IMF? And if so, aren’t the infamous tycoons fattening at their own [American taxpayer’s] expenses?». You have to know the farmers to guess that it will be the leading topic. As we will discover in the following parts these concerns can’t be deemed as unjustified.
We also had a mail from some of the companies and persons mentioned in the article. One of corporations that wrote us an email is Nibulon Group of Companies. They had prized us with a eight-page long request to cease and desist from disclosing their more or less doubtful business practices. Of course, they blatantly denied all the information enclosed in the Robert’s article. They even denied that Vadatursky family is the owners of the Nibulon. Well, it is quite in style of the very President of Ukraine who is hiding his companies, «Roshen» and others, in a plain sight.
Moreover Nibulon has threaten to sue us for ‘defamation’ and the ‘erosion of the business reputation’ of the company. Nibulon requested that their correspondence to us will remain discreet. In our view we may use any of the editorial mail at own discretion. Without their arguments published our editorial boards is leaving the readers with our point of view only, which is unfair to the Nibulon and the trustfulness of our own stand.
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As a standard routine prescribed for such situations we’ve asked our author to disclose each and every source he used to compile the data on Nebulon specifically. Consistent sourcing is the very base for journalist’s work and as long the sources are present we are free to maintain our own views despite all the pressure from the company mentioned above.
The First Amendment of the United States Constitution prohibits any laws that abridge the freedom of speech or infringe upon the freedom of the press. It allows an individual to express themselves through publication and dissemination. It is part of the constitutional protection of freedom of expression, granted by Constitution of the United States.
Of course, along with the Constitution there are a lot of laws that protects individuals and commercial entities from the libel and false accusations. But they are not imposed just by addressing the letter without any proof it is actually the case. Quite the opposite – it proves that while defending the Nebulon you are ready to abuse the power of law and the threat of suing a small scale regional news outlet. It is not the case we go silent, though, as the law is on our side.
Our search for the sources and general motivation of the article is presented here along with the author’s open letter to the Nibulon.
— Stert of the letter
I received your letter, dated 15 June 2018, regarding the article of May 23rd, “The Vicious Circle: How Financing from IMF And Other Financial Institutes Feeds Corruption in Ukrainian Agricultural Sector”.
While I appreciate and even encourage criticism towards my articles, I have to respond, that I don’t share your views on this one.
I do not share what you say in your letter for the below reasons, nonetheless, I believe, that people have the right to form their own opinion. That is why I beyond the shadow of a doubt publish this letter as-is.
The article in question was a result of diligent and independent investigation. It demonstrates the general Ukrainian problem of coalescence of government authorities and business in the context of whole agricultural market, rather than its particular participants. All the provided information is on the surface and was taken from various public sources.
You probably heard that as long I have sources that I can point as a starting point of my research I am immune of the accusations you’ve pushed towards me. This exact article is sourced as no other. The following part is devoted exclusively to the sources used as a basis of the research – with a tiny morals attached at the end. Every link that is mentioned stays live and as the majority of sites in the list are Ukrainian I presume that your company was not able to prove the facts opposite to the published.
It’s a fact, that Andriy Vadaturskyy is one of the owners of Nibulon and at the same time member of Ukrainian Parliament. The financial situation, structure and way of interactions within the Nibulon was widely covered in media, including media-group Golos.ua https://golos.ua/i/477711, which among other things reports: “…the farmers of Nibulon LLC offer a purchase price for second-class wheat of USD 210 per ton on ex-works to Nikolaev or USD 189 per ton in the remote Ternopil region. At the same time in Egypt, which is a strategic direction for Vadaturskyy, the wheat of this class can be sold on average USD 312 per ton. The earnings, earned on this game, are exported abroad, and they leave the debt obligations to creditors at home and the debt of the Ukrainian company to the Swiss one”.
Similarly, the examples of political lobby in Ukrainian politics have been investigated by Ukrainian anti-corruption web-portal https://antikor.com.ua/articles/141771-zvezda_oligarha_ukrainy including the law on internal water transport: “The son of Alexei Vadaturskyy Andrei Vadatursky is actively involved in blocking this law. By lucky coincidence he is a people’s deputy, a member of the presidential faction of the BPP and a member of the agrarian committee of the Verkhovna Rada. And he also possesses 20% stake in his father’s company”.
Information regarding the volume of quotas is public and can be easily verified on governmental website http://meold.kmu.gov.ua/minec/control/uk/publish/printable_article?art_id=153321. From the available chart you would see, that two biggest companies (Nibulon and Kernel) managed to allocate 39,379% of export quotas on corn, with Nibulon itself allocating 20,747%. The non-transparent nature of the export restrictions was highlighted in media, by various business associations and is even recognized by the Office of the United States Trade Representative:
“After imposing nontransparent and burdensome testing requirements, the government of Ukraine introduced grain export quotas in October 2010 in a nontransparent and arbitrary process that failed to allocate export quotas to most non-Ukrainian companies”
https://ustr.gov/sites/default/files/Ukraine.pdf (page 384).
The financial indicators and analysis of the financial standings of the company were reported by the leading Ukrainian agrarian web-portal latifundist.com https://latifundist.com/novosti/34571-vyruchka-nibulon-ne-pozvolyaet-polnostyu-obsluzhivat-obyazatelstva-pered-ebrr with reference to the StockWorld web-site https://www.stockworld.com.ua/ru/news/nibulonu-ghrozit-diefolt-pieried-iebrr. It is solid piece of data and it can’t be dismissed.
Other sources, that depicted various sides of the Nibulon’s activities include:
— Ukrainian MP Roman Semenukha tells that Nibulon’s lobby is blocking much-awaited river freight law.
Vadaturski family involved in some political affairs for Ukrainian PM.
Vadaturski family diversify their political investitions by supporting opposing parties.
Well-known news outlet «Obozrevatel» dig into the reasons of Nebulon monopoly at the river freight and Vadatursky family lobby in the Parliament.
Censor.net, one of the leading Ukrainian sites tell the readers about the involvement of the Valadarsky Jr. in the political lobbying of the Valadarsky Sr. interests.
Capital.ua, the respectable financial and economics news outlet has published the article about the looming Nibulon default.
Podrobonosti uncovers the tax evasion of Nibulon.
Comments.ua coins a story on unaccounted grain export by Kernel and Nebulon.
Alexey Vadatursky is involved in personal tax evasion, according to investigative site Blackmark.
Some quarrel between minister of transport and MP Vadatursky Jr. presented by Censor.net.ua
— End of the letter
Of course, one may feel unpleasant about the article. Let me remind you that it’s purpose in not pointed at your company specifically. It’s purpose is to show how easily the global aid provided to Ukraine lands in the pocket of tycoons and politicians of all sorts. The most intriguing part of it however is dedicated to the lavish lifestyle adopted by agro ‘new riches’, their outstanding Tuhao Jin of yachts, jets and half-palaces half-prisons. It is characteristic for the Ukrainian tycoons with their silly ambitions to show their wealth and power surrounded by the poorest nation around in the Western world.
But in the light of the facts shown we will not bend to your pressure, as our cause is right and the data is based on a solid ground. You have no power here, no matter how many jets and palaces you managed to steal from yours very country.
We understand that you are accommodated to the realities of your own corrupted country all too well. If the press couldn’t be bought it can be frightened with the court proceedings. Ukrainian courts have gained some reputation, you know. But even as Ukraine is considered an unsafe country for journalist we see that the Nibulon meddling in the politics is well exposed, the tax evasion schemes uncovered and the fraud at the export terminals reported. Should we take down the article and thus show that American journalists protected by the American Constitution and the State are weaker than their Ukrainian colleagues? I don’t think we can afford such a disgrace.
It is a duty of a free media in a democratic state to provide information to everyone concerned. That is why the article will remain on the WISC24 web-site, as well as this response to the issues raised.