It is difficult to get a handle on the total amount that Ukrainian President Viktor Yanukovych and his allies took out of the country during his time in office, from 2010 to his removal in 2014. That's because they used a myriad of methods and shadow accounts to achieve their aims. Economist Anders [Angstrom]slund gave a detailed estimate of the amounts and the methods used in his 2014 report, "Oligarchs, Corruption, and European Integration."
THE CAS TRADE
For any oligarch wanting to acquire serious wealth, control of state gas monopoly Naftogaz was the most effective method. Government subsidies kept the price of natural gas piped from Russia artificially low, which benefited Ukrainian households during the cold winters.
However, 8 percent of the nation's GDP was spent each year on subsidizing Naftogaz, and the main beneficiary was not the Ukrainian consumer. A few businessmen in Russia and Ukraine managed to shave off billions by diverting some of the gas and selling it to industry at vastly inflated rates. Gas could be bought at $53 per 1,000 cubic meters and sold for as much as $410.
It is thought that corruption in the gas sector yielded profits of more than $3 billion a year. And then there was the opportunity cost. Today, a properly regulated gas industry is Ukraine's biggest taxpayer, contributing 14 percent of the total revenues of the state budget.
Each year, Yanukovych doled out large infrastructure projects to friends and family. There was little to nothing by way of oversight or transparency. He was fortunate to become president just as Ukraine was preparing to co-host the prestigious UEFA European Championship, so there was a lot of money to go around.
It's thought that the state paid double the real cost of each project. Corruption is not unheard of in government procurement around the world, but kickbacks of 50 percent are unusually high. The...