The “YurEk” cooperative of 1992: how Yatsenyuk, Burbak, Andrei Pyshnyi, and Pavlo Petrenko’s school network captured power in Ukraine

20:35, 12.09.2016

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The “YurEk” cooperative of 1992: how Yatsenyuk, Burbak, Andrei Pyshnyi, and Pavlo Petrenko’s school network captured power in Ukraine

Ukrainians who stood on the Maidan sincerely believed they were taking power away from corrupt officials and placing it in the hands of a new generation: young, honest, professional, and pro-European. Maksym Burbak was one of those who could be seen on the stage standing alongside the “leaders of the revolution,” and one of those in whom millions of Ukrainians placed their hopes. He also became one of those who quickly shattered those hopes, demonstrating that the new is not always better than the old and is often merely a repetition of it.

Senya and His Team

Maksym Yuriiovych Burbak was born on January 13, 1976, in Chernivtsi, into an educated family of lecturers at Chernivtsi University. His maternal grandfather, Fedir Stepanovych Arvat, headed the Department of Philology, while his mother, Elena Fedorivna, worked in the Department of Foreign Languages.

It can be said that he owed much of his future career to his mother. She enrolled her sons, Aleksey (born January 1, 1974) and later Maksym, in Chernivtsi Specialized School No. 9 with advanced English studies (now Gymnasium No. 9). There, the older Aleksey became classmates with young and energetic Senya — the son of her friend and university colleague, lecturer Mariya Grigorivna Yatsenyuk.

The future Prime Minister of Ukraine sat at the same desk as Aleksey Burbak and became his friend. Moreover, Aleksey, thanks to his physique and strong character, repeatedly protected Senya from bullies as well as from classmates irritated by his boundless energy and constant activity.

Thus, the close relationship between Arseniy Yatsenyuk and the Burbak brothers began in childhood, and even earlier — with the friendship of their mothers.

Another member of their school circle later became Pavel Petrenko (the future Minister of Justice), who was several years younger than the Burbak brothers and Yatsenyuk.

Aleksey Burbak and Arseniy Yatsenyuk in a student photo album

There is persistent silence among the Burbak brothers regarding the Soviet past of their father, Yuriy Nikolayevich Burbak. Their official biography states only that before 1991 he was engaged in “various activities,” but the exact nature of these activities is never disclosed.

In modern times, Maksym Burbak has repeatedly said that his father “reads books on the couch,” and any psychologist would note that such statements about close relatives are often not far from the truth.

It is also noteworthy that Yuriy Burbak officially entered business only in the early 1990s — precisely when his elder son Aleksey, together with his friend Arseniy Yatsenyuk, entered Chernivtsi University and began engaging in business activities already in their first year.

Therefore, it is possible that for all that time the prominent Chernivtsi businessman Yuriy Burbak was in fact only a nominal figurehead for his sons’ companies.

In 1992, Arseniy Yatsenyuk, who had a talent for building useful connections, became close to Valentin Gnatyshyn — the son of the then governor of Chernivtsi region — through whom he co-founded the company “YurEk Ltd.”

As partners, he brought in his old friend Aleksey Burbak and two other university classmates: Andrey Pyshny and Andrey Ivanchuk — now members of parliament from the “People’s Front” party.

During their active involvement in privatization-related activities, their group also became acquainted with well-known figures from Chernivtsi, such as Mikhail Papiev and Aleksandr Zinchenko (who died in 2010).

It is also worth noting that in the same academic group as Yatsenyuk and Aleksey Burbak studied future Ukrainian military prosecutor Anatoliy Matios.

Arseniy Yatsenyuk and the Burbak brothers

Aleksey Burbak remained inseparable from Yatsenyuk for a long time and even accompanied him to Crimea when he was appointed Minister of Economy of the Autonomous Republic of Crimea in 2001.

Aleksey Burbak became his adviser and unexpectedly established deep connections within the Crimean political establishment. Even after his friend Yatsenyuk left for Kyiv, he remained in Simferopol, serving as adviser to the head of the government and the chairman of the Crimean parliament.

At the same time, while maintaining ties with Yatsenyuk, Aleksey Burbak became his trusted representative on the peninsula and later created and headed the local branch of the “Front for Change” party.

At the same time, it is noteworthy that Aleksey Burbak avoided official government positions offered to him, preferring to remain an adviser, consultant, and academic, focusing mainly on behind-the-scenes politics and informal business activity.

Aleksey Burbak and Arseniy Yatsenyuk at an Easter ceremony

“Dobrobut” of the Burbaks

While the elder brother remained constantly alongside his childhood friend, the younger Maksym Burbak graduated in 1998 from the same Chernivtsi University with a degree in law and went into business. He never publicly disclosed details of his first commercial experience, but there is information that he initially became involved in importing cars from Hungary and Slovakia to Ukraine, then opened a used-car lot and a dealership for new vehicles. In 2008, he became head of the company “Bukovina Auto Alliance,” which sold TATA trucks, ZAZ buses, and passenger cars of brands such as Lada, Chevrolet, Opel, and Chery.

As a result of this business, 35 vehicles — both trucks and passenger cars — remained in the family’s private ownership, and they were listed in Maksym Yuriyovych Burbak’s 2013 declaration. At the same time, Maksym Burbak became involved in business related to the Chernivtsi “Kalynivskyi” market (locally known as “Kalynka”), established in 1990 and owned by the municipality. It is one of the largest markets in Ukraine (alongside “Barabashovo” and the “Seventh Kilometer”), and it became an economic center not only of Chernivtsi but of the entire region. In 2013, around 22,000 entrepreneurs and traders worked at “Kalynivskyi,” and their taxes and fees formed a significant share of the city and regional budget revenue (around 32 million). In the 1990s, this market already attracted the attention of the team formed around Yatsenyuk and the Burbak brothers.

In 1996, the director of “Kalynivskyi,” Bohdan Kravchuk — known in Chernivtsi as a Soviet dissident and member of the Helsinki Group — was arrested on bribery charges. He was replaced by Ivan Rynzhuk, a person connected to Mykola Fedoruk, the former first secretary of the Chernivtsi regional Komsomol committee, who had headed the city council of Chernivtsi since 1994 and became mayor in 1997 (and is now a member of the “People’s Front” faction). Arseniy Yatsenyuk developed very close relations with Fedoruk, and through him the Burbak family also became closely connected — primarily Maksym, who remained in Chernivtsi, and his father, who “reads books.”

Maksym Burbak and Nikolay Fedoruk

For several years, the established arrangement satisfied all parties. However, in 2005, after Arseniy Yatsenyuk was appointed Minister of Economy of Ukraine, the following events took place. The municipal authorities of Chernivtsi, with active support from the city mayor Fedoruk, leased a land plot of 6.42 hectares on Kalynivska Street 13B to LLC “Invest-Alliance” (founder — Lidiia Stepanivna Leshcheva, Arseniy Yatsenyuk’s maternal aunt). This “vacant lot” belonged to the local DOSAAF driving school and was located right on the border of the expanding “Kalynivskyi” market. In fact, the market had nowhere else to expand except in one direction, and this particular plot was acquired by “Invest-Alliance” allegedly for the construction of an educational and exhibition pavilion. However, instead of an exhibition center, a private market called “Dobrobut” was established on the leased land. Its founders and owners became “Invest-Alliance” and the company “Bukotrading.” As it turned out, the founder of “Bukotrading” (with a charter capital of 17 million hryvnias) was a modest Chernivtsi pensioner who enjoys reading books on the couch — Yuriy Nikolayevych Burbak. The origin of these 17 million hryvnias contributed to the charter capital of “Bukotrading” was never explained.

In 2006, the leased plot was expanded — within just a few years, LLC “Invest-Alliance” took control of almost 12 hectares of land, which were privatized for only 5 million hryvnias with full approval from the city authorities represented by Mykola Fedoruk. The essence of this scheme was that the growing “Kalynka” market gradually merged into “Dobrobut”: in fact, it became one large market, where the old sections remained municipally owned as “Kalynka,” while the new ones became the private “Dobrobut.” In addition, parking areas and a trading площадка of more than 3 hectares were built on the “Dobrobut” territory: in 2013, entry for each vehicle cost 10 hryvnias (1.25 USD), generating tens of thousands per day. At the same time, using the fictitious status of an “exhibition pavilion” and having privatized the land, the “Dobrobut” market paid nothing to the city budget! The absorption of “Kalynka” was not only not obstructed but even facilitated by its director Ivan Rynzhuk, who created unbearable conditions for entrepreneurs (including criminal methods), forcing them to leave the municipal “Kalynivskyi” market and move to the private “Dobrobut.” The revenues of “Dobrobut” owners were so enormous that the market was considered a key source of funding for the “Front for Change” party.

And they could have been even higher: in 2006, at Fedoruk’s insistence, the “Kalynivskyi” market itself was almost privatized. It was transferred to LLC “Megamarket,” owned by the trio Yatsenyuk–Fedoruk–Burbak. However, market entrepreneurs revolted, reached Kiev, and won court cases that preserved “Kalynka” in municipal ownership.

In 2007, another scheme was carried out by the owners of the “Dobrobut” market (Yatsenyuk and the Burbaks). The market was pledged to AT Svedbank — the former TASC Bank of Sergei Tigipko, which he sold to Swedish owners while remaining its manager. The loan amounted to approximately 136 million, of which only 36 million were repaid. This would hardly have been possible without prior arrangements with Tihipko, who in 2007–2008 actively issued loans through Svedbank and left the position after the crisis, leaving the Swedish owners with massive losses.

The scheme proved highly calculated. In 2011, a political upheaval took place in Chernivtsi: Mayor Fedoruk was removed by the city council, and the director of the “Kalynivskyi” market, Ivan Rinzhuk, was arrested for a 250,000 USD bribe. The new city administration, led by acting mayor Vitalii Mykhailyshyn (Party of Regions), initiated a court case to cancel the privatization of the land under “Dobrobut,” attempting to nationalize it from the Yatsenyuk–Burbak group. It is notable that shortly afterward Arseniy Yatsenyuk launched his political campaign “Rise, Ukraine!”, calling for the swift overthrow of the “Donetsk regime.”

However, the expropriation attempt failed because the land was under credit collateral with Svedbank, and the Swedish side insisted on postponing the court decision until full repayment of the debt — which never occurred due to subsequent events in Ukraine. In May 2014, Aleksey Kaspruk, a member of the “Front for Change” and a close associate of Yatsenyuk and Maksim Burbak, was elected mayor of Chernivtsi. And in January 2015, the city court closed the criminal case against Ivan Rynzhuk, who had previously been released on bail.

The brilliance and poverty of the “People’s Front” members

In 2009, Yatsenyuk mobilized his school friends and business partners into his “Front for Change” movement. Maksim Burbak immediately headed its Chernivtsi regional branch; his lack of political experience was compensated by Yatsenyuk’s strong personal trust in his childhood friend. Experience, however, came with time: in the 2010 local elections, Maksim Burbak was elected to the regional council and became head of the “Front for Change” faction. For a time, this allowed the group to protect the business interests of the Burbaks and Yatsenyuk in Chernivtsi. However, on 31 March 2011, the Chernivtsi city council voted to terminate Mayor Fedoruk’s powers early; only the “Front for Change” and “Svoboda” factions did not support the decision. Seeing that power in the city — and effectively in the region — was slipping away, Maksim Burbak decided to move to Kiev. In the 2012 parliamentary elections, he received number 43 on the “Batkivshchyna” party list, with which the “Front for Change” had merged into a single electoral bloc.

Interestingly, in his candidate declaration Maksim Burbak stated that in 2011 he earned nothing at all — not a single hryvnia. This striking poverty is explained by the fact that his business was registered under his father’s name.

Until the Euromaidan, Maksim Burbak, like other faction members, alternated participation in the “Rise, Ukraine!” campaign with blocking parliamentary sessions.

On 27 February 2014, Maksim Burbak became Minister of Infrastructure of Ukraine, demonstrating that Yatsenyuk does not forget childhood friends and business partners.

Soon it became evident that replacing “Donetsk” and “Kharkiv” elites with “Dnipro,” “Vinnytsia,” and “Chernivtsi” ones did not significantly change the nature of Ukrainian governance, which continued to involve corruption, asset distribution, and patronage on an even larger scale.

The first scandals soon emerged with Mikhail Pankiv: his candidacy for head of Ukrposhta was proposed to Burbak by Andrey Ivanchuk. As a result, Ukrposhta began operating in the interests of the Yatsenyuk–Burbak team, even using public funds. During the 2014 parliamentary campaign, Ukrposhta granted the “People’s Front” a 900,000 hryvnia discount for distributing campaign materials. In spring 2015, as the hryvnia sharply devalued, Ukrposhta sold 6 million USD at a reduced rate to Avant Bank, linked to the circle of Boris Poroshenko.

At the same time, another personnel scandal unfolded: at the request of Euromaidan activists, Maksim Burbak dismissed the CEO of Boryspil Airport, Aleksey Kachanov, a protégé of businessmen Boris Kaufman and Aleksandr Granovskiy. He appointed his deputy, Sergei Gombolevskiy, also associated with Granovskiy, as his replacement. It was reported that Burbak not only knew Gombolevskiy’s background but also appointed him at Yatsenyuk’s request, as Kaufman and Granovskiy allegedly provided financial support to the “People’s Front” party fund.

Another sponsor of the party, oligarch Ihor Kolomoiskyi, Maksim Burbak effectively “gifted” Ukrainian airspace. First, he appointed Denys Antoniuk — a former top manager of the airline “International Airlines of Ukraine” (UIA), owned by Kolomoiskiy — as head of the State Aviation Service of Ukraine. He then carried out a redistribution of air routes in Ukraine in favor of UIA, effectively pushing all its competitors out of the market, which caused outrage among air carriers that demanded a personal meeting with the Prime Minister and the President.

Maksim Burbak rushes to the rescue

After the early parliamentary elections in autumn 2014, Maksim Burbak returned to Parliament, taking over as head of the “People’s Front” faction and focusing on saving his friend Senya in every possible way — thanks to which Yatsenyuk’s second government lasted until the beginning of 2016. However, even then the inevitability of its resignation was already obvious, so the “Chernivtsi group” wisely chose parliamentary mandates and parliamentary immunity. Yet, having tasted a luxurious lifestyle at public expense, they did not give up their newly acquired habits. Thus, in August of the current year, Maksim Burbak arrived in his native Chernivtsi by helicopter. Moreover, it was practically the same one (if not the very same) that once was used by President Yanukovych, whose extravagance became a byword. But while Yanukovych’s “golden toilet” and equally “golden” helicopter were widely discussed in the media at the time, the luxurious means of transportation of the head of the “People’s Front” faction is carefully hidden from public view today. And who knows how much his own “golden toilet” costs!

Helicopter of Maksim Burbak

Yanukovych’s helicopter

Meanwhile, Maksim Burbak officially lives exclusively on his parliamentary salary: in his 2015 declaration he reported only 76,000 hryvnias of annual income and an old VAZ-2108 car. However, this time he included his wife’s income (1.25 million hryvnias), as well as her capital (1.3 million in deposits and 4 million in charter funds). As for his father, a book-loving man who owns half of the “Dobrobut” market with millions in annual revenues, Maksim Burbak chose not to mention him.

Sergey Varis, for SKELET-info