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The New York Times: A Disgraced Ukrainian Oligarch’s Bizarre Ski Resort Plan

November 3, 2019

If a Ukrainian oligarch gets his way, Chorna Tysa, a village in the foothills of the Svydovets massif, could be tied to a billion-dollar ski resort. James Hill for The New York Times

Source: The New York Times

By Andrew Higgins

Nov. 3, 2019

CHORNA TYSA, Ukraine — With Ukraine besieged by questions about President Trump, mysterious goings-on along a dirt road through a mountain forest are raising what, for many Ukrainians, is a far more urgent and important question: Just what is one of the country’s most powerful and scandal-singed oligarchs up to?

A sudden flurry of work to widen the near-impassable track in the Carpathian Mountains in the country’s southwest has added new fuel to growing alarm in Ukraine that Ihor Kolomoisky, a disgraced billionaire now seeking rehabilitation, is making a comeback and widening his already substantial influence.

In 2017, Mr. Kolomoisky went into self-imposed exile in Switzerland and then Israel after the government seized his prize asset, Privatbank, and accused him of embezzling billions of dollars. He returned to Ukraine this year after the comic Volodymyr Zelensky, a former business partner of the oligarch, won the presidential election in April.

Ihor Kolomoisky is staging a comeback now that Volodymyr Zelensky, a former business partner, is president of Ukraine. Valentyn Ogirenko, via Reuters

Mr. Zelensky came to office promising an all-out assault on Ukraine’s chronic corruption and out-of-control oligarchs, so his relations with Mr. Kolomoisky are being treated as a sensitive barometer of his sincerity and capability in following through on his pledges.

Mr. Zelensky, asked recently about Mr. Kolomoisky at a meeting with journalists in Kiev, the capital, said that the state was not going to return any seized assets. But he added that he was ready to hold talks about the future of Privatbank and other matters.

Officials say the road work in the mountains is part of regular repairs. Opponents of a stalled ski resort project in the area, however, see the first concrete signs that, thanks to Mr. Kolomoisky’s revived clout, one of Europe’s most fragile, pristine and inaccessible wilderness areas is under threat.

A proposed ski resort threatens to damage a particularly sensitive high-altitude zone of woodland known as the Svydovets massif. James Hill for The New York Times

Enabled by corruption, illegal logging has ravaged the Carpathian forests. Conservationists say the proposed ski resort — whose plan includes 33 lifts, 142 miles of ski runs, scores of hotels and 120 restaurants — threatens to extend the damage to a particularly vulnerable high-altitude woodland zone known as the Svydovets massif.

Mr. Zelensky’s spokeswoman, Iulia Mendel, said that the fate of a ski resort was not a matter for the president to concern himself with, but opponents of the resort proposal beg to differ.

“Svydovets is a test for Ukraine’s new president of whether he is under the control of Kolomoisky or independent from him,” said Iris Del Sol, a Franco-Ukrainian environmental activist who grew up in the mountain region. Along with her father, she has helped spearhead a campaign inside Ukraine and abroad — known as Free Svydovets — to halt the resort project.

The Bukovel ski resort is on the other side of the mountain from the proposed development. James Hill for The New York Times

The area proposed for the resort contains the source of the Tysa River, an important tributary of the Danube, as well as old growth forests, plant species that have mostly vanished elsewhere and endangered animals like the European brown bear. It also hosts part of a primeval beech forest that has been designated a UNESCO World Heritage Site.

Why Mr. Kolomoisky, a shrewd businessman with holdings in some of Ukraine’s most profitable companies, would want to sink hundreds of millions of dollars into a risky project offering uncertain returns is a mystery.

“A lot of what our oligarchs do does not make much sense under normal economic rules,” said Bohdan Prots, a botanist at Ukraine’s State Museum of Natural History and vocal opponent of the Svydovets project.

Mr. Kolomoisky did not respond to interview requests. His longtime business partner in the region, Oleksandr Shevchenko, who runs a nearby ski resort, Bukovel, that was funded in its early years by the oligarch, insisted that Mr. Kolomoisky has never had any interest in building a bigger resort at Svydovets.

Mr. Shevchenko, who travels around his own resort in a bulletproof Range Rover escorted by bodyguards, dismissed all talk about Mr. Kolomoisky’s role in the new resort as “rumor” and “fairy tales.”

Corporate records, however, name Mr. Kolomoisky as co-owner of Skorzonera LLC, a company that official government documents have identified as the driving force behind “the development of a detailed plan of Svydovets tourist and recreational complex.”

Oleksandr Shevchenko, center, who runs the Bukovel ski resort, insisted that Mr. Kolomoisky had no interest in building a bigger resort at Svydovets. James Hill for The New York Times

In a July 2016 letter to local authorities in the area, Mr. Kolomoisky’s company trumpeted the huge scale and economic advantages of the Svydovets project, saying Skorzonera “is convinced that we can realize an outstanding tourism project.”

Conflicting accounts of Mr. Kolomoisky’s involvement are a measure of the confusion surrounding his broader role in Ukraine since Mr. Zelensky took office in May — and named the oligarch’s former lawyer as his chief of staff.

Before his bank was seized by the government amid accusations of fraud, Mr. Kolomoisky enjoyed strong public support. Using his own money and influence, he rallied resistance in 2014 to pro-Russia separatists in his hometown, Dnipro in eastern Ukraine, preventing them from seizing control there.

Oksana Stankevich-Volosyanchuk, right, of the ecology group Ecosphere, said that what Mr. Kolomoisky really wanted was to gain control of Svydovets’s water supplies. James Hill for The New York Times

This favorable image crumbled after the debacle at Privatbank. But since his return to Ukraine just days before Mr. Zelensky’s inauguration, Mr. Kolomoisky has steadily reasserted himself on the public stage and as a skilled behind-the-scenes operator.

With many of his assets still frozen, however, Mr. Kolomoisky’s spending is limited, and even some opponents of the Svydovets resort complex doubt he is ready to invest in a project expected to cost well over a billion dollars.

What he really wants, said Oksana Stankevich-Volosyanchuk of the ecology group Ecosphere, is to gain control of Svydovets’s supplies of water, a scarce resource that Bukovel, once partly owned by Mr. Kolomoisky, needs to keep its snow machines running and dozens of hotels operating. Mr. Shevchenko denied this, insisting that Bukovel has plenty of water and has shed its ties to Mr. Kolomoisky.

Some villagers, angry that they had not been properly consulted or informed about the planned resort, have filed a suit that is now before the Ukrainian Supreme Court. James Hill for The New York Times

The Svydovets project was first announced in 2016 by the governor of the Trans-Carpathia region at the time, Gennady Moskel, who said the planned resort would accommodate as many as 28,000 visitors at once — an ambitious target in an area that currently has no asphalt roads, virtually no people and is five hours by car on often bone-bruising mountain tracks from the nearest airport in Ivano-Frankivsk.

On a visit to southwestern Ukraine this summer, Mr. Zelensky made no public mention of the Svydovets project or the movement to halt it. But he did meet with Mr. Shevchenko to discuss rebuilding Ivano-Frankivsk’s ramshackle Soviet-era airport and spoke of the importance of lifting the area’s dim economic prospects. Mr. Kolomoisky’s company, Skorzonera, runs the airport under a concession from the government.

While strongly supported by many local officials, the new resort project quickly ran into legal and other troubles. Some villagers, angry that they had not been consulted or informed about the governor’s plans, successfully sued in a regional court in 2017 to have the project shelved until more information was provided.

The mayor of Chorna Tysa, Ivan Pavlyuchuk, wants the ski resort to move forward. “If this project does not happen, nothing will get done here,” he said. James Hill for The New York Times

A higher court reversed that decision and, after an appeal by the villagers, the matter is now before the nation’s Supreme Court.

Valery Pavluk, the co-owner of a sawmill, who was among those who brought the case, said that his opposition to the resort brought immediate retaliation from the authorities: His business was suddenly in the sights of tax, health and other government inspectors.

“They just wanted to frighten me,” he said at his home in Lopukhovo, a village to the west of the planned resort.

Harvesting cabbages on the edge of the Svydovets massif. Trans-Carpathia is one of Ukraine’s poorest regions. James Hill for The New York Times

He said he did not vote in the April presidential election won by Mr. Zelensky..“Elections never really change anything here,” Mr. Pavluk said. Real power in Ukraine, he added, has always rested with billionaires like Mr. Kolomoisky.

The region’s current governor, Ihor Bondarenko, who was appointed this summer by Mr. Zelensky, said he understood opposition to tearing up a forest wilderness to make way for a giant resort. Nevertheless, he added, Trans-Carpathia, one of Ukraine’s poorest regions, desperately needs investment to fund development and provide jobs. “There are two sides to every coin,” he said.

Fedin Shandor, a professor at Uzhgorod University and adviser to the government on tourist development, said he shared local officials’ interest in attracting investment but was “100 percent against” the new ski resort.

“We know these people and know how it will end,” he said, referring to Mr. Kolomoisky, whom he described as “a leech who sucks our blood here and puts it in Switzerland.”

Ivan Pavlyuchuk, the mayor of Chorna Tysa, a village in the foothills of the Svydovets massif, dismissed concerns about Mr. Kolomoisky, saying he did not know or care who was behind the project but was determined to see it get off the ground. “If this project does not happen,” he said, “nothing will get done here: no new roads, no new schools, no jobs. Nothing.”

Mr. Prots, the Museum of Natural History scientist, said that he understood the mayor’s eagerness for better economic prospects, but that he and other mountain people were being sold a bill of goods.

“For Kolomoisky, this is just a toy,” Mr. Prots said. “He is not really bothered about developing a ski resort. He just wants to show his influence.”