When a former business partner of President Donald Trump’s and a Ukrainian politician approached an ally of the administration with a “peace plan,” they were already at work on an energy trading deal. That deal, said one of the region’s leading energy policy experts, stood to benefit from the scheme the pair proposed to resolve the ongoing conflict in Ukraine.
Felix Sater, who worked obtaining financing for Trump projects including the Trump SoHo, told TPM that the “peace plan” came up in the course of his attempts to broker an agreement to sell energy abroad from Ukraine’s nuclear power plants with Andrii Artemenko, at the time a Ukrainian parliamentarian. The plan was to refurbish dilapidated nuclear power plants in that country and then sell the power generated by them into Eastern Europe, using established commodities trading companies as a means of retroactively financing the deal, Sater said.
The business proposition would help break the Russian monopoly on energy, according to Sater. But Artemenko’s political proposal would have had Ukrainian voters decide whether to lease Crimea to Russia for 50 or 100 years—an idea encouraged by advisors to Russian president Vladimir Putin, and so offensive to his country’s government that Ukrainian prosecutors accused Artemenko of treasonous conspiring with Russia after the peace plan was first reported earlier this year.
It’s been widely reported that Sater and Artemenko met with Michael Cohen, who was then Trump’s personal lawyer and who has known Sater since he was a teenager, in January; under discussion was the peace plan, which would have paved a path for the U.S. to lift sanctions on Russia. Cohen has given conflicting statements about his involvement. Sater said he came to be involved in the scheme through Artemenko.
“We were trying to do a business deal at the same time,” Sater told TPM. “We were working on a business deal for about five months, and he kept telling me about the peace deal, and as the Trump administration won, that’s when I delivered it [the peace deal] to them.”
He insisted the political and business propositions were unrelated, other than each involving himself and Artemenko as primary players.
Sater had worked brokering major deals internationally for some time after the 1996 dissolution of White Rock, a firm at the center of a pump-and-dump securities fraud scandal that led to Sater’s conviction for fraud. Instead of going to prison, Sater paid a fine and went to work as an FBI informant. Those deals included a job for AT&T in Russia, as previously reported by Mother Jones, where Sater says the company was “trying to expand.”
Sater said the business proposition with Artemenko “was to try to rehabilitate the existing nuclear power plants in the Ukraine and build new ones using either U.S. or Canadian [companies] like GE, or the Koreans.” Ukraine’s history with nuclear power includes the Chernobyl disaster, and Sater noted that the aging plants needed refurbishment in order to continue working without another incident. Otherwise, he noted, “they’re ready to [have] another Chernobyl any day now.”
The pair further planned “to sell the excess power to [international energy companies] Trafigura or Vitol to sell the power to Eastern Europe, and in that way finance the plants,” Sater explained. He named Poland and Belarus as two potential state clients.
“It was a way to break the energy monopoly the Russians have,” he said.
Chi Kong Chyong, director of the Energy Policy Forum at Cambridge University’s Energy Policy Research Group, told TPM that energy independence from Russia was indeed a pressing issue in Ukraine, and noted a peace deal would ease the kind of international transaction Sater and Artemenko were proposing.
Sources close to the matter told TPM that there were no records of any current conversations between Sater or Artemenko and American industrial conglomerate GE. Trafigura and Vitol are trading houses that deal heavily in energy; Victoria Dix, a spokeswoman for Trafigura, said there was “no element of truth whatsoever” to any suggestion that Sater was pursuing a proposal with the company. Andrea Schlaepfer, a spokeswoman for Vitol, said, “We don’t comment on commercial activities.” Neither the Ukrainian Embassy nor the Consulate immediately responded to requests for comment.
Artemenko responded “Maybe later” when asked to comment generally on this story through Facebook Messenger. He did not respond to specific follow-up questions.
For Artemenko, the fallout from the January meeting with Sater and Cohen was immediate and severe. He was expelled from his Verkhovna Rada political party the day after the New York Times reported the meeting, and by May, Ukrainian President Petro Poroshenko had stripped him of his citizenship.
For his part, Sater said he had nothing to do with the documents filled with damaging information on Ukrainian politicians, including Poroshenko, that Artemenko reportedly brought to the January meeting. “I never saw them,” Sater said, adding that Cohen might have thrown them in trash but he wasn’t sure. “I don’t want to get into it.”
Whether Sater and Artemenko’s energy trading plan was well underway or simply in the proposal stage by the time of the meeting, it would have been an easier sell with Artemenko’s Putin-approved ceasefire in place, according to Chyong.
“Any military conflict in your neighborhood or close to you affects the transaction cost of arranging commercial deals, whether that is between Ukraine and the eastern [EU, where Poland lies] or Ukraine and Belarus, for example,” Chyong said. “It increases the transactional costs. The conflict itself, of course, forces the Ukraine to think about other ways and other sources of importation of energy—gas and electricity trading.”
Exporting energy from Ukraine would be easiest to places like Belarus and Russia, Chyong noted. Old electrical grids are among the strongest remaining ties between former Soviet bloc states and Russia itself; Ukraine hopes to break them by 2025, something Sater said he hoped he could help along.
Sater insisted his motivations in bringing the proposal to the Trump administration via his longtime acquaintance Cohen were altruistic.
“People are getting killed. They’re dying,” he said. “I didn’t see anything wrong with trying to do something that could help all sides.”