Ukrainian Energy Firm Sues Over Drilling Contract Given To Rick Perry Pals

KIEV, UKRAINE - 2019/11/27: The logo of Naftogaz, state-owned national oil and Gas Company of Ukraine, is seen on a plate at the entrance to the main office in Kiev. The Swedish Court of Appeal dismissed a first Gazprom (Russian Gas Company) appeal, on decisions of the Stockholm arbitration, as the website of the Naftogaz informed on 27 November 2019. (Photo by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
KIEV, UKRAINE - 2019/11/27: The logo of Naftogaz, state-owned national oil and Gas Company of Ukraine, is seen on a plate at the entrance to the main office in Kiev. The Swedish Court of Appeal dismissed a first Gaz... KIEV, UKRAINE - 2019/11/27: The logo of Naftogaz, state-owned national oil and Gas Company of Ukraine, is seen on a plate at the entrance to the main office in Kiev. The Swedish Court of Appeal dismissed a first Gazprom (Russian Gas Company) appeal, on decisions of the Stockholm arbitration, as the website of the Naftogaz informed on 27 November 2019. (Photo by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images) MORE LESS
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December 17, 2019 11:16 a.m.
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The Ukrainian energy firm Naftogaz is suing the government of Ukraine over a contract that it says was improperly awarded to a friend and donor of U.S. Energy Secretary Rick Perry.

The contract went to an American firm co-owned by Michael Bleyzer, a longtime friend of Perry’s who donated $30,000 to Perry’s Texas gubernatorial campaign in 2010, and Alex Cranberg, another Perry supporter and GOP donor.

“We know our offer was better,” Naftogaz CEO Andriy Kobolyev told Time Magazine, which broke the news of the lawsuit on Monday.

A Ukrainian government panel awarded Bleyzer and Cranberg’s firm, called Ukrainian Energy, 50-year drilling rights to a massive oil and gas field covering 1,340 square miles. Naftogaz’s subsidiary UkrGasVydobuvannya outbid the American company by millions of dollars — $60 million to $53 million — but Bleyzer and Cranberg got points for their company’s financial resources and technical expertise, the Associated Press reported last month.

“We are very annoyed with this,” Kobolyev told TIME last month. “Very annoyed, to say the least. And when we are annoyed, we usually do act, and we will.”

Bleyzer protested to TIME that Ukrainian Energy’s bid “was judged as superior by the interagency committee as advised by a group of independent experts.”

But Perry’s involvement in the Trump administration’s Ukraine policy hangs over the deal. The Energy Secretary reportedly suggested Bleyzer, among others, to Ukrainian officials as a potential new member of the Naftogaz board. Bleyzer, born in Ukraine, has long been involved in the energy industry there. He denied to Time that anyone discussed a board position with him.

Though the Energy Department has denied boosting any individual’s or company’s interests in Ukraine, Perry did acknowledge to the Associated Press that he might have mentioned Bleyzer as a potential adviser to Ukrainian President Volodymyr Zelensky.

“It’d be remarkable if I didn’t say, ‘Talk to Michael,’” he said.

The contract was awarded to Ukrainian Energy a month after Perry name dropped Bleyzer and others to Ukrainian officials, at Zelensky’s May inauguration.

Perry has announced he will resign by the end of the year. He refused to testify in the House’s impeachment inquiry about his work in Ukraine, defying a subpoena but following White House orders.

The details of Perry’s work in Ukraine have emerged parallel to another Naftogaz-related story — that of Rudy Giuliani’s associates Lev Parnas and Rudy Giuliani. They reportedly presented an offer to a Naftogaz board member at a Texas energy conference in March: The board member would take over as Naftogaz CEO, they proposed, and as new CEO would begin accepting natural gas shipments from them.

The proposal, which the Naftogaz board member rejected and reported to an American diplomatic official, is seen by some as potentially running afoul of the Foreign Corrupt Practices Act. Time Magazine reporter Simon Shuster noted that the board member who rejected the offer, Andrew Favorov, is the listed plaintiff in the lawsuit over the Ukrainian Energy deal.

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