The Democrats’ impeachment inquiry is all about Ukraine. And Ukraine is all about natural gas. Most Russian gas sold to Europe flows through pipelines crossing the nascent democracy. The gas sector is where a huge amount of Ukraine’s wealth comes from—and, by extension, its corruption. And the country’s huge state-owned natural-gas company, Naftogaz, finds its way into smackdowns between oligarchs and international energy stand-offs.
That’s why Energy Secretary Rick Perry hovers in the background of the impeachment saga. As Texas governor, he earned the affection of America’s oil and gas barons. And as energy secretary, he’s pushed for reforms to make Ukraine friendlier to Western investment.
In the process, he’s encouraged the Ukrainian government to turn to at least two Americans for advice: one man who donated to Perry’s inaugural campaign, and another who used to advise one of Ukraine’s most Russia-friendly politicians. So who are they?
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Welcome to Rabbit Hole.
Perry goes to Ukraine: Perry has become a key supporting figure in the story of the Trump administration’s tumultuous relationship with Ukraine. He was the most senior American official to attend the inauguration of President Volodymyr Zelensky earlier this year, and Trump reportedly blamed Perry for even having the notorious phone call in the first place. Now, questions about his efforts to influence Ukraine’s energy sector are percolating in the background of House Democrats’ impeachment inquiry of Trump.
Perry reportedly suggested the Ukrainian government listen to two Americans...
Michael Bleyzer: This Ukrainian-American investor based in Houston goes back at least 10 years with Perry. In 2009, Bleyzer and then-Gov. Perry accompanied Rabbi Irwin Katsof on what investigative reporter Wayne Barrett called a “grandiose pilgrimage” to Israel. “Within a few months of the trip, Perry appointed Bleyzer to a prized position as a member of Texas’ Emerging Technology Fund, which awards hundreds of millions in grants,” Barrett wrote. Two years later, Bleyzer and his wife gave $10,000 to Perry’s inaugural fund.
It wasn’t Bleyzer’s first political donation. In 2008, he gave $2,300 to Rudy Giuliani’s unsuccessful presidential bid. His brother Lev, now SigmaBleyzer’s chief operating officer, also gave Giuliani $2,300. He’s donated tens of thousands to prominent national Republicans. In 2010, his Sigma Venture company gave $50,000 to the gubernatorial campaign of former New Mexico Republican Gov. Susana Martinez, joining a handful of prominent donors from the energy industry who spent big on her campaign. He also spent $30,000 to have a private jet fly Sen. Ted Cruz (R-TX) to the Cayman Islands in 2015.
Bleyzer was born in Kharkiv, Ukraine, according to his company bio. He immigrated to the U.S. in 1978, the page says, and worked at Exxon and Ernst & Young before starting SigmaBleyzer Investment Group in 1994 (Bleyzer has said he fled the USSR and arrived in Texas as a refugee). He appears to have a deep understanding of the relationship between government decisions and private investment opportunities. In 2003, he co-authored an op-ed for The Wall Street Journal headlined “Taking Iraq Private” with former Reagan National Security Adviser Bud McFarlane. The piece, published shortly after Bleyzer worked as an adviser to the U.S. occupation in Iraq, called for the U.S. to put together “a team of private sector business leaders” that would “supervise and monitor the execution of” policy measures aimed to court foreign direct investment.
“In the oil sector, priority should be given to improved transparency and predictability to encourage the early involvement of private international companies,” he wrote. “Today, Iraq’s oil industry is plagued by corruption and bitterly resented by the Iraqi people. Cleaning it up would boost the economy and give Iraqis some evidence that change and social benefit is coming.”
More than a decade later, he’s urged the Ukrainian government to shape its energy policy to appeal to foreign investors. Bleyzer formed the Bleyzer Foundation, which bills itself as a nonprofit that “provides assistance” to emerging economies “in creating favorable market conditions, improving the investment climate, and ensuring sustainable economic growth.” Its staff overlaps with Bleyzer’s company, SigmaBleyzer, and it publishes economic analysis and policy advice focused on former Soviet republics and Eastern European countries like Ukraine, Kazakhstan, Bulgaria, and Romania.
Bleyzer has stayed in Perry’s corner since first donating to his campaign years ago. In a Facebook post on Nov. 13, 2018, Bleyzer cheered a speech Perry had given the night before at the U.S. embassy in Kyiv. And he called for opening exploration and production markets to attract foreign investment in the country’s energy sector. Bleyzer also called for production-sharing agreements between the Ukrainian government and foreign companies that would have the technology and skills to increase the country’s natural-gas production, including by fracking.
“To unleash their true potential Ukraine must move quickly and decisively to open their markets to the best in class investors,” he wrote. “Many of them will come from America, and many of them will be from Texas.”
Five months later, Ukrainians elected comedian Volodymyr Zelensky as president. He turned to Perry—who had been running point on the U.S./Ukraine relationship—for suggestions on Americans who could advise him on the energy sector, according to a U.S. official. Perry recommended a number of names, including Bleyzer.
In 2018, Bleyzer announced that his private-equity firm planned to partner with energy producer Aspect Energy to invest up to $100 million in Ukrainian gas exploration. In July of this year, after Zelensky’s election, the investment plans paid off when the Ukrainian government awarded a tender to Bleyzer’s firm and Aspect for the development of the country’s Varvinska gas field.
The AP reported that Perry indicated to Ukrainian officials during a May 2019 trip to Kyiv that he wanted the state-owned Naftogaz to replace its whole supervisory board with new members. According to the AP, Perry wanted Bleyzer to be one of those members. A Department of Energy spokesperson, meanwhile, said Perry did not advocate “for the business interests of any one individual or company.”
Robert Bensh: Politico reported that Perry also floated this Houston oil executive as a potential Naftogaz board member.
Unlike Bleyzer, Bensh is an ecumenical political donor, giving $1,000 to the Republican National Committee in 2017 and $250 to Texas Democrat Beto O’Rourke’s presidential campaign.
Bensh has spent the past 20 years investing in the country’s energy sector. In 2014, he served as an adviser to Yuriy Boyko, the Ukrainian energy minister who served in ousted president Viktor Yanukovych’s Party of Regions. (Yanukovych, you may recall, was the pro-Putin leader of Ukraine at the time. Boyko currently leads the Ukrainian political party that’s friendliest to Russia.)
After Russian President Vladimir Putin drew international condemnation for annexing Ukraine’s Crimean Peninsula in 2014, Bensh told Oilprice.com that it was a done deal. “The reality is that this game is over,” he said. “The Crimea is Russia’s and everyone’s let it go.” Five years later, the prediction has been borne out.
Despite his work for Boyko, Bensh appears to have enjoyed cordial relations with successive Ukrainian governments. After Ukraine’s Maidan revolution swept Yanukovych from power, Bensh expressed support for the post-revolutionary government in Ukraine. “Ukraine is a great place to operate, and now it will be more transparent,” Bensh said in a 2014 interview. “So the sector should be opened up to more investment, which will happen as energy independence assumes a higher priority on the government’s agenda.”
More recently, he has praised the incoming President Zelensky for his “new leadership for the country that fosters [the] rule of law and affects a generational change in the country.”
Bensh’s Twitter account shows a series of tweets over the years criticizing Trump for his Russia policy. “Are you kidding me?” he tweeted at Arkansas Republican Sen. Tom Cotton in the spring of 2018. “You’re @RealDonaldTrump’s sycophant, who is clearly unwilling to do anything to counter Russia and Putin?”
Bensh, a graduate of Arizona State University, has been outspoken in his support for the late Sen. John McCain. “@SenJohnMcCain passes away and this is your tweet?” he tweeted when Trump cheerily passed along stock market news shortly after McCain passed away.
Bensh appears to have had at least a casual acquaintance with another of the “three amigos” who handled Ukraine policy for the Trump administration, former Special Envoy for Ukraine Kurt Volker. Photos from Bensh’s Instagram account show that he visited the McCain Institute at Arizona State University in 2015 and wrote that “Ambassador Volker was great and he asked if I would do the conference on reform.”
It’s unclear why Perry included Bensh’s name on a list of potential Naftogaz board members, but Bensh has argued for “unbundling” the state-owned oil and gas company from its gas transport business, a process now underway as part of trade negotiations between Ukraine and the European Union.
It is clear, meanwhile, that Perry’s relationship has drawn immense interest from congressional investigators looking to suss out the details of the administration’s policy toward Ukraine. And that interest is unlikely to abate.
