Dec 25, 2017
Fake news campaign in Ukraine uses Trump brand to smear state agency
A look inside a $50,000 disinformation campaign
KYIV. In case you missed it, a textbook PR campaign unfolded before Christmas. It was managed by Ukrainian lobbyists and public relations specialists during the last week of 2017 and targeted Ukraine’s State Service for Geology and Mineral Resources (Gosgeonadra) — the agency tasked with regulating access to the country’s vast natural resource wealth.
Two “articles” describing rampant corruption at Gosgeonadra appeared simultaneously on December 21, 2017 in foreign Internet publications, Poland’s Wschodnik.pl and France’s Paris Guardian. Both specified bribe amounts charged by Gosgeonadra — $1,000,000 to obtain a license and $250,000 to adjust existing license parameters.
If the foreign ezine publications were only the first phase of the PR campaign against the state service, the content of the articles would be irrelevant. Prior to the Revolution of Dignity in late 2013 and early 2014, muckrakers at least eschewed using rumors about sexual orientation and young children in their hit pieces, but these taboos have been dispensed with in recent years because of the declining number of customers.
The next phase of the PR campaign was standard, based on the simple algorithm: citations — top news platforms — widespread dissemination. Articles about Gosgeonadra on December 22 began appearing in Ukrainian media, citing Polish and French media sources. The campaign was synchronized. The same fake news began circulating on hundreds of Ukrainian websites.
The original corruption message in Polish and French publications was strengthened in the Russian- and Ukrainian-language versions with reference to the stated desire of U.S. President Donald Trump to end unfair distribution of Ukraine’s natural resources and sack Gosgeonadra’s acting chief Oleh Kyryliuk before Christmas.
Chances anyone in the United States knows who Kyryliuk is are slim to none. He is not exactly well known in Ukraine, either. PR campaign organizers calculated the value of information would increase exponentially if they cited foreign media branding Kyryliuk as corrupt. Such “news” is of obviously low quality. Reporting Trump’s interest in an obscure Ukrainian state agency is preposterous, leading to the conclusion that whoever paid for the PR campaign did not hold its target audience in high regard.
According to Ukrainian media reports, thanks to intrepid French journalists and the diligence of American lawmakers, Trump decided to personally intervene and put an end to the shenanigans.
Journalists at Ukraine’s Ekonimicheskie Izvestia ezine on December 22, 2017 write:
“Donald Trump was amazed by demands made by Gosgeonadra for $1 million bribe to receive a license and $250,000 to change parameters of an existing license. Facts published by U.S. Congressmen have led to the investigation of Gosgeonadra’s acting head Oleh Kyryliuk.”
Investigators at the Kyiv-based Kapital ezine, citing French and Polish news reports, also covered the story. They write:
“Unfortunately, Kyryliuk declined comment when our journalists called to ask about the sensational allegations. That is not surprising, because it’s not every day the American president mentions you by name involving a corruption scandal that threatens U.S. geopolitical plans.”
Observations
The PR campaign using “fake news” and the Trump brand can be distinguished from dozens of similar ones based on the following:
- Budget. The fee for article placement in the French edition of the Paris Guardian starts at EUR 5,000, not including the fee charged by the intermediary PR agency. Total expenses, including charges informing Ukrainians about corruption at Gosgeonadra in Ukrainian media (read: article placement) are an estimated $50,000 spent over three days. The size of the budget indicates whoever ordered the PR campaign has unlimited financial resources.
- References to Trump. The content of the fake news indicates the customer/author is at least familiar with the workings of the U.S. political system, i.e. Congressional oversight. Because they violated the time-honored principle, “The U.S. president can be criticized, but he can never be used,” we can narrow the list of potential PR campaign organizers to individuals with contacts in the United States, but who are inexperienced playing political games. That European media declined to include U.S. interest in the alleged shenanigans at Gosgeonadra (although it’s reasonable to assume they were offered to include it) is also a clue. All mentions of Trump in media are carefully monitored, but not by Ukrainian government agencies. The decision to invoke Trump in the battle for control over one of Ukraine’s state agencies is peculiar. It raises questions about the PR campaign organizer’s competence.
- Most likely, the organizers of the PR campaign assumed they would remain incognito by using several media agency intermediaries. But I have bad news for them: the number of cutouts matters little when U.S. intelligence agencies begin digging. Secondly, even without being privy to proprietary information, informal chit chats with Ukraine’s incestuous media bosses and PR marketeers make it easy to to draw up a list of possible candidates. There is almost always someone unknown on the list. As for the New Year PR campaign against Gosgeonadra, however, the list of suspects is one name long: Andriy Kobolev, head of NJSC Naftogaz Ukrainy.
Conclusions:
Gosgeonadra is currently engaged auditing licenses handed out during the previous 25 years. The task is not simple, because according to Ukrainian tradition, each new government tries to distribute as many licenses as possible to its supporters, regardless of their lack of experience in the industry and/or available capital to actually develop these deposits. There have been many governments in Ukraine over the last quarter of a century and the most attractive deposits of mineral resources have wound up in the pockets of persons close to country’s rulers.
The result achieved — formally licensed but not developed fields — as of 2017 contradicts what Washington requires from Kyiv, that is, to allow private companies from different countries to compete for rights to extract Ukraine’s gas, oil and mineral resources on a competitive basis. But in order to hold competitions, available deposit fields are necessary. This explains why Gosgeonadra months ago began the official process of voiding so-called sleeping licenses, the holders of which have for years ignored contractual obligations to develop their deposits within two, three, four or five years.
The audit of licenses first identified private companies with documentation problems, as well as state-owned companies. The process ruined the best laid plans of many license holders, who had hoped to sell their deposit rights to investors in the natural gas and oil sector (the investors who never materialized all these years in Ukraine). Unused licenses for oil and gas extraction began returning to the state, so they can be auctioned off again, but this time not only to Ukrainian and Russian companies, as was the case in the past, but to investors the European Union and United States.
Ukraine’s largest energy company, Naftogaz Ukrainy, is acutely affected by the license audit process. The company is burdened by debts, many of which are secured with banks using the company’s property and licensed gas/oil field reserves as collateral. The revocation of these licenses and evaporation of collateral could require Naftogaz secure new bank loans by leveraging other assets.
Moral of the story: Poorly thought out, bungled and expensive PR campaigns used in unremitting battles waged between Ukrainian elites often backfire, reflecting poorly on those who instigated, organized and paid for them.
