Gay Mitchell represented controversial military dealer at EC

Presidential candidate Gay Mitchell made a representation to the EU Commission in 2009 on behalf of a controversial Ukrainian aviation businessman who supplied Congolese armed forces with military aircraft. The businessman is attempting to reclaim planes confiscated by Ukraine's government in 2001. By Malachy Browne and Graham Stack.

On 7 October 2009, four months after his re-election as an MEP, Gay Mitchell made the following representation to the EU Commission on behalf of a company registered in Ireland:

"The Dublin-based aviation company East/West Alliance has been the victim of the widespread corruption that permeates Ukrainian business and society. They had a significant amount of property ‘confiscated’ by authorities and despite rulings by the Ukrainian courts that the property belonged legitimately to East/West Alliance they have received neither their property nor compensation for loss of income." Mr Mitchell closed by asking "what action can the Commission take to assist a company registered within an EU Member State to receive the property and compensation it is due?".

Of 76 submissions made by Mr. Mitchell to the EU Commission and Council since 2009 (recorder on the EuroParl website), this is the only one made on behalf of an active private company. While no suggestion arises that Mr. Mitchell acted improperly in making the submission, perhaps unwittingly, Mr. Mitchell advocated on behalf of a Ukrainian citizen implicated in transfers of military equipment to African war zones. Mr Mitchell has not replied to questions on the matter put by Politico several weeks ago (see below).

East/West Alliance, the "Dublin-based" company to which Mr. Mitchell refers, is a brass-plate company with no staff in Ireland. The company has no office at the Ranelagh address to which it is registered. The company's listed bank account is an offshore account in Parex Bank in Riga, Latvia.  

The “significant amount of property” to which Mr. Mitchell refers comprises Soviet transport aircraft confiscated by Ukrainian authorities in 2001 on foot of an investigation into tax fraud into companies owned by Anatoly Liovin. Mr Liovin is a director of East/West Alliance; his 24-year old daughter Ganna, with an address in London, is the sole shareholder of the company, according its 2010 Annual Return. 

Documents released under the Freedom of Information Act (FOI) show that East/West Alliance wrote a letter to Mr. Mitchell in 2006 thanking him for contacting them and agreeing to meet with them. His representation in September 2009 came two months before a United Nations report was published identifying Liovin as having leased military aircraft to the Democratic Republic of Congo armed forces (FARDC) in 2008 and 2009 during the ongoing Kivu conflict. The aircraft were shipped without notification to the UN, as required under a Security Council resolution. Indeed, attempts were made to conceal the ownership and transport route of the aircraft leased to the FARDC, the UN report notes. The UN report was investigating FARDC support for the rebel Rwandan group, the FLDR in the east of the troubled country. 

The Antonov-12 planes leased to the FARDC, the UN Group of Experts writes, "are no longer airworthy according to the Antonov Design Bureau so their delivery to the DRC not only constitutes a violation of paragraph 5 of resolution 1807 (2008) but their use also poses a potential  aviation safety hazard."

Hugh Griffiths, an arms trafficking and aviation expert at Stockholm International Peace Research Institute said in an interview: "It is deeply ironic that European officials are pressuring the Ukraine to return cargo planes to someone involved in transfers of conflict-sensitive materials to African war zones. The planes, if released to Liovin by Ukraine, would seem destined to be used by, or sold to, actors in African conflicts with poor human rights records.”

Mr Mitchell has a strong record on development issues and he visited the Democratic Republic of Congo in 2007. His championing of Liovin might be a simple failure to perform an adequate background check. Just weeks after raising the issue of East/West Alliance, Mitchell and MEPs tabled a resolution in the European Parliament condemning the continued violence in DR Congo. The second sentence of the resolution specifically referred to the newly published UN Report that listed Liovin as having supplied planes to the DR Congo’s armed forces. It called for tougher controls on "arms shipments, trading routes and (...) flights from the Great Lakes region to the Democratic Republic of the Congo and from the Democratic Republic of the Congo to the Great Lakes region".

On receipt of Mr. Mitchell's representation, European Commissioner for External Relations Ferrero Waldner replied positively, stating, "anti-corruption plays a central role in the existing dialogue between the EU and Ukraine". Waldner said she "would be glad to discuss the specific case of East/West Alliance with company representatives... to determine the best course of action". Representatives of the European Commission subsequently met with East/West officials in Ukraine and in the UK and Ireland in May 2010. Ferrero Waldner's office now notes that it has "outstanding issues" with East/West Alliance Ltd.

According to Liovin himself, Irish government representatives also raised his case with Ukrainian officials. The Department of Foreign Affairs declined a request by East/West Alliance to make representations at European level`and referred the matter to the Irish embassy in Prague, according to documents released under FOI. 

Mitchell’s office says that Fine Gael has not received any financial contributions from East/West Alliance Ltd. He has since failed to answer the following questions sumbitted on 30 August and requested again by email and telephone (Politico also received no reply to prior attempts to speak with Mr. Mitchell about the representation): 

  • How did you first become aware of East West Alliance?
  • The representation above is the only official representation made by you at European level on behalf of an active private company. Why did you make the representation on behalf of East West Alliance? Who or what prompted you to make the enquiries?
  • You refer to East West in your submission as an Irish company. Were you aware that East West is a brass plate company with no business activity, set up in Ireland to avail of tax incentives?
  • Did it strike you as strange that an Irish company would have aircraft confiscated by authorities in another country? Did this not prompt you to investigate the company's activities further before making a representation?
  • Were/are you aware that East West's bank account is in Latvia and has administrative connections with other 'Irish' brass plate companies with bank accounts and connections in Latvia?
  • Have any of the nominees or associates connected with East West Alliance made a financial contribution to Fine Gael or to your political campaigns?
  • Were you aware that a UN report on the Congo was forthcoming at the time of your proposal? Were you aware that Anatoly Levin (connected with East West) was implicated in this report?
  • Do you consider it a mistake to have made the representation on behalf of East West alliance?

Group of Experts Report DRC November 2009

East West Alliance 2010 Annual Return