Ukrainian Reconstruction Bank Set Up by BlackRock and JPMorgan Chase Has Secured at Least $500 Million in Capital

A key purpose underlying the Ukraine War was made clear at the annual meeting of the World Economic Forum in Davos in January when Philipp Hildebrand, vice chairman of BlackRock, the world’s largest asset manager, announced the start of a much-touted Ukrainian Reconstruction Bank in five to six months.

The Reconstruction Bank is being put together by BlackRock and JPMorgan Chase for the Ukrainian government.

Many of its initiatives will be overseen by Penny Pritzker, a banking heiress from a family with CIA and Mafia connections and a history of white-collar crime,^[1] who was appointed by the Biden administration as a special envoy for Ukrainian reconstruction.

The Reconstruction Bank has secured $500 million in pledges by foreign investors seeking to profit off of Ukraine’s reconstruction with the expectation that another $500 million will be secured in the next six months.

One of the potential investors is Robert Kraft, the billionaire paper manufacturer and owner of the New England Patriots, who has been part of JPMorgan-led discussions on rebuilding Ukraine for the past year, and is now seriously considering building paper manufacturing factories in western Ukraine.^[2]

The reconstruction of Ukraine is necessitated by a war manufactured by the U.S., which turned the Ukrainians against the Russians in order to draw Russia into a devastating conflict that held the prospects of weakening Russia and enriching U.S. corporations.

The elimination of a generation of Ukrainian and Russian youth and devastation of Ukrainian cities was “collateral damage” whose only utility lay in its propaganda value as the Russians have been blamed for all the carnage.

At the World Economic Forum, Ukrainian President Volodymyr Zelensky met JPMorgan CEO Jamie Dimon and other senior JPMorgan executives, BlackRock’s top management, executives from Bridgewater Associates, Carlyle Group, a leading weapons contractor, Blackstone, Dell and ArcelorMittal, which all seek to grow rich in Ukraine.

Last January, Zelensky gave a speech before the Boca Raton Chamber of Commerce in which he boasted that BlackRock, JPMorgan, and Goldman Sachs “have already become part of our Ukrainian way.”^[3]

When Dimon and other JPMorgan executives visited Kyiv in February 2023, they agreed that JPMorgan would not only help to raise private investment funds for Ukraine, but would also advise Ukraine on financial stabilization, sovereign credit ratings, and economic ties to Europe.

Dimon said the “full resources” of JPMorgan would be available to Ukraine as it “charts its post-conflict path to growth.” Earlier, Dimon had called Ukraine “an inflection point for the Western World for one hundred years.”

Such views correlated with Dimon’s self-interest; on top of the lure of reconstruction contracts funded by the Reconstruction Bank, JPMorgan held more than $2.5 billion in Raytheon stock, and over $1.3 billion worth of both Northrop Grumman and General Dynamics stock as of February 15, 2023, major weapons contractors that have made huge profits from the war with Russia.

Fittingly, during his visit to Kyiv, Dimon and other JPMorgan executives gifted Zelensky with a New England Patriots jersey with the number 91 on it for the year Ukraine gained its independence after the collapse of the Soviet Union.

Besides opening the floodgates to foreign capital, Ukraine continues to be valued by Dimon and his associates as a battering ram whose purpose is to weaken Russia and affect regime change so a new leader can allow Wall Street to penetrate Russia’s economy and gain ownership of its rich natural resources, as it was beginning to do under Boris Yeltsin, Vladimir Putin’s predecessor.

Disaster Capitalism

Ukraine would provide another good chapter in Naomi Klein’s book, The Shock Doctrine: The Rise of Disaster Capitalism, published in 2007, which showed how capitalist interests have deliberately manufactured crisis after crisis so that they could profit from the wreckage.

A key case study of the book is Iraq, where Klein shows how military contractors and oil companies that profited from the Bush administration’s shock-and-awe campaign sought to capitalize on the privatization bonanza and opening of the country to Western corporations under the direction of L. Paul Bremer, the Coalition Provisional Authority (CPA) economic czar.

Klein reported that Bremer, a former managing director at Kissinger Associates, enacted a “radical set of laws described by The Economist in glowing terms as the ‘wish-list’ that foreign investors and donor agencies dream of for developing markets.”^[4] Iraq, however, was transformed under Bremer into a dystopia where the country relinquished its economic sovereignty.

Ukraine appears on the threshold of suffering the same fate.

Zelensky has already helped to establish a low-wage, low-tax economy conducive to foreign investors, while dismantling progressive labor laws, supporting land privatization and initiating attacks on unions and left-wing politicians and political parties, which have been banned.

Founder and chairman of a private investment firm, PSP Partners, and past member of the Board of Directors of the Council on Foreign Relations, Wall Street’s think tank, Penny Pritzker visited Kyiv during her tenure as Commerce Secretary following the February 2014 Maidan coup and helped deliver a $3 billion loan that was contingent on the government adopting neo-liberal reforms beneficial to foreign corporations that had been resisted by Viktor Yanukovych, the pro-Russian leader ousted in the coup.

As a result of the “reforms” championed by Pritzker, U.S. corporations such as Cargill, DuPont (a Delaware-based company which has long supported Joe Biden’s political career) and Monsanto have been able to invest heavily in Ukrainian agriculture and, according to a report in the Australian National Review, purchased more than 17 million hectares of Ukraine’s arable land—more than all the arable land that exists in Italy.

The main shareholders in these latter companies are Wall Street investment firms—The Vanguard Group, BlackRock and Blackstone—which donate heavily to both the Democratic and Republican parties and own major weapons companies like Raytheon, Boeing, Northrop Grumman, General Dynamics and Lockheed Martin that have done brisk business contributing to the destruction of Ukraine.

An April 2021 report by the International Monetary Fund (IMF) made the lifting of a moratorium on the sale of land to foreign companies a condition for the loan package that Pritzker helped to deliver.

A poll found that 81% of Ukrainians were against the sale of land to foreigners and lifting of the moratorium, while only 13% were in favor of it.

Geopolitical analyst Drago Bosnic wrote that “the Ukrainian people have not only been quite literally robbed of the lands their ancestors gave their lives for”; they are also “effectively dying in battle to make sure this theft continues unabated.”

At the World Economic Forum, Pritzker spoke about the interest of promising investors, who are ready for higher risk, which she said will have to be mitigated by donor countries (i.e., taxpayers), before wealth from pension funds managed by BlackRock can be mobilized.

About 280 projects have applied to the fund so far, with around 30 projects being considered by BlackRock and JPMorgan Chase.

Rostyslav Shurma, deputy head of Zelensky’s office, expects $1 billion commitments in “catalytic capital.” This term refers to capital-like investments, debt and guarantees in which the investor accepts higher risk for greater social impact, according to Reuters.

The European Bank for Reconstruction and Development (EBRD), of which the U.S. is the largest shareholder, wants to further “massively engage” in Ukraine.

Based in London, the EBRD was founded in 1991, to intervene with credit and projects to help former Soviet areas to “adjust” to Western ways after the Soviet Union dissolved.

For example, the EBRD worked overtime in Ukraine in the 1990s, to aid the global agricultural cartels to gain dominance in the country.

The EBRD plans to provide €7.5-15 billion in announced investments in the next five years, with special emphasis on “support for the private sector.”

European Commission President Ursula von der Leyen is “optimistic” that all 27 EU member states will agree to joint financial assistance for Ukraine—in 2024-2027 some €50 billion altogether.

The EBRD’s important role in the new Ukraine underscores the function of Western government institutions in facilitating shameless corporate war profiteering.

How much longer Ukrainians will put up with Zelensky’s brazen fealty to Western corporate interests is an open question, as signs of disaffection in the country continue to grow.

Ukrainians at this time would do well to read the chapter in Klein’s book about Iraq and mobilize to prevent the same thing from happening to them, even if it is already far along.

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1. For example, in 2011, the Federal Deposit Insurance Corporation (FDIC) discounted a balance of $144 million from a $460 million fine Pritzker had been assessed for illegal bank and loan shark operations at the failed Hinsdale, Illinois, Superior Bank while depositors, who were still owed $10.3 million, lost their savings. According to journalist Greg Palast, the depositors included “poor folk in [then] Senator [Barack] Obama’s South Side district [who] lost their homes.” Superior Bank’s failure resulted from years of sub-prime lending combined with fraudulent reporting practices and the deception of regulators.  ↑

2. New York Post reporter Charles Gasparino was told by banker sources that Zelensky convinced the investment big shots that he is rooting out corruption, a big obstacle for any significant capital raising. Inflation is also down in the country, which is considered a significant positive. ↑

3. Bradley Devlin wrote in The American Conservative that “Zelensky did not elaborate on what the ‘Ukrainian way’ is.” “Maybe,” he writes, “the ‘Ukrainian way’ is one of rampant corruption—two of the presidents before Zelensky have either been charged with or convicted of high treason and numerous government officials have been fired or forced to resign for improper use of wartime funds.” Bradley Devlin, “Ukraine Gets Another Angel Investor,” The American Conservative, February 16, 2023, https://www.theamericanconservative.com/ukraine-gets-another-angel-investor/ ↑

4. Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism (New York: Metropolitan Books, 2007), 345. ↑

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