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Whither The Oligarchs? Amid Russia Crisis, Fears For Ukraine's Struggle To Uproot Corruption


Ukrainian President Volodymyr Zelenskiy (center) meets in Kyiv with Ihor Kolomoyskiy (second from right), an oligarch whose TV station supported Zelenskiy's successful election bid in 2019. (file photo)
Ukrainian President Volodymyr Zelenskiy (center) meets in Kyiv with Ihor Kolomoyskiy (second from right), an oligarch whose TV station supported Zelenskiy's successful election bid in 2019. (file photo)

KYIV -- The jets -- private, elite, and chartered -- were clearly seen on the flight trackers, as was the direction they were headed in: out of Ukraine, toward the West, away from a country facing the threat of a major new Russian invasion.

That so many were flying out of Kyiv on February 13 -- around 20 documented by Ukrayinska Pravda’s sharp-eyed reporters -- was notable.

Equally notable were the reported owners: the business tycoons, commonly known as “oligarchs,” whose wealth and power have long been both a symbol of Ukrainian capitalism and a millstone around the effort to clean up its reputation for corruption.

With what the White House says is more than 150,000 troops and powerful weaponry positioned along its borders, not to mention a flotilla of naval landing ships off its Black Sea coast, Ukraine could be plunged into a devastating new war -- on top of the simmering conflict with Russia-backed separatists that’s been waged since 2014 in the eastern Donbas region.

Buried in the calls for Ukrainian solidarity in the face of Russian threats, and in the calls for help from the West, is the suspicion that the efforts by President Volodymyr Zelenskiy’s government to uproot corruption may sputter even more than they already are.

Or even worse: that Zelenskiy’s government is dragging its feet on following through with the reforms.

The goals of the overall reforms include diminishing the power of the oligarchs, a list whose best-known names include Rinat Akhmetov, Viktor Pinchuk, Dmytro Firtash, Viktor Medvedchuk, and perhaps most prominently, Ihor Kolomoyskiy. Lesser-known figures include agrobusiness tycoon Vadym Nesterenko, shipping magnate Andriy Stavnitser, billionaire lawmaker Ihor Abramovich, and metals magnate Vadym Novynskiy.

“Because of war and all these threats, the focus on our international partners’ attention is on Russia, and that means we are losing leverage from our international partners,” said Daria Kalenyuk, executive director of the Anti-Corruption Action Center, a Kyiv nongovernmental organization.

“Ukraine still needs financial support. We are losing a lot because of Russia, and the buildup, but it should not be unconditional support. There has to be conditionality, it has to be linked at least to make sure the reforms of the last eight years are not reversed,” she said. “We shouldn’t lose internal focus on internal reforms.”

The 2013-14 Maidan movement -- the largely peaceful street protests that culminated in violent clashes and in the flight of President Viktor Yanukovych -- was fueled in large part by widespread disgust among Ukrainians with the country’s corruption problem; not to mention the powerful oligarchs, several of whom were key backers of Yanukovych and his Party of Regions.

Under President Petro Poroshenko, who won election later in 2014, and under major pressure from Western donors, the government pushed through two major projects. The first was the establishment of formal investigative agencies like the National Anti-Corruption Bureau of Ukraine, or NABU, which proves corruption and prepares cases for prosecution.

The second was a push to streamline and improve corporate governance, in particular at state-owned companies, which occupy a major part of the Ukrainian economy.

Petro Poroshenko talks to supporters in front of a court in Kyiv prior to proceedings on charges of high treason against the former president, which began earlier this year.
Petro Poroshenko talks to supporters in front of a court in Kyiv prior to proceedings on charges of high treason against the former president, which began earlier this year.

But Poroshenko was seen by critics as being slow to make fundamental changes, or go after powerful officials seen as corrupt, including the country’s chief prosecutor.

Ukraine’s oligarchs each have their particular characteristics, Kalenyuk said.

“But the common factor is their wealth,” she said. “If they want to support pro-Russian politicians to benefit their wealth, they will do that. That is something that is common for all of the oligarchs.”

“Also, they all rely heavily on the West,” she said.

Servant Of The People

In 2019, Zelenskiy won the presidency by a landslide over Poroshenko after campaigning on pledges to end the conflict with Russia and to tackle the corruption and bureaucracy that has hamstrung the economy and hurt living standards.

Results have been mixed at best, and there is growing suspicion that Zelenskiy administration officials may be undermining those efforts themselves.

Transparency International said in its latest report released last month that there had been “no progress” and the country’s rating had even slipped slightly: “too many urgent anti-corruption tasks are delayed, frozen, or postponed indefinitely.”

Two spokespeople for Zelenskiy’s administration did not immediately respond to queries from RFE/RL for this article. In the past, administration officials have said they are committed to reforms and denied seeking to slow or stop them.

Ukrainian President Volodymyr Zelenskiy (file photo)
Ukrainian President Volodymyr Zelenskiy (file photo)

In September, lawmakers in parliament, where Zelenskiy’s party, Servant of the People, holds a majority passed a law that allows the National Defense and Security Council to establish a definition of what an oligarch is.

Criteria include the level of influence over media, control of any monopoly-like company, political activity, and net worth. A person deemed to be an oligarch will be banned from funding political parties or holding government posts or participating in privatization auctions of state companies. They will also be required to disclose assets.

Activists and campaigners said that the law was mainly window dressing and that other anti-corruption drives are being quietly thwarted, such as the effort to choose the new head of the Specialized Anti-Corruption Prosecutor's Office.

The process, which should have taken just few months, has now lasted more than a year due to repeated failures to gather a quorum and administrative problems.

“The requirements the law would impose are more insulting than ruinous for the men who consider themselves the owners of Ukraine,” commentator Konstantin Skorkin wrote in an article for the Carnegie Moscow Center. “Zelenskiy wants not so much to dispossess them of their business empires as to put them in their place: to show them that the president is no oligarch’s puppet.”

Picking Fights

For Zelenskiy, the easiest fight to pick was with Medvedchuk, who owned three TV stations which often promoted Russia-friendly narratives. And Medvedchuk has a personal relationship with Russian President Vladimir Putin, who is the godfather of his daughter.

Viktor Medvedchuk (file photo)
Viktor Medvedchuk (file photo)

The United States imposed sanctions on Medvedchuk in 2014, accusing him of undermining democracy in Ukraine. In February 2021, Zelenskiy’s administration moved to shut down his TV stations, and a month later, Ukrainian prosecutors put him under house arrest.

Amid an outcry from critics who charged that Zelenskiy was suppressing freedom of speech, U.S. and Western officials have said little publicly to condemn the TV stations’ shutdown, justifying it by saying Medvedchuk’s stations were a conduit for Russian disinformation.

Prosecutors have launched a treason case against Poroshenko, who is also widely considered an oligarch due to his wealth from the large chocolate and candy corporation he founded. He and his supporters contend that the allegations are politically motivated.

The harder fight for Zelenskiy has been with Kolomoyskiy, who has backed Zelenskiy’s political party, and whose TV station supported Zelenskiy in his presidential bid.

In the early years of the war in the Donbas, Kolomoyskiy financed one of best-known and most effective militias in the east. But in 2016, Kolomoyskiy’s bank, Privatbank, collapsed amid accusations of embezzlement and fraud, a failure that resulted in a more-than-$5 billion bailout by the Ukrainian government.

The U.S. government sanctioned Kolomoyskiy in 2021; he also faces U.S. Justice Department charges that he misappropriated Privatbank funds to invest in commercial real estate in Cleveland, Ohio.

Ihor Kolomoyskiy (file photo)
Ihor Kolomoyskiy (file photo)

In a rare interview published on February 15, Kolomoyskiy asserted that he no longer communicates with Zelenskiy.

“The man has chosen his path; he is the president of the country. He has his vision, program, plans,” he was quoted as saying. “Communicating with me gives him only a minus.”

Kolomoyskiy also praised the law, saying it would force fellow oligarchs to disclose and justify where their money comes from, for both local and foreign banks.

A day after Ukrayinska Pravda published its findings on the chartered jets leaving Ukraine, Zelenskiy spoke publicly, calling for solidarity among all Ukrainians in the face of Russian threats.

And he accused lawmakers, as well as unnamed business leaders, of fleeing the country in the face of a potential imminent assault by Russian forces.

Rinat’s Return

The following day, Akhmetov, whose metals business empire has made him Ukraine’s wealthiest man, returned to the country, and then traveled to the port city of Mariupol, near the front line in the Donbas war, where his company has two factories. His spokeswoman, Anna Terekhova, posted a picture on Facebook of him, along with Novynskiy, who is also a member of parliament.

In recent months, there’s been growing visible tension between the government and Akhmetov’s businesses. Earlier this month his metals company, Metinvest BV, was raided by tax investigators. And in November, the government abruptly withheld a $115-million payment to an Akhmetov energy company -- a move the company called "shocking."

Meantime, the Ukraina 24 television channel, which is owned by Akhmetov, has drawn scrutiny in recent months for hosting people who were pointedly critical of Zelenskiy.

And on the same day that Akhmetov returned, the channel featured a prime-time segment with Andriy Portnov, a former top official in the Yanukovych government. The United States imposed sanctions on Portnov in December, accusing him of “using his influence to buy access and decisions in Ukraine’s courts and undermining reform efforts.”

Rinat Akhmetov (file photo)
Rinat Akhmetov (file photo)

Spokespeople for Firtash and Medvedchuk did not immediately respond to queries.

In a message to RFE/RL sent by his spokeswoman, Akhmetov rejected the suggestions that his travels, and his return to Ukraine, were connected in any way to Zelenskiy’s remarks, or that he was trying to flee the country.

"My trips do not depend on the president's comments,” he said. “When I read that a war may start on February 16, I decided to come back to Ukraine, namely to Mariupol, on February 15.”

Akhmetov also criticized the “anti-oligarch law,” saying it “violates human rights and will not bring anything good to Ukraine and Ukrainian society."

“We need an economic rebound. To achieve the economic growth, we need a favorable investment climate, fair competition, a level playing field, and a strong anti-corruption agenda,” he was quoted as saying. "There's nothing of the kind in this law. And furthermore, it seems to be poor timing for the ‘witch hunt,’ when Ukraine is facing potential aggression."

Nataliya Vovk, a spokeswoman for Pinchuk, said in an e-mail to RFE/RL that Pinchuk traveled frequently in and out of Ukraine, both for business and personal activity. She said he was in the Ukranian city of Dnipro on February 16, followed by Kyiv, and was later flying to Germany for the Munich Security Conference this weekend.

Viktor Pinchuk (file photo)
Viktor Pinchuk (file photo)

“For us, Ukraine is our only homeland, the only thing that matters to us, this is the place in which we invest, the place for which we will fight together,” she quoted Pinchuk as saying.

Novynskiy, whose plane was among those spotted leaving over the weekend, told RFE/RL’s Ukrainian Service that his flight out of the country was nothing unusual, and that his plan all along had been to return on February 14. He also said he planned to fly to St. Petersburg in the coming days.

“I have my own personal life,” he said. “I have nothing to hide. It’s not a secret to anyone.”

Vadym Novynskiy (file photo)
Vadym Novynskiy (file photo)

Andrian Prokip, an analyst at the Ukrainian Institute For The Future, a Kyiv-based think tank, predicted that the oligarchs on the whole will lean toward ensuring that any government in power in the foreseeable future -- Zelenskiy’s or otherwise -- will be independent of Russian control.

"If, as a result of some coup, a pro-Russian government comes to power that is accountable to Putin, Ukrainian oligarchs understand they will lose their power. For them, it's better to be oligarchs in independent Ukraine rather than nobody in a Ukraine controlled by Putin's puppet," Prokip told RFE/RL.

“That is why these guys will take steps to protect their territories and protect Ukraine,” he added.

RFE/RL senior correspondent Todd Prince contributed to this report from Washington, D.C.
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    Mike Eckel

    Mike Eckel is a senior correspondent reporting on political and economic developments in Russia, Ukraine, and around the former Soviet Union, as well as news involving cybercrime and espionage. He's reported on the ground on Russia's invasion of Ukraine, the wars in Chechnya and Georgia, and the 2004 Beslan hostage crisis, as well as the annexation of Crimea in 2014.

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