While there are some hopeful criminal investigations under way, the oligarchs in Ukraine threaten to tame President Volodymyr Zelensky just like they did his predecessors.
Zelensky rails publicly and hard against officials or businesspeople he considers “bandits.”
But when face-to-face with the biggest oligarchs, he appears unwilling or unable to confront them, and the damage they are doing to Ukraine.
His administration may never recover from the political or economic damage if billionaire oligarch Ihor Kolomoisky, with whom Zelensky has done business and met in the President’s Office on Sept. 10, regains control of PrivatBank, the country’s biggest lender.
In London, Kolomoisky is set to face trial over alleged fraud. To avoid English justice, he will need to persuade the Supreme Court there to throw out the case against him. It looks unlikely to happen: a High Court justice has recognized that “fraud on an epic scale” took place while the oligarch owned PrivatBank and this week, the Court of Appeal reminded us that Kolomoisky knows he is in trouble: “the defendants do not dispute the existence of a good and arguable fraudulent case against them.”
But the signs are less positive in courtrooms here in Ukraine, where the bank and its customers are located.
The state nationalized PrivatBank in 2016 because forensic audits found that Kolomoisky and co-accused lent money to themselves, associated businesses and partners, allegedly stealing at least $5.5 billion this way, driving the bank to insolvency. Taxpayers had to step in with the cash — an amount that is more than 10 percent of the nation’s annual budget.
Evidence shows Kolomoisky should be indicted for bank fraud and forced to reimburse taxpayers. So far, we see no movement here in Ukraine on possible criminal charges from Zelensky-era prosecutor general, Ruslan Ryaboshapka. We hope he doesn’t go down the route of his predecessors, notably Yuriy Lutsenko, who even met with Kolomoisky in Amsterdam in 2017.
Kolomoisky has the gall to not only want the bank back, but to demand reimbursement for the state saving it. It appears that the Kyiv judge hearing his lawsuit, Liudmila Shkurdova, could be in his pocket. She has kept the proceedings closed, citing banking secrecy laws. This is wrong. The public’s right to know how these proceedings are conducted outweigh the sanctity of a private contract. This is a public court hearing a case on a matter of tremendous public importance.
Now we know why the judge wanted secrecy. Two lawyers involved in the trial tell the Kyiv Post that the judge routinely rules against the defendant PrivatBank’s interests and doesn’t allow fair arguments. She acts like a one-woman kangaroo court, even turning down attempts to empanel three judges, making co-option less likely, but still possible. A ruling in favor of Kolomoisky won’t surprise anyone.
Kolomoisky isn’t the only problem. There is no reason for oligarchs like Dmytro Firtash to continue to have their monopoly or oligopoly privileges in energy or media. Ex-President Petro Poroshenko is no longer in power. Their “Vienna Agreement” of mutual support is no longer in force. Zelensky controls parliament. It’s high time that he strips the privileges of Firtash and the rest of the oligarchs, Rinat Akhmetov and Victor Pinchuk among them.
We saw some good signs on Oct. 17, when law enforcement came after two notorious untouchables. The National Anti-Corruption Bureau of Ukraine arrested ex-National Security and Defense Council chief Oleg Hladkovsky, one of the closest associates of Poroshenko. Hladkovsky is investigated for abuse of office, having allegedly given a lucrative defense contract to his company. On the same day, Ryaboshapka filed a request for the parliament to allow the prosecution of its member Yaroslav Dubnevych. A powerful businessman benefitting from state contracts, Dubnevych is suspected of embezzlement.
Even though they are second-tier people, these two are as high as law enforcement has reached in a while.
It’s a good start for Ryaboshapka. His office looks promising with three well-reputed deputies he appointed: Vitaly Kasko, Viktor Chumak, and Viktor Trepak. We will see if they are capable to reach higher and eventually bring the big shots to justice.
