In 2010 the company’s fortunes began exploding. By 2014, Yanukovych was worth an estimated half billion dollars. What was the difference between Mako Holdings’ first and second four years? It was that Oleksander’s father Viktor became president of Ukraine in 2010. And Papa funneled half of all government construction business to Mako Holdings.
This story is just one example of the nepotism infesting the former Soviet Union. By putting wealth in the hands of family instead of those with the most talent or potential, it hurts the economy. It also breeds cynicism and loss of hope among the rank and file, who know they cannot achieve success with no family in high places.
There are endless variations on nepotism.
One is for a leader to funnel government business to a relative, as Papa Yanukovych did.
Another is for a leader to arrange for a family member to get a government position that can be used to suck up money like a vacuum.
Vladimir Putin has done this in Russia.
Dmitry Peskov (pictured) is Russian President Vladimir Putin’s spokesman.
An even brassier and more lucrative scheme is for a leader to help family members commandeer entire businesses or industries, as President Nursultan Nazarbayev has done in Kazakhstan.
Although nepotism is a serious matter that grates the public, sometimes its manifestations border on comedy.
Recently Armenian Prime Minister Hovik Abrahamyan presided over the first meeting of the country’s Anti-Corruption Council.
Afterward he met with Swiss-Armenian businessman Vartan Sirmakes, whom Abrahamyan praised for investing in Armenia.
Armenian journalists chortled when they pointed out in news stories that Hovik Abrahamyan, the son of the corruption fighter, is a major investor in the Armenian operation of Sirmake’s luxury watch brand, Frank Muller. Papa was greasing the skids for Sonny.
Stories about Putin enriching cronies by helping them commandeer major chunks of the petroleum and other industries are legendary.
So are stories of his appointing cronies to government positions they could use to gorge themselves at the public trough.
A case in point is recent public outrage over Putin press spokesman Dmitry Peskov sporting a watch that cost $620,000, four times his official salary. Recently Putin extended his king-making — or, in this case, queen-making — to his 28-year-old daughter, Ekaterina.
Despite no background in business or technology, she has an executive position overseeing the creation of an innovation complex next to Moscow State University that Russia hopes will become its Silicon Valley.
Top companies, including the oil giant Rosneft, nuclear power plant operator Rosatom and defense conglomerate Rostech, are pouring money into the project. In the Russian scheme of things, this creates an opportunity to get rich for anyone in a top position associated with the project.
Nazarbayev’s nepotism has been on a much grander scale than simply helping a relative obtain a government appointment — although he has done that, too.
Unfortunately for him, two of his greatest embarrassments in office — both at home and abroad — have involved sons-in-law he helped enrich.
One is Timur Kulibayev, Kazakhstan’s richest man.
The billionaire, who is married to Nazarbayev’s middle daughter Dinara, used his father-in-law’s clout to become head of the national petroleum company KazMunaiGas, banks and other businesses.
Timur Kulibayev.
He tarnished Nazarbayev’s legacy when he mishandled an oil workers’ strike in Zhanaozen in western Kazakhstan. The workers wanted more pay. Instead of being open to compromise, Kulibayev ordered the strike crushed. Police fired into the workers on December 16, 2011, killing at least 15 and wounding 86. Nazarbayev fired Kulibayev and the governor of the region where the strike occurred over what came to be known as the Zhanaozen Massacre.
The other son-in-law whom Nazarbayev helped enrich became an even worse embarrassment.
Rakhat Aliyev used his position as deputy director of the KNB — the successor of the Kazakhstan’s KGB — to take over many lucrative businesses, including banks, media and the entire sugar industry.
His brutal methods included murder, prosecutors say. He hanged himself in an Austrian prison in February before the Austrians could try him for the murder of two executives of Nurbank, which Aliyev had controlled. He ordered them killed because he believed they had stolen some of the bank’s money, prosecutors maintained.
Rakhat Aliyev.
Kazakhstan, Russia and other countries in the former Soviet Union have nepotism laws, but the elite routinely flout them, global transparency organizations contend. Until all countries in the region have those laws, and enforce them, nepotism will remain a scourge, allowing elite families to steal countries’ wealth and crushing common folks’ hopes of achieving equality.
Armine Sahakyan is a human rights activist based in Armenia.
