All will be forgiven and forgotten if President Volodymyr Zelensky creates an economic boom, brings an end to Russia’s bloody war, and recovers Crimea and Kremlin-controlled parts of the Donbas.
But I don’t see how Zelensky is going to do that given the company he keeps and the people he courts. Here’s some of what I find disturbing about Zelensky’s first four months in office:
Secret meetings
Zelensky is disrespecting the people of Ukraine by not making all of his meetings known to the public. Have you ever tried to find out what the president is doing today, next week, next month? It’s seldom to be found. His press secretary, Iuliia Mendel, says it’s for security reasons. But what about disclosing who the president met with after the fact? They don’t do that either, unless it’s a meeting that the president wants the public to know about. If it’s a meeting with, say, notorious Odesa Mayor Gennady Trukhanov, good luck. Investigative journalists are going to have to discover this on their own, because this president has shown he will not be transparent in this regard.
And if the president is traveling to, say, Mariupol or Ivano-Frankivsk for official reasons, the press corps should be informed in advance and have the opportunity to travel there at their own expense to cover.
While hardly unique among Ukraine’s presidents, this administration has continued the tradition of showing disdain and disrespect for the free press in multiple ways, with chief of staff Andriy Bohdan telling journalists that the administration doesn’t need them to communicate with the public. Zelensky and his team prove it daily by carefully attending to their Instagram accounts while ignoring basic questions.
Independent and ethical journalists are used to shabby treatment by those in power. The saving grace is that this arrogance usually ends up undoing political careers as elected officials become more detached from reality because sycophants in their protective bubbles keep telling them they’re great. We’ve given up on seeking timely responses to relevant public policy questions. Zelensky’s press operatives, while fashioning themselves as hip and modern, have told us to file formal Soviet-style official requests for responses to serious questions, even for stories on deadline. It smacks of a press operation as window-dressing, while the dirty deals are being cut behind closed doors.
I used to think Zelensky talking into the camera and posting videos on YouTube was cool and clever. But now I think it’s just the sign of a thin-skinned president who doesn’t want to take any tough questions and who can’t stand criticism. And I detect a shift in public opinion moving against him, even if not yet registered by polling.
My guess? He’ll get away with this arrogance and unresponsiveness as long as his public approval rating stays above 50 percent.
Ihor Kolomoisky
How to treat a person suspected of stealing $5.5 billion from Ukrainians through the largest bank fraud in national history and locked in legal battles with the state to get the bank returned to him with compensation?
Well, for starters, Zelensky, don’t invite him to friendly meetings in the President’s Office with your prime minister, chief of staff, and energy minister. It sends absolutely the wrong signal to the people you represent and foreigners (like myself, an American and permanent resident of Ukraine) who care deeply about the nation. And it runs counter to your claim that the oligarchy will be broken up in this nation.
Based on overwhelming evidence, including an independent forensic audit, there is a strong case to be made that Kolomoisky should be sitting in prison, not the President’s Office, for the money looted from PrivatBank. He denies, of course, all wrongdoing.
The presidential meeting happened on Sept. 10, days before Prime Minister Oleksiy Honcharuk sounded conciliatory to a compromise over Kolomoisky’s attempts to regain ownership of PrivatBank, statements to the Financial Times that he denied and retracted the day they were published on Sept. 17. It would be legalized bank robbery if the state stopped trying to recover the $5.5 billion allegedly looted through insider loans and returned the bank to Kolomoisky.
The developments seem to support what Zelensky’s critics warned during the election campaign: that he is indebted to Kolomoisky, whose 1+1 television channel helped the showman get elected president.
Kolomoisky’s rehabilitation is so far along that he got invited to the Victor Pinchuk Show on Sept. 12–14, formally known as the Yalta European Strategy conference. The only one sullied by this appearance, however, was Pinchuk’s already checkered reputation. It appears that billionaire oligarchs have to show their solidarity with each other. These are the same two guys, it should be said, who accused each other of the worst of human behavior in a lawsuit over business disputes before reaching an undisclosed settlement. Pinchuk even accused Kolomoisky of ordering murders, accusations Kolomoisky denied. Now, displaying the moral code of gangsters, they’re buddies again.
The biggest problem, however, with Kolomoisky’s return to power in Ukraine is that he always wants special favors and privileges that run counter to Zelensky’s promises of creating a fair, transparent and competitive economy in Ukraine.
There are already highly detailed and credible reports circulating from knowledgeable but anonymous sources — but it seems likely from billionaire oligarch Rinat Akhmetov, Kolomoisky’s only real rival in the energy sector — describing Kolomoisky’s plans. Oleksiy Orzhel, the new energy minister, was in the Sept. 10 meeting with Kolomoisky and Zelensky.
Ripping off Ukrainians
According to the document, which some economy experts looked at for the Kyiv Post and found credible, Kolomoisky has gone back to ripping off Ukrainians again since July, if he ever stopped.
The document says he is accomplishing this by selling coal from his entity, Nafta Force, to state-owned Centrenergo at an inflated price — 40 percent higher than coal under the Rotterdam+ formula of Hr 1,700 ($69) per ton, according to the information shared with me.
He is also, in turn, buying electricity from Centrenergo at below-market prices. Kolomoisky properties are energy guzzlers — including the Nikopol Ferroalloy Plant, Zaporizhzhia Ferroalloy Plant, DniproAzot, Pokrovsky and Marganetsky mining and processing plants. Since July alone, the losses on sales to Kolomoisky enterprises has been Hr 555 million, or $22 million.
If true, it is typical Kolomoisky: scheming for indefensible profits at both ends of the transactions — purchase and sale.
Ukrnafta
The well-researched document goes on with these findings:
The state, through Naftogaz, owns 50 percent + 1 share of state oil producer Ukrnafta, but Kolomoisky officials allegedly manage the enterprise.
Ukrnafta has a 93-percent share in oil production, yet is one of the largest debtors to the state budget, ceasing to pay rent since 2014 for oil and gas production. Today, Ukrnafta’s debt to Ukrainians amounts to Hr 32 billion, or $1.3 billion. That’s 3 percent of the state budget — more reasons why the roads and schools are so bad.
The National Anti-Corruption Bureau of Ukraine also was thwarted in trying to investigate how Hr 20 billion, or $800 million, was withdrawn from Ukrnafta to Kolomoisky entities as an advance payment for oil products that were not delivered.
Monopoly on refineries
Kremenchuk Oil Refinery, legally known as Ukrtatnafta, is the only operating oil refinery in Ukraine. It is controlled by Kolomoisky. In turn, Ukrtatnafta controls 85 percent of gasoline production, 89 percent of diesel fuel production and, with Ukrnafta, owns 52 percent of liquefied petroleum gas production in the nation.
Moreover, Ukraine still has not paid $112 million in compensation ordered in 2014 by a London court for the illegal takeover of the plant in 2008 by Kolomoisky entities.
Deputy Foreign Minister Olena Zerkal warned about the consequences of non-payment in July to ZN.ua journalists: “If we consider that it (the arbitration decision) was made in 2014, and now it is already the 2019, then it is clear that it should be implemented sometime. It may be unpleasant for us to do it, but if we avoid it, this could be used by the Russians as a bargaining chip for non-compliance with court rulings on investment disputes initiated by Ukrainian companies.”
It gets worse
Kolomoisky also owns more than 1,500 gas stations in Ukraine, with a majority share in Dnipropetrovsk and Zaporizhia oblasts, under the brand names Avias, Sentosa and ANP. According to the information shared with me, an investigation by the Anti-Monopoly Committee of Ukraine “was blocked” by one of the defendants in the case, Bologna Company LLC, in court.
There are even more allegations of offshore tax evasion by Kolomoisky amounting to hundreds of millions of dollars, while underpaying the state more than $1 billion in the acquisition of ferroalloy assets, according to the information I received, which estimates his offshore profit at $360 million yearly.
There’s more, but the picture is clear.
Arsen Avakov
Also troubling, Zelensky kept on Interior Minister Arsen Avakov, an obstructionist to legal reforms who is tainted by numerous corruption allegations that he denies. Zelensky’s reform of the judicial system — police, prosecutors and judges — is dead on arrival with Avakov as the nation’s top cop, commanding 200,000 Interior Ministry employees.
In an interview with German newspaper Die Welt, Foreign Minister Vadym Prystaiko gave a ludicrous explanation for Zelensky’s keeping of Avakov: “Zelensky doesn’t want to replace the leadership for the sake of replacing it. He also appreciates the verified competence showed by Avakov during the successful holding of very difficult reform of the police,” Prystaiko said.
Avakov did nothing of the kind; he obstructed police reform and continues to do so to this day, except for the most visible (to the public) patrol police, which have no real investigative powers.
Dmytro Firtash
Poroshenko tainted his presidency even before its start — by flying to Vienna, Austria, with Vitali Klitschko for a meeting with exiled billionaire oligarch Dmytro Firtash. Firtash, wanted by the United States on corruption charges that he denies, bragged in his extradition hearing that he got what he wanted — Poroshenko for president, Klitschko for Kyiv mayor.
Firtash still has monopoly control of gas distribution in the state, owing Ukrainians $2 billion (through Naftogaz) in unpaid supplies because of a farcical arrangement in which the state oil-and-gas monopoly is forced to sell natural gas to Firtash entities at subsidized prices. To add insult to injury, Firtash hasn’t had to account for the gas he sells — whether the subsidized gas is really going to households under the state’s public service obligation or being marked up and sold to businesses.
Firtash’s Group DF operation dismisses such allegations as “speculation.”
Sept. 10 meeting
The public only knows about the Sept. 10 meeting among Zelensky, Kolomoisky, Bohdan, Honcharuk and Orzhel because the President’s Office released information about it.
It must have been a doozy of a meeting. Two days later, on Sept. 12, Ukraine’s government cancelled U.S.-based Trident Acquisitions’ right to explore and develop oil and gas reserves in the Black Sea shelf, a promised $1 billion investment. Kolomoisky was said to covet this license.
On Sept. 17, an arsonist set fire to the home of one of Kolomoisky’s biggest enemies: ex-National Bank of Ukraine Governor Valeria Gontareva. It wasn’t the first attack on her or her family. A few weeks earlier, a motorist struck her while she was on a crosswalk in London, leaving her with serious injuries. Then, someone torched her son’s car.
There’s no evidence Kolomoisky had anything to do with the mishaps suffered by Gontareva, but he created the conditions for it with his public hostility toward her and his campaign to regain ownership of PrivatBank. She was the architect of the nationalization of the institution.
But already, it appears there have been lots of private meetings about matters of the public interest with back-door deals cut that the public finds out about only after the fact, when it’s too late.
There is still time for Zelensky to correct the problems and show his true self. But like “Servant of the People,” the TV series that vaulted him to the presidency, we are at the stage in the program when President Vasyl Petrovych Holoborodko is losing to the oligarchs.
Perhaps Zelensky, like all previous presidents, is not strong enough to take on the oligarchs — or, also like all previous presidents, he doesn’t want to do it.
If that’s the case, Zelensky’s honeymoon with Ukrainians and the international community will be short-lived and the next five years will be rough indeed.
