The world’s richest should follow the example of former multi-billionaire Charles “Chuck” Feeney, and Ukraine’s richest are no exception. The reality, however, is that it will most likely not happen any time in the near future by Ukraine’s tycoons.
As Ukrainian newspaper Focus released its latest popular ranking on Ukraine’s top 100 richest people, a day after Forbes magazine wrote an article on Feeney’s legacy of philanthropy titled “The Billionaire Who Wanted to Die Broke… Is Now Officially Broke.” There’s much that Ukrainian oligarchs and tycoons can learn from Feeney.
The article describes the impressive philanthropic work of a billionaire who donated more than $8 billion to charities, universities and foundations throughout the globe through The Atlantic Philanthropies, one of the largest private foundations globally, which will very soon close its doors.
“When I first met him in 2012, he estimated he had set aside about $2 million for his and his wife’s retirement. In other words, he’s given away 375,000% more money than his current net worth,” writes Forbes editor Steven Bertoni. He goes on to say that Feeney “ lives in an apartment in San Francisco that has the austerity of a freshman dorm room. When I visited a few years ago, inkjet-printed photos of friends and family hung from the walls over a plain, wooden table.”
Feeney also doesn’t just give money to projects, he is involved in them.
According to the article, Feeney said: “I feel very good about completing this on my watch,” he said, adding that others should try it.
And his example continues to inspire some of the world’s richest — Laurene Powell Jobs, Bill Gates, Warren Buffett — to further give away their enormous wealth.
Feeney’s way vs. the Ukrainian way
The names of Ukraine’s richest in the top 100 list stands out in stark contrast to the Irish-American businessman who built his financial empire off of Duty Free Shoppers Group selling luxury goods in airports.
Giving to the community is not an ethic developed amongst Ukraine’s richest. Contrary, they tend to extract money out of the country through opaque offshores and shell companies, spending it elsewhere. And even if the richest do not want to give away their wealth, in the United States – a country where the wealthier people tend to give more to charity — at least they will be taxed. In Ukraine, the rich tend not to give to charities and steer away from paying taxes.
Just looking at the top three positions of Ukraine’s most wealthy, the average Ukrainian will undoubtedly say that these rich will never give up their accumulations for the common good. Just look at their resumes.
The perennial leader of the list, Rinat Akhmetov, rose to prominence in the 1990s from the wild and violent Donbas. He acquired wealth from opaque deals within the energy sector.
Second place goes to Victor Pinchuk, whose reputation has taken a hit for the way he made his fortune. Pinchuk’s father-in-law is Ukraine’s former President Leonid Kuchma, who ruled from 1994 to 2005, when Ukraine had little in the way of transparent, competitive selloffs of valuable Soviet-era assets. The oligarch class formed under him. Kuchma is accused of ordering the Sept. 16, 2000, murder of journalist Georgiy Gongadze, accusations he denies. Pinchuk’s media, however, decided to stay silent or took part in the official obstruction about the horrific murder of a journalist that occurred 20 years ago.
Third place on the list goes to Dmytro Firtash who is fighting extradition to the U.S. in Austria after facing multiple financial crime charges in the United States, including bribery, accusations he denies. He allegedly got rich as an exclusive intermediary of the shady gas trade between Russia and Ukraine.
These are only Ukraine’s top three richest, according to the ranking. Go through the list and most of the people will have more or less of a similar structure of wealth-making. The business model is typically how to acquire what exists already rather than create new wealth. This malevolent practice in Ukraine is exacerbated by the tight relationship between politics and business, with no effective structures in place that will hold the powerful accountable.
There are some exceptions.
For example, it is encouraging to see someone like Dmytro Lider, the co-founder of startup Grammarly, among the ranks as he took 33rd place with a net worth of $333 million. There’s also Oleg Rogynskyy, founder of startup People.ai, who has a net worth of $350 million, according to the ranking. So far Lider’s and Rogynskyy’s reputations stand in good faith. But again, they are the exception.
Occasionally one can see some of Ukraine’s oligarchs being involved in some corporate social responsibility project or funding a posh conference, but these tend to be perceived as coverups and attempts to wash away the dirt of non-transparent deals. These “givings” are also just a miniscule fraction of the person’s overall wealth yet will typically receive exaggerated attention. It’s another way of lighting a candle in church for the forgiveness of sins just to go back to “doing business” as usual.
Since ample wealth of Ukraine’s most prosperous was accumulated in non-transparent and unjust ways, they are not going to give up even a few percent of what they accumulated. Their wealth gives them protection and respect within a land of other like-minded who might go after them once they lose their power.
Solutions?
Perhaps a point where to start changing this Ukrainian trend of toxic materialistic culture among the rich is to create a structure of accountability and a fashion, where caring and giving back to the community is considered not only noble but as a norm and responsibility.
As for journalists, perhaps it’s time not to simply look at people’s wealth but also at how much they give back to the community compared to their overall worth. It’s time to make giving away to the community fashionable and something the young will look up to rather than simply accumulate wealth.
Another solution could be to start an innovative independent transparent fund to which Ukraine’s richest will contribute a particular portion of their wealth and which will show to which causes the wealth has been distributed. Ukrainians can vote on what are the most important projects that will serve the community, such as schools, universities, cultural events or scholarships for Ukrainians studying abroad. The fund can also have a peer-pressure effect where the rich will want to give more since others have already done so.
At this point, taxing the rich will most likely either be ineffective or simply impossible, as the rich always find a way out through legislation loopholes. Perhaps Ukraine can start with more innovative solutions until the country becomes stronger and where accountability structures such as the judicial system work.
In general, building and fostering a responsible community where high ethics are valued will do the trick.
