Ukraine may serve as a lab for studying how the virus of corruption takes over national politics. These weeks, everyone has been holding their breath to see what will happen to the bill on PrivatBank. This situation became a reflection of how oligarchic groups apply a full arsenal of tools to protect their corrupt interests.
While they themselves are professing the principles of fighting with no rules, the oligarchs demand that the state strictly abides by the law, and with any encroachment on their sphere of interests, they start shouting about the Constitution. Meanwhile, they are engaging loyal television channels, loyal members of parliaments, and paid lobbyists to protect their interests.
The whole absurdity of this was demonstrated by what has been happening with the PrivatBank bill.
The question of PrivatBank arose in the relations of Ukraine and the International Monetary Fund because of Ukrainian courts’ notorious corruption.
When a year ago, a provincial court in Baryshivka, in Kyiv Oblast, began issuing rulings targeting Kolomoisky’s competitors in the aviation business, it became a signal for the IMF: In exactly the same way, the oligarch can try to either return PrivatBank to his control or get compensation for it.
This forced the IMF to look for a way to insure against such a scenario. In the fall of 2019, the idea arose to adopt a special law that would remove this issue from the jurisdiction of Ukrainian courts. I repeat, if the judicial system had not been corrupted by Kolomoisky himself, the very issue would not even have arisen.
In turn, Kolomoisky launched an attack on the government of Oleksiy Honcharuk to knock out a key player in negotiations with the IMF. There was another reason to start the attack: Last fall, the Ministry of Finance transferred 100% of PrivatBank’s shares to the Cabinet of Ministers. This means that the fate of numerous lawsuits against Kolomoisky in the UK, U.S., Israel, Switzerland, and Cyprus depends on the instructions that a shareholder — the Cabinet of Ministers — gives to the bank’s management. Therefore, Kolomoisky hoped to get a more loyal prime minister after Honcharuk, although he seems to have miscalculated again.
When then-Prime Minister Honcharuk introduced a draft law on PrivatBank at the end of the year, Kolomoisky’s headquarters played their trump card: the oligarch’s lawmakers Oleksandr Dubinsky and Ihor Palitsa used their right to file “alternative bills.” And when the bill was passed in the first reading, they blocked it with an avalanche of proposed amendments.
The result is that, as of mid-April, Kolomoisky successfully shifted the discussion from the PrivatBank bill to the new bill on combating this “legislative spam.” And then President Volodymyr Zelensky’s administration had to shift attention to finding votes for a bill that changes the parliament’s bylaws.
They solved this problem and passed the bill that stops the practice of “amendments spam” on April 16.
Under the new rules, when more than 500 amendments were proposed for one bill, there is a special procedure for considering them:
First, the relevant committee of the parliament considers the amendments. The ones it approves get added to the bill.
Then, authors of the amendments that were not approved have the right to insist that the parliament votes on them. But there are limitations: one faction can have no more than five amendments put up for vote; an independent lawmaker has the right for just one amendment.
This ends the practice of spamming the parliament with proposed amendments to block the adoption of the bill — because lawmakers can no longer insist that the parliament hears every single of the proposed amendments. It means that the 16,000 amendments that Kolomoisky’s minions drafted for the PrivatBank bill will go down the drain. Now the essential bill can be passed in just a couple of hours.
To stop this scenario, Kolomoisky dispatched his loyal lawmakers, who are now trying to destabilize the already somewhat wobbly faction of the Servant of the People. They are propagating the idea that this change of the parliament’s procedures “breaks down parliamentarism.”
This is not true, and I can say this based on my experience as a lawmaker. A member of the parliament never had any chances to get an amendment passed in the session hall after a committee didn’t add it to the bill. There are never votes for it. When a lawmaker does it, it’s either a PR stunt or an attempt to stall the bill.
The anti-spam amendment was passed with 242 votes. Of these, only 202 were “Servants of the People,” which once again showed that Kolomoisky can influence 40 lawmakers within the president’s faction and destroy the single-party majority. The remaining votes were given by the Dovira (Trust) group and by 15 members of the pro-Russian party Opposition Platform For Life. Among those who supported the bill were representatives of the group controlled by the exiled oligarch Dmytro Firtash and his long-time partner Serhiy Lyovochkin: lawmakers Mykola Skoryk, Oleksandr Puzanov, Yuriy Pavlenko)
But Kolomoisky and his associates did not stop there. Fighting for their interests, they are using all the bureaucratic loopholes imaginable. After the bill on combating “legislative spam” was passed, Kolomoisky’s lawmakers exercised another right of a member of parliament: They filed decrees to abolish the passing of the bill — so-called “stop-orders.”
What does it mean? Another delay. The bill can’t be signed and come in force until those “stop-orders” are considered by parliament. This means that there needs to be yet another extraordinary meeting of the Verkhovna Rada in order to vote on these “stop orders.” It will take place after the Orthodox Easter (April 19) weekend. Only after this, Zelensky can sign the law against spam, opening the way for the Rada to pass the law on Privatbank.
But the saga of Kolomoisky’s obstruction won’t end there.
After the Privatbank bill is passed, Kolomoisky’s people will file their “stop-orders” again. Which means that more time will be lost. Zelensky won’t be able to sign the PrivatBank bill until those are considered.
It means that the crucial bill that unblocks the much-needed $8-billion loan program from the IMF will be signed no sooner than May. At least three emergency sessions of the Rada will be needed to get us there.
At the core of this situation is the obvious conflict between Zelensky and Kolomoisky. Paradoxically, Kolomoisky, whose media helped Zelensky during the presidential campaign one year ago, isn’t just making Zelensky a hostage of his interests — he also tries to make Zelensky’s presidency a failure.
To avoid dependence on Kolomoisky, Zelensky in his political activity started searching for situational allies: to get the necessary votes he sometimes needs to go to Petro Poroshenko’s party European Solidarity, Svyatoslav Vakarchuk’s Voice and pro-Russian Opposition Platform For Life.
In the opposite corner, there is a clearly defined union of Kolomoisky and Yulia Tymoshenko.
On the eve of the 2019 presidential election, Tymoshenko and Kolomoisky were seen in the same hotel abroad, presumably meeting to discuss the campaign. This gave rise to rumors about their tacit alliance. Now everything is clear: they have a common agenda — to bring down not only the newly-passed land market law but also the law on banks.
One should remember that it was when Tymoshenko was prime minister that all legal disputes between Ukraine as a majority shareholder of the company Ukrnafta and Kolomoisky were moved from Kyiv to London, aiding the oligarch’s interests.
Another instance when the coordinated work of Tymoshenko and Kolomoisky was obvious happened on April 13 at Rada’s Legal Committee where their lawmakers Serhii Sobolev and Serhiy Vlasenko from Batkivshchyna together with Ihor Fris and Serhiy Demchenko marked the law on banks unconstitutional. They failed to achieve any result, but it became obvious that they were trying to help Kolomoisky.
During the parliament session on April 16, Tymoshenko took a break together with Kolomoisky’s group “For the Future,” trying to disrupt the vote for the amendments that would greenlight the way for the Privatbank bill. When she couldn’t do it, Tymoshenko’s associates moved from the hall to the parliament balcony, saying that they will watch and report lawmakers voting for their absentee colleagues, known in Ukraine as “button pushers.”
At the same time, Tymoshenko, Kolomoisky and the third member of this triangle, Viktor Medvedchuk, are plunging Ukraine into the abyss of fakes, manipulations and witch hunts, replicating phobias and attacking anyone in Zelensky’s team who advocates for a liberal choice or European integration.
One of the typical manipulations is that the land market and the law on banks are needed not by Ukraine itself, but by the IMF to “enslave” the country.
It’s obvious that the IMF loan to Ukraine is offered on the most favorable terms from the financial point of view. And it’s us who need the land market, not the IMF. For the IMF, it is a beacon of the fact that Ukraine will be able to service its debts and develop its economy. We also need the law on PrivatBank to save our funds, and for the IMF it is a guarantee that Ukraine as a country will not use their loan to pay compensations to Kolomoisky.
In terms of the macroeconomic situation, the current situation in Ukraine is stable. The debt-to-GDP ratio is about 50 percent, while 60 percent is considered problematic, and we have no problem servicing the debt — this year Ukraine needs $3 billion to pay off the bonds and interest, plus $1 billion to pay off the debt obligations that were guaranteed by the U.S. Treasury, plus $700 million from the IMF.
It totals $5 billion in payments which is fine as our foreign exchange reserves are five times more. And there is a prospect of getting an extra $10 billion from the IMF, the World Bank, and the European Union. Securing this loan won’t require anything extraordinary, we just have to behave adequately as a country — start the land reform in the interest of small farmers and do not scatter money in Kolomoisky’s interests. This is a reasonable price for access to additional financial resources.
However, one worrisome thing in this whole situation is the political cost of achieving this goal.
There is a bitter paradox. To reduce the influence of Kolomoisky, the administration has to opt for the help of other oligarchs like Rinat Akhmetov or Sergey Lyovochkin. It means that, instead of deoligarchization, we might end up merely reshuffling balances in the club of the richest plutocrats in Ukraine.
Sergii Leshchenko is a Kyiv Post columnist, investigative journalist and former member of the Verkhovna Rada.
