Ukraine’s swamp of corruption could be mixing with Washington’s, according to a May 23 BBC article.
The article alleges that President Poroshenko paid former Trump lawyer Michael Cohen between $400,000 and $600,000 to arrange a brief June 2017 between the two heads of state, relying on multiple anonymous sources in Ukraine as well as apparent Suspicious Activity Reports obtained by Michael Avenatti, lawyer for a porn star who is suing the U.S. president.
Additionally, the story claims that Poroshenko ordered a halt to Ukrainian investigations into the actions of former Trump Campaign Manager Paul Manafort, and organized high-profile deals with American companies as part of an effort to soothe President Trump, irate over reports that the Ukrainian government had leaded information which led to Manafort’s resignation.
The story has already elicited a flurry of denials, with the Presidential Administration threatening to sue, calling it “slander,” and the National Anti-Corruption Bureau of Ukraine saying that the article “does not reflect the actual situation.”
“It’s one thing when people take money for access to a public official in Ukraine, such a practice has long existed here,” said political analyst Volodymyr Fesenko. “But it’s another thing in the U.S. These accusations are more against the American administration than the Ukrainian.”
Cohen did not reply to a request for comment.
Politically possible?
Critics of the article have pointed out that it relies almost entirely on anonymous sources.
Special Investigations Prosecutor Serhiy Gorbatyuk, who is investigating a case involving Paul Manafort and who was the only on-record source for the article, told the Kyiv Post that “there is a fact of the [Manafort] investigation being thwarted.”
“But there are guesses, and no confirmation as to why.”
The BBC story has been changed since publication to reflect stylistic changes and responses from people cited in the article. It also removed a section claiming that deals with U.S. companies were uneconomical because “Ukraine has its own locomotive maker and its own coalmines,” a partly innacurate assertion.
Others say that the story at least appears to be politically possible in the context of Ukraine.
“I don’t believe that the BBC would print this without verifying it,” said Viktor Chumak, a member of parliament.
Sergii Leshchenko, another member of parliament, said “it’s a common way of doing business in the Presidential Administration.”
Political analyst Fesenko and others named Presidential Administration Deputy Chief Kostyantyn Yelisieiev as point man for arranging ties with the Trump administration.
Yelisieiev did not reply to a request for comment.
Ukraine signed a $600,000 contract with lobbying firm BGR two weeks before Trump’s January 2017 inauguration as a way to build clout with the incoming administration.
One U.S. political consultant pointed out that the BBC article makes it look as if “BGR can’t get a meeting with the President.”
“I heard from Yelisieiev that the Ukrainian authorities had been trying to arrange a meeting with Trump from February 2017, and that the negotiations were ongoing,” Fesenko said.
That time period saw many different characters in Ukraine try to use the change in power in Washington as a political springboard.
Perhaps most notorious was former member of parliament Andrey Artemenko, who attempted to send a “peace deal” through Cohen that would have seen Ukraine “lease” Crimea to Russia in exchange for an end to the war in the Donbas.
When asked over Facebook messenger about whether he was involved in the events described in the BBC article,” Artemenko replied “hahaha,” before adding a smiley face and declining to comment further.
Distressed assets, political benefit?
A separate allegation of quid pro quo between Ukraine and the U.S. has to do with a spate of high-profile business deals between state-owned Ukrainian companies and American industrial conglomerates.
The three U.S. entities allegedly involved – General Electric, Westinghouse, and Pennsylvania coal – are all facing serious troubles at home. General Electric is undergoing internal restructuring to massively cut costs, while Westinghouse just exited a painful bankruptcy process. Coal in Pennsylvania, a state crucial for Trump’s electoral chances, has been on the decline for decades.
Alexander Paraschiy, head of research at Concorde Capital, said that there was a “political margin” that explained the inflated coal price.
“In terms of money, we can take the same coal of possibly comparable or better quality from Russia or South Africa, so for Ukraine it was not the best,” Paraschiy said.
The deal saw Ukraine’s state-owned Centerenergo import 700,000 tons of coal from Pennsylvania firm XCoal at $113 per ton. That price is more than $30 more than the cost of purchasing coal from South Africa, which Ukraine had used in the past.
Paraschiy pointed out that the deal received an unusual amount of attention relative to its small size, with both Commerce Secretary Wilbur Ross and Energy Secretary Rick Perry issuing statements praising the agreement for improving the American economy.
Fesenko, the political analyst, said that the deals were cut for Ukraine to receive Javelins.
“Corruption is too simple a way to talk about this,” he added.
Chumak said that the deal did “appear to be a gift.”
“A collection of questions, is accumulating in Ukraine that the President has not yet answered,” said Chumak.
