BY
President Poroshenko talks big about
reform — but he’s missing what may be his only chance to break the power of the
oligarchs.
A few weeks
ago, Ukrainian President Petro Poroshenko published an article in the Wall Street Journal trumpeting his achievements in
office. First and foremost among them was his claim that his government has
made progress in combating the legacy of “more than 20 years of Soviet-style
governance, endemic corruption, cronyism and inefficient policy.” He cited
efforts to launch a new police force that will, it is hoped, be free of
entrenched corruption. He described efforts to reform the judiciary, long
riddled with graft, and boasted about his success in recruiting “young
reformers” from outside the country to bring “new faces” into the government.
Above all,
he proclaimed a new approach to governance, one, he claimed, that embraces
openness and accountability to its citizens. “Today, following free, fair and
internationally praised elections,” he wrote, “the Ukrainian leadership is
transparent and accountable as never before.”
It all sounded
wonderful — so wonderful, in fact, that I decided to take the president up on
his promises. I was particularly intrigued by his claim that, “[o]ver the
past year, 2,702 former officials have been convicted of corruption.” If this
were true, surely there would be no reason for his government to conceal the
details. Such an amazing track record would be a remarkable achievement. (And
it’s worth noting that criminal trials in Ukraine, as in most countries, are
generally open to the public.)
And yet, when I
asked the presidential administration for a list of those prosecuted, they
refused. When I wanted to know why, they said only that the names are
“confidential.” So much for the much-touted new transparency of
post-Euromaidan Ukraine.
Sadly, this
unwillingness to allow closer scrutiny of Poroshenko’s much-ballyhooed reform
effort is indicative. The president is under intense pressure from Washington,
Brussels, international financial institutions and of course Ukrainian citizens
to deliver on his promises of reform and reducing corruption.
Yet changing the
name of Ukraine’s main law enforcement body from “militia” to “police” does not, in itself,
entail a dramatic transformation of the bloated, corrupt, and incompetent
Ministry of Interior.
Similarly, all the
positive headlines can’t conceal the fact that the president’s campaign against
corruption is stalling, with 72 percent of
Ukrainians believing Ukraine is heading in the wrong direction, citing the
conflict with pro-Russian separatists in the east and corruption as the
two main issues facing the country.
The grim reality
is that the real rot within the Ukrainian state has always begun at the top,
from a corrupt and cynical nexus of high-ranking politicians and business
magnates — and it is precisely here that Poroshenko’s efforts are failing to
gain traction. Ukraine’s reforms are not threatened by the kind of petty
bribery common to many countries, but by high-level corruption on a scale so
great that only three out of 15 countries in the former USSR have worse records, according to the
anti-corruption watchdog Transparency International.
The central
problem is the president’s failure to follow through on his promises to combat
the pervasive influence of the oligarchs — politically well-connected business
tycoons whose domination of key sectors of the economy is amplified by their
ownership of influential media assets. Discontent with the oligarchs was one of
the drivers of the Euromaidan movement that swept away former President Viktor
Yanukovych, who was regarded as the epitome of the oligarchic system.
Ironically, though, the elections that followed his overthrow brought to power
none other than the billionaire-cum-politician Poroshenko (who once held a
senior government position under Yanukovych). In his new book, Ukraine: What Went Wrong and
How to Fix It, Anders Aslund writes that
“big businessmen have captured the state in Ukraine, more than any other
post-communist country,” and warns that “the power of the oligarchs has to be
broken” if reforms are to be successful.
Knowing that
efforts to reform the system will be credible only if the power of the tycoons
is curtailed, Poroshenko has made “deoligarchization” one of the planks of his
anti-corruption campaign. He created an enormous stir a few months ago when he
fired Ihor Kolomoisky, one of the country’s most powerful businessmen, from his
position as governor of the Dnepropetrovsk region. In June, a National
Anti-Corruption Bureau was established. Parliament
adopted a tough “lustration law” designed to weed out Soviet-era officials
(and, presumably, the associated mindsets). Poroshenko has also appointed a
high-profile outsider, former Georgian President Mikheil Saakashvili, as
governor of the notoriously corrupt Odessa region.
But Ukrainians
aren’t buying it. A recently released poll by the
International Republican Institute found that
40 percent of
Ukrainians see no changes taking place, while 32 percent believe changes are
taking place too slowly.Critics contend that the few
high-profile arrests of officials are “cheap spectacle” and “a Potemkin village
of empty crackdowns.” Only last month, Ukraine’s leading civil society
organizations called on the president to
“unblock” his stalled anti-corruption efforts.
They are reacting
to Poroshenko’s failure to curb the power of the oligarchs, who still control
the country’s economy and its main television channels. Ukraine’s ruling elites
have always had de facto immunity from prosecution and they continue to be
above the law, untouched by the “deoligarchization campaign.” Some have been
permitted to flee Ukraine to escape
civil society’s demands for criminal
prosecution. Despite his removal as governor, Kolomoisky continues to control
the country’s largest bank as well as one of its most influential television
networks. Perhaps most bizarrely of all, the business empires of Yanukovych’s
allies, including his eldest son Oleksandr, are still in place in eastern
Ukraine, and they continue to profit from them.
Any effort to
declaw Ukraine’s oligarchs has to start with the country’s notoriously corrupt energy sector, which has sucked
billions from the budget. Perhaps the most visible of the country’s energy
tycoons is Dmytro Firtash, who began trading gas in the 1990s with the support (as he
admitted to the U.S. Ambassador to Ukraine) of mafia don Semyon Mogilevych, who
iswanted by the FBI. Firtash and
the other members of what has been called the “gas lobby” have successfully
cultivated mutually profitable ties with all of Ukraine’s presidents (including
Poroshenko), the prosecutors’ office, and the security services. Indeed, U.S.
diplomatic cables from Ukraine leaked to Wikileaks showed more detailed
knowledge of corruption in the energy sector than that possessed by Ukrainian
presidents or law enforcement, who have continually denied close links between
Firtash and themselves.
In fact,
Poroshenko has a long record of collaborating with Firtash that goes back to
Leonid Kuchma’s presidency prior to the 2004 Orange Revolution. Less than a
month after the Euromaidan revolution, Poroshenko travelled to Vienna with
boxing champion (and now mayor of Kiev) Vitaliy Klitschko to seek political
support from Firtash, who was awaiting trial there over U.S. demands to extradite him to face
corruption charges. While they were in Vienna, Poroshenko and Klitschko struck
a deal granting the leaders of the “gas lobby” (Firtash, former Energy Minister
Yuriy Boyko, and Yanukovych’s Chief of Staff Serhiy Lyovochkin) immunity from
prosecution in exchange for the oligarchs’ support — in the form of money,
media, and connections — for their political ambitions.
“We got what we wanted — Poroshenko as
president and Klitschko as mayor,” Firtash bragged to the
Viennese court. It would have been impossible for the Yanukovych regime to
carry out its corrupt schemes without Lyovochkin’s involvement — but today he
is untouchable because of the Vienna immunity deal that he helped to broker.
In agreeing to
give immunity to the “gas lobby” in a political bargain, Poroshenko is not only
breaking his promises to rid Ukraine of its oligarchs — he may be sowing the
seeds of a future counter-revolution. Lyovochkin and former Energy Minister
Boyko are leaders of the Opposition Bloc party in parliament, which is
comprised of former Yanukovych supporters and holds extreme pro-Russian
positions at odds with Poroshenko’s declared course of European integration.
Even aside from
his cynical political maneuvering, Poroshenko has hamstrung his own efforts to
prosecute wrongdoing by mishandling reforms and appointments of senior law
enforcement officials. The prosecutor’s office, massively over-manned and
itself corrupt to the core, has remained virtually untouched. Poroshenko has
compounded the problem by appointing incompetent and corrupt chief prosecutors
who quickly discredited themselves through inaction or by defending their
corrupt colleagues.
This has served to
perpetuate an all-encompassing culture of selective justice: ruling elites and
oligarchs are never prosecuted (unless they happen to run afoul of law
enforcement in other countries), while regular citizens are almost
automatically declared guilty, as evidenced by a 99 percent conviction rate.
Vitaliy Yarema,
the general prosecutor appointed after the Euromaidan, left office in disgrace
after only a year after failing to prosecute a single member of the Yanukovych
regime for murder and grand corruption that brought Ukraine to the verge of
bankruptcy. In mid-July, parliament began procedures to remove his replacement,
Viktor Shokin, after only six months in the position. Ukraine’s civil society
groups have burned effigies of Shokin in
protest of his obstruction of investigations into high-level corruption and the
murders of unarmed Euromaidan protesters.
Poroshenko touting
2,702 officials convicted for corruption is a very poor attempt at misleading
Ukrainians and the West. The recent IRI poll shows that his lack of political
will to confront corruption is being noticed by an increasingly discontented
citizenry. His failure to meaningfully address the problem will rule out his
chance for a second presidential term, as it did for the Orange Revolution’s
victor, President Yushchenko, who received only five percent of support in 2010
and opened the door to Yanukovych’s counter-revolution.
As the second
anniversary of the Euromaidan protests approaches in November, Ukrainians are
growing increasingly disillusioned, nationalist populists are gaining
popularity and calling for Poroshenko’s ouster, and pro-Russian forces and
oligarchs are untouched by Ukraine’s corrupt judicial system and remain as
powerful as before. Poroshenko needs to follow through on his promises. If, as
it seems, he will not, Ukraine’s European integration will grind to a halt —
and the Euromaidan revolution will be remembered in the same inglorious way as
the Orange Revolution a decade ago.
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