KIEV, Ukraine — The text message to Ukraine’s minister of economy and trade was as unwelcome as
it was unexpected. The sender, a stranger, wrote that he wanted to be the new
deputy minister.
The minister, Aivaras Abromavicius, a former
investment banker from Lithuania, had joined the government amid promises by
the new Western-backed leaders to clean up the country’s corrupt economy.
Having no need or desire for a deputy, particularly someone he knew nothing
about, Mr. Abromavicius tried to brush off the applicant.
“We don’t have the possibility to create a new
position,” he wrote back.
“I think they will make one,” the man replied in
another message, this one saved on the phone and released after Mr.
Abromavicius resigned, in part over this exchange.
“I got this offer from the team of Petro
Oleksiyovych,” the man wrote, referring to the country’s president, Petro O.
Poroshenko. “Who specifically?” the minister asked.
Ihor Kononenko — a former army pal and business
partner of the president — the applicant replied without hesitation.
This case of possible
influence-peddling is under review by Ukraine’s National Anti-Corruption
Bureau. But it is hardly the only worrying sign for a government swept into
power in 2014 on a wave of popular anger at the egregious corruption of the
previous president, Viktor F. Yanukovych, with promises of cleansing Ukraine of
its endemic corruption and establishing a modern, Western-oriented democracy.
Ukraine’s problems are not just its own. As a plum in
the new Cold War-like struggle between Russia and the West, Ukraine received a
four-year, $40 billion bailout
package in 2014 from Western governments and theInternational Monetary Fund.
But over the winter, with Kiev, the capital, buzzing
with claims of Mr. Poroshenko’s people cutting back-room deals to control state
assets, the I.M.F. quietly suspended disbursements. When the fund’s board
convenes in Washington this summer, it will have to decide whether to resume
the payments. To reopen the financial spigot, it must certify that the money
will be used to help Ukraine overhaul its economy, rather than line the pockets
of the country’s politicians and the powerful class of ultrawealthy businessmen
known as the oligarchs.
The decision will revolve in great part around Mr.
Poroshenko and the men around him. Alarmed Western officials, including Vice
President Joseph R. Biden Jr., have traveled to Kiev in recent months to plead
with Mr. Poroshenko to stay on track, but few close observers expect
significant changes.
“They are like bad students, always saying,
‘Professor, just wait until Monday; I will do better,’” said Tymofiy S.
Mylovanov, president of the Kiev School of Economics. “Nothing changed. The
same elites are there. The same oligarchs.”
Mr. Poroshenko, he said, had
fallen into the old habits of rule through associates and negotiations with the
oligarchs. “The disappointment is very widespread,” Mr. Mylovanov said.
Mr. Poroshenko, who took the
helm of a country at war and in deep recession, has asked for patience and says
he is overhauling the government and the economy. He points to his formation of
a capable army as the principal achievement of his tenure.
“Fighting corruption is priority
No. 1,” the president’s press office said in a statement. It said that the
National Anti-Corruption Bureau planned to train with the F.B.I. and that
Anders Fogh Rasmussen, the former Danish prime minister and NATO secretary
general, was appointed on Friday as a special adviser to the president.
The post-Soviet titans of
business have always held sway over state policy in Ukraine through, among
other means, the figures known as the smotryaschi, or the watchers. These are
loyal politicians and functionaries ostensibly working for the state but in
fact keeping an eye on state assets, to ensure that their true bosses win a
share of the spoils.
Despite its Western leanings,
the Ukrainian government is seeded with these watchers, who hold midlevel
positions in Parliament and various ministries, frustrating efforts to overhaul
and clean up their practices, which would limit opportunities for payoffs.
Mykola V. Martynenko, for
example, who was believed to have been the watcher for energy sector
businesses, was forced in December to resign his seat in Parliament and his
position as deputy head of the People’s Front, the party of the former prime
minister, Arseniy P. Yatsenyuk. The resignation came after it emerged that
Swiss prosecutors had opened an investigation into whether Mr. Martynenko,
while working in government, had helped an equipment supplier win padded
contracts from the national nuclear power company Energoatom, in exchange for a
$29 million bribe.
Mr. Abromavicius resigned in
February to protest what he characterized as pressure from the man widely
understood to be Mr. Poroshenko’s watcher, Mr. Kononenko. Mr. Abromavicius and
other former officials said in interviews that executives from the president’s
business empire and allied politicians had quietly been tightening their grip
on power this year, while technocrats like Mr. Abromavicius and the former
finance minister Natalie A. Jaresko, a Ukrainian-American, have been forced
out.
Ukraine’s new prime minister, Volodymyr B. Groysman, appointed in April, served
previously as mayor of Vinnytsya, home to a major factory of the Roshen
Confectionery Corporation, the site of one of the largest candy makers in
Eastern Europe and a centerpiece of Mr. Poroshenko’s business.
Mr. Kononenko, for his part,
is first deputy chairman of Mr. Poroshenko’s political faction in Parliament,
the BPP group, and was a co-owner, with the president, of a Ukrainian bank.
In 2014, state-owned companies
lost about $9.7 billion, mostly because of energy subsidies but also because of
embezzlement and abuse. It was a sum covered by I.M.F. lending and American and
European bilateral aid.
In his resignation letter, Mr.
Abromavicius accused Mr. Kononenko of maneuvering to control one such asset, a
state-owned ammonia shipping company, Ukrkhimtransamiak.
But critics wonder whether
things will ever change, at least under Mr. Poroshenko. Even the simplest and
seemingly least divisive step — prosecuting those responsible for theft of
state property and other corrupt acts under Mr. Yanukovych, the former
president — has never materialized.
Vitaliy V. Kasko, a prominent
Kiev lawyer who defended protesters pro bono during the Maidan revolution, was
appointed director of the internal affairs bureau in the prosecutor’s office,
the General Inspectorate, with the task of sorting out why the incumbent
prosecutors had shown no interest in pursuing obvious corruption cases. But
soon enough, he hit a wall.
The Ukrainian authorities
asked the European Union to impose sanctions on 22 Yanukovych-era officials,
yet none of them have faced prosecution at home.
“There’s an unstated
agreement,” Mr. Kasko said in an interview at Très Français, a popular lunch
spot off Maidan Square, where dozens of protesters were killed in 2014. “The prosecutor
will look the other way if it’s in the interest of the leadership.”
Revealing the criminal origins
of these former officials’ money, Mr. Kasko said, would inevitably also reveal
and destroy lucrative corruption strategies.
“The simplest scheme is to
siphon money out of a state company,” he said. “The same schemes used under
Yanukovych are used today.”
Mr. Abromavicius, the minister
of economy, had made a priority of cleaning up state companies — of which there
are 1,824 in Ukraine, some as small as a single apartment building owned and
rented out by the government. To cut down on graft, he created an electronic
tender system, called ProZorro, and convened an independent panel to appoint
chief executives on merit for every company.
“That is when all my problems
started,” he said. He came under intense pressure from the president’s office
to have Poroshenko loyalists appointed to key positions in the state companies.
Mr. Kononenko has denied
wrongdoing. The applicant, Andriy P. Pasishnik, an executive at the state oil
and gas company, later said he did not have the backing of Mr. Poroshenko or
Mr. Kononenko, and said he was just bluffing.
“The guy, out of the blue, sends
me a text saying, ‘I want to be your new deputy minister,’” Mr. Abromavicius
recalled in an interview in Kiev. “I have no reason to believe what this guy
said was not true.”
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