June 10, 2021

As attention shifts to foreign policy, Zelenskyy intensifies internal battle against Ukraine’s oligarchs


While attention this month has shifted to the foreign policy sphere, the unprecedented offensive recently launched by President Volodymyr Zelenskyy against Ukraine’s hitherto seemingly all-powerful oligarchs has intensified.

The outcome of Mr. Zelenskyy’s campaign is likely even more important than what may occur on the international scene in the coming days and months.

At the forthcoming important international summits in Europe (G-7 and NATO), Ukraine may not, as seems increasingly likely at this stage, be able to secure an accelerated integration into Euro-Atlantic structures, nor stop the controversial Russian Nord Stream 2 gas pipeline project. But its prospects as a partner of its Euro-Atlantic supporters will depend on how promptly and effectively it will be able to show that the political will to press ahead with the democratic transformation of the country exists not only in words but in deeds.

Indeed, this topic figured very prominently during the telephone discussion that Mr. Zelenskyy had with U.S. President Joe Biden on June 7. We know that their direct contact and exchange of views was very important for Kyiv, given that it came on the eve of the American leader’s trip to Europe to participate in various summits, and, in particular, to hold a one-on-one meeting with Russia’s president Vladimir Putin in Geneva on June 16.

The head of Mr. Zelenskyy’s office, Andriy Yermak, said that, “Much of the president’s conversation was dedicated to the issue of transforming our state into a transparent and competitive system.”

“The American side understands that the elimination of the destructive consensus between oligarchs and politicians in Ukraine is strongly opposed by the old elites,” Mr. Yermak said in summarizing the conversation. And, he emphasized, that “U.S. support for Ukraine in this work will be maximal.”

So, what have been the main developments in this area since this issue was last analyzed by this author in The Weekly on 20 May?

Mr. Zelenskyy told a press conference that same day that his number one priority at home is “building a country without oligarchs” in which the rule of law and equality before it should prevail. The first steps “for which I have been preparing for a long time” had been taken, Mr. Zelenskyy said.

His team completed a draft law on oligarchs that was submitted to Ukraine’s parliament on June 2. Although it is still a preliminary version that will need to be revised in order for it to have sufficient substance and teeth, it is a major step forward.

According to the document, any three of four conditions suffice for the National Security and Defense Council (NSDC) of Ukraine to include a person in the register of oligarchs: significant influence on the media, on political life, ownership of monopolistic companies and personal wealth totaling a million times more than the average in Ukraine (that is, about $83 million at the current exchange rate). Public servants will be obliged to register their contacts with oligarchs.

Mr. Zelenskyy has instructed the NSDC to deal with the details, including the preparation of a preliminary list of those who could currently be considered oligarchs. On May 11, the NSDC had already identified 13 people who fit the new definition of an oligarch. It did not name the individuals classified as oligarchs.

On June 4, following a meeting of the NSDC to discuss the matter, the Ukrainian president addressed the nation in a TV broadcast on the subject.

“I suggested that the NSDC and the President’s Office, together with the Antimonopoly Committee, develop a new fundamental bill on the status of an oligarch in our country. This has never happened in Ukraine,” the president said, before adding that “we support big business, any business in Ukraine.” But huge wealth, if honestly acquired, should not be used to secure inordinate influence over the pollical, economic and legal systems.

Mr. Zelenskyy noted that “the influence of the oligarchs on Ukraine, [on] the country’s choice, [on the] economy, laws, and the Verkhovna Rada – this, I believe, must no longer be allowed. Therefore, a legislative initiative on oligarchs will be developed.”

Clearly, Mr. Zelenskyy’s determination to put an end to the system of oligarchic influence in Ukraine, which has endured for most of the country’s 30 years of independence, has only intensified the hostility of the country’s oligarchs toward Mr. Zelenskyy. Regardless of their politics and vested interests, Ukraine’s oligarchs appear in recent weeks to have been closing ranks in an undeclared alliance to block his initiatives and undermine him politically.

Now suddenly, once rival TV channels controlled by adversarial oligarchs and their proxy representatives, have banded together to provide airtime to one another in a joint, scarcely concealed counterattack. Thus, former president Petro Poroshenko’s TV channels have hosted key figures from the pro-Russian “Opposition Block – for Life,” and oligarch Rinat Akmetov’s channels are behaving in a similar fashion.

Some of the oligarchs have chosen to either seemingly lie low for the moment, such as Ihor Kolomoisky (who has numerous legal challenges to face at home and abroad) or, as in Mr. Akhmetov’s case, to try to persuade the public that they are not oligarchs, merely successful businessmen and investors not involved in politics.

The most active oligarch to oppose Mr. Zelenskyy is Mr. Poroshenko. He is currently in deep water because of further leaked recordings suggesting his collusion with tycoon Viktor Medvechuk who is currently under house arrest on charges of treason for his alleged dealings with Moscow and its auxiliaries while he was in office. Mr. Poroshenko’s supporters have gone so far as to claim in recent days that the entire anti-oligarch campaign is really aimed at their leader.

Other familiar figures on the Ukrainian political scene, such as Yulia Tymoshenko, Oleh Liashko, Arseniy Yatseniuk and Volodymyr Groysman, have also been mobilized by the oligarchs to discredit Mr. Zelenskyy’s moves against them. Various political commentators hostile to the president have accused Mr. Zelenskyy of wanting, if not to destroy democracy and impose a dictatorship, then to clear rivals from his path in order to have a successful second presidential campaign.

Anticipating opposition within the parliament from deputies in his own Servant of the People faction to his bill, the Ukrainian president has masterfully played a trump card which has caused even greater panic among his political foes.

On June 4 Mr. Zelenskyy addressed the nation in a TV broadcast and announced he intends to put the issue of the status of oligarchs to an all-Ukrainian referendum.

“I will have one question for those who will try to rock the boat, persuade, break or reach an agreement with deputies on this law. This is a question about the status of oligarchs, which will be put to an all-Ukrainian referendum. This question will be the first, and for some perhaps the last one,” he said.

“You can’t own deputies, ministers and any other officials. This bill is the first decision in all of the 30 years of independence that demonstrates our attitude to the oligarchic system…. Yes, there are oligarchs in Ukraine. Yes, they influence politics. And, yes, it will not happen again,” the president said.

Although Mr. Zelenskyy has launched a risky if decisive battle on the broadest of fronts, the problem for his opponents is that according to the latest polls he still seems unbeatable if any new presidential election were to be held soon.

According to the results of a poll published at the beginning of this week by the Rating group, 27.3 percent of voters support Mr. Zelenskyy, 14.6 back Mr. Poroshenko, and 11.9 would vote for Ms. Tymoshenko. Mr. Zelenskyy would win comfortably in a run-off, and his popularity is likely to grow considerably if he can tame the oligarchs.