March 5, 2021

Ratings, Russia, reforms: what is driving Zelenskyy’s moves against Medvedchuk?


Ukrainian President Volodymyr Zelenskyy got heads turning last month when his administration imposed what it described as sanctions against individuals and entities with strong ties to Russia, including three television stations and an influential tycoon who is close to President Vladimir Putin, in a surprise show of force.

Advocates of reform hope the unprecedented actions are signs that Mr. Zelenskyy is getting serious about delivering on the aggressive agenda of political and economic change that he outlined during the 2019 presidential campaign but struggled to implement last year amid concerns about backsliding.

However, some observers suspect that the punitive measures – as well as the high-profile arrest last month of bankers in an alleged $5.5 billion fraud case – may be driven more by the president’s desire to bolster his sagging ratings and score points with the new U.S. administration than by an intention to improve the rule of law and advance other reforms.

Morgan Williams, the president of the U.S.-Ukraine Business Council, an association that represents dozens of foreign investors operating in Ukraine, said the business community has reacted favorably to Mr. Zelenskyy’s steps to weaken the political clout of figures seen by critics as agents of Russian influence but remains concerned about what comes next.

“All this occurred so suddenly, without advance notice, that there are questions about what happened to trigger the actions – and why now,” Mr. Williams, who is U.S.-based but travels frequently to Ukraine, said in a telephone interview with RFE/RL.

Business leaders hope the moves are “not meant to distract domestic and international audiences from the tough judicial reform choices Mr. Zelenskyy should make,” he said.
That international audience includes U.S. President Joe Biden, whose administration has promised to support Ukraine in the face of Russian interference but is also expected to press Kyiv for progress on issues including judicial reform and fighting corruption.

The series of steps was set in motion on February 2, when Mr. Zelenskyy signed off on measures proposed a day earlier by the National Security and Defense Council, imposing sanctions on Taras Kozak, a lawmaker from the Moscow-friendly Opposition Platform – For Life party, and shutting down three television stations he owns.

Many in Ukraine who back integration with Europe see the stations – 112, NewsOne, and ZIK – as “Russian Trojan horses,” an instrument for planting pro-Kremlin propaganda and disinformation from within.

The perception of an influence campaign coming from inside Ukraine comes hand-in-hand with pressure from across the border. Russia seized control of the Crimean Peninsula in 2014 and has given military, political and financial support to militants who control parts of two provinces in the eastern region known as the Donbas, where a deadly separatist war is almost seven years old.

Opposition Platform – For Life, whose support largely comes from eastern and southern provinces where Russian-speakers predominate, promotes closer economic and political ties with Moscow and is the second-largest party in the parliament.

Mr. Zelenskyy next signed off on sanctions proposed by his national-security council against Viktor Medvedchuk, one of Ukraine’s richest and most powerful figures and a longtime friend of Mr. Putin’s, as well as 19 companies and eight individuals associated with him.

Mr. Medvedchuk, who chose Mr. Putin to be the godfather of his daughter, is one of the highest-ranking members of the Opposition Platform – For Life party. The tycoon is also believed to be the true owner of the television stations that were shut down.

The measures targeting Mr. Medvedchuk freeze his assets in Ukraine, including his bank accounts. The day after they were imposed, the U.S. Embassy tweeted support for “Ukraine’s efforts to protect its sovereignty and territorial integrity through sanctions.”

The embassy pointed out that “Mr. Medvedchuk has been under U.S. sanctions since 2014 for undermining Ukraine’s security, territorial integrity, and democratic institutions” – a reference to measures imposed by the Treasury Department in connection with Russia’s takeover of Crimea.

In announcing the measures against Mr. Medvedchuk, the national-security council accused him of “financing terrorism.” Mr. Zelenskyy’s administration claimed the tycoon is channeling money from his Russia-based refinery to the separatists in eastern Ukraine.
The national-security council accuses Mr. Kozak of financing propaganda, claiming his television stations receive money from the sale to Russia of coal produced in the separatist-controlled regions.

Mr. Medvedchuk has denied the accusations, calling them “nonsense.”

“It is just a provocation in order to first close the three TV stations, and then restrict me so that I either quit politics or leave the country,” he told the BBC in an interview published on March 2.

A television star and comedian with no political experience when he campaigned for the presidency in 2019, Mr. Zelenskyy promised to enact reforms recommended by Western governments, curb corruption, take on the powerful tycoons known as oligarchs, and do his best to end the war in eastern Ukraine – a vow that resonated with voters weary of a conflict that has killed more than 13,000 people since 2014.

Mr. Medvedchuk had served as a broker in peace negotiations and prisoner exchanges over the years, shuttling between Ukraine and Moscow on his private jet for talks with Mr. Putin, but was sidelined when Mr. Zelenskyy came to power.

Mr. Zelenskyy’s administration claims that he is acting in the interests of Russia, not Ukraine, and has been undermining the peace process through the media assets – assertions he denies.

“We have come to the conclusion that as long as Mr. Medvedchuk openly subverts the chances of Kyiv’s efforts for a peaceful resolution, as long as he is able to seed discord, promote the Kremlin’s agenda and spread disinformation in Ukraine, our country will remain at war,” Andriy Yermak, Mr. Zelenskyy’s chief of staff, said in a statement posted on February 26 on the website of the Atlantic Council, a Washington-based think tank aimed at policymakers and analysts in the United States.

Mr. Zelenskyy’s moves targeting Mr. Medvedchuk come at a time when the president may feel a mixture of encouragement and pressure from the United States to lessen Moscow’s influence and pursue political and economic reforms that Western officials say would also help shorten Russia’s levers of power over Kyiv.

Kyiv’s relations with the Trump administration were badly strained. Mr. Biden – who pushed Kyiv to enact reforms in Ukraine as vice president in 2009-2017 – has vowed to be tough on Moscow and said on February 26 that the United States would “stand with Ukraine against Russia’s aggressive acts.”

The dual message – support for sovereignty and pressure for reform – has been sent again since Mr. Biden’s election in November 2020. In a Senate confirmation hearing on January 19, Secretary of State Antony Blinken said that standing up to Russia was only half the battle: Unless Ukraine tackles corruption and improves the rule of law, he said, it will struggle to build a durable democracy.

Mr. Zelenskyy would have had little to show the new U.S. administration on that front when Mr. Biden took office the following day. Critics say the Ukrainian president has so far largely failed to implement the economic and political changes urged by the United States and European Union since his inauguration in May 2019.

He fired his pro-reform government in March 2020, just six months after its formation, despite what people like Mr. Williams say was noticeable progress on long-awaited policies.

Among those who lost their job during the reshuffle was Prosecutor General Ruslan Ryaboshapka, who was admired in the West as tough on corruption. In an announcement that analysts say was a clear message by the Biden administration to Mr. Zelenskyy that he is not doing enough to curb graft, the State Department on February 23 named Mr. Ryaboshapka one of its 12 global “anti-corruption” champions.

A day before that, Ukrainian authorities made their first arrest ever in the alleged embezzlement of $5.5 billion from PrivatBank, once the nation’s largest bank.
The United States and Europe have pushed Ukraine to investigate the alleged theft ever since Kyiv nationalized the bank in 2016. The United States has opened a criminal investigation into its owners, including influential tycoon Ihor Kolomoisky, on suspicion of money laundering.

“Courageous actions like these are an important step in the fight against corruption,” the U.S. Embassy in Kyiv tweeted following the first arrest.

Geopolitical factors notwithstanding, some analysts suspect the timing of Mr. Zelenskyy’s moves is aimed at reversing a sharp drop in his poll ratings.

A survey conducted in January by the Kyiv International Institute of Sociology showed that 23 percent of Ukrainian voters would choose Mr. Zelenskyy from a list of potential presidential candidates, down from more than 70 percent at the start of his term in 2019 and 27 percent in December 2020.

Former President Petro Poroshenko, whom Mr. Zelenskyy crushed in a runoff in April 2019, was not far behind at nearly 18 percent.

Mr. Zelenskyy’s Servant of the People party has also experienced a drop in support. Its approval rating is 16 percent, behind both Mr. Poroshenko’s party, European Solidarity, and Mr. Medvedchuk’s party, which have 18 percent and 17 percent, respectively.

“Mr. Zelenskyy has now obviously realized that pro-Russia television stations and politicians are causing a significant influence on his rating,” Yevhen Mahda, a political analyst at the Ukrainian Institute of Politics in Kyiv, told RFE/RL.

Mr. Mahda said that Mr. Zelenskyy had taken no action after hinting early in his term that he had information about alleged ties between Mr. Medvedchuk’s party and the Russian business world. In response to an August 31, 2019, question about Mr.

Medvedchuk’s party, Mr. Zelenskyy told reporters “we have the answers” about the amount of cash it receives and from where. He said it would become a very high-profile story “that will end very badly.”

The government’s move against Mr. Medvedchuk also comes amid a struggle for control of the judicial system and concerns about backsliding on efforts to reform it.

The outcome of that battle is likely to have major consequences for Mr. Zelenskyy and his relations with Western governments and voters seeking change.

The Constitutional Court, which many in Ukraine suspect is under the influence of magnates like Mr. Medvedchuk, in October 2020 dismantled key elements of the nation’s anti-corruption legislation.

The court case that led to that development was initiated by members of Mr. Medvedchuk’s party and suspected by critics to be aimed at undermining Ukraine’s relations with the West.

The October 27 ruling has resulted in a months-long standoff between the Constitutional Court and the Zelenskyy administration over the future of anti-corruption legislation.

Steven Pifer, who was the U.S. ambassador to Ukraine from January 1998 to October 2000, said the decline in Mr. Zelenskyy’s approval ratings coincided with his backsliding last year on political and economic changes.

Reining in Mr. Medvedchuk is one way to “reinvigorate” that reform program and potentially boost his popularity, he said.

“I think he needs to re-instill a sense in the Ukrainian population that he is carrying out the agenda he campaigned on two years ago. He still has an opportunity to do this and I hope that these things we have seen mean that he is now going to get serious about that,” said Mr. Pifer, now a nonresident senior fellow at the Brookings Institution in Washington.

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