October 25, 2019

Scandals in Ukraine overshadow progress


KYIV – Scandal after scandal, overshadowing progress. That summarizes the last 10 days or so in Kyiv, as the focus switched from foreign to domestic issues. These have involved a public rift over charges of corruption and bribery within President Volodymyr Zelenskyy’s majority Servant of the People party that necessitated drastic damage-control measures and the alleged exploitation of a famed Ukrainian cultural institution for political purposes to benefit a notorious oligarch.

In connection with the first case, a bizarre scene unfolded on October 23. After exchanging accusations in public with the head of the president’s faction in the Verkhovna Rada, Davyd Arakhamia, Oleksandr Dubinsky, an outspoken journalist linked with the notorious oligarch Ihor Kolomoisky, took a lie detector test live on the Internet. The following day Mr. Arakhamia also did so voluntarily. The result will not be known for several days.

The president has insisted that all the deputies suspected of taking bribes do the same.

These two new scandals, as well as other recent developments, involve to a greater or lesser extent Mr. Kolomoisky. He is fighting in the courts to undo the decision in December 2016 to nationalize “his” PrivatBank, the largest in Ukraine, after an estimated $5.65 billion (U.S.) went missing, and to reassert his influence. Observers note that has become conspicuously active and outspoken in public, exuding renewed confidence and, in effect, defying Mr. Zelenskyy, his former business partner, to either side with him or face the consequences.

First, there was a distasteful skit on TV on October 19 by Mr. Zelensky’s former colleagues in the Studio Kvartal 95 comedy show team using, and for many discrediting, one of Ukraine’s cultural emblems – the Veryovka National Folk Choir – to mock the former Governor of the National Bank of Ukraine Valeria Gontareva.

In September she was the victim of mysterious attacks, including a fire-bombing of her home in Kyiv. Ms. Gontareva, who had been involved in the cleaning up the corrupt banking sector and the nationalization of PrivatBank, immediately pointed the finger at Mr. Kolomoisky. He has denied responsibility, but did not disguise his glee.

In the skit, shown on Mr. Kolomoisky’s popular 1+1 channel, Mr. Zelensky’s close friend Yevhen Koshovyi, accompanied by the Veryovka Choir, transformed the folk song “The pine burned” (Horila, Sosna, Horila) into a parody about a house going up in flames “out of shame” and a woman in London (Ms. Gontareva lives there) reduced to tears.

“The mocking of human grief is impossible to imagine in a civilized society,” Ms. Gontareva told RFE/RL. Echoing the view held by critics of the comedy group created by Mr. Zelenskyy, she added: “There was no doubt about the cynicism of Kvartal 95 for a long time. But the participation of a national choir in this is a shame for the whole country.”

The sense of outrage was expressed by numerous political and cultural figures. Petro Kraliuk, vice-rector of the National University of Ostroh Academy, and a respected author and publicist, described the involvement of the Veryovka Choir in the skit as “the apogee of cynicism and national nihilism.” He and others have called for the resignation of its director, Zenoviy Korinets, while still others consider that the choir has become unworthy of performing the national anthem in the Parliament on official occasions.

With President Zelenskyy out of the country, Prime Minister Oleksiy Honcharuk sought to calm emotions. He assured journalists that Mr. Zelenskyy was deeply concerned about the arson attack on Ms. Gontareva’s house and is pushing for a thorough investigation into what happened. “It’s wrong to link the president’s stance [on the arson attack] with comedy,” he said. Mr. Honcharuk intimated that, although he personally does not approve of jokes “making fun of people’s misfortunes,” humor cannot please everyone.

Significantly, while President Zelenskyy has remained silent on the matter, two officials nominated by his team have condemned the skit. The minister of culture, youth and sports, former media manager Volodymyr Borodyansky, apologized to Ms. Gontareva on October 20 in a Facebook post. “In my value system, rejoicing that a person’s house burned down is malevolence, which promotes over-permissiveness. This behavior model cannot be supported or justified,” Mr. Borodyansky wrote.

Tymofiy Mylovanov, the minister of economic development, trade and agriculture, said the signal sent by the parody jeopardized the investment climate in Ukraine. “Most foreign investors see Gontareva as a prominent reformer,” he stressed. “According to foreign observers, Gontareva is under pressure from Kolomoisky for the decision on PrivatBank. They also don’t understand how much the current government is independent of Kolomoisky and other oligarchs. Kvartal 95 is associated with the authorities. And jokes against Gontareva can and will be seen as confirmation of ties between oligarchs and the authorities.”

Mr. Kolomoisky’s reaction was to declare that Mr. Mylovanov should promptly resign because his response made it clear that he is a moron, and that it was “very sad that the minister of economics of Ukraine is a moron.” The minister was more generous in his response. Refraining from prolonging the recriminations, he replied that “the scandal has exhausted itself, because everyone has had their say.” What’s important he added, diplomatically, is “that we see a discussion within society,” a “free society.”

Despite his apparent bravado, the oligarch himself has reason to be nervous. The court hearing to address his claims to undo the nationalization of PrivatBank has been repeatedly postponed. On the last occasion, on October 17, it was because of a bomb hoax. President Zelenskyy is under great pressure both at home and abroad not to be identified with Mr. Kolomoisky, and further support for Ukraine from the International Monetary Fund appears dependent on the outcome of the PrivatBank case.

Meanwhile, a London court has just ordered Mr. Kolomoisky and his partner Gennady Bogolyubov to pay PrivatBank $14 million (U.S.) for legal expenses incurred after it successfully won a jurisdiction claim against its former owners. And the names of both businessmen were mentioned again earlier this month in in connection with another fraudulent scheme.

The other major scandal in Kyiv has been generated by claims in the press about the alleged involvement of some national deputies of Servant of the People in a corrupt scheme that has subsequently triggered a response from the law enforcement agencies.

According to media reports, 11 Verkhovna Rada lawmakers from Mr. Zelenskyy’s party accepted up to $30,000 in bribes to oppose a bill to eliminate corruption schemes allegedly benefitting property companies linked to another lawmaker, Anton Yatsenko. He belongs to the parliamentary group For the Future that includes Mr. Kolomoisky’s allies. Ukraine’s Specialized Anti-Corruption Prosecutor’s Office announced on October 23 that it was launching an investigation. Mr. Arakhamia insisted that his party colleagues need to prove their innocence, while Mr. Dubinsky challenged his efforts and denied the charges.

All this was was highly embarrassing for President Zelenskyy, who won the presidential election in April promising to fight corruption and not to tolerate it within his team or party. Responding on October 23 from Japan, where he was attending the coronation of the new Japanese emperor, he urged members of the Finance Committee, the alleged center of the scandal, to take a polygraph test.

He warned: “I will not allow anyone from the [party’s] representation [in Parliament] or from outside to cast a shadow on the political force that obtained a majority mandate from the Ukrainian people.” If the lie detector test “reveals even the slightest possibility that any of the lawmakers took bribes for their votes in the committee, then anti-corruption agencies must deal with them,” he wrote.

Mr. Yatsenko has denied the charges and refused to take a lie detector test. Mr. Dubinsky, a former journalist on 1+1 agreed to do so, but rejects the accusations. It was unclear how many other lawmakers would agree to take the lie detector test and how the scandal would unravel. But one thing is certain, divisions within the Servant of the People party have been exposed, raising questions about loyalties and competing interests. It is a major test for the credibility of the party and its leadership, and whether discipline within the ranks can be maintained.

There have been a number of other noteworthy developments. On October 16, the Parliament passed a whistleblower law that also established monetary rewards for those who expose large-scale corruption schemes. On the same day it adopted a law seeking to jumpstart the judicial reform that the Servant of the People party claims was “sabotaged” by the Poroshenko administration. On October 18, a law revamping the National Agency for Prevention of Corruption also came into force. Among other things, it abolishes e-declarations for anti-corruption activists.

Several high-profile arrests have been made of former officials suspected of large-scale corruption, including former Deputy Secretary of the National Security and Defense Council Oleh Hladkovsky and the ex-Deputy Minister of the Economy Yuriy Brovchenko.

On the other hand, President Zelenskyy has made more dubious appointments that contradict his avowed commitment to do away with cronyism. On September 30 he appointed to the High Council of Justice the daughter of a top prosecutor from the Yanukovych era. More recently, on October 21 he appointed a Studio Kvartal 95 showman and producer, Serhiy Syvokho, as advisor for Donbas re-integration and rehabilitation to the secretary of the National Security and Defense Council.

Last but not least, on October 24, the controversial head of the President’s Office, Andriy Bohdan, who was Mr. Kolomoisky’s attorney, met with G-7 ambassadors to discuss priorities for economic reforms and cooperation with international partners. He briefed the diplomats on policies being developed to encourage economic growth and improve the investment climate, and assured them that “regardless of decisions taken by [Ukrainian] courts, there is no reason to return state-owned PrivatBank to its former shareholders.” Observers were left wondering why this official known for his sense of self-importance had carried out such a briefing and not the prime minister or a minister responsible for economic and financial matters.