Recent media coverage addressing Ukrainian government’s efforts to derail President Donald Trump’s candidacy and embarrass his former campaign manager and political insider Paul Manafort is another indication that President Poroshenko is struggling to contain Ukraine’s growing corruption. A European country of some 44 million people that was once part of the Soviet Union, Ukraine is now engulfed in expanding regional civil unrest and economic and political turmoil. Stability in Ukraine is important for U.S. interests because of its strategic location, its conflict with its neighbor, Russia, and exorbitant stockpile of weapons it still possesses.
Ongoing jousting between former Ukrainian Parliament member Alexandre Onishchenko and Poroshenko are another example of the disarray in Ukraine’s government. Onishchenko, who is now purportedly hiding out in Moscow, is occasionally spotted in England and elsewhere in Europe with a Russian diplomatic passport, was a supporter of Ukraine’s former Prime Minister Yulia Timoshenko. Onishchenko has yet again released taped conversations that implicate Ukraine’s President in bribery, extortion, and grandiose self-dealing.
Ukrainian Oligarchs have divvied up regions and industries, hired mercenaries to run private “battalions,” and now resemble Somalian warlords rather than defenders of democratic principles embraced by the recent Maidan revolution. Recent coverage of Ukrainian government’s shady tactics to win favor with Hillary Clinton and help her win the U.S. presidency was revealing. Ultimately, Ukraine has not changed. The new rhetoric embracing democracy is thinly veiled and hollow. It prostitutes slogans about human rights and Ukrainian self-determination to cover up corruption at levels Europe has not seen. The disintegration of Ukraine has been exacerbated by the Ukraine – Russia conflict, which has all the earmarks of a budding civil war, and serves to deflect from serious ethical and operational challenges plaguing Ukraine’s government. The new Trump Administration, Congress and Senate are poised to investigate systemic Ukrainian government graft, and experts are lining up to provide insight into the political culture of the Poroshenko administration and to follow the money flowing out of Ukraine, which many insiders claim is in the billions of dollars.
Congressman Dana Rohrabacher, who chairs U.S. House Foreign Affairs Subcommittee on Europe, Eurasia and Emerging Threats, has been the main voice on the subject of corruption in Ukraine. The Committee scheduled a hearing to review the clandestine business activities of numerous Ukrainian politicians and business influencers. These business and political insiders have been accused of massive scale graft. They include Valeria Gontareva, Ihor Kononenko, Alexander Hranovsky, Vitaly Homutynnik and Alexander and Sergey Buryak, Anatoli Matios, Sergey Kurchenko, Igor Kononenko, Sergey Alexeev, Vasily Burba, Valery Kondratuk, Sergey Berezenko Maksym Burbak, Vitalii Nayda, Anatolii Mateos, and Boris Timonikin. There are many others.
Additional people are being investigated as they relate to U.S. national security, terrorism, and funds that have been directed by U.S. and its western allies to provide aid to the post-Maidan Ukraine. Members of Ukraine’s parliament and its ministers and officials still maintain ties to organized criminal groups in Eastern Europe and to the former President Yanukovych loyalists who have been accused of funding Ukraine’s separatist movement.
In particular, the activities of the head of the National Bank of Ukraine, Valeria Gontareva have caught attention of Western observers. A number of disparate charges of corruption have been leveled against her, and her cohorts. Gontareva’s business was one of the main actors in a scandal with the Brokbusinessbank, a banking institution that was controlled by a Yunukovich frontman, businessman Sergey Kurchenko. Kurchenko was one of the youngest and most successful businessmen within the Yanukovych kitchen cabinet. He bought an 80% stake in the bank from brothers Sergey and Alexander Buryak. Alexander Buryak became a deputy head of the Supervisory Board. Gontareva’s company had transferred the securities in amount equivalent to $240 million to that bank. Brokbusinessbank made a similar deal with the National bank of Ukraine. It sold bonds and received cash. In 17 days the National Bank of Ukraine, that was managed by Stepan Kubiv, declared Brokbusinessbank to be insolvent. Massive losses were booked to Ukraine’s treasury as a result of this scheme.
There is no shortage of controversial business and political personalities in Ukraine. Igor Kononenko is close to President Poroshenko. Kononenko is a major business magnate and member of the Ukrainian Parliament, the first deputy head of Poroshenko’s faction. Companies that were managed by Kononenko were accused of money laundering, tax evasion. In turn, Mr. Granovsky is a close partner of Kononenko. He also has been repeatedly accused of corruption and even of raider-style seizures of businesses. Granovsky used to participate in a number of pro-Russian political projects, one of which was associated with Viktor Medvedchuk, who is in a close relationship with Russian President Putin.
Another Ukrainian parliamentarian, Serhiy Alexeev is a close ally of Alexander Granovsky. Alexeev is associated with illegal laundering of 300 Million Hrivna, illicit links to Yanukovych appointed judge Viktor Tatkov and Artur Emilyanov, as well as pressure on Ukraine’s judiciary to facilitate attacks and prosecutions in order to confiscate businesses and assets of other Ukrainian businessmen. Alexeev also collaborated in raider style schemes with Sergey Kurchenko and Boris Timonkin.
Bureaucrats turned business expediters close to President Poroshenko such as Sergey Berezenko, Alexander Gronovsky, Sergey Kovolenko, Vasily Burba, and Valery Kondrachuk have engaged in schemes for personal pecuniary gain that have threatened Ukraine’s national security. Contraband sale of cigarettes via military conflict zones, human trafficking, and weapon smuggling into the rest of Europe seem to be their forte. Money for contraband cigarettes smuggled into Europe is controlled by an individual by the name of Seyar Korshutov. A criminal kingpin based in Russian occupied Crimea, he is purported to collects funds from these illegal ventures. In turn, Korshutov is protected by Yuriy Sheremeta, an agent of the Fiscal Services of Ukraine.
Ukraine’s Military prosecutor, Anatoli Mateos is another enigmatic and corrupt business tycoon. He seems to be in charge of coal distribution and all funds from transport of vodka and general consumption products in Ukraine. Mateos is a relative of former speaker of Ukraine’s parliament, Vladimir Litvin. Criminal schemes headed by him deplete Ukraine’s budget and increase prices for consumer goods. Many of the Maidan personalities have turned out to be Ukraine’s false prophets, making unholy alliance with corrupt business elite and are now promoting Mateos for higher posts. The list of corrupt transactions and politicians that are embroiled in them is a long one – as long as Ukraine’s history of political discord, growing civic unrest, and descent into what may soon become a completely defunct nation in the middle of Europe. Corrupt business and political associates such as Kononenko, Granovsky, Kovalenko, Kontratuk, Kurshutov, Mateos, and scores of others are leading Ukraine and its president on an inexorable march to economic destruction. Corruption that has weighed down Poroshenko administration is bringing Ukraine towards another revolution. Kremlin is using this for its advantage and has used the corrupt Ukrainian system to create a blocade in Donbas. These well know personalities like Medvechuk, Levochkin, Sadovoy, Tymoshenko, Semenchenko are some of the engineers of Ukraine’s continuing downfall. Supported by people like Kondrachuk, Nalivaychenko, Burba, and Mateos, criminal organizations are systemically depleting Ukraine’s resources.
As it examines America’s relationship with Europe and the delicate condition of the European Union, Trump’s administration and U.S. Congress ought to consider consequences of Ukraine becoming a major destabilizing force in Europe, with business elite resembling warlords, and Ukraine’s politicians forsaking their duties as public officials for short term profit. They and their ties with the Yanukovych’s people, their offshore accounts and corrupt schemes will be an object of the downfall of Ukraine as a country.
Congress ought to consider creating a special committee to investigate financial crimes of Ukrainian government official both appointed and elected. The U.S. government has not ignored the requests of Mikheil Saakasvili, former governor of Odessa, and once President of the post-Soviet Georgia. Sakashvili urged the U.S. government to investigate offshore accounts and business practices of parliamentarian Homutynnik accusing him of tax kickback schemes.
The Trump Administration should establish a list of corrupt Ukrainian politicians, suggest corrective measures and possible list of sanctions. It should investigate illicit flow of funds into offshore accounts and start holding Ukrainian politicians and their financiers accountable. These measures should prevent the disintegration of Ukraine. If that happens, Ukraine will become a polygon for illicit trafficking of weapons, drugs, and extremist groups. The risks to Europe’s economic and political stability and Russia’s further incursion into Ukraine are real, and the implications of Ukraine breaking up and erupting into warring regions can impact U.S. and Europe in terms of geopolitical leverage and expansion of Russia’s influence.
The invocation of democratic principles and efforts to appease current American political insiders are nothing more than rhetoric aimed at deflecting and confusing Western leaders to avoid being exposed as fraudsters and thugs that have yet again seized control of a European country of nearly 44 million people – a country that once was called the Breadbasket of the Soviet Union with stockpiles of dangerous weapons and an even more dangerous culture of political graft.