|
Sergii LeshchenkoThrowing Their Weight AroundPresident
Yanukovych is losing his support among Ukraine's oligarchs -- and that could be
the key to his fate. When
Rinat Akhmetov celebrated his birthday a few years back, he counted among his gifts a painting and best wishes
from none other than Viktor Yanukovych, the president of Ukraine. Few of their
compatriots paid much attention. After all, Yanukovych and Akhmetov, who both
hail from the same hardscrabble industrial town, have been close allies for
decades. Many Ukrainians, indeed,regard the
president as a virtual protégé of Akhmetov, who happens to be the
richest man in the country. But
a lot has happened since then. In November, Ukrainians took to the street to
protest their president's last-minute decision to back out of an agreement on
closer cooperation with the European Union. For a while it seemed as if
Akhmetov was unwilling to distance himself from his old friend, at least in
public. But after Ukrainian security forces opened fire on protestors last month,
killing several, Akhmetov (estimated personal wealth: $15.4 billion) published
a statement on his company website that condemned the
deaths and called for "peaceful action" and "constructive
negotiations and results." Just hours later, Yanukovychoffered jobs in his cabinet to two leaders of the
opposition -- who quickly denounced the offer as too little, too late. Either
way, it was hard to avoid the conclusion that Yanukovych isn't feeling pressure
only from the streets. The
protests in the center of the Ukrainian capital of Kiev have now spread across
the country. But it is not the protestors alone who will decide the president's
fate. The
political class will also have its say -- and no one within that class is more
powerful than Ukraine's oligarchs, the billionaire business tycoons who
together own a vastly disproportionate share of the country's wealth.(Akhmetov,
for example, commands the loyalties of around 50 of the 450-member parliament
-- among them his former driver, his head of security, and his family lawyer.
This group has generally supported Yanukovych throughout the crisis.) Some
oligarchs have opposed the president from the start, of course. Perhaps the
best example is Viktor Pinchuk, who amassed many of his assets during the reign
of previous President Leonid Kuchma -- who happened to be Pinchuk's
father-in-law. In more recent years Pinchuk has rebranded himself as a fan of shareholder-friendly
business practices and close ties with the West. The owner of a mansion in one
of London's priciest neighborhoods, Pinchuk opened an event
during last month's World Economic Forum in Davos with a moment of silence for
the protesters who were killed in the center of Kiev. Pinchuk came out in favor
of the protests early in December, and his newspaper, Facts, suddenly
began reprinting articles from online media that were sharply critical of the
president. Yet
Pinchuk may be motivated less by his admiration for Western values than by cold
self-interest. Like many of the other oligarchs, he evidently sees closer
alignment with the European Union as a prelude to tariff-free access for his
exports -- and he also knows that an authoritarian crackdown by Yanukovych
would be likely to prompt European and United States sanctions that could
complicate doing business with the outside world. And moving closer to the
Moscow-engineered Customs Union, which already includes ex-Soviet republics
such as Kazakhstan and Belarus in addition to Russia itself, could potentially
make Ukrainian businessmen vulnerable to takeover bids by their Russian rivals. Can
Pinchuk's camp bring others to its side? One candidate for defection is Dmitry
Firtash, whose personal fortune is estimated at $3.8 billion. Firtash, who also controls
a significant bloc of parliamentary votes, is a former firefighter who once
allegedly admitted to U.S. diplomats in Kiev his ties to mobster
Semyon Mogilevich, one of the FBI's "Ten
Most Wanted Criminals." (Firtash has since denied "any partnership or other commercial
association" with Mogilevich.) A founding member of the scandal-plagued
gas trade company RosUkrEnergo, which has earned hundreds of millions of
dollars from its monopoly on gas, Firtash has long remained close to
Yanukovych. Among other signs of support, he transformed his TV
channel, Inter(the biggest network in Ukraine), into a government
propaganda machine. But
now Firtash, too, is trying to hedge his bets. Over the past few years, Firtash
has tried to polish his reputation in the West by launching PR
campaigns and cozying up to the British elite -- part of an effort to fend off
possible sanctions by the United Kingdom or the EU. (He's already persona non grata in the United States.) Recently, a
close Firtash ally named Sergii Liovochkin resigned from his job as
Yanukovych's chief of staff -- then turned up in Davos, where he took care to
present himself as a thoroughly pro-European politician. It's
Akhmetov, though, who -- thanks to his long years of association with the
embattled president -- may face the biggest challenge when it comes to
straddling the growing gulf between president and opposition. Akhmetov, ranked by Forbes as
the 47th richest man in the world, rose from obscure beginnings in the
industrial city of Donetsk to amass vast assets in mining, metals, real estate,
and telecommunications. (He first attracted national notice when he became the
head of the Donetsk soccer club after his predecessor in the job, a well-known
local criminal, was blown up by a bomb.) And even as Akhmetov luxuriates in
his $200 million London flat and his $30 million French
chalet, he has done his best to cultivate his contacts on both sides of the
political divide back home in Ukraine. Publicly,
Akhmetov still supports Yanukovych -- but he also negotiates regularly with
opposition leader Arseniy Yatsenyuk (one of the opposition figures who
was offered a job by the president). It has also been widely
noted in Kiev that Akhmetov has yet to cut off the power supply to
protester-controlled areas of the capital, even though he controls the relevant
energy distribution company. Akhmetov's normally pro-government Ukrainian
television channel has also given airtime to opposition leaders. The
oligarchs are a sensitive topic for Ukrainians. One of the issues that fueled
the current wave of protests is a general awareness of the oversized role
played by tycoons in the country's political and economic life. (The photo
above shows a recent protest outside Akhmetov's Kiev office.) Yanukovych has
inspired public anger by enabling the rise of the so-called "Family,"
a group of high-ranking officials who gained office through their connections
with Yanukovych's son Oleksandr. Oleksandr has a history of opaque business dealings that have won him a vast fortune estimated at half a billion dollars; he
also controls Ukraine's much-criticized security
forces. Last fall the Family also stirred controversy through its purchase of
one of Ukraine's few remaining independent magazines,prompting the departure of dozens of journalists who
accused the new owners of censoring coverage unfavorable to the government. Indeed,
Yanukovych's efforts to maximize his own political and economic power have
aggravated the oligarchs as well. Pinchuk and another tycoon by the name
of Igor Kolomoysky hail from the city of Dnipropetrovsk, where Yanukovych
appointed one of his own loyalists to the key job of provincial governor in
2010. That slap in the face gave the city's tycoons an additional reason to
back the opposition. Geneva-based Kolomoysky has since allowed his television
channel, 1+1, to support the protesters despite intense pressure from
government officials to do otherwise. Yet
most of the oligarchs have shied away from criticizing Yanukovych all too
directly -- perhaps because they suspect that the president isn't willing to
surrender power. The main exception is Petro Poroshenko, the so-called
"chocolate king of Ukraine," whose core business has been hit
particularly hard by recent Russian moves to pressure Ukraine economically into
toeing the Kremlin line (including restrictions on Ukrainian chocolate
imports). Poroshenko regularly speaks on one of the main opposition TV
networks. He also frequently visits Western Europe to discuss means for
resolving the crisis with senior EU officials, and makes no secret of his
aspiration to be prime minister. According to the latest
polls, he has the third-highest level of support in the country -- right
after Yanukovych and opposition leader Vitaly Klitchko. Yanukovych
and the oligarchs are also highly sensitive to pressure from the outside. U.S.
sources say that Western banks, worried by the recent turmoil, have recently
refused to extend credit lines for some of the oligarchs. It's rumored that
similar hesitations by some of Ahkmetov's Swiss banks may have persuaded him to
order his parliamentarians to vote for the resignation of Yanukovych's cabinet
and against a recent package of legislation aimed at suppressing the protests.
In other cases, though, the oligarchs' forces have continued to vote with the
government. The
U.S. use of targeted financial and visa sanctions has apparently unnerved the
tycoons oligarchs who have indirectly controlled Ukrainian politics for
decades, and who have funded Yanukovych's ruling party. Their families live in
London and Vienna, enjoy the benefits of European values such as democracy and
the rule of law, and enrich themselves using capital from European markets. In
a perfect world, removing the oligarchs from politics altogether would seem to
be the solution of many of Ukraine's problems -- but such a goal is simply
unrealistic. The oligarchs are simply too deeply integrated into politics and
society. The best hope, perhaps, is to use the oligarchs' experience of Western
life to convince them of the advantages of furthering Ukrainian democracy. The
future of a truly democratic Ukraine depends on it. http://www.foreignpolicy.com/articles/2014/02/05/throwing_their_weight_around Feb 05 2014 |