This article was first published at ukraineverstehen.de
“Oligarchic rule” is the phrase which people often use to describe Ukraine. At each election, politicians make lofty promises to end it. However, so far these were only words without actions. Moreover, the next presidential and parliamentary elections in Ukraine are (again) all about the oligarchs.
Oligarchs extort money from the country by monopolizing the key state enterprises, establishing their rule over different areas of life, blocking the free market, supporting corruption, and scaring away potential investors. To implement their plans, the oligarchs need instruments – allies within the government who would maintain their rule and politicians who would pass beneficial laws and promote the messages oligarchs want people to hear.
Who are the key influencers in Ukraine?
In August 2018, the Ukrainian magazine Novoye Vremya published their rating of the most influential people in Ukraine. The incumbent president Petro Poroshenko headed the rating. The media estimated his business assets at $1bn. The confectionery corporation Roshen and agriculture companies make up the largest share of his business empire. After being elected in 2014, he promised to sell his business, with the exception of the 5 Kanal TV channel, but in the end, transferred his assets to a blind trust. Ukrainian media also accuse the president of profiting from corruption schemes in the defence sector.
The second place was given to Rinat Akhmetov, the richest oligarch of Ukraine, whose assets wax or wane in line with the country’s economic situation. Akhmetov’s main areas of influence are energy, metallurgy, communication, media, and others.
The next oligarch in the rating is Ihor Kolomoiskyi, he holds the fifth position in the list. His main interests lie in the oil business and banking. In 2015-2016 he became the only target of Poroshenko’s policy of de-oligarchization and was deprived of control over the oil company Ukrnafta and the largest Ukrainian bank PrivatBank. Kolomoiskyi managed to maintain control over one of the most popular Ukrainian TV channels 1+1.
According to Novoe Vremya, the oligarch Viktor Pinchuk is the eighth most influential person in Ukraine. He is a media magnate, maecenas, and a representative of the interests of former president Leonid Kuchma who’s daughter he is married to.
Other key figures of the campaign include the oligarchic pair Dmytro Firtash and Serhiy Liovochkin, who did not make it to the top-10 of the rating, and the gray cardinal Viktor Medvedchuk who is not an oligarch in a traditional meaning but has a huge influence on Ukraine’s politics. He is also well-known for representing interests of Russian President Vladimir Putin.
The agreements of the politicians with these people to much extent define the campaigns of both 2019 elections – the candidates would trade the agenda they are going to promote for the oligarch’s support.
How oligarchs support their politicians
Elections in Ukraine are an expensive business. This is the main obstacle preventing new players from entering the field. First, presidential candidates should prepare a deposit of UAH2.5mn ($91,853) which will be returned only to those who enter the second round. However, this is only a tiny part of the overall cost of the electoral campaign.
As Ukrainian voters tend to fall for populist fairytales and rarely analyze real actions or policy proposals, it is important for the candidates to be popular. Therefore, media coverage is crucial for them. The candidates are ready to spend exorbitant sums to achieve popularity. For example, during the 2014 presidential campaign, Poroshenko spent UAH96.5mn ($3.5mn) according to official data – while unofficial expenditures are estimated to have been several times higher. Political expert Serhiy Haiday estimates that holding an all-Ukrainian presidential campaign requires around $50mn per candidate. Despite legislative attempts to regulate the financing of political parties by providing them with state funding, the role of so-called black cash is still key to the process. When becoming an official candidate, a person is obliged to register an election fund were their supporters can send money to. Financing a campaign with the money out of the fund is forbidden.
Despite the official campaign of a candidate in Ukraine starting after registration in the Central Election Commission, political billboards advertising the candidate appear on the streets long before it. Due to the loopholes in the legislation, candidates can start an unofficial campaign earlier, without revealing those who ordered it, and financing it from outside their election funds.
Candidates need unofficial money not only for the pre-election campaigns.
According to Olha Aivazovska, the Head of the Civic Network Opora NGO, people – agitators, headquarters representatives, electoral commission members, and observers – are the main item on pre-election expenditure lists of the candidates. The expert says that this part of expenditures is covered by black cash. She also estimates that expenditures for these “human resources” exceed the official election funds by at least 80%.
A significant part of electoral expenditures covers media expenses. Prior to the beginning of the campaign, TV channels published the prices for airtime for political advertisement. The candidates have to pay for it only from their funds. However, apart from official ads, candidates are keen to use unmarked political advertisements masquerading as real news (so-called ‘jeansa’). Last but not least, the channels themselves are assets of the abovementioned oligarchs. So at any time, an oligarch can provide a platform for the additional coverage of a candidate, which in fact is not regulated so far.
“I suggest to change legislation in a way that it would guarantee equal opportunities of the access to the airtime to all candidates,” said Taras Shevchenko, co-founder of the coalition of NGOs Reanimation Package of Reforms.
So far only the candidates who were ignored by channels or who were covered in a negative way can apply to court or to the Central Election Commission.
Another way oligarchs interfere in the electoral race is by persuading and even blackmailing employees from their enterprises to vote in support of a specific candidate.
Who supports whom
The oligarchs will hardly state whom they support publicly, but in some cases, their preferences are obvious. In others, the possible scenarios are complicated. There is no doubt that oligarch Poroshenko supports himself as the presidential candidate. Kolomoiskyi denies his support to the comedian Volodymyr Zelenskyy, however political experts in Ukraine have no doubts about it. Zelenskyy’s shows are hosted by Kolomoyskyi’s 1+1 channel. Moreover, on the New Year eve 2019 the channel broadcast the speech of Zelenskyy before the President’s as it usually done in Ukraine. Kolomoyskyi’s hand was seen behind it.
“He [Zelenskyy] was an actor, maybe even an author of the idea. However, only Kolomoyski could have allow himself such a trick as the owner of the channel who for several times has been expressing his negative opinion towards the current president,” wrote Inna Kuznetsova, Chief Editor of the Kyiv bureau of the RFE/RL.
Radical Party leader Oleh Liashko is rumored to be Akhmetov’s candidate. This oligarch also supports the pro-Russian candidate Oleksandr Vilkul. However, experts stress that Ukraine’s richest oligarch will start his main game after the elections.
“He has good relationships with Poroshenko, however if Tymoshenko or even Anatoliy Hrytsenko will come to power, he will deal with a new president,” said political expert Volodymyr Fesenko.
The media magnate Pinchuk is also known for his abilities to come to an agreement with everyone. Referring to sources inside the oligarch’s inner circle, the media Ukrainska Pravda writes that he would give different candidates access to his channels during the pre-election period. According to the media, Firtash and Liovochkyn bet on the pro-Russian candidate Yuriy Boiko. However, their main goal is not his victory, but to have a big faction in the parliament after the Autumn elections.
The grey cardinal Medvedchuk is considered to be a supporter of Boiko. However, he is repeatedly ascribed to have some hidden agreements with President Poroshenko. Medvedchuk pro-Russian rhetoric, unpopular in Ukraine fighting a Russian-instigated war, helps unite patriotic voters around Poroshenko’s slogans. Also, in November 2018, RFE/RL journalists revealed that Poroshenko and Medvedchuk had repeatedly met in secret, with the exchanges between them remaining unknown.
Parliamentary and Presidential elections for politicians and oligarchs go hand in hand. Therefore, for Ukraine, 2019 huge sums of money by oligarchs and businessmen will be spent on campaigns and shady agreements. Unfortunately, the collapse of the oligarchic system can hardly be expected in Ukraine after the parliamentary elections too. As the oligarchs already working on forming their forces. Still the graduate entering of new faces from society to the scene is possible.