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Ukraine's New President Needs to Get Fellow Oligarchs to Stop Being So Corrupt

Genya Savilov/AFP/Getty Images

Translated by Ilya Lozovsky.

The press center of presidential candidate Petro Poroshenko welcomed journalists not with champagne, but with an abundance of Roshen brand candy. He became president with an impressive showing in the election’s first round, but the night results were announced did not feel like a holiday—not in his headquarters, and not in Ukrainian society.

Getting rid of the corrupt President Yanukovych has cost Ukraine dearly. And Poroshenko’s victory looks incredible from a historical perspective.

The oligarchs—along with President Yanukovych—were one of the causes of the Maidan. And the Maidan’s demand was to replace these political elites. Poroshenko has tried to distance himself from this negative image. He considers the label “oligarch” offensive, and his campaign used the slogan “To live in a new way.” In fact, he has spent 16 years in Ukrainian politics, changing parties, working for different presidents, multiplying his capital from year to year, and possessing loyal TV channels that he refuses to sell even now, after his presidential victory.

It is widely known that Poroshenko is the godfather of President Yuschenko, who himself became godfather to the children of the chocolate king. But few know that Poroshenko not only served as Viktor Yanukovich’s Minister of Economics, but also maintained a fairly good relationship with him. For example, Yanukovych asked him to find him a good English teacher. In 2010, in the early days of his presidency, the future authoritarian leader had delirious dreams of learning English and even learned a few phrases with characteristic mistakes, greeting investors with the words “Welcome in Ukraine.” In his turn, Yanukovych recommended Poroshenko a foreign doctor who helped him get the better of his diabetes.

Poroshenko’s problems began in the last year of Yanukovych’s presidency, when he declined his offer to continue working in the government, resigned as minister of economics, and declared his personal ambitions: first to become mayor of Kiev, the Ukrainian capital, and then to be president. To temper his appetite, the Yanukovych government banned Poroshenko’s party, Solidarity. 

The growth of Poroshenko’s popularity has been phenomenal. At the beginning of 2014, as of February 1, his popularity rating stood at 13 percent. Four months later he won with over 54 percent of the vote.

This rise can be explained by the dramatic changes that have taken place in Ukrainian politics. Viktor Yanukovych, who had always enjoyed a stable 30 percent of support, disappeared from the electoral field. These votes had to go somewhere, so some went to Poroshenko. Just as swiftly, he occupied the niche of the opposition leaders Arseniy Yatseniuk, Vitali Klitschko, and Oleg Tyagnybok, who had discredited themselves during the Maidan. Though they spoke on stage more often than some others, they did not vindicate the people’s hopes, and were busy negotiating with Yanukovych even as the open season on opposition supporters began in Kiev.

As a result, Petro Poroshenko won the presidential election on May 25, 2014, largely due to the low turnout in eastern Ukraine, roiled by separatist strife. It was revealing that, in his victory, he received 1.8 million fewer votes than Yulia Tymoshenko did when she lost the election in 2010.

The main challenge for Poroshenko today is to understand that his victory is the result of a fortuitous set of circumstances, and in no way a vindication of all of the choices he has made during a convoluted political career. In 2005 he became secretary of the security council as part of President Yushchenko’s team. But his popularity collapsed under the weight of scandal, when he was accused by Yulia Tymoshenko of corruption and extortion. The Tymoshenko supporters of that time, such as Nikolai Tomenko, accused Poroshenko of usurping power. Today, during the elections, Tomenko—having refused to support Tymoshenko—is Poroshenko’s authorized representative.

In addition to support from voters, a consensus among the oligarchs has formed around Poroshenko. This, too, is a challenge for him: how to force people who have spent lifetimes making money in politics work for him honestly. Dmitry Firtash, arrested in Vienna at the request of the FBI and awaiting extradition to Illinois, has come out openly in support of Poroshenko. Viktor Pinchuk, son-in-law of former President Leonid Kuchma, supports him tacitly, as does Konstantin Zhevago, the owner of Ferrexpo. In the last stage of the election, grasping the inevitability of Poroshenko’s victory, both Igor Kolomoiski and Rinat Akhmetov managed to find common ground with him as well. But now Poroshenko must decide how to curb Kolomoiski, who controls the Dnepropetrovsk and Odessa Oblasts, appoints prosecutors, and is equipping a private army.  And how to reduce the influence of Rinat Akhmetov, whose business empire grew to such an extent under Yanukovuch that it now makes up 20 to 30 percent of Ukraine’s GDP?

His victory is itself a challenge for Poroshenko. He can devote his five years at the helm to enriching himself, as his predecessors did, and as he was suspected of doing in 2005. But then he runs the risk of a new Maidan. An alternative would be to work for the good of society. Being elected president also presents Poroshenko with the dilemma of how to separate his political power from his business. He has already declared that he is in search of an investment firm to advise him how to sell off his assets. But, since Ukraine’s investment climate is at its nadir, this process could take months or even years.

Furthermore, Poroshenko has refused to sell Channel 5, which for many years has served as his trusty propaganda outlet in the struggle for political victories. In answer to a question posed by the author of this piece about the relationship between Channel 5 and Poroshenko, he answered: “This is my asset, and I can do whatever I want with it.” Aside from serving Poroshenko himself, Channel 5 is a way to pay off the politicians who are loyal to him. Many journalists in Kiev remember how it supported former Speaker of Parliament Vladimir Litvin, who is close to Poroshenko, and who was implicated in the murder of journalist Georgy Gongadze.

Also challenging for Poroshenko are the weak presidential powers under the current Constitution. Confidence on the part of 55 percent of Ukrainians shows that the voters associate him with quick changes for the better. But the President can’t even name the prime minister and most members of the government, since these powers lie with the parliament. And Poroshenko has no political faction of his own in the Ukrainian legislature, which again suggests that his high popularity ratings are a result of a very specific set of circumstances.

Under these conditions, Poroshenko has two courses of action. He can rewrite the Constitution in his favor, strengthening the powers of the president and facing charges of usurping power. Such a step would be very similar to the actions of Yanukovych, who half a year after his election completely changed the power structure in the country, subjugating the government through the Constitutional Court. In his campaign, Poroshenko promised not to aspire to powers greater than those for which he was elected.

The second way Poroshenko can carry out his promises is to achieve a majority in parliament. This would be possible only by holding early parliamentary elections, and only while Poroshenko’s approval rating is at its peak. It will inevitably begin to decline from its current 55 percent, giving him a span of a few months. In his campaign, Poroshenko promised “a full reset of power” and early elections “before the end of 2014 through an open list system.” This last promise is indicative. Ukraine has never held elections through an open list system. In an ideal case, this means the future composition of parliamentary deputies will be determined by the people, rather than through closed party meetings.

Undoubtedly Poroshenko could easily gather a parliamentary group from among the traitors who supported President Yanukovych and then quickly sided with the new government after his escape. But without early elections, Poroshenko would be held hostage to these deputies’ corrupt interests.

The current parliament stopped representing Ukrainian society long ago. It discredited itself by adopting the “dictatorship laws” of January 16, 2014, provoking the first deaths on the Maidan. Its dissolution will be perceived positively. Failing to hold early elections could become Poroshenko’s first big mistake. Both previous presidents, Viktor Yushchenko and Viktor Yanukovich, had to work with the deputies they inherited, which bound them hand and foot.

But here another problem arises for Poroshenko—his lack of a team. During the elections he was forced to surround himself with people discredited by their association with Yanukovych, the corrupt former mayor of Kiev Chernovetsky, and Vladimir Litvin, implicated in the murder of the journalist Gongadze. Asked about his team in a pre-election interview, Poroshenko evaded the question, listing his wife, his children, his employees, and all Ukrainian citizens—but not naming a single name.

Aside from political issues, challenges await Poroshenko in foreign policy and in defense, his direct responsibilities. He was an ardent supporter of the signature of the Association Agreement with the European Union, as a result of which he even clashed openly with Sergei Glazyev, President Putin’s special representative, at a September 2013 conference in Crimea. 

Today, however, Poroshenko must seek a compromise with the industrialists in eastern Ukraine, who say they are unwilling to open the markets. The Wall Street Journal cites sources claiming that Poroshenko has asked EU leaders to postpone signing the association agreement. On the same day, Poroshenko’s press office declared that he is insisting that the document be signed as soon as possible. 

In addition, Poroshenko must give a clear answer about Ukraine’s possible integration into NATO. Judging by the last months of the presidential campaign, Yulia Tymoshenko’s party intends to make joining NATO a major element of its platform. At the same time, the idea of joining NATO is a question that divides Ukrainian society, though its most ardent supporters live in western Ukraine, which voted for Poroshenko to the tune of 60 to 70 percent. 

Furthermore, Poroshenko must find a way out of the crisis in relations with Russia. He has repeatedly said that he does not recognize the annexation of Crimea. According to my sources, the current speaker of Russia’s parliament, Sergei Naryshkin, has contacted Acting President Alexander Turchinov several times, offering to withdraw the separatists from eastern Ukraine in exchange for recognition of the annexation of Crimea. In response, Turchinov advised him to hold such talks with the duly authorized and elected winner of the elections. Now this challenge stands before Poroshenko. Time will tell whether his experience as Foreign Minister will help. Aside from this, Poroshenko is quite close to the Russian Orthodox Church, and when in 2007 he was banned from entering Russia, the Moscow Patriarchate wrote letters to Putin in his support.

Meanwhile, Russia controls several of Poroshenko’s business assets. For example, he owns a candy factory in Lipetsk, the accounts of which were seized in March 2014. Poroshenko also owns the Sevastopol Marine Plant in Crimea. In order to avoid being held hostage to the will of the Kremlin, he must resolve the resulting conflict of interest.

Having become president of a country that has turned into an arena on which the Kremlin attempts to realize its imperial ambitions, Poroshenko is in a difficult situation. He must fight simultaneously on several fronts: externally against the Russian aggressor, internally for the sake of reforms demanded by Ukrainians after the Maidan, and the battle against himself and his own temptations.

Plundered by its previous governments, Ukraine more than ever needs help from the West. To repel foreign aggression it needs advanced weapons and technologies, and to carry out internal reforms it needs a sizeable financial infusion. But it’s no less important to help the Ukrainian authorities overcome the habit of corruption. That’s why any financial assistance from the United States or European Union must come only after the fulfillment of the West’s demands to establish mechanisms which would control the civil servants and establish the infrastructure of democracy. This will be the best way to repay the Ukrainians who sacrificed their lives on the Maidan. 

This post has been updated.