For Poroshenko, last week started as a disaster: His offshore schemes were made public through the Panama Papers leak. The disclosure of his British Virgin Islands holding company for his Roshen confectionery came through leaks rather than any detailed public explanation from the president beforehand.
The April 3 revelations instantly reminded Ukrainians of at least three of Poroshenko’s failings in nearly two years as president:
1. He is not as honest as he pretends to be;
2. He promised but failed to crack down on offshore tax havens that rob Ukraine of up to $11.6 billion in tax revenue year, about 10 percent of gross domestic product or 25 percent of the national budget;
3. He has not lived up to his 2014 election campaign promise of selling off his business assets so he could concentrate fully on being president with no vested interests or conflicts of interests. Instead, Poroshenko’s estimated fortune has shot up by $100 million — to $858 million — while the nation’s fortunes have faltered. How did he perform that feat, by the way, when Roshen says its revenues declined to $450 million — 26 percent from the previous year — in 2015? Moreover, his Roshen confectionery does business in Russian-occupied terrority of Ukraine and in Russia, which has been waging war against Ukraine for more than two years. This is not ethical for a president of a nation at war; at the least, it’s a monstrous conflict of interest.
Now, Poroshenko’s party will try to get Volodymyr Groysman, the speaker of the Verkhovna Rada, as the replacement for Prime Minister Arseniy Yatsenyuk.
Out of all possible candidates, Groysman, the former mayor of Vinnytsia, is singular for his 100 percent loyalty to Poroshenko.
His ties with the president are so evident that Poroshenko allies feel the need to persistently deny them. One of them, presidential chief of staff Boris Lozhkin, even said in a recent interview that “Groysman is not an avatar of Poroshenko.” Thou doth protest too much.
At the same time, media reports say that the main candidate for general prosecutor is Yuriy Lutsenko, head of the president’s 138-member faction in parliament.
Lutsenko, a long-time politician and former interior minister, was a political prisoner under ex-President Viktor Yanukovych. But that hardly qualifies him to be prosecutor general and, given his loyalty to the president, makes him unlikely to combat corruption in the prosecutor’s office or enforce the law against oligarchs.
If Poroshenko manages to install Groysman and Lutsenko, he will manage to get full control of all branches of power, given the president’s dominant power over courts.
He will have the presidency, the Cabinet of Ministers, the largest faction in parliament and the top prosecutor from his own party.
When Yanukovych amassed this kind of power his first year in office, the public called him a dictator, and rightly so.
Will Poroshenko abuse his new powers?
His record doesn’t leave much room for optimism.
The president has made quite a few mistakes. Last week, Ukrainian weekly magazine Novoye Vremya listed 10 of them.
The list is familiar for anyone who follows Ukraine’s politics. Poroshenko continues doing business after the election. Poroshenko allowed, if not approved, the scandalous failures and obstructions of the Prosecutor General’s Office. Poroshenko helped his son get into parliament.
Last but not least, Poroshenko was secretly re-registering his Roshen confectionery as an offshore company in the British Virgin Islands – which potentially gives him an opportunity to evade taxes in Ukraine. He waited a week before finally explaining himself and denying any allegations of tax evasion as groundless.
One major problem with Poroshenko’s past mistakes: He was never punished for any of them.
Whether it’s a wise provision or not, Poroshenko violates the constitution every day by serving as a president who runs a business, but so do many of his offshore friends in parliament.
The consequences? None for him, even though these offshore entities appear to exist for a combination of legitimate and illegitimate reasons.
If the president would like to dispel suspicions of tax evasion, then he should disclose the effective tax rate that he and his businesses pay. The representatives of his company, Roshen, refused to do so when Kyiv Post asked them about the tax rate last week, days after the offshore scandal.
His closest ally, lawmaker Ihor Kononenko, was accused of trying to have his own deputy economy minister who would run the state-owned Naftogaz, possibly to return the troubled energy monopoly to its dark days when one scam after another in natural gas trading cost the nation’s taxpayers up to $1 billion monthly. Kononenko denies all.
Economy Minister Aivaras Abromavicius finally had enough on Feb. 3 and quit because Poroshenko refused to rein in Kononenko. For Ukraine, the loss of Abromavicius is significant as the Lithuanian investment banker proved to be one of the most successful and technocratic reformers in government. And now, Ukraine is on the verge of losing three other highly effective and honest reformer ministers — Natalie Jaresko in finance, Oleksiy Pavlenko in agriculture and Andriy Pivovarsky in infrastructure — because seats in the new Cabinet of Ministers under Groysman look like they will be divided up under the old spoils system.
Again, there were no consequences for Poroshenko, whose fear of Jaresko’s independence and reputation for incorruptibility frightened him so much that he wouldn’t dare back her for prime minister.
The offshore company that Poroshenko was secretly registering during the fiercest fighting in eastern Ukraine, when Russian troops routed Ukrainians in the epic Battle of Ilovaisk, is also something that is likely to bring no consequences on Poroshenko.
The way Poroshenko is going, one would need to tear him from his seat by force or revolution to get him out of power — or by clean election, if he dares to sign a new law strengthening provisions for transparent and honest elections.
2019 is a long way off and anything can happen before then. At the moment, Poroshenko is flashing traits of Yanukovych’s insatiable appetite for power (and food) and Yushchenko’s reputation for incompetence. It’s a really bad combination.
The people of Ukraine and the nation’s Western partners share the blame for not checking Poroshenko’s steep ethical descent. Both allowed Poroshenko to get away with every misdeed, perhaps rationalizing that with the nation at war, we should all look the other way at rampant corruption under Poroshenko’s watch.
But how is he going to learn his lessons if he faces no consequences?
Many Ukrainians struggle for the hryvnias and kopecks they need simply to survive. Yet so many are in frightful connivance with the offshoring ways of their political and business leaders. “Every big businessman in Ukraine has offshore companies, why wouldn’t he have it, too?” was the common shrug.
Others went so far to blame journalists who fished out Poroshenko’s business dealings from the 11.5 million documents purloined from Mossack Fonseca law firm for damaging the country’s international image by attacking the president of a nation at war.
This is a ridiculous charge. It is Poroshenko and the corruption he is tolerating — if not actively engaging in — that is weakening the nation, not the journalists who are exposing the truth. Some of the squealing critics are lackeys for whoever is in power in Ukraine at any given moment, showing themselves to be unprincipled in embracing Leonid Kuchma, Yushchenko, Yanukovych and now Poroshenko.
The easiest explanation is metastasis of the Soviet mentality that took away the people’s ability to be critical and demanding of their public servants, as well as the worse examples set by Ukraine’s first four presidents, who make Poroshenko look good by comparison.
Poroshenko had a unique chance to go down in history as the leader who transformed Ukraine. He had all the cards in his hands, but instead of playing them to win, he sold them to other players — to players like the odious oligarchs Igor Kolomoisky and Rinat Akhmetov, who are known to be visiting the Presidential Administration recently – presumably to trade votes of lawmakers at their command for the state’s loyalty and benefits. Which include, presumably, presidential connivance in ensuring that no criminal or tax investigations ever take place against them or their friends.
If Poroshenko continues plunging into his power-obsessed delirium, he will go down in history as another of Ukraine’s wasted chances.
