The New Ukraine: Inside Kiev's House of Cards

By Christian Neef, Wladimir Pyljow and

Photo Gallery: Charting a Future for Ukraine Photos
AP/dpa

In the days after Yanukovych's fall, the Ukrainian president's lavish lifestyle spurred outrage around the world. Now the provisional government is struggling to avoid the corruption and clientelism that plagued its predecessors.

It was 11:37 a.m. last Wednesday when Rinat Akhmetov, Ukraine's wealthiest and most powerful oligarch, released a statement: "Like all Ukrainians, we want to create a new country in which democracy and the rule of law are supreme. We will participate in the blossoming of Ukraine."

Akhmetov, who controls more than 100 companies with 300,000 employees, was a close confidant of toppled Ukrainian President Viktor Yanukovych. In contrast to many others of his standing, he remained in the country and his statement was a clear indication that he had switched allegiances to the new government in Ukraine. It was received with a sigh of relief in Kiev.

By then, many other rich and powerful Ukrainians had long since left, including the top Ukrainian official sitting sitting in a café near Pushkin Square in the center of Moscow last week. He too had served the Yanukovych government in recent years. "Only God knows when I will be able to return to Kiev," he says. Afraid that the country's new leaders might take revenge, he adds, "please just call me Oleg."

Oleg can effortlessly recite the names of section heads responsible for issues pertaining to Russia and Ukraine in the foreign ministries of Western European capitals. He knows them all. He soberly recounts how Europe rebuffed him and his delegation while the Kremlin ratcheted up the economic pressure on Ukraine in recent years. "The EU should have gotten involved," he says.

Then Oleg explains the preparations made by Yanukovych to storm Independence Square, the location of the mass protests that ultimately brought down his government. Oleg says he knows that fighters from the elite ALFA unit were responsible for setting fire to opposition headquarters and that ALFA snipers opened fire on demonstrators from the rooftops of surrounding buildings. "Everything went according to plan. But then Yanukovych suddenly flinched and ordered the offensive to be stopped," Oleg says.

He says that when foreign ministers Frank-Walter Steinmeier, Laurent Fabius and Radoslaw Sikorski spent the night negotiating with Yanukovych on February 20-21, the Ukrainian president's aides were busily preparing his escape. "They packed up suitcases and boxes. In the end, the helicopters were so heavy that they could hardly take off," Oleg says.

Top League of Eastern Oligarchs

Last week, several additional members of Yanukovych's entourage arrived in Moscow. Many of them consider their former head of state to be a traitor who plunged his country into chaos through his indecision. Even some of Yanukovych's closest allies have headed abroad, such as Sergei Kurchenko, a 28-year-old billionaire. Kurchenko is said to have fled to the Belorussian capital of Minsk after Yanukovych was toppled. Then, eyewitnesses claim to have seen him in the bar of the Radisson Royal in Moscow a week ago.

Kurchenko is considered the financier of the Yanukovych clan -- he is referred to in Ukraine as the "billfold." His VETEK Group most recently reported annual turnover of some €7.3 billion ($10 billion). One year ago, with Ukraine stuck in a deep economic crisis, the company invested in a service station chain in Germany focusing on liquefied natural gas. Kurchenko also purchased a refinery in the Ukrainian Black Sea city of Odessa from the Russian oil giant Lukoil. In December 2012, he bought the football club FC Metalist Kharkiv, along with the stadium.

He had, in short, become part of the top-league of eastern oligarchs, despite his modest origins. With an estimated worth of $2.4 billion, he had climbed up to seventh place in the list of the country's richest people published by the Ukrainian magazine Korrespondent. He is not, however, mentioned in the list published by the Ukrainian edition of Forbes. Because the magazine had published several critical articles about his fairy-tale rise to riches and his friendship with Yanukovych's oldest son Alexander, Kurchenko simply bought the publication.

It was, however, a former journalist at his new paper who discovered 30 sacks in an underground garage in Kiev early last week. They contained shredded documents from Kurchenko's collection of companies. Prior to the discovery, VETEK employees had removed computers from the holding company's offices and destroyed their hard drives. The bags of shredded documents revealed contracts, legal proceedings and bank remittances, including the purchase of a motorboat for €2 million. Insiders have begun reporting about the wasteful and eccentric lifestyle led by the up-and-comer. The oligarch allegedly hired a celebrity chef from the West and paid him €100,000 for just one day's work. When Kurchenko didn't like what he was served, he fired the cook.

The oligarch was married, but also is said to have maintained a relationship with a Moscow television personality. He flew with his mistress across Europe in his private jet and they would meet for dinner in the Russian capital in a private section of Turandot, the famous gourmet restaurant.

His ties with Yanukovych were close right up until the end. Just two weeks ago, the National Bank of Ukraine propped up Kurchenko's Brokbusinessbank with a billion hryvnia, roughly equivalent to €84 million. The loan came at a time when Ukraine was facing bankruptcy.

Changed Lives

Yanukovych remained loyal to the young businessman because Kurchenko was an important building block of his regime. Last summer, when Ukraine was still flirting with Europe, Kurchenko made preparations to purchase natural gas on European markets via foreign subsidiaries. It was clear to the leadership in Kiev that were Ukraine to sign an Association Agreement with Brussels, the Kremlin would likely respond by curbing natural gas deliveries. That would have been a problem for Yanukovych the president, but not Yanukovych the businessman -- Kurchenko would have resold the natural gas to Ukraine at a hefty mark-up, and the president's clan would likely have profited as well.

The collapse of the Yanukovych regime has changed the lives of many in Ukraine. Kurchenko isn't the only one who has disappeared. The judge who once sentenced Yulia Timoshenko is also missing as is the ex-interior minister who referred to the Maidan activists in Kiev as fascists and the former commander of the Berkut special police force, which was disbanded last week.

But in Kiev, anarchy has been making inroads. Ukrainians speak of "Makhnovshchina," a reference to the anarchist-Communist partisan movement under the leadership of Nestor Makhno during the civil war that started in 1917. Makhnovshchina is a term applied to anything that smells of capriciousness and chaos.

Revenge taken against the rich and prominent is part of that chaos. In the Kiev suburb of Gostomel, 20 assailants burned down an estate belonging to Communist Party head Petro Symonenko. A Toyota Land Cruiser and an Aston Martin Vantage -- a €129,000 vehicle allegedly driven by his wife -- were found in the garage.

Parliament has seen its share of audacity too. Last week, laws were being rapidly pushed through -- including some of with doubtful legal underpinnings and seemingly questionable adherence to the constitution. But revolution is in the air and everything has to go quickly. On occasion, Speaker of Parliament Oleksander Turchinov introduces appointments and then signs them immediately, as acting president of Ukraine.

Tuchinov was long the éminence grise of Yulia Timoshenko's Fatherland alliance, but has now become the country's most important figurehead. He is head of parliament, acting president and is simultaneously coordinating the establishment of a new government. "Yanukovych couldn't have dreamed of having so much power," commented the editor-in-chief of one Kiev newspaper.

Skepticism of Timoshenko

The biggest loser thus far has been Vitali Klitschko's UDAR party, which has been unable to keep up with Turchinov's fast pace. When it came time to appoint a new governor of Ukraine's national bank last Monday, UDAR was still trying to agree on a candidate of its own. Undeterred, Turchinov simply called a vote and had his own favorite installed -- a candidate who hadn't even been part of previous discussions. The Fatherland alliance, with its experienced apparatchik Turchinov, is handing out portfolios and cabinet positions as it sees fit. Last Wednesday, its party head Arseniy Yatsenyuk was named acting prime minister.

Early on, the protesters on Independence Square could only stand by and watch, basically forgotten as power was divvied up. It is the fate of many revolutionaries: The new power brokers seek to do away with those who brought them to power. But last Tuesday, the Maidan, as the movement is known, forced parliament to delay the establishment of a transitional government and won a promise that a third of all government posts would go to activists instrumental to Yanukovych's overthrow. Only the radical Right Sector militant group was dissatisfied. The group had sought to get its leader, Dmitry Jarosh, appointed deputy prime minister, a post which also includes responsibility for the police and secret services.

And Yulia Timoshenko? Her arrival on Independence Square a week ago as part of a convoy of Mercedes and Lexus sedans was not well received. It shows, wrote one Kiev newspaper, that she "still doesn't understand what is happening in the country." Half of the emotions she displayed in her Maidan speech, it argued, were feigned. "Ukraine needs reforms, not emotional outpourings."

Timoshenko, one of the heroes of the 2004 Orange Revolution, seems to have understood. When it came to divvying up government posts, she too made a plea on behalf of the Maidan activists.

Still, the skepticism activists have for Timoshenko remains difficult to ignore. They are afraid that the political profiteering of recent years will carry on, just with different beneficiaries. And Timoshenko herself was long part of the Ukrainian establishment.

Their concern appears to be justified. Last Monday, a high-ranking officer from Ukraine's customs administration contacted a newspaper to inform editors of a new deal pertaining to the "internal" allocation of unexpected customs revenues. No longer would confiscated money and valuables be given to Yanukovych's Party of Regions as they had been previously. Rather, they would go to the Fatherland alliance. Timoshenko, the man said, had personally approved the deal. Furthermore, the Communist Party, he said, had been handed the leadership of the customs administration so that it would support Timoshenko in the future. The impression was that the struggles for influence which characterized the years following the Orange Revolution had returned.

Still, Kiev-based publicist Valery Kalnysh says she remains hopeful that the political system will be able to clean itself up. She notes that many parliamentarians now support a move to make police archives public as well as those from the defense ministry, the secret services and the public prosecutor's office. Nowhere in the former Soviet Union has such a step been taken.

Recent documents have already begun coming to light. Last week, papers emerged showing that the SBU secret service had sought to recruit people on Independence Square to provoke a military response. The papers also showed that the Ukrainian army had been tapped with the crushing of the protests. According to order number 313, issued on Feb. 18, 30 trucks, two helicopters and 2,500 troops from the airborne forces were to be made available. The soldiers were to be deputized as military police and allowed to arrest civilians and raid homes and apartments. The use of weapons was expressly permitted.

Translated from the German by Charles Hawley

Article...
  • For reasons of data protection and privacy, your IP address will only be stored if you are a registered user of Facebook and you are currently logged in to the service. For more detailed information, please click on the "i" symbol.
  • Post to other social networks

Comments
Discuss this issue with other readers!
6 total posts
Show all comments
    Page 1    
1. The House of Cards- Joker's Wild
ivh79x 03/03/2014
Dmitry Yarosh the radical oppositional militant that slammed the Ukraine into turmoil, now has his eyes set on total control of Ukraine's military forces. I wouldn't trust this man with my dog, let alone my country. When it comes time to cast any votes for President's of Ukraine, I surely hope the people of that country will remember that none of this hyped up frenzied chaotic mess would have been had Dmitry Yarosh not ambushed the negotiaions that Yanukovich went to the table with in good faith. Remmber, all demands of the other factions were met, but Dmitry Yarosh wouldn't just work on securing Ukraine's stability and honor all those agreements. He chose to make a radical call to arms and now wants Ukranian's trust and honor bestowed upon his radical right manifests? This one man created more heartache and trouble for Ukraine than was necessary. And it is because of his hot headed, irrational, rabid frenzied tactics that some within Ukraine do not believe his heart is in the right place or a good seed to sow in Ukraine. If I were the EU I would watch this man closely. His own lust for extremism and misguided power may prove it difficult to work with Ukraine on economic, peace and trade issues.
2. optional
joep.rijntjes 03/03/2014
http://www.nytimes.com/2014/03/03/world/europe/ukraine-turns-to-its-oligarchs-for-political-help.html So it seems a foregone conclusion: The Ukraine is repeating its pattern of clientelism and the infighting which doomed the Orange revolution probably isn't far off.
3. language - the big lie and the tragic events unfolding
jackielublin 03/04/2014
on of the sticking points raised in favour of the Russian occupation is the law that has been either passed or put forward that the media in its ignorance states 'outlaws Russian' - however, it should be noted the wording. The law puts forward the 'primacy of Ukrainian as the language of the nation'. In other words, the national language is Ukrainian much as the national language of Germany is German, or America is English, or depending on the province in Canada, French or English. Indeed, a similar law exists in Russia with respect to Russian. It would be worthwhile to discuss the semantics of word choice - as a counter to the 'Big Lie' - the propaganda so easily accepted by purported journalists and hence spread. In such a matter, may I congratulate your concern as to the fairness of its journalistic coverage of this and other events.
4. How can a country ruled by oligarchs and mafias change
lourencofn 03/04/2014
How can we expect that a country that have been ruled by oligarchs and other mafias with a high level of corruption in the last decades, that apart from having elections and a parliament it is still far away from being a democratic country, will change in so quickly, it will take two or three generation to change this if they start now. Why they want to join Europe, not to stop corruption, not help Europe to become the most prosperous region in the world and not overcome the critical economic EU moment, but only to take economic advantage from belonging EU and benefit from freedom of movement in Europe and also to expand the mafias influence to a broader area. Because they are not much different than the Russians they should stay with them for now, when there is real democratic change in the Ukrainian society they can join Europe.
5. nobody
nobody 03/04/2014
"Revenge taken against the rich...burned down an estate belonging to Communist Party head Petro Symonenko". NO! This is not because of his money, this is because of his political position. Did you know that Communist Party is forbidden in western Ukraine? Some members of new government belongs to nationalistic forces and they allow this to happend. I can say even more: government can't control and don't want to control ultraradical nationalists from euromaidan. Those guys have a huge amount of weapon and want to use it. A lot of people, who belongs to Communists or old government were victimized. Other side is anarchy. Right now any guy with mask and gun can took something from the store. And police won't stop him, because he can say: i'm a activist from euromaidan and this is expropriation for maidan's people. But euromaidan says: this is not our guys! Yes, this is anarchy, "Makhnovshchina". I don't care who exactly will be our president, but i want to be protected by police or army. So it is not a surprize, that most people in Crimea were happy when russian army came!
Show all comments
    Page 1    
Keep track of the news

Stay informed with our free news services:

All news from SPIEGEL International
Twitter | RSS
All news from Europe section
RSS

© SPIEGEL ONLINE 2014
All Rights Reserved
Reproduction only allowed with the permission of SPIEGELnet GmbH



Photo Gallery
Photo Gallery: The Disintegration of Kiev

From DER SPIEGEL
Photo Gallery
Photo Gallery: Street Battles in Kiev


European Partners
Facebook
Twitter