by Olivier Del Fabbro
No matter where you go, Aristotle believes, the rich will be few and the poor many. Yet, to be an oligarch means more than to simply be part of the few, it means to govern as rich. Oligarchs claim political power precisely because of their wealth.
Rightfully then, we associate oligarchy with the few individuals, who enrich themselves in Eastern Europe after the downfall of the Soviet Union, in order to take part in political governance. Alexander Smolensky, Yuri Lushkov, Anatoly Chubais, Boris Berezovsky, Vladimir Gusinsky, and most famously Mikhail Khodorkovsky, are the protagonists of David E. Hoffman’s The Oligarchs, who are right on the spot, when the Soviet planned economy turns into a wild privatization of profitable industries and resources.
But the economic situation in the 1990’s in Eastern Europe is by no means comparable to the market economy of a liberal democracy. What is missing, according to Timothy Snyder in The Road to Unfreedom, is the rule of law. In other words: oligarchs wish to manage Russian “democracy” in favor of their own interests.
Later on, when Vladimir Putin succeeds Boris Yeltsin, oligarchy in Russia continues. Putin keeps those he likes in his inner circle and gets rid of others, who are critical or not playing along: e.g. the case of Khodorkovsky. It is time for Putin’s KGB friends to come to power, as Catherine Belton shows in her book, Putin’s People. Yet, Putin’s Russia becomes at the same time, as Mark Galeotti highlights in his podcast In Moscow’s Shadows, more and more an authoritarian regime, in which many different types of individuals desire a piece of the cake: mega-oligarchs, mini-oligarchs, corrupt politicians and officials, warlords, generals and what not. Russia has never been democratic – not under the Tsars, the Soviet Union, Yeltsin nor Putin. Its path is one from imperialism to communism to oligarchy to authoritarianism – not to freedom.
Ukraine, similarly to Russia, falls under the grip of its very own oligarchs after the Soviet Union vanishes from the world map. And Ukraine too has its list of protagonists, its main actors dominating the stage of wealth and political power. There is Rinat Akhmetov, Ukraine’s richest oligarch, owner of System Capital Management (SCM), and owner and president of the football club Shakhtar Donetsk. Akhmetov is also member of the Ukrainian parliament from 2006 to 2007 and 2007 to 2012. Ihor Kolomoyskyi owns, together with his business partner Gennadiy Bogolyubov, Privat Group, which controls companies in steel, oil, gas, chemical and energy sectors. They also founded the biggest bank in Ukraine, PrivatBank. The “princess of gas”, Yulia Tymoshenko, is not only involved in industrial but also offshore business in Cyprus. She is prime minister of Ukraine in 2005, as well as from 2007 to 2010. Similarly to the princess, Dmytro Firtash operates in the gas sector, and promotes Russian interests in Ukraine, for example those of Gazprom. Viktor Medvedchuk is a member of the Ukrainian parliament from 1997 to 2002, and head of the Office of the President of Ukraine from 2002 to 2005. He is also a member of the Kyiv Seven, a clan of oligarchs enriching themselves by fixing prices and establishing offshore financial centers. Putin is his daughter’s godfather. Lastly, there are the two most famous oligarchs: on the one hand Petro Poroshenko, the fifth president of Ukraine from 2014 to 2019, who acquires his wealth with the Ukrainian confectionery manufacturing group, Roshen (the reason why he is also called the “Chocolate King”); and on the other hand, Viktor Yanukovych, Poroshenko’s predecessor, president of Ukraine from 2010 to 2014.
These actors, and many others, are the subject of Sébastian Gobert’s newly published book, Ukraine, The Republic and its Oligarchs, Understanding the Ukrainian System (in its original French, L’Ukraine, la République et les oligarques. Comprendre le système ukrainien). Yet, while Russia changes from a communist state to an oligarchy to an authoritarian regime, Gobert is able to show how Ukraine embarks on a road to de-oligarchization, that is, freedom and democratization. That road is, as we all know, not a bright looking story, but a struggle of the many against the rich and the few. It is civil society, the masses, who little by little empower themselves, and not only fight Russia, but also their very own oligarchic republic.
To showcase such development, Gobert not only describes the history of the oligarchs, how they acquire their wealth, the illegal and corrupt activities they are involved in, he also discusses the political evolution of the country, and the role that civil society plays.
It is worthwhile to follow and summarize Gobert’s meticulous description of the de-oligarchization and democratization of Ukraine.
The first important event that comes to mind, when thinking about the disruption of the oligarchic republic by civil society is of course the Orange Revolution in 2004-2005, and the third presidency of Ukraine under Viktor Yushchenko. But, it already starts earlier, during the presidency of his predecessor Leonid Kuchma. Under Kuchma, Ukraine is not only a kleptocratic and corrupt oligarchy, criminal violence and murder is a commonly used tool to achieve social and political ends. In November 2000 a journalist, Georgiy Gongadze, is found decapitated in a forest south of Kyiv. Gongadze’s investigations on political corruption are followed by the so-called “Cassette Scandal” in which Kuchma and other officials can be heard to say that Gongadze needs to be silenced. More dead follow, public demonstrations emerge and evaporate, Kuchma is never charged with a crime, but it is the beginning of a long path to democratization, not by the means of violence, but public opinion.
In September 2004, Viktor Yushchenko is victim to dioxin poisoning. His face bears the marks of the violent practices present in Ukrainian political life. Ukrainians are fed up, the Orange Revolution starts on the Maidan, Yushchenko beats Yanukovych, only to be replaced by his adversary four years later. Physically and also psychologically weakened, Yushchenko’s presidency is only a triumph at first. Too strong are the oligarchs, who follow their own interests alongside the political and juridical system too deeply embedded in corrupt mechanisms. Moreover, Yushchenko’s family is itself not free from scandals – his wife is involved in the creation of dubious foundations, while his son drives luxurious cars, parks illegally and is fined ridiculously small sums.
With the failure of the Orange Revolution, the Ukrainians withdraw from public life and live their lives in private: work, family, leisure. By doing so, they allow the most kleptocratic oligarch of all times to seize the presidency, Viktor Yanukovych – even if he only beats Tymoshenko by a small margin. But, as Gobert highlights, Yanukovych is not yet an oligarch, when he comes to power in 2010. Like most politicians in Ukraine at that time, he is an opportunist, best demonstrated by his connection to Ukraine’s richest billionaire, Rinat Akhmetov. Hence, members of Akhmetov’s Donetsk clan, his close associates, obtain high positions in the government. More importantly however, Yanukovych gets rid of his most dangerous political rival, Yulia Tymoshenko, by imprisoning her. She has no support from other oligarchs, whose businesses thrive under Yanukovych’s presidency. He also becomes a puppet under Vladimir Putin’s control, who for a long time wishes to get his grip on Ukraine. Like Yanukovych, Ukrainian oligarchs adapt and balance between East and West, be it in partnership with the European Union or the Eurasian Economic Union: money does not smell. Yanukovych’s role becomes that of a conductor of a nepotistic mafia system, therefore publicly called “The Family”. Accordingly, names associated to The Family appear in the Panama Papers in 2016, the Paradise Papers in 2017, the FinCen Files in 2020 and the Pandora Papers in 2021. In 2020, estimations believe that Yanukovych’s mafia system managed to make 40 billion dollars disappear.
At the time of Yanukovych’s reign, the Ukrainian public has no clue of these gigantic numbers, but the middle class feels it. Under his presidency economic growth stagnates with thousands of small and middle-sized companies suffering. Moreover, a younger generation of Ukrainians, born after the fall of the Soviet Union, has reached adult life by now. They live in urban areas, are well educated, connected on social media, think globally, and informed about what is happening in the world not via TV but the internet. Since the Orange Revolution, civil society has not vanquished, on the contrary, journalists, human rights activists, students, feminists, and ecologists, all want political change and act in concert. Maidan, yet again, becomes the stage for protests and civil demands. Yanukovych answers with violence. Hundreds of thousands in turn answer by occupying the square, including intellectuals and artists, generations of all age. Even Vitaly Klitschko and members of the few, such as Petro Poroshenko, attempt to profit from the moment. Violence escalates, protesters are killed, but they nevertheless manage to take control of the city. Yanukovych flees to meet his puppet master. Russia in turn seizes the moment of civil and political disorder and intervenes militarily in Crimea and Eastern Ukraine.
The Minsk agreements of 2014 and 2015 stabilize the front in the Donbas. In Kyiv Poroshenko professes change. An oligarch, of all people, becomes the new president of Ukraine. But elections also vote more and more representatives from civil society into parliament. Another little triumph for the democratization of Ukraine. Two steps forward, one step backward, that’s how Gobert describes Ukraine’s long and rocky way to democratization. Poroshenko plays along. Under his presidency Ukraine opens up towards Europe. He also profits from his presidency to nationalize Kolomoyskyi’s PrivatBank, an old rival he aims to weaken. Kolomoyskyi wants revenge and allows no other than Volodymyr Zelenskyy to air his TV show, Servant of the People, on his television channel 1+1. The show becomes a hit and criticizes the Ukrainian oligarchic republic in a comedic fashion. Ultimately, it helps Zelenskyy to win against Poroshenko in the 2019 presidential election. But Poroshenko does not only lose because of the TV show. On the background of an ever-growing civil society, Poroshenko cannot bring the change he promised. Moreover, his name too appears in the Panama Papers. The TV channels and media companies of Poroshenko’s oligarch friends cannot help him win the election – that is, Rinat Akhmetov’s Media Group Ukraine, Dmytro Firtash’s Inter, and Victor Pinchuk’s Starlight Media Group. Not even his own television station, 5 Kanal, can help the Chocolate King.
Once in power, Zelenskyy is at first no wizard bringing radical change. Pinchuk, Akhmetov, Kolomoyskyi, Medvedchuk, the oligarchs remain part of the rich and the few. It is only later, when first Joe Biden is voted into the Oval Office and second Russian troops invade Ukraine, that Zelenskyy rises to the occasion – even though his name also appears in the Pandora Papers, making him not guilty of corruption, but of tax evasion.
The oligarchs in turn react differently to the invasion. Akhmetov, Pinchuk, Poroshenko help the effort against the invader – even if Akhmetov’s empire is targeted by Zelenskyy’s fiscal reforms. Firtash lives in exile in Vienna since 2014, waiting for his extradition to the United States. Medvedchuk is accused of treason and handed over to Russia in 2022 in a prisoner exchange. Kolomoyskyi, whose activities have been investigated by the FBI since 2019, is arrested in 2023 and placed under pre-trial arrest. Others flee the country to relax on the French Riviera. Kuchma is seen walking in Saint-Jean-Cap-Ferrat next to the villa of his son-in-law, who is no other than Victor Pinchuk. All in all, the war catalyzes the democratization process in Ukraine, the oligarchs are slowly losing more and more of their wealth and their grip on political institutions.
At the end of his book, Gobert presents a couple of possible future scenarios for Ukraine: membership into EU and NATO; oligarchs trying to seize power by forming their own militias; the potential rise of new oligarchs; the US and EU growing tired of support for Ukraine; even a possible Russian victory – who knows?
Indeed, two steps forward, one step backward, that has been the advance of the many in their struggle against the few in Ukraine. And if that pattern is accurate, then the future scenario, the road to democratization and freedom, will continue to be strenuous for the Ukrainians, their fight against oligarchy and authoritarianism, domestic and foreign.
Yet, Gobert finishes with what I believe to be the most important fact: By now, Ukrainian society is sensitized to war. Millions of men and women are trained for war, they are armed and have good relationships with military and paramilitary organizations. Who will dare to reinstate a true oligarchic republic, or a pro-Russian government, if not the Ukrainians themselves? After all, that’s what a democratic – and not an oligarchic – republic means: to take your destiny in your own hands.