Servent of the Corrupt…The Relationship Between Zelensky, Oligarch Kolomoisky & Washington DC

by Pedro Gonzalez

In February 2021, by order of President Volodymyr Zelensky, Ukraine shut down three domestic television channels, accusing them of spreading Russian “propaganda.” Three months later, Zelenksky arrested Viktor Medvedchuk, who was at the time leading the second-biggest party in Ukraine’s national parliament, the pro-Russia and Eurosceptic Opposition Platform for Life (OPZZh).

 

Zelensky didn’t have trouble incinerating vaunted democratic norms well-before Russia crossed the Rubicon into Ukraine this year. So it was no surprise when he did it again amid the war in late March, invoking emergency powers under martial law to nationalize TV channels and ban 11 opposition parties, including OPZZh — all supposedly done in the name of combatting Russian misinformation and Russian sympathizers, even though OPZZh’s then-chairman, Yuriy Boyko, denounced the war and called for a ceasefire and the withdrawal of Russian troops from Ukraine. Zelensky, however, wouldn’t miss another opportunity to clip the wings of political opposition in his country, certainly not now that Western media rationalizes and glorifies his every move.

 
But the portrait of the Ukraine President as a democratic paragon whitewashes the real Zelensky and conceals a vast web of corruption and international skullduggery of which Ukraine is situated in the centre. Understanding the real Zelensky, requires seeing him as a creation of Ukrainian oligarch Ihor Kolomoisky. He is, in truth, a puppet of intrigue.
 
The Pandora Papers
 

It might be hard to believe now, but revelations from documents in the Pandora Papers — millions of files from offshore service providers leaked to the International Consortium of Investigative Journalists and shared with partners around the world — sent Zelensky reeling last year, threatening to end his political career. Though the actor-turned-politico campaigned as an anti-corruption reformer, the Pandora Papers showed him to be just as crooked as his predecessors.

 

Of more than 300 politicians and public officials, including several current and former national leaders, in more than 91 countries and territories to whom the documents were linked, Ukraine was home to more secret offshore holdings than any other, including Russia. The Organized Crime and Corruption Reporting Project (OCCRP), which contributed to the investigation, found that just before Zelensky was elected president, “he gifted his stake in a key offshore company, the British Virgin Islands-registered Maltex Multicapital Corp., to his business partner — soon to be his top presidential aide. And in spite of giving up his shares, the documents show that an arrangement was soon made that would allow the offshore to keep paying dividends to a company that now belongs to his wife.”

 

As it was with crackdowns on free speech and political opposition, Zelensky’s office attempted to justify the use of offshores by blaming the specter of Russian aggression. An adviser to Zelensky’s chief of staff said the offshores were necessary to “protect” the group’s incomes against the “aggressive actions” of the “corrupt” regime of former President Viktor Yanukovych, who was ousted in a US-backed color revolution in 2014. The expensive properties acquired by Zelensky associates in the center of London with the offshores, it seems, were but humble havens for persecuted Ukrainians.

 
It was true that Zelensky and his partners in a television production company, Kvartal 95, set up a network of offshore firms dating back to at least 2012. That was also the year the company began producing regular content for TV stations owned by Kolomoisky, Ukraine’s most flamboyant oligarch and Zelensky’s key backer.
 
The Raider
 

Kolomoisky is known to have intimidated guests by feeding a live shark he kept in a huge aquarium at his Dnipropetrovsk office, and has even reportedly ordered contract killings. If he did not exist, Richard Marcinko would likely have invented him as a villain in one of his Rogue Warrior novels.

 

Kolomoisky co-founded and was until 2016 the main owner of PrivatBank, Ukraine’s largest commercial bank, as well as PrivatBank Group, a global business coalition whose control extends across thousands of companies in virtually every industry from Ukraine, the European Union, Georgia, Russia, the United States and elsewhere. He denies having or needing influence over the President, but when the International Monetary Fund ended talks with Zelensky’s government after failing to reach a new lending agreement in 2019 (citing pervasive corruption) Kolomoisky, asked in an interview who would win if Zelensky was forced to choose between him and IMF loans, answered: “I would.” Ukrainian media has noted that Kolomoisky has not denied financing Zelensky’s campaign.

 

Kolomoisky built his enormous fortune atop PrivatBank primarily as a ‘raider’. In a story for Harper’s Magazine about Zelensky’s backer, Andrew Cockburn colored in the meaning of that term with the help of Matthew Rojansky, director of the Kennan Institute at the Woodrow Wilson Center for International Scholars. There are firms in Ukraine “registered with offices and business cards, firms [that specialize in] various dimensions of the corporate raiding process, which includes armed guys to do stuff, forging documents, bribing notaries, bribing judges,” said Rojansky to Cockburn. And according to Rojansky, Kolomoisky is “the most famous oligarch-raider, accused of having conducted a massive raiding campaign over the roughly ten years up to 2010.” At some point, he managed to end up on the United States’ visa ban list, prohibiting him from entering the country.

 
But the interests of the oligarch go well-beyond cutthroat business dealings, overlapping with Washington’s affairs in the region.
 

Between 2013 and 2014, the U.S. backed a color revolution in Ukraine that resulted in regime change. It also triggered a civil war between government forces and pro-Russian separatists in the eastern part of the country who declared independence from Kiev. Amid this crisis, acting President Oleksandr Turchynov appointed Kolomoisky governor of Dnipropetrovsk Oblast. He turned his workforce into a private army to combat the separatists. Yet even as Kolomoisky morphed into a warlord, he did not neglect his business empire.

 
Washington-Approved Oligarch
 

In 2014, the IMF approved emergency aid to Ukraine and injected billions into the National Bank of Ukraine — the country’s central bank — to support local commercial banks. Through a globe-spanning scheme involving PrivatBank accounts and PrivatBank Group companies and a corrupt Ukrainian court system, Kolomoisky looted billions in IMF aid. The con, as revealed in a series of court judgments, was outlined as follows by Cockburn:

Forty-two Ukrainian firms owned by fifty-four offshore entities registered in Caribbean, American, and Cypriot jurisdictions and linked to or affiliated with the Privat group of companies, took out loans from PrivatBank in Ukraine to the value of $1.8 billion. The firms then ordered goods from six foreign “supplier” companies, three of which were incorporated in the United Kingdom, two in the British Virgin Islands, one in the Caribbean statelet of St. Kitts & Nevis. Payment for the orders — $1.8 billion — was shortly afterwards prepaid into the vendors’ accounts, which were, coincidentally, in the Cyprus branch of PrivatBank. Once the money was sent, the Ukrainian importing companies arranged with PrivatBank Ukraine that their loans be guaranteed by the goods on order.
 
But the foreign suppliers invariably reported that they could not fulfill the order after all, thus breaking the contracts, but without any effort to return the money. Finally, the Ukrainian companies filed suit, always in the Dnipropetrovsk Economic Court, demanding that that foreign supplier return the prepayment and also that the guarantee to PrivatBank be cancelled. In forty-two out of forty-two such cases the court issued the identical judgment: the advance payment should be returned to the Ukrainian company, but the loan agreement should remain in force.

During this period, Kolomoisky kept his portfolio of activities diverse. Twenty fourteen was also the year when then-Vice President Joe Biden’s son, Hunter Biden, reportedly joined the board of Burisma, a Ukrainian energy company to which Kolomoisky has been connected with a controlling interest, according to the New York Post. Emails obtained by the Post revealed that Vadym Pozharskyi, a Kolomoisky protégé, communicated with Hunter in 2015 about a meeting between Pozharskyi and then-Vice President Biden. Further, bank records of Hunter (lawfully obtained according to D&A Investigations) show payments made to him by PrivatBank.

 
By 2015, Kolomoisky was onto his next controversy, the one that would ultimately lead to Zelensky’s rise.
 

In March of that year, Kolomoisky’s men physically seized control of Ukrnafta, the largest oil and gas producer in the country, and UkrTransNafta, which controls virtually all oil pipelines in Ukraine. This was Kolomoisky’s way of showing his disapproval of the government’s timid reform efforts, which posed a direct threat to then-President Petro Poroshenko’s power. Poroshenko thus turned to Washington for help — namely, then-Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland and Geoffrey Pyatt, who was U.S. Ambassador to Ukraine at the time.

 

Nuland is an interventionist married to arch-neoconservative Robert Kagan. She’s been called “the architect of American influence in Ukraine,” was instrumental in regime change, and has served in every presidential administration except Trump’s since Bill Clinton’s days. People like Nuland are why presidents come and go, but interventionist foreign policy always remains.

 

With D.C.’s help, in exchange for him backing down, Poroshenko successfully removed Kolomisky from the visa ban list, among other things. Importantly, Pyatt and Nuland looked the other way on Kolomisky’s IMF scheme, even as Washington persecuted other oligarchs.

 
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Meanwhile, at the same time that it ignored Kolomoisky’s corruption, the State Department attempted to extradite Ukrainian oligarch Dmitry Firtash for a bribery incident that allegedly took place in India. However, his real crime was holding ties to the government Nuland had a role in toppling as well as his association with deposed Ukrainian President Viktor Yanukovych. When Firtash appealed against his extradition, a European judge agreed and concluded that “America obviously saw Firtash as somebody who was threatening their economic interests.” Nevertheless, Washington has a long memory, and Firtash may end up standing trial in the U.S after all.

 
Even as he was removed from the U.S. banned list, Kolomoisky allegedly continued to embezzle and defraud PrivatBank of huge sums. Some of his schemes spilled over onto American soil.
 

According to the Justice Department, from approximately 2008 through 2016, Kolomoisky obtained fraudulent loans and lines of credit as part of a massive scheme totaling at least $5.5 billion, i.e. roughly equal to five percent of Ukraine’s gross domestic product at the time. In the U.S., millions of those dollars were allegedly laundered through commercial real estate purchases from Ohio to Kentucky and Texas. Furthermore, Zelensky’s benefactor allegedly purchased a dozen steel mills in small towns across America, leaving in his wake bankrupt factories, unpaid taxes, rotting buildings, and hundreds of steelworkers out of jobs.

 

By nationalizing PrivatBank in 2016, Ukraine effectively put the burden of a multi-billion dollar bailout on the shoulders of taxpayers.

 
The Servant of the People
 
Kolomoisky would have his revenge for what happened in his domain. The confrontation with Poroshenko, which was seen as humiliating for the oligarch, concluded in March 2015.

By October, the first episode of a new show, Servant of the People aired on Ukraine’s 1+1 channel, in which Zelensky played the leading role: a high-school history teacher who unexpectedly becomes President of Ukraine and is committed to fighting government corruption. 1+1 is owned by the 1+1 Media Group, one of the largest Ukrainian media conglomerates, whose owner, according to the Atlantic Council, is none other than Kolomoisky himself, giving him “significant political influence in today’s Ukraine. His media assets were used to promote the 2019 election campaign of President Zelenskyy, whose hit shows previously aired on Kolomoisky’s network.”

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