All the President’s Men

Secret recordings reveal Zelensky aides steering criminal probes of opponents

Some countries just have their thing, the thing that’s done there with a little extra flair. Brazil and soccer, Italy and cooking, those are some easy and nice examples.

Sadly, Ukraine’s not going to be world famous for its people’s bravery in confronting autocracy, or for its arts, or for impressive post-Soviet gains against intolerance, or many other attributes of which it can be rightly proud. Instead, the country is getting its mug shot taken now on a global stage, charged with being irredeemably corrupt.

The case is being unironically prosecuted online by various Trump trolls and hangers-on, taking their cues from an epically corrupt president. As someone who roots hard for Ukraine, I find this monumentally unfair, and yet here we are.

Every country suffers from corruption, of course. But Ukraine’s unusual for suffering graft on post-Soviet scale amid democratic pluralism.

In Russia or, say, Kazakhstan, the skimming is directed from the top and there are serious consequences attached to publicizing what little is discovered about it.  In Ukraine, by contrast, untamed oligarchs jostle openly for economic rents and employ journalists to expose rivals.

Recently the country has been swamped with scandalous leaks of illicit recordings from the highest levels of government.

‘Pipe Has Burst’

Most notably, parties unknown have so far leaked 27 highly incriminating recordings surreptitiously made in the office of Roman Truba (above), the head of the State Bureau of Investigations (DBR) before his recent dismissal. Since his last name translates literally as pipe, the leakers are sharing the recordings on the “Pipe Has Burst” Telegram channel.

The recordings reveal that even as Ukrainian President Volodymyr Zelensky was wrestling with Trump’s demands that he announce  probes into Trump’s political opponents, his top aides were steering politically motivated investigations on Zelensky’s behalf.

Zelensky’s men ordered investigators to put more pressure on former Ukraine President Petro Poroshenko and his associates through multiple  criminal probes. Truba and an underling were also caught on tape discussing instructions from Zelensky’s aides not to encroach on the business interests of Ihor Kolomoisky, the Ukrainian oligarch who was Zelensky’s longtime business partner and campaign backer.

The tapes repeatedly reference Zelensky chief of staff Andriy Bogdan as Truba’s de-facto boss and the curator of the agency’s politically motivated probes, and they feature extensive conversations between Truba and Bogdan deputy Andriy Smirnov as well as Ivan Bakanov, the childhood friend Zelensky named head of the State Security Service (SBU).

When Justice Is Criminal

In one recording, Truba and Bakanov discuss a scheme to gather the heads of all the leading smuggling organizations to present them with a unified protection tariff on behalf of all the law enforcement agencies.

“I have a whole folder on the leaders of this  movement; they should be assembled and told: ‘Respected guests, plus 30, plus 20%, etc.,’ and let them get on with it. On the other hand, you and I can’t sit at a table with them. We need to, but we can’t ,” says Bakanov, likening the smugglers to the leaders of the Russian-held enclaves in eastern Ukraine.   

And here’s Bakanov on Ukraine’s justice system:

“We must have a first case against some judge. They can all be written up. I mean it’s not a secret, they’re all basically compromised. But the way the court system works, everyone gets let off eventually. I mean the detectives would put bandits and mobsters before the court and they would get off for a bribe. So the prosecutors got involved, said this is bs, what about us? And started letting them out a little earlier. Then the police said, excuse us respected colleagues, why should we apprehend them in the first place then? Better we get paid for not apprehending them. So then they all went in on it. So then the lawyers said, hey, where’s our cut? Because you’re committing lots of improprieties. And they too joined in the fleecing of bandits and honest people alike. Because now you had a corrupt chain: the lawyer, the investigator, prosecutor, courts. And then throw in the head of administration, as an overseer.”

“Fine,” Truba responds.

On another recording, Truba and a deputy discuss instructions from the presidential administration to rein in one of their local agents. The man was apparently probing the deployment of tax police friendly to Kolomoisky’s interests, right after Zelensky’s inauguration as it happens, to effectively bottle up the country’s leading oil products port, diverting imports to the terminals of Kolomoisky’s Privat group.

Truba’s subordinate recounts taking a local commander to task for the actions of that investigator. “Have you effing lost it? Tell your [expletive] he’ll be fired! You have no idea what you’ve gotten yourself into.” He then specifies that the order to back off is coming from “The Closest Andriy,” meaning Bogdan, who got a personal call from “Benya” (Kolomoisky’s nickname.) “Quick, [expletive] close this [expletive] case. I’ll send [Bogdan] a memo. Then tell him Roman solved everything. So that on top of everything Benya ends up in Roman’s debt.” Martin Scorsese should make a three-hour movie about these guys.

Corruption Crusader

Bogdan served as the commissioner for anti-corruption policy under deposed Ukrainian president Viktor Yanukovych until the latter was deposed by the revolution of 2014. Yanukovych proved such a compulsive kleptomaniac that the next Ukrainian administration cited his thievery in refusing to repay a Russian loan. Bogdan then represented Kolomoisky in his lawsuits against the next government over the seizure and bailout of Kolomoisky’s bank. And when it turned out that he was ineligible to serve as the head of the presidential administration under a law banning former Yanukovich officials from specified public offices, Zelensky simply renamed the presidential administration the office of the president, and named him anyway.

Similarly, Zelensky had no constitutional authority to fire Truba after the recordings from his office started surfacing. So his majority in parliament passed a law reestablishing the agency, appointing a Zelensky loyalist in Truba’s place. So far the new chief has named a former Yanukovych lawyer as her top deputy, casting doubt on her will to impartially investigate the 2014 killings of protesters by riot police loyal to Yanukovych. She has also promoted a holdover implicated on the Truba tapes. As Kyiv Post reporter Oleg Sukhov notes, this fits the general pattern of Zelensky backsliding on his promises to end corruption and reform the justice system.

The hapless Truba has acknowledged that his office was bugged, and a Canadian expert who analyzed the recordings for journalists from Poroshenko’s TV channel found them to be genuine. Truba is now being probed by the Prosecutor General, the National Anti-Corruption Bureau (NABU) and his own former agency. The most obvious beneficiary of the recordings from his office is Poroshenko, leading many to believe they were made on his behalf.

Despite their shock value, the Truba recordings have had to compete for public attention with others in which Prime Minister Oleksiy Honcharuk shares unflattering views of Zelensky with government officials. Those recordings are widely attributed to Kolomoisky. Many of whose former bodyguards now provide security for the government. The SBU carried out a search at Kolomoisky’s TV channel, claiming the recordings were edited there.

A History of Violence

On the other hand, the SBU has been so far come up with nothing in its pledged investigation of the September fire at the home of the former central bank chief repeatedly assailed by Kolomoisky over the seizure of his bank. Similarly, no breaks in the investigation of the torching of the car belonging to her family. Instead, the comedy show once headlined by Zelensky later featured a prominent choir singing a folk song parody with the lines The House Was Burning / in London a woman cried.

When some government ministers criticized the act, Kolomoisky responded characteristically, calling one a “moron” and another “scum.”   

Post-Soviet Ukraine’s most famous clandestine recording was made in 2000 by one of the bodyguards to President Leonid Kuchma, now something of an elder statesman. Kuchma was heard complaining to his top security officials about an investigative journalist whose decapitated body was later discovered in a forest. An Interior Ministry official and three police officers were ultimately convicted and imprisoned for murdering the journalist. Kuchma’s interior minister died of two gunshots to the head hours before he was due to testify in the case, his death controversially ruled a suicide.  

The current interior minister, Arsen Avakov, is no one’s idea of a patsy. He’s more the J. Edgar Hoover type, keeping his job when Zelensky defeated Poroshenko. Like Hoover, he leans toward authoritarianism, has cultivated the reputation of someone not to cross and is believed to be protected by the kompromat he holds on everyone.  

The NABU, set up to fight corruption, had probed Avakov’s son for embezzlement in connection with an ill-starred tender for backpacks for the Ukrainian Army. But a special anti-corruption prosecutor let ministerial progeny off the hook. That prosecutor too is widely seen as compromised. Ukraine has too many investigative bodies and too many investigators and few if any of them are clean, or they wouldn’t be working.

The SBU alone currently has a staff of 27,000, though Bakanov (shown at a recent meeting with SBU leadership above) has spoken of plans to cut that to 15,000 “in five to seven years.” For comparison, the FBI employs nearly 35,000.

But the SBU and all its kin are much more of a burden for Ukraine, not just in terms of salaries paid but in the money extorted and economic activity discouraged.

After promising to halt armed police raids as a means for resolving business and regulatory disputes during the presidential campaign, Zelensky reneged after taking office, as with many if his populist campaign promises. Last July Bakanov’s SBU raided the ArcelorMittal steel plant in Zelensky’s hometown of Kryvyi Rih and confiscated a key piece of equipment, prompting the head of the American Chamber of Commerce to complain that “investors will be concerned about selective justice.”

The environmental probe that prompted that raid continues, as does another over taxes. And while ArcelorMittal plans more investment in its Ukraine plant, the country’s top foreign investor also took the rare step of repatriating $433 million out of the country last year. Meanwhile, Zelensky in Davos pitched “investor nannies.”

Looking Out for Benya

Kolomoisky’s interests, on the other hand, continue to be jealously guarded by Zelensky’s allies. The close ties between the oligarch and the president have the West concerned that Zelensky might try to return the previously rescued Privatbank to his friend. Passage of a law barring such transfers is one of the conditions set by the International Monetary Fund for the release of the first tranche of a $5.5 billion credit Ukraine hopes to tap over the next three years.

The government did submit a draft law to Rada, the Ukrainian parliament, in December. It ran to some 400 pages and specified the compensation process for any owners (wink, wink) whose bank might be found to have been nationalized illegally. In particular, they would only be able to claim compensation equal to actual losses as verified by an international auditor.

A week into the work on the new legislation in the Rada, where Zelensky’s party has a comfortable majority, the draft law is down to six pages and lets any wronged bank owners negotiate with the government over compensation no longer constrained by the conclusions of the auditor. Furthermore, any owners whose own deposits were bailed in as was done with Kolomoisky’s Privatbank would now be eligible for compensation. The IMF is extremely unlikely to buy this sausage for $5.5 billion, even if it only has to put a third of that down.

Meanwhile, the state-owned energy giant Naftogas has settled with its majority-owned subsidiary Ukrnafta, in which Kolomoisky’s Privat holds a 42% stake. The deal allows Ukrnafta to recoup the cost of the natural gas its parent company forced it to supply from 2006 to 2012, at prices several times higher than the price of gas at the time it was supplied and significantly higher that Ukraine’s tariffs today for industrial customers. But it’s significantly lower than the compensation ordered by a Ukrainian court. The payment will be used to extinguish Ukrnafta’s mammoth tax debt.

So here we are, 2,000 words into discussing Ukrainian corruption. and I’m exhausted, depressed and far from done. There was no time to get into the brazen money grabs of Zelensky’s ministers and their deputies, the early embarrassments of his Rada faction or the time-tested and undisturbed rackets of the oligarchs who haven’t gotten as lucky as Kolomoisky lately.

That’s next, and then we have to figure out the import of all this corruption for Ukraine, and Washington. Buckle up.