US slaps sanctions on Ukrainian oligarch Kolomoyskiy over corruption charges
The United States says it has banned powerful Ukrainian tycoon Ihor Kolomoyskiy from entering the country, another sign that President Joe Biden’s new administration is taking a tougher stance on endemic corruption in Ukraine.
In a March 5 declaration announcing the travel ban, Secretary of State Antony Blinken expressed his “concern about [Kolomoyskiy’s] current and ongoing efforts to undermine Ukraine’s democratic processes and institutions, which pose a serious threat to its future. “
Critics of Kolomoyskiy in Ukraine accuse the tycoon of undermining efforts to implement political and economic changes – including judicial, banking and registry reforms backed by Washington and Brussels – with the help of dozens of loyalists in parliament .
Lawmakers close to the tycoon are seeking to oust Artyom Sytnyk as head of Ukraine’s National Anti-Corruption Bureau (NABU), which has been investigating cases related to Kolomoyskiy. The mogul’s media empire has also criticized the work of NABU.
The State Department ban “is clearly a message to all those parliamentarians who are trying to protect Kolomoyskiy,” Daria Kaleniuk, executive director of the Kiev-based Anti-Corruption Action Center, told RFE / RL.
The United States has already sued at least one MP close to Kolomoyskiy. In January, the Treasury Department sanctioned Oleksandr Dubinskiy for meddling in the 2020 US election. The move freezes all US assets he owns, including dollar-denominated accounts. Dubinskiy was then expelled from the Servant of the People party of President Volodymyr Zelenskiy.
In a tweet, former Ukrainian Prime Minister Oleksiy Honcharuk called the travel ban an “intermediate result”, adding that “Kolomoyskiy’s partners and servants will not escape their responsibilities either.”
The actions of the State Department formalize what had been a multi-year rumor that Kolomoyskiy was banned from traveling to the United States.
The mogul in 2017 even hired Washington-based lobbying firm Arent Fox for $ 50,000 to help him get an E-2 investor visa, a sign he was facing some difficulties.
In addition to Kolomoyskiy, Blinken appointed his wife, Iryna Kolomoyska; his daughter, Angelika Kolomoyska; and his son, Israel Zvi Kolomoyskiy, also rendering them ineligible for entry into the United States.
The actions of the State Department do not impose any financial penalties on Kolomoyskiy, which is within the purview of the Treasury Department. However, major U.S. banks are likely to avoid working with him, Sarah Felix, anti-money laundering expert and founder of Palerma Consulting, told RFE / RL.
Energy, metals, media
Kolomoyskiy is one of Ukraine’s most influential tycoons, with assets ranging from media and airlines to energy and metals. He was also briefly governor of Dnipropetrovsk, where many of his companies are based, from 2014 to 2015.
Kolomoyskiy’s media assets are credited with helping Zelenskiy, a former comic with no political experience, win the April 2019 presidential election in a landslide.
The mogul is rumored to have influence in the administration while activists say he controls at least 30 MPs from the president’s party.
In his statement, Blinken accused Kolomoyskiy of being “involved in acts of corruption which undermined the rule of law and the confidence of the Ukrainian public in democratic institutions and the public processes of their government” while he was governor. Kolomoyskiy used “his political influence and official power for his own personal gain,” the Blinken statement said.
Separately, the FBI is investigating Kolomoyskiy and his business partner Hennadiy Boholyubov in connection with the $ 5.5 billion bailout of PrivatBank, once Ukraine’s largest lender.
The tycoons are accused of embezzling billions of dollars from the bank through fraudulent loans and using part of the proceeds to buy assets in the United States, including real estate and metal factories.
The United States is seeking the seizure of three commercial real estate owned by the tycoons and allegedly purchased with the embezzled funds. Kolomoyskiy and Boholyubov deny the charges and last month filed a lawsuit against the US government.
Ukraine’s reform struggles
The United States and Europe have been backing Kiev with aid and political support since Russia illegally annexed the Crimean Peninsula in 2014 and supported separatists in two provinces in eastern Ukraine.
However, Washington and Brussels have attached conditions to the aid, including demanding that Ukraine implement difficult economic and political reforms that would weaken the enormous influence of a small group of tycoons like Kolomoyskiy who have hampered the development of the country. the nation.
One of the bills demanded by the West was the so-called “Anti-Kolomoyskiy” bill intended to clean up the banking sector and prevent the owners of nationalized lenders from regaining control.
While Ukraine has made a lot of progress on economic and political reforms since 2014, the country has fallen short of Washington’s expectations, with some achievements like anti-corruption reform being partially reversed.
The Biden administration has said it will make fighting corruption and strengthening democratic institutions a key part of its foreign policy agenda.
In a move that many see as a message from the new Biden administration in Kiev about the centrality of reform in bilateral relations, Blinken last month named ousted Zelenskiy attorney general Ruslan Ryaboshapka an “anti-corruption champion” .
Ryaboshapka, who briefly served from 2019 to 2020, is said to have angered tycoons with his investigations.
Blinken told the Senate in January during his confirmation hearing that even if the United States helped Ukraine contain Russian aggression, the country would fail to build a lasting democracy if it did not tackle Corruption.