By now, most people have heard about the Panama Papers. More than 11 million documents from the Panamanian law firm Mossack Fonseca were leaked to journalists, exposing the offshore shenanigans of politicians and celebrities.
Several world leaders and their family members were named in the leak. The consequences were bad for them. The Icelandic prime minister was forced to resign when the public discovered he owned an undeclared offshore firm with his wife. The U.K. Prime Minister David Cameron’s late father used to run an offshore investment fund, and Cameron got in trouble, prompted to release six years of tax returns.
Now, let’s look at the reaction in Ukraine. It’s quite different.
The exposed offshore affairs of President Petro Poroshenko are more incriminating than what was found about Cameron or the Icelandic prime minister.
In August 2014, he registered a firm in the British Virgin Islands that was supposed to serve as a holding company for his Roshen confectionery business, operating in Ukraine and worth hundreds of millions of dollars.
Poroshenko has been under fire in Ukraine for being slow to fulfill his campaign promise to sell Roshen after the election. Preparations to transfer his Roshen assets to an offshore company led to a legitimate allegation that he was doing so to avoid paying taxes when finally selling the business.
One would think it was an outrageous thing to do for a president of a struggling country. One would think it could be worth some public protests, as it was in Iceland, or at least a major media scandal and some bitter criticism in parliament, as in the case of Cameron, and that the journalists who uncovered the scheme would be appreciated.
But in Ukraine, the opposite is happening.
A destroyed armored personnel carrier is on the road near Ilovaisk on Sept. 3, 2014. Russian forces stopped a Ukrainian military offensive in the city 50 kilometers east of Donetsk. At least 366 soldiers were killed, 429 wounded, 158 went missing and 128 were captured in the defeat that forced concessions from Ukraine. (AFP)
Not only did Poroshenko kept silence about the matter for as long as possible, leaving it to his lawyers to comment on it before finally offering a personal explanation a week later, but surprisingly, civil society played along and did everything to bury the scandal.
Instead of putting under scrutiny Poroshenko’s tax affairs, they decided to shoot the messengers – the journalists who broke the story.
The main subject of criticism in the days following the publication was not the unethical behavior of Poroshenko, but the way it was reported by the journalists of the Organized Crime and Corruption Reporting Project and Hromadske TV.
Listing the president’s steps to register a British Virgin Islands company, the journalists put them in the context of the events taking place in his public life and in Ukraine – like the bloody Battle for Ilovaisk in Ukraine’s east, that coincided in time with the beginning of the registration process, or Poroshenko’s address on the first anniversary of EuroMaidan Revolution, where he swore to the families of the slaughtered protesters that he would “do everything to ensure that their sacrifice wasn’t made in vain.”
The critics, among them many fellow journalists and acknowledged media experts, bashed the Ilovaisk parallel, calling it emotional and manipulative.
Hromadske TV reacted to the criticism by calling a meeting of the editorial board that made a verdict: The war parallel is important for understanding the context of the story, but the way it was presented shouldn’t have been so emotional.
The video story by Hromadske was, indeed, emotional and overly dramatic. It featured interviews with a war veteran and a widow of a soldier killed in the eastern Ukraine.
But this is what TV – and Ukrainian TV especially – does all the time: over-dramatizing the story to sell it to the audience. The journalists and experts who criticized Hromadske’s storytelling are certainly aware of this practice.
Here’s the important part: the story got the facts right.
The authors followed the journalistic standards, asked Poroshenko for a response before running the investigation, and talked to the necessary experts.
So it is amazing that the condemnation of the journalists went further and further, turning into a witch hunt.
It took a grotesque turn on April 11, when the International Renaissance Foundation, part of George Soros’s Open Society Foundations and a donor to Hromadske and other independent media outlets in Ukraine, including the Kyiv Post, bashed the authors of the Poroshenko’s offshore investigation in a statement published online.
A screenshot from the Hromadske TV documentary on President Petro Poroshenko’s offshore firm shows journalist Anna Babinets standing next to the Presidential Administration in Kyiv. (Hromadske TV)
It called the reaction of the journalists to the reasoned criticism disappointing.
“They resorted to the position of uncritical self-justification without any hint of recognition of their violation of journalistic standards, namely the manipulation of the facts,” reads the statement available on www.irf.ua. “The authors of the investigation do not recognize that the connection between the president’s offshore company and the Ilovaysk tragedy is artificial.”
It isn’t artificial.
The critics of this connection point out that Poroshenko wasn’t personally registering the company, but delegated it to his lawyers, which meant it didn’t interfere with his duties as the president and the commander-in-chief of the army fighting in the east.
Indeed, Poroshenko wasn’t doing the paperwork. But he was sending thousands of Ukrainian troops, equipped with shabby outdated guns and vehicles, left after the long years of plunder by army officials, to die in battle with the much better-equipped Russian military, while at the same time scheming to deprive Ukraine – and these soldiers – of millions of dollars in taxes. The connection is not literal, but ethical.
Some say, and Renaissance Foundation board agrees, that the registration of an offshore company is not a proof that Poroshenko intended to evade taxation.
“They have no evidence of the Roshen assets being moved to the offshore area, nor the evidence that offshore company was created precisely to avoid sales taxes,” reads the Renaissance Foundation statement.
Indeed, Poroshenko could have legitimate reasons to re-register Roshen abroad. But could he have a legitimate reason to choose, out of all possible jurisdictions, a tax-free haven that offered full anonymity?
If a man in a mask enters a bank carrying a gun, can he just be there to sign mortgage papers? He can, but he probably isn’t.
The Renaissance statement, along with a meeting of the Independent Media Council that discussed the quality of the story on April 8, prompted a response from the OCCRP, the journalist organization that Ukrainian authors of the Poroshenko investigation are members of.
The statement by OCCRP editor Drew Sullivan said that the editorial decision on how to present a story and build its narrative shouldn’t be discussed as an ethical issue.
“However, the story was also not popular politically. Our fear is that the ethical criticism is also based on the political criticism and that is far more dangerous and damaging to civil society,” reads the commentary by OCCRP.
The scary thing about the Renaissance Foundation’s position is not what’s in the statement, it’s what was left out of it.
Days before the foundation’s board members signed this appalling verdict to the investigative journalists, they showed outright antagonism to the story and publicly protected Poroshenko.
Two days after the Poroshenko investigation was published, foundation board member Yevhen Bystrytsky wrote a Facebook post saying that Poroshenko looked dignified in the Panama Papers findings.
Another board member, Natalia Ligachova, bashed the investigation immediately after it was released, in a blog on Detector Media, a media watchdog website that she manages.
In the blog, Ligachova, who is a well-known media expert in Ukraine, also suggested that the recent New York Times editorial on corruption in Ukraine was somehow fixed in Moscow, or even directly ordered by Russian billionaire Konstantin Grigorishin.
Apparently the explanation that the newspaper simply noted the obvious flaws in Ukraine’s government and decided to highlight them in an editorial seemed less likely to the media expert than this borderline-mad conspiracy theory.
Moreover, when four days after the Panama Papers publication another team of Ukrainian investigative journalists ran a story on Poroshenko’s offshore dealings in 2003-2004, the same expert again promptly reacted with a blog, protecting Poroshenko from these new allegations and once again bashing the journalists for “manipulations.”
Ligachova also justified Poroshenko’s right to use offshores to minimize taxes, because “all other businessmen in our country do it.”
When representatives of such a respected foundation give a public slap to the journalists for doing their job, it is appalling. When the same representatives pair it with the blind praise and justification of a serving official, it raises the question about their judgment and independence.
One of my favorite pieces of the public discussion of the matter was a Facebook post of Poroshenko’s communications adviser and long-time employee, Vladyslav Synyahovsky. He wrote it two days after the Poroshenko offshore investigation was published, while he was in Japan with Poroshenko on an official visit. He deleted the post next morning, but I have a screenshot.
The short post compiled of several sentences with poor logical connections advised people to “toss away” the journalists who broke the story about Poroshenko and make “a simple conclusion: Ukraine is united, and (Russian President Vladimir) Putin is a dickhead.”
Ironically, this illogical rhetoric of Poroshenko’s paid staffer stand is on the same level of absurdity as much of the criticism aimed at the journalists for breaking the Poroshenko story in the wrong way.
But even the staffer had the common sense to remove this ridiculous post. Others continue lynching the journalists.
Apparently, Poroshenko doesn’t even need to justify his offshore affairs. He is safe as long as he doesn’t author a story with the narrative that is “too emotional.” Because that is a real crime, it turns out.
What a lucky man our president is. No other world leader among those entangled in the Panama offshore scandal is blessed with such gullible and forgiving people.
Olga Rudenko is an editor of the Kyiv Post.
