In the Soviet Union’s last years, when the first foreign shows were allowed on TV, an Italian television drama series about an honest police officer’s fight against the mafia won the viewers’ hearts. It was called “La Piovra” (“The Octopus”) and showed the Soviet audience how the interests of politicians, the criminal world, and corrupt enrichment were closely intertwined in the West. The octopus was a metaphor for their all-pervading influence and corruption.
When the series premiered, Rinat Akhmetov was in his late teens.
Akhmetov was raised in a corner of Ukraine no less ridden with mafia than Italy’s Sicily. It was a settlement that grew up around the Oktyabrskaya coal mine on the outskirts of the eastern Ukrainian city of Donetsk.
It was society’s rock bottom, where the choice of entertainment was alcohol, drugs and playing cards. Akhmetov preferred cards. At first he played to have some pocket money. Later, young Akhmetov started winning large sums. He brought in some serious earnings from a resort town on the Black Sea coast of Sochi, which was the epicenter of the card games. Playing for money was illegal in the USSR.
Akhmetov’s other hobby was boxing. He didn’t serve in the Soviet Army because of a chronic illness that he earned while trying to urgently lose weight to get to the right weight category.
The coach motivated Akhmetov with promises that he would be an Olympic champion. And he really became a champion — not in sports, though. He came first in oligarchic competitions, building an empire from shattered Soviet enterprises, inventing nothing except the eternal engine of corruption — the more you invest in politics, the more you can enrich yourself at the cost of the state.
Now it may change. The policy of de-oligarchization, announced by President Volodymyr Zelensky, should curb the appetites of the oligarch who has put himself above the interests of the state.
In 2019 and 2020, Akhmetov, through lobbyists, persuaded the authorities that his business was barely making ends meet. By threatening mass layoffs at his enterprises, he canceled the government’s plan to increase rent payments for the iron ore that his companies extract. Also, the state-owned Ukrzaliznytsia failed to raise tariffs on the transportation of iron ore, which is sent by railway to Ukraine’s ports to be sold on the Chinese market.
As a result, it was Ukraine’s state budget that barely made ends meet in 2020, while Ukrzaliznytsia suffered losses of $426 million.
And how was Akhmetov’s year? His net worth tripled, according to Forbes, and he bought his son a villa on the shores of Lake Geneva.
Time to pay?
The rumor has it that the villa purchase made an impression on Zelensky, who had every reason to feel deceived.
Apart from the luxury real estate, Akhmetov’s surplus profits, instead of being paid to the budget, paid for his TV channels and the army of politicians he grows to replace the current government.
Zelensky plans to launch a large-scale campaign to curb Akhmetov’s appetites and impose fair payments to the state budget on him.
These include introducing new environmental tax rates for coal-fired power plants, a land tax for iron ore mining companies, and an excise tax on the sale of green energy. The most painful for Akhmetov will be a new approach to calculating the rent for iron ore mining. If Zelensky’s plan is implemented and rents begin to be levied on the value of ore in the Chinese market, where it’s sold, it could cost Akhmetov at least $1 billion.
His loyal lawmakers
The adoption of these new rules of the game requires parliament’s vote. To stop this undesirable scenario, Akhmetov uses an extensive network of his agents of influence. Although the oligarch no longer has his own pocket faction in parliament, lawmakers from all factions are ready to defend his interests. Recently, for the first time, the names of puppet lawmakers who work as mouthpieces for the oligarch were made public. They included Lyudmyla Buimister from Servant of the People, Oleksiy Kucherenko, Mykhailo Volynets and Valentyn Nalyvaichenko from Batkivshchyna and Oleksiy Honcharenko from European Solidarity.
This list was made public by the head of the National Commission for Energy Regulation Valery Tarasyuk. He imposed the maximum possible fine on the oligarch for deliberate sabotage of coal accumulation at power plants. The fine was only Hr 5 million ($180,000). But this is the first time that the energy regulator went against Akhmetov.
They didn’t have to wait long for Akhmetov’s pushback: Kyiv District Administrative Court issued a ruling that requires the government to dismiss members of the National Commission for Energy Regulation, including Tarasyuk.
The above mentioned five lawmakers are only a part of Akhmetov’s informal lobby in parliament. Within the ostensibly ruling 244-member Servant of the People faction, his interests are defended by an informal “group of Illia Pavlyuk.” This group unites mostly single-seat constituency lawmakers from the border regions of Ukraine. Pavlyuk, a businessman widely believed to be involved in smuggling, which he denies, isn’t a lawmaker himself, but he delegated his nephew to parliament.
Another group loyal to Akhmetov includes independent lawmakers led by the oligarch’s business partner in Metinvest Vadim Novinsky. Another former business partner of Akhmetov, Serhiy Taruta, is now a deputy from Yulia Tymoshenko’s party. In Petro Poroshenko’s party European Solidarity, lawmakers Oleksiy Honcharenko and Mykola Bondar were spotted voting in Akhmetov’s interests.
His talking heads
Some of the most vocal Akmetov’s supporters are among retired politicians who are present every week on the oligarch’s TV channel and promote political formats that are beneficial to him. The frontman of Akhmetov’s TV empire is former Prime Minister Arseniy Yatsenyuk, who has been demoted to the level of the oligarch’s messenger on sensitive issues.
A few weeks ago, according to my sources, Yatsenyuk reached out to Lviv Mayor Andriy Sadovy, whose family owns Channel 24, which aired a series of stories about the oligarch’s schemes. Yatsenyuk reportedly said that either Sadovy stops giving a platform to Akhmetov’s critics, or the oligarch’s media will start attacking the mayor of Lviv.
Indeed, as if on command, Akhmetov’s TV channels, which had not been interested in the situation in Lviv for months, began to “attack” both the city and Sadovy.
Yatsenyuk’s spokeswoman Olga Lappo denied that he threatened Sadovy.
Another asset in Akhmetov’s toolbox is another former prime minister, Volodymyr Groysman. It was Groysman who turned a blind eye to the corruption scheme Rotterdam Plus. Named after the energy hub in the Netherlands, the coal formula was a scheme that made Ukrainian energy consumers overpay Hr 39 billion ($1.4 billion) in 2016–2019, according to the National Anti-Corruption Bureau of Ukraine, known as NABU. And now Groysman is a regular guest on the oligarch’s TV shows.
Akhmetov’s channels are also promoting former lawmaker Oleh Lyashko and former presidential candidate Ihor Smeshko.
Akhmetov’s press pool also includes Dmitry Gordon, whose YouTube interviews with politicians and celebrities have millions of views. Recently, Gordon said on Akhmetov’s Ukraine 24 TV channel that Akhmetov is not an oligarch. I found a TV interview that I did with Gordon two years ago, where he said the opposite. What has changed during this time? Nothing, except that Gordon was apparently offered a format of cooperation with Akhmetov — he became an “exclusive guest” on Akhmetov’s channels. He appears there two to three times a week, and almost nowhere else.
Former Minister of Infrastructure Volodymyr Omelyan is also a frequent guest on Akhmetov’s shows. His role is to attack Ukrzaliznytsia’s supervisory board, which I am a member of, because the board is demanding a tariff increase for the transportation of iron ore and coal by rail, Akhmetov’s main product line. A similar role is played by ex-lawmaker Boryslav Bereza, who was even given the opportunity to host a TV show on Akhmetov’s channel.
Loyal organizations
In addition to recruiting “talking heads’’ from among the current or former politicians, Akhmetov defends his interests through various associations and NGOs.
One of them is the European Business Association, where the Infrastructure Committee regularly makes statements in favor of the oligarch, while refusing to accept Ukrzaliznytsia as a member.
One of Akhmetov’s NGOs is the All-Ukrainian Energy Assembly, headed by Ivan Plachkov, a former energy minister who headed the supervisory board at Akhmetov’s Kyivenergo company.
Ukrmetalurgprom Associations and the Federation of Transport Employers are in charge of Akhmetov’s favorable rents and tariffs. The latter is headed by former lawmaker Orest Klympush, the father of the current lawmaker from Poroshenko’s party Ivanna Klympush-Tsintsadze, who was also spotted promoting Akhmetov’s narratives about the electricity market.
Akhmetov’s interests also extends beyond the Atlantic. BKSH & Associates was registered as a lobbyist for his business, and Akin Gump maintained the purity of Akhmetov’s reputation in the Western press. In order to dispel suspicions about his criminal past, Akhmetov hired a detective agency Kroll. Bruce Jackson, head of the NGO Project for Transitional Democracies, also worked for Akhmetov.
By the way, it was Akhmetov who brought Paul Manafort to work in Ukraine, advising his then partner Viktor Yanukovych on this political technologist. He, in turn, was recommended to Akhmetov by Russian oligarch Oleg Deripaska.
Preparing for a fight
Akhmetov is not going to give up his interests without a fight.
Lately, he’s been growing his influence both in politics and in media.
In addition to Ukraine and the newer Ukraine 24 TV channels, the list of media weapons used by Akhmetov may soon include Nash (Ours) TV channel, which he doesn’t yet own but reportedly controls.
Moreover, a new party is also in the works, according to Ukrainska Pravda. The party will target the same political niche as Yanukovych’s Party of Regions, which Akhmetov sponsored — the working class of Ukraine’s southern and eastern regions.
Akhmetov’s ally, businessman and veteran politician Borys Kolesnikov has confirmed that he is launching a new party, called Ukraine Is Our Home.
All of this is oligarchy in its pure form — the use of media, paid politicians and lobbyists to win favors for business. These favors cost the people of Ukraine billions of dollars every year.
For those who become his allies, Akhmetov guarantees a puff piece on TV and a fat paycheck. But unruly officials who dare to go against him will be intimidated and attacked on TV.
The year 2021 must become the last year of Akhmetov’s domination. Otherwise, the oligarchic system will gather strength for revenge and inevitably strike a blow to the back of Ukrainian democracy.
