You're reading: Gontareva: Intimidation now ‘fact of life’ for Ukrainian reformers

LONDON – The former governor of the National Bank of Ukraine (NBU), Valeria Gontareva, has called for Ukrainian allies and international financial institutions to support Ukraine amid what she claims is a worsening climate of harassment and intimidation of reformers in her country.

She issued this call to action during a talk at the London School of Economics on Nov. 27, where she is a research fellow at the Institute of Global Affairs. Gontareva now lives in London.

Gontareva also said that ongoing reforms in the banking sector in Ukraine, as well as the independence of its central bank, were under threat and that she feared for the future of her country, its reformers and its economy.

Intimidation and harassment

“(Kolomoisky) terrifies all our country daily,” she told the audience, referring to the oligarch who owned the country’s largest lender, PrivatBank, up until its nationalization in 2016.

The bank was taken over by the state after forensic auditors found a $5.5-billion hole in its books. Gontareva says that PrivatBank was a ponzi-like pyramid scheme in which 100% of its lending portfolio was fraudulent related-party lending.

It was recapitalized and the state-owned bank is now suing its former shareholders in the U.K. and U.S. to recover assets that went missing amid this alleged large-scale fraud.

Kolomoisky denies wrongdoing and, in Ukraine, he is on the offensive, using the media and filing lawsuits to try and regain the bank.

Intimidation of reformers is a reality in today’s Ukraine,” Gontareva said, citing recent examples of bankers and former NBU officials being arrested, and Kolomoisky-backed protests outside of PrivatBank and the NBU. “I’m really very scared,” she said.

Gontareva knows about intimidation firsthand. At the event, she was seen out of a wheelchair for the first time in months, having spent weeks in a London hospital after she was struck by a car in central London in August.

After that hit-and-run, her son’s car in Kyiv was then set on fire. Shortly thereafter, her apartment in the Ukrainian capital was raided by police, and then arsonists destroyed her house outside of Kyiv. There have been no arrests so far, but police say they are still investigating the incidents.

Gontareva said she is awaiting a fourth operation on her injured legs and still fears for her life: “I know these people could do any awful thing,” she told the Kyiv Post.

She believes that the threats against her and other reformers intensified over the last five months, after the election of President Volodymyr Zelensky in May this year.

Zelensky was a close business associate of Kolomoisky, who returned to Ukraine after the actor-turned-politician was elected. The oligarch was a major media backer of Zelensky through his 1+1 television channel during the election campaign.

In the past, Gontareva has repeatedly stated that Kolomoisky is a leading figure behind the campaign against her and other reformers.

She also accused other former shareholders of the banks she nationalized of promoting a campaign of “sustained harassment,” enabled by corruption in the justice system and police.

The charred remains of the house of the former governor of the National Bank of Ukraine, Valeria Gontareva, are pictured on Sept. 17, 2019 in the village of Gorenychi, Kyiv Oblast. The arson attack on Gontareva’s house followed a previous incident in Kyiv in which her son’s car was set ablaze.

Bank investigations

Gontareva has denied any wrongdoing amid ongoing investigations into alleged embezzlement at a number of Ukrainian banks. Critics of those investigations say they are politically motivated and driven by the opponents of Gontareva and former President Petro Poroshenko.

I suppose it’s stupidity, and not corruption,” said Gontareva, commenting on the arrest of her former deputy governor of the NBU, Alexander Pisaruk, who was instrumental during the three year, IMF-backed cleanup of the banking sector.

I still hope that the (National Anti-Corruption Bureau of Ukraine) is not a corrupt organization, but maybe I’m wrong,” she added.

As previously reported, the Bureau accuses Pisaruk of conspiring with businessman Oleg Bakhmatyuk to illegally obtain a stabilization loan for the latter’s private bank, which they subsequently embezzled. Pisaruk has denied the allegations and has a broad base of support among colleagues and civil society in Kyiv.

Read more: After $20 billion in losses, justice on the way?

Gontareva admitted to knowing about the loan – a one-off $49 million lump sum – she claimed that the money couldn’t have been stolen because it was issued to pay out insured private deposits.

Bakhmatyuk couldn’t even have taken (the money),” she said, “It’s an oxymoron. How can you steal money that is in private individuals’ deposits?”

Gontareva said Pisaruk’s signature, rather than hers, appears on the loan documents only because she was in Washington at the time for an annual meeting with the IMF.

Reforms threatened

Unfortunately, the spirit of reforms evaporated,” Gontareva said in response to a Kyiv Post question at the event.

If you look at what’s going on in Parliament and, after, you observe what’s going on in the backyard, it’s like cognitive dissonance,” she said.

Gontareva believes that, although the government is passing laws in line with the reforming spirit of predecessors, it is just about “ticking boxes” with the IMF. Behind the scenes very little is happening to implement serious reform, she alleged.

She mentioned the alleged aggressive slander campaign and hundreds of lawsuits rolled out by oligarch Ihor Kolomoisky, the recent arrests of her fellow reformers and threats to the independence of the NBU as examples of this trend.

During the panel discussion, Gontareva voiced her fears that a “reoligarchization” was being allowed to take place in Ukraine because of widespread corruption across the judiciary and failure to respond by the new government.

She pointed out that while reformers and banks are coming under what they say is sustained harassment, the individuals who allegedly looted billions from the Ukrainian banks have not faced justice.

My message today is very strong,” Gontareva said, “you cannot tick a box and pretend that you are doing reforms. We need to be more proactive”.

Kolomoisky has recently boasted that PrivatBank, which was nationalized under Gontareva’s governance, will soon be back in his hands. The government has repeatedly said this will not happen.

Gontareva explained that, if unreliable courts in Ukraine returned PrivatBank to Kolomoisky, the NBU would immediately declare it insolvent and ask the government to re-nationalize it as a result.

She said it is time for President Zelensky to “prove that he is truly independent” from Kolomoisky’s influence.

But nobody will believe their (the government’s) words anymore,” Gontareva said. “They will only believe actions.”