The Chocolate King Who Would Be President
Petro Poroshenko is the Chocolate King of Ukraine. What does that mean in a country where average yearly income still hovers around a few hundred dollars a month, where pensioners are impoverished by just about any definition and where the hunger to blame someone, anyone, for the country’s troubled post-Soviet path has produced not one but two revolutions in the last decade? For starters, that he lives like a king, a real one.
Poroshenko’s palace is a short ride outside central Kyiv in Kozyn, a suburb that, in Soviet times, used to be a proletariat retreat, dotted with tall, slender pine trees and small wooden cabins for workers’ families to enjoy the summer months by the Dnieper River. Today, a few vintage compounds with rusted metal gates remain, and dilapidated houses stand in the center of town. But the choice land close to the river has been bought up by wealthy
Ukrainians who have erected mansions along its banks. Poroshenko’s grand manse—complete with a white portico and columns that recall, not at all subtly, the White House, is surrounded by a yellow brick wall. Over the top, you can see rows of freestanding Roman archways, metal-leaf gates and the golden cupola of an Orthodox chapel.
Although it’s technically illegal, Poroshenko and many others in the neighborhood have cut off access to the shorefront along their property. The high gates blocking the water have become a visible symbol of the excesses of a crony capitalism that has walled off much of Ukraine from the prying eyes of its people, turning land that was once for everyone to enjoy into an elite playground. “I don’t like it,” one of Poroshenko’s neighbors told me. “But what can you do?”
By the count of those keeping score, Poroshenko is Ukraine’s seventh richest man today, worth an estimated $1.3 billion, according to Forbes. A 48-year-old with a large jowl and pompadour-styled salt-and-pepper hair, he owns UkPromInvest, a mysterious holding company that has no website but boasts interests in bus manufacturing, car distribution, shipyards, banking and electrical cables, among other things. He is most famous for owning the confectionary firm Roshen, which has factories in both Ukraine and Russia and produces all manner of flashy gold-wrapped chocolate wafers, bars and candies. Perhaps even more relevantly in these troubled times, Poroshenko is also the owner of Channel 5, known as the country’s main opposition television station and a leader of the revolution that toppled President Viktor Yanukovych this winter.
If business made Poroshenko a king, his main occupation has been politics for much of Ukraine’s short, tumultuous history as an independent country, and he has held a high position in every government since the Orange Revolution in 2004—from minister of foreign affairs and minister of economic development and trade to head of the National Defense and Security Council to chairman of the National Bank. Now—three months after a violent uprising in which Ukrainians were united perhaps by only one thing: revulsion at the tyranny of the corrupt oligarchy that has dominated the country since independence— the billionaire is also the strong frontrunner in presidential elections scheduled for this Sunday, May 25.
How strong? Since striking a deal to get his most popular opponent out of the race, Poroshenko has held an overwhelming lead. Polls now show him running at close to 50 percent support—if he crosses that threshold, he could win outright, without a runoff—and the oligarch who already lives in a White House of his own making is positioning himself as a Western-oriented savior for Ukraine who will get the country back on course toward the European Union and away from the menacing Russians wielding tanks and missiles on Ukraine’s eastern border.
Still, the presidential campaign has made for some elaborate contortions on Poroshenko’s part, given his hard-to-hide credentials as a pillar of the embattled country’s establishment. Appearing on a popular Ukrainian television talk show the other day, Poroshenko was asked a simple enough question: Is he, in fact, an oligarch? “No,” he said, visibly offended, and all appearances to the contrary. “I am not an oligarch because an oligarch is a person who uses state power to enrich themselves. I was in the opposition the whole time. And quite the opposite, it was the thugs and criminals in power that destroyed the economy.” Poroshenko’s presidential campaign slogan is a Ukrainian phrase that means “Live in a new way!”
Therein, of course, lies the strange paradox of his candidacy and its worrying implications for Ukraine: How is it possible that someone who has been in and out of the political constellation for decades, made billions off the collapse of the Soviet state and then denied his role could have emerged as the default choice to lead the country through this most existential crisis? Oligarchs are part of Ukraine’s problem; on that, pretty much everyone agrees. So why is this one being presented as Ukraine’s solution?
Getting rid of people like Poroshenko was in fact one of the main reasons Ukrainians took to the streets for three months this winter in the aftermath of Yanukovych’s controversial decision to abandon talks to join the EU in favor of closer ties with Russia and a $15 billion bailout from Russian President Vladimir Putin.
But that didn’t stop Poroshenko from joining the growing throngs on Kyiv’s Independence Square, known as the Maidan. Although Poroshenko had served as one of Yanukovych’s ministers until December 2012, he opted to take part in the protest movement when many other big businessmen did not, and he frequently addressed protesters from the heavily guarded main stage. In one YouTube video, he is shown standing on a tractor in the midst of clashes to try to calm the situation—at which point he is met by jeers from the assembled crowd and shouted down.
Against this backdrop, Poroskenko seemingly cemented his rise. And he did so in what appears to be a classic of Ukrainian backroom deal-making: According to various sources and publishedreports, his frontrunner status was sealed at the end of March when he made a deal with Vitali Klitschko, the world-titled boxer with a Ph.D. who had been polling second in the presidential race. Klitschko and Poroshenko were reportedly brought together by a Ukrainian oligarch with close ties to Putin, Dmitry Firtash, who amazingly enough appears to have convened the talks in Vienna while on bail and facing extradition to the United States in connection with alleged bribery of Indian officials involved in a titanium mining deal. While details are scarce, it is indisputable that soon after the talks Klitschko stepped aside and threw his support to Poroshenko, who in turn is now supporting Klitschko’s candidacy for mayor of Kyiv—a position Klitschko has run for, and lost, three times. “The only way to win is by nominating a single candidate from the democratic ranks,” Klitschko said at the joint press conference announcing the alliance. “This should be a candidate with the greatest support from the people.”
That leaves the presidential race between Poroshenko and Yulia Tymoshenko, a two-time former prime minister. Tymoshenko ran for president in 2010 and was trounced by Viktor Yanukovych, a symbol of the failed promise of the Orange Revolution. She was then arrested and convicted in 2011 of embezzlement and abuse of power, charges she and her supporters alleged were entirely politically motivated. She became an international cause célèbre while in jail, known for her golden traditional braids piled high on her head and her hunger strikes. She emerged from jail, triumphant, after Yanukovych fled the country. Tymoshenko has since returned to politics with gusto (and without the braids), but she trails at a far distant second in the polls.
The two rivals broadly claim to agree on the pro-Western policy they would follow if elected, and each has instead spent much energy on the campaign trail accusing the other of secretly colluding with Putin and the Russians. In fact, it was Tymoshenko who reportedly leaked the Firtash meeting to the press, suggesting afterwards that Poroshenko’s business interests in Russia were the reason.
Following the meeting, Poroshenko’s chocolate plants and bank accounts in Russia—disputed on and off since a trade war broke out last year—had been unblocked, she claimed pointedly. “Such things don’t happen without Putin’s blessing,” local media reported her as saying. Meanwhile, according to Poroshenko, his accounts are still frozen—a fact he is trumpeting to prove “that the policy I stick to is pro-Ukrainian,” as he put it recently. “I believe that this is the sign that I do everything right.”
It’s all so reminiscent of the last post-revolutionary circus. Back in2004, protesters occupied the same Maidan for two months after a sham election in which then-president Leonid Kuchma tried to pass power to his political protégé, the Russia-backed candidate Yanukovych. Eventually, opposition candidate, Viktor Yushchenko, was declared the winner. But within a year, disillusionment with the Orange Revolution reigned supreme. The running joke in the capital was nothing changed during Yushchenko’s presidency except that bribes were increased by 100 percent. In 2010, the Ukrainians who actually went out to vote, mostly fairly, elected Yanukovych, the same man they had come out against in 2004—and the same man they would oust again three years later.
Between revolutions, Ukraine’s economy crumbled—the country’s GDP grew zero percent in the last two years—and the culture of corruption remained unchanged. Ukraine now ranks the worst in Europe in Transparency International’s corruption rankings; even Russia has a better score. So there is much disillusion that the presidential campaign has come down to Poroshenko and Tymoshenko, who have already been in power and bear as much responsibility as others in the country’s venal establishment for Ukraine’s political and economic malaise.
Indeed, whenever I asked Ukrainians to explain to me the appeal of Poroshenko in this presidential race, I heard not enthusiasm but something decidedly more tempered. He was, I was told repeatedly, “the best of the worst.” And besides, others insisted to me, he would “probably steal the least.” Not exactly inspiring stuff for a country that’s wondering how it can possibly expect the same political elite that got Ukraine into this mess to make a serious run at dismantling the system that made them what they are today.
“Ukraine has a great opportunity to clean up its act, to reform its economy, to improve its governance, to attack corruption, as people said they wanted to do,” says William B. Taylor, who served as U.S. ambassador to Ukraine from 2006 to 2009. “They have the opportunity again. I hope they learned from the Orange Revolution. … Almost all of them had something with their past. The question is: What are they doing going forward?”
The real cancer of Ukraine is corruption; it has been entrenched by every government Ukraine has had since independence. “You have to imagine people sitting in government buildings, thousands of them, all across this city in particular, the capital Kyiv, and they’re stealing all they can, every day. And that’s been happening for 24 years,” says Ivan Lozowy, a political analyst in Ukraine’s troubled capital. “Imagine 30 large government buildings here in Kyiv, and underneath them are these huge pipes, leading outwards like a network, and the pipes are just funneling out money, all the time.”
Since the Soviet breakup in 1991, access to profit has been about proximity to political power. This pattern was set during the waning years of the USSR, when members of the communist nomenklatura had started amassing cash. As state assets were being privatized, they purchased heavy industry on the cheap. Politicians who assisted them or looked the other way got kickbacks. During the 1990s, the bonds between those nascent oligarchs and politicians were cemented: Those who had access to the power made the money, and those with the power to help them get the money were funded in a closed feedback cycle of mutually beneficial corruption. Oligarchs in Ukraine emerged in clans known by their regions—Donetsk, Dnepropitrosk and Kyiv—each with their own political agenda.
It was in this freewheeling atmosphere that Poroshenko, considered part of the Kyiv clan, first drew attention. He was born in a Russian-speaking home in Odessa, the famous port on the Black Sea, and his father was a so-called “red director,” a Soviet factory boss. The son got his start selling cocoa beans, speculating on black pepper or starting a consultancy firm, depending on which interview you read. (There is a saying about oligarchs, here as in elsewhere in the post-Soviet world: Don’t ask about the first million.) Either way, he made a bundle of cash while he was still a student at the international relations and law department of the Taras Shevchenko National University in Kyiv. He was, his former professor, Alexander Zadorozhny told me, a standout—not just an ambitious joiner in the communist youth league, but its leader.
After graduation, Poroshenko made his fateful turn toward Ukraine’s iconic chocolates, taking on the debt of Soviet confectionary factories with a promise to the bank to turn them around. Which bank and with what money is all unclear, and since Poroshenko declined to meet me after repeated promises of an interview, his ascension to chocolate tycoon remains vague, beyond the fact that he managed to obtain ownership of the factories and consolidate his holdings in 1995 under the brand Roshen. “It was legal,” says Volodymyr Lanovoy, a former deputy prime minister and leading economic reformer in the early ’90s. “The question was why he got that advantage with the bank to begin with. Probably there was some kind of security service connection or agreement. … They weren’t selling factories to just anyone at the time.”
By the late 1990s, Poroshenko began dabbling in politics. Across Ukraine, oligarchs were moving into the public sphere—a good business play for protecting your assets, experts told me—and Poroshenko dove in headfirst. An early founder of the political grouping that would become Yanukovych’s Party of Regions, he switched sides in 2000 and came out as a strong supporter of Yushchenko in 2004. During the Orange Revolution that year, the Chocolate King was applauded for keeping opposition Channel 5 broadcasting. Internet access in Ukraine at the time was minimal, and the channel stoked revolutionary fervor. “Owning media in Ukraine means you have always an option to negotiate with someone for something, to give them positive PR and to get some business benefit in return,” says Carl Volokh, an Israeli businessman with investments in his native Ukraine. “That’s why Ukrainian media is loss-making, but oligarchs are really happy to keep it, just because it’s one of the most important protections for them.”
But politics didn’t turn out quite as Poroshenko expected. He had bankrolled Yushchenko’s presidential campaign and expected to be rewarded with the prime minister position. Instead, Yushchenko gave the post to Tymoshenko, beginning years of squabbling that would ultimately sink their democratic revolution in a mess of finger-pointing and squandered opportunities. Poroshenko found himself sidelined as head of the National Security and Defense Council.
Everyone I spoke to for this article mentioned Poroshenko’s loss of the prime minister post as a decisive moment for him. “This was what he deserved, he thought, and when he didn’t get it, which says a lot about his character, he became very vengeful against Tymoshenko. He tried to trip her up at every turn,” says Lozowy, the Kyiv political analyst. “Anything to grab the headlines and upstage her, and he did this from about the whole time she was prime minister, and this was on the public scene. What he did behind the scenes was even worse.”
The personal rivalry between Tymoshenko and Poroshenko continued to bleed into politics. In September 2005, Oleksandr Zinchenko, the president’s chief of staff and one of Tymoshenko’s people, accused Poroshenko and another senior official of “cynically carrying out their plan to use government posts to their own ends.” Zinchenko resigned in a national television broadcast, saying, “Corruption is now even worse than before.” Present at the press conference, Poroshenko seethed in the back of the room and took to the podium to deny the allegations. No charges were ever filed, but it led to a full-scale political crisis, and on Sept. 8, President Yushchenko addressed the nation: “I knew that there were definite conflicts between those people,” he said. “I hoped that if each of them immersed himself in work, there would not be enough time for mutual intrigues.” Instead, he fired the Tymoshenko government, and Poroshenko resigned as well.
But the scandal only temporarily derailed the two rivals: If there’s anything in common between Poroshenko and Tymoshenko, it is that they are both survivors, and each soon returned to power. In 2009, Poroshenko became minister of foreign affairs, his nomination backed ironically enough by Tymoshenko, who had returned as prime minister in 2007 and was reported to dislike the previous foreign minister even more than she loathed Poroshenko.
In 2010, when Yanukovych was president-elect from a different party, then-foreign minister Poroshenko—in theory an opposition leader—prepped him for his first phone call with U.S. President Barack Obama. In a leaked diplomatic cablefrom 2010, the U.S. ambassador wrote that Poroshenko “sought to use the meeting to highlight his closeness (or what he portrayed as closeness) to Yanukovych. He gave no signal that he planned to step down soon as FM; indeed, quite the opposite.” This desire to be close to power, regardless of its affiliation, is what many in Kyiv told me when I asked about the character of their would-be president.
Poroshenko was removed from his post by Yanukovych anyway, after only three months in office. Still, he did go on to serve in Yanukovych’s government; Poroshenko was appointed minister of economic development and trade in 2012, a post in which he served for almost a year, finding himself enmeshed in rumors over whether he was using his government post to help boost his Chinese car distribution business.
Though unproven, it’s a reputation that has stuck: that for Poroshenko his own business and the government’s are very much intertwined. Poroshenko has pledged he will sell his chocolate business if he wins the presidency, but few seem swayed. “He knows how to use power. He knows how the administration works. He has a very clear understanding of the world around him, and he doesn’t hesitate to use his authority,” Bohdan Yaremenko, a retired Ukrainian diplomat, told me. “His weakness is they say that like no matter where he’s serving, he never made an attempt to forget about his business and his business interest, that he’s always trying to assist his business as well, and to promote it, and using his office for this.”
Which of course, may be the very definition of an oligarch
The Ukrainian parliament, called the Verkhovna Rada, is a stately Stalinist neoclassical building rimmed with white marble columns and topped with a glass dome. It’s about a six-minute uphill walk from the Maidan. The streets leading to the parliament were the scenes of the fiercest clashes during the protests this winter.
In mid-March, the Rada, which has for years behaved more like an executive business lounge than an actual governing body, was humming with activity. Smartly dressed parliamentarians flitted in and out of voting sessions, pausing for quick interviews against a backdrop of framed photographs of the killed protesters topped with thorn crowns. With Russia massing forces at their country’s border and the ex-president’s Party of Regions in shambles, the deputies were eager to show themselves at work actually running the country.
In Crimea, Putin had deployed what were caustically referred to in the capital as “little green men.” Russian special forces, without insignia, had taken over the peninsula and installed a pro-Russian government that was ushering the territory toward a hasty referendum on annexation. That morning, deputies in the Rada were set to vote on annulling the decision of the Crimean parliament to hold this referendum. It was a symbolic move at best. I was there waiting for an agreed interview with Poroshenko. But in true form for Ukrainian politics, he was nowhere to be found, and his young, foppish press secretary, Andrei, seemed forlorn. (Poroshenko attended 44 percent of sessions of the parliament in 2012, based on rankings from the Ukrainian NGO watchdog Chesno.) Andrei said he had no idea where Poroshenko was, but promised me a meeting was imminent.
Stets, Poroshenko’s campaign manager, and I decided to duck outside for a smoke. “Ukraine got its independence too easily,” Stets told me. “We’re going to value it much more now, because we have the opportunity now to build a new Ukraine, but we got it by blood. Those pictures of people being killed will stay in our minds—my generation absolutely. That’s why I am totally convinced the system will change now and everything will be different.”
That morning, masked men in mismatched camouflage with billy clubs and large wooden bats had surrounded the parliament. They belonged to the Right Sector, a neo-nationalist paramilitary group that shot to fame during the protests for their bravery in fierce clashes with security services. But it was their worship of Stepan Bandera, a Ukrainian nationalist who joined the Nazis to fight against the Soviets and also supported pogroms against Jews, that Putin had harped on, and Russian speakers in the east point to as evidence of “fascism.” Their leader, Dmytro Yarosh, had recently announced he was also going to run for president.
As we stepped out the heavy wooden front door, a group of them stood on the landing checking IDs. Stets flashed his deputy card and told them we were going for a smoke. “Back inside,” one of them ordered, “You outed yourself! Go back, go back!”
“I didn’t out myself,” Stets replied, with some incredulity, but the line of men pushed in, forming a human barricade around us on the doorstep. “Go back! Go back!” they continued to chant.
“Guys, don’t worry. I will explain what’s happening to the journalist. He’s going to go vote!” a younger voice called in Ukrainian before switching to English: “Right now, our government electives don’t want to do their work. It’s just a game, claiming to change their colors, and that’s it. We want to change the system, not have the same faces in this government. So we have our demands! They work for us!” the young kid with vivid blue eyes under his mask shouted.
Stets began to steer me back to the door. “See, everything has changed,” he told me with a sheepish grin.
But has it? With bat-wielding groups like Right Sector running amok in Kyiv and heavily armed separatist groups in Eastern Ukraine, how can Poroshenko, or any new president, assert control? Ukraine seems as close to ungovernable as one can imagine.
Poroshenko has made unity an important point in his campaign. When theLos Angeles Times asked Poroshenko earlier this month why he wanted to run for president, he responded saying: “When you appeal to people to follow you, when you lead them, you must be prepared to take responsibility. … I am not a destroyer by nature. I know how to build an economy. I know how to build plants and factories. I know how to create jobs. I can be a diplomat, I can be a banker too. … I intend to unite the people, to demonstrate zero tolerance for corruption, to modernize the country.”
Local media have already reported that Poroshenko tried to cut a deal with Tymoshenko, offering her the prime minister position if she drops out of presidential elections (for unity’s sake). She declined.
But whether he can really unify the country remains to be seen. And for now Poroshenko has been staking out an array of positions that can best be described as all things to all people—supporting, for example, the interim government’s military actions in the east to retake power, while also suggesting taking pro-Russian sentiments into account politically and negotiating with the separatists (as long as they aren’t armed, which of course they all are). Among his public promises since beginning the campaign has been to end purchasing Russian gas by 2016 (whether practical or not is another question), and he promises EU membership, or at least a visa-free regime, as soon as he’s elected. He promises to strengthen the Ukrainian army too.
But although he has always loudly favored EU integration, he has not denied that he is open to talks with Putin, and many now theorize that Poroshenko’s rise has contributed to the easing of Putin’s rhetoric; in Poroshenko, goes this line of thinking, is someone the Russians can negotiate with—a pragmatist who will not risk the ire of his neighbor in the way the more unpredictable populist Tymoshenko might.
While no one knows for sure whether Poroshenko will be more apt to cut a deal with Putin, few doubt that the mutual rancor is real between him and his opponent in Sunday’s election, or that the country’s situation is anything but dire. Right now, the interim government is composed of Tymoshenko allies, who have a long history in power, including acting Prime Minister Arseniy Yatsenyuk and acting President Oleksandr Turchynov. Yatsenyuk has said he is leading a kamikaze government that will hitch the country to painful IMF reforms and make unpopular subsidy cuts. But Ukraine has made these promises before. In November 2008, when Tymoshenko was prime minister, Ukraine got a $16.4 billion loan; it was frozen after a year and ultimately cancelled because of a lack of reform. In July 2010, another $15.2 billion package was disbursed under Yanukovych; the payments were again halted the next year after the country failed to meet conditions.
“Most of the reasons that reforms didn’t happen were not about Russia, and they were not about the old regime,” says Matthew Rojansky, director of the Kennan Institute in Washington, D.C. “They were basically about the self-interest of a very powerful clique of people, and those people are still basically around and are basically still in charge.”
Many people I spoke to expressed concern that Poroshenko would be no different. And also that there was nothing much that could be done about it.
“Oligarchs still think they can reboot the system. They cannot reboot the system. Rebooting a system means you had an operating system in your computer that used to work properly, but there is a virus and you will reboot it and the system will be good,” says Yuriy Vitrenko of the Ukrainina financial services company AYA Capital.“But it’s not that Yanukovych was bad. The whole system was bad. They can’t reboot it. They need to install the new system. In terms of Poroshenko, unfortunately, I’m not sure that he’s here to install a new system instead of rebooting the old system.”
Sarah A. Topol is a journalist based in Istanbul. Follow her on Twitter @satopol
Source : http://www.politico.com