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Kleptocracy Versus Democracy: Vladimir Putin’s Biggest Fear

Trump, Giuliani, Manafort and a host of Russian oligarchs have all felt threatened by Ukraine’s efforts to tackle corruption and improve democratic accountability, reports Matt Bernardini

Vladimir Putin and Donald Trump in 2020. Photo: AAP Image/Lukas Coch

Kleptocracy Versus DemocracyVladimir Putin’s Biggest Fear

Trump, Giuliani, Manafort and a host of Russian oligarchs have all felt threatened by Ukraine’s efforts to tackle corruption and improve democratic accountability, reports Matt Bernardini

As Russian troops move closer to seizing Kyiv and Vladimir Putin’s closest confidante escapes, the lens though which this war should be viewed is a struggle between kleptocracy and democracy – not NATO expansion. 

According to the UK’s House of Commons Library, there were zero NATO troops in the eastern part of the alliance until the Russian President annexed Crimea in 2014. With more nuclear weapons than any other country, it is highly unlikely that Putin is concerned about any kind of forceful regime change in Moscow. 

Instead, Ukraine has long been a battleground between democracy activists – seeking to reform the Government – and kleptocrats who naturally align themselves with Russia.

As pro-Russian Ukrainian politician Oleh Voloshyn told Time magazine earlier this month: “Russia either gets the influence it wants by peaceful means, or it gets it by force.” 

Trump, Putin and Yanukovych

Until recently, Vladimir Putin has had great success in spreading his influence through like-minded kleptocrats. 

Between 2010 and 2014, former Ukrainian President Viktor Yanukovych, and his kleptocratic gang from the Party of Regions, allegedly stole nearly $37 billion from Ukraine – hiding it in banks around the world.

Yanukovych had plenty of help from willing lawyers, bankers and consultants such as Paul Manafort – all of whom appeared to view politics as a means of enrichment.

Manafort – who would later become the campaign chairman for Donald Trump’s 2016 US presidential run – flourished on the gravy train of Russian oligarchs and their pro-Russian Ukrainian counterparts.

Starting in 2004, he worked closely with Russian aluminium magnate Oleg Deripaska and other oligarchs in Ukraine to do public relations work for Yanukovych. According to the US Senate Intelligence Committee, these PR approaches led to Russia shifting “its focus from direct and overt interference in Ukrainian politics toward a more subtler approach”.

Manafort’s electoral strategy succeeded and he received more than $60 million for his Yanukoyvch-related activity, mostly from Serhiy Lyovochkin and Rinat Akhmetkov. 

Lyovochkin, who was Yanukovych’s chief of staff, worked with Manafort to try and rig a privatisation deal for Ukraine’s largest telecoms company. The plot failed, but the company was privatised anyway, with one of the buyers being another pro-Russian oligarch, Dmytro Firtash. 

Rick Gates, Manafort’s deputy, noted in a 2014 interview with the FBI that Yanukovych kept the same oligarchs close to him, referring to them as the “Donetsk clan”.

The staggering levels of corruption led to Yanukovych’s regime being ousted in 2014. In response, Putin annexed Crimea and continued to try and control Ukraine though pro-Russian forces in the east of the country and the theft of its natural resources.

In 2014, Russian entities began illegally exporting coal from the Donbas region of Ukraine into Russia. C4ADS – a non-profit organisation focused on global conflict – found that Russian companies imported nearly $130 million worth of coal from the occupied areas.    

Some of this coal money was used to fund pro-Russian TV channels connected to Viktor Medvedchuk, who is considered Putin’s closest friend in Ukraine. 

In 2016, Putin’s attempts to further influence Ukraine found a willing partner in the Donald Trump administration.

In March 2016, Manafort was named the Trump campaign chairman. Over the course of the campaign, he met repeatedly with Konstantin Kilimnik – whom the US has asserted is a Russian intelligence agent. The two discussed various plans that would allow Russia to effectively control eastern Ukraine by having it declared an ‘autonomous region’. One of the plans even included having Viktor Yanukovych return to run the region. Manafort was still working with Kilimnik on this plan as late as 2018, after he had already gone to prison for tax and bank fraud. 

While the plan to have Yanukovych control eastern Ukraine was never implemented, Russia continued to destabilise Ukraine.

In June 2017, Russian military hackers conducted a large-scale cyber-attack that wiped data from a plethora of Ukrainian companies. And despite Manafort being temporarily out of commission, the Trump administration continued to work with pro-Russian figures to squeeze Ukraine. 

In April 2018, Lev Parnas and Igor Fruman – both associates of Trump’s lawyer Rudy Giuliani – first pressured Trump to fire Marie Yovanovitch, the ambassador to Ukraine. Yovanovitch had been supportive of anti-corruption efforts in Ukraine and, as a result, attracted a number of enemies in Ukraine who resisted any reforms. Ukrainian Interior Minister Arsen Avakov told Yovanovitch that Giuliani and his associates were repeatedly talking about the need to fire her and investigate Joe Biden.  

In addition to asking for an investigation into the Bidens, Giuliani and his associates also targeted the Anti-Corruption Action Centre – Ukraine’s leading anti-corruption organisation. Its director, Daria Kaleniuk, told the LA Times that these attacks only benefited Russia, which has sought to portray Ukraine as hopelessly corrupt. 

Shortly after Volodymyr Zelensky’s election as President of Ukraine in April 2019, the smear campaigns escalated.

In July, Trump had his infamous phone call with Zelensky in which he pressured him to investigate his 2020 US Presidential Election rival Joe Biden and his son, Hunter Biden, as well as bogus conspiracy theories about interference in the 2016 Presidential Election that would have shifted the blame from Russia to Ukraine. 

As the 2020 US Presidential Election approached, the efforts to ensure that Russia would continue to have a favourable American administration to work with became more open.

Giuliani met several times with Andrii Derkach – a Ukrainian law-maker the US has called an active Russian agent. Giuliani even went so far as to work with several pro-Russian figures to produce a documentary about the Bidens, although it never aired.

Backlash Against Progress

Despite these efforts by Russia to control Ukraine through kleptocrats, the country has made progress in rooting out corruption.

Daria Kaleniuk noted in an article for Foreign Policy magazine that Ukraine has sought to make government information as transparent as possible. Asset declarations by politicians and Government contracts are now easily accessible to the public. In 2015, the National Anti-Corruption Bureau of Ukraine was launched.

Meanwhile, President Zelensky – who some expected to govern in a pro-Russian way – has taken another path.

Last February, he banned Putin ally Viktor Medvedchuk’s three pro-Russian television channels in Ukraine. Perhaps the final straw for the Russian President came in May, when Medvedchuk was indicted on charges of treason and accused of financing the separatists in Donbas. He was confined to house arrest until he escaped on Sunday, according to Ukrainian authorities. 

Russian propaganda on Ukrainian television is not as prominent. Many of the figures involved in the 2016 and 2020 election interference have been sanctioned. Investigations around Rudy Giuliani and his allies remain ongoing. Even some of the Russian oligarchs, now feeling the squeeze of Western sanctions, have spoken about the need for some kind of peaceful resolution.

As Ukraine moves to further root out kleptocracy, more of these figures will be held to account. This is what autocrats cannot accept and it is why Russia has resorted to taking Ukraine by force.

Vladimir Putin is right to be afraid. But it is not NATO he is scared of, it is democracy.

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