Q&A: Will scandal sink Poroshenko’s second term chances?

On February 25, investigative journalists accused President Petro Poroshenko’s close associates of getting rich by smuggling spare parts for military equipment from Russia. The Bihus.Info report claims that the son of Oleh Hladkovskiy, deputy secretary of the National Security and Defense Council, was the mastermind behind a scheme to buy spare parts from Russia in 2015. The year before, Russia annexed Crimea and occupies part of the Donbas. Bihus.Info alleges that Ukraine bought the goods from private companies linked to Hladkovskiy at inflated prices and that Ukroboronprom, the state company that oversees everything, knew the origin of the parts.             

Bihus.Info says that it received the information from anonymous sources. It was published weeks before Ukraine’s presidential election on March 31. 

Before the scandal broke, most polls put Poroshenko in second place. Support for the army has been one of Poroshenko’s main campaign themes, and he recently said that he wouldn’t allow anyone to steal from the army.

We asked the Atlantic Council’s Ukraine experts and friends the following questions: How serious are the allegations? How will they impact the presidential race? Is it game over for Poroshenko? Should we be concerned about where the information came from?

Kristina Berdynskykh, political reporter, Novoe Vremya, Ukrainian weekly magazine:  For Poroshenko this is a very serious blow. His team came up with the slogan Army. Language. Faith. And now one of the main parts of its slogan—the army—is questionable. After all, there are now suspicions that the president’s friends have simply enriched themselves with the help of the war. The main issue is that society will have these new doubts. Of course, this situation will play primarily into the hands of the showman Volodymyr Zelenskiy. He doesn’t need to do anything, except follow the situation and explanations of the authorities. After all, society is waiting for official charges regarding the participants of the scheme.  

I do not think this is the end for Poroshenko. He has every chance of reaching the second round and possibly winning. Before the election, his team still has time to issue assistance to pensioners, and the mayors of large cities, such as Kharkiv and Odesa, are working on his side. They are doing everything for Poroshenko to win. But it will certainly be difficult. He can talk as much as he wants about the real achievements of his team—a visa-free regime with the EU and getting autocephaly for the Ukrainian church—but he can’t stop the emergence of new information about the problems that, unfortunately, he didn’t want to solve for all these years, which is the corruption of those close to him.

Sasha Borovik, attorney and technology entrepreneur: The journalistic analysis of corruption in the defense sector was presented by Bihus.Info, a leading investigative reporting outlet. It implicated Oleg Hladkovskiy, a business associate of Poroshenko, alleging that he has been taking part in illegal army procurement.

With the presidential election campaign entering its final weeks, supporters of the incumbent expressed anger at the timing. Conflicting narratives have followed in what seemed as much about partisan theatre as fact-finding.

The journalists have based their findings on documents delivered to them anonymously in early 2018. They claim that the timing for the release was random as it took them a year to work through the documents. Whether this implies diligent fact-checking is uncertain. It is also imaginable that the materials were obtained by illegal means.

Poroshenko has politically exposed himself now. A nation at war will not ignore the allegations of serious corruption in military procurement. The National Anti-Corruption Bureau has started an investigation. It is unlikely that the detectives will complete it before the election. In the meantime, journalists may be revealing new materials.

This further complicates the political landscape, opening the path to power for someone friendlier to the Kremlin; it may be the price that the nation has to pay for neglecting to deal with its corrupt elites earlier.

Michael Carpenter, former US Deputy Assistant Secretary of Defense, Senior Director at the Biden Center, and Nonresident Senior Fellow at the Atlantic Council: The charges made in the Bihus.Info report are serious and indicate that corruption schemes were endemic within Ukraine’s defense industrial sector. The Ukrainian government therefore has an obligation to investigate these allegations to determine if crimes were committed. I can’t speculate about the veracity of the reporting, and there are questions about the timing of the release of this information, but the Ukrainian public deserves a serious, credible, and impartial investigation.

Peter Dickinson, Nonresident Fellow at the Atlantic Council and Publisher, Business Ukraine Magazine: The allegations of defense sector corruption are particularly explosive given Ukraine’s ongoing undeclared war with Russia and President Poroshenko’s role as commander-in-chief. Nevertheless, this scandal is unlikely to prove an electoral game-changer because it is simply not shocking enough to undermine the broader campaign narrative. Even the most optimistic of Poroshenko’s supporters generally assume he is personally connected to corruption schemes of this nature. He has almost zero credibility as an anti-corruption crusader and therefore this issue is not an important part of his re-election bid. Poroshenko’s electoral appeal is rooted in the notion of “better the devil you know” and his presidential campaign rests on his ability to convince voters that he is the lesser of all available evils. These corruption claims are certainly damaging, but they do not fundamentally alter that equation. 

Oleksandra Drik, Head of Declarations Under Control and a 2019 James Denton Transatlantic Fellow at the Center for European Policy Analysis: The facts revealed in the investigation are yet another glaring example of the gap between the president’s words and actions. Even more important, it shows how tight the links are between Ukraine’s current leader and his closest allies and Russia. These links are based on money, and they are so strong that they override Ukraine’s national and international security. 

John Herbst, Director of the Eurasia Center, Atlantic Council: We only have some details about this issue. If the Ukrainian military needed spare parts for critical equipment and the best place to get those parts was in Russia, then kudos to those who executed the purchase. But if they then took a personal profit from the sale, they broke the law and should be indicted for doing so. The release of this information, one month before the presidential elections, gives it a political cast. But that should not hinder an investigation and prosecution if crimes are uncovered.

Adrian Karatnycky, Senior Fellow at the Atlantic Council’s Eurasia Center and Managing Partner of Myrmidon Group LLC: The allegations are very serious as they include price gouging in the supply of spare parts to the Ukrainian military. That said, it now appears the spare parts were Russian-sourced contraband, in transactions that were necessary to repair and refurbish Ukraine’s then decrepit military arsenal. If that is the case, it is understandable why contraband shipped under the nose of the FSB would come at a higher cost.

It will depend on the president’s response. If Poroshenko speaks openly and frankly, explains what was legitimate and authorized, and what was or may have been criminal, and demands that all involved in any transgression be quickly arrested and charged, he can maintain his strong second place in the ratings and live to fight on in a runoff.

The next few days will determine the president’s fate. He needs to be transparent on all the elements of these transactions. And he needs to express honest anger if those he trusted abused that trust.

While there were criminal investigations underway in some of the alleged transactions, we should be concerned about explosive documents of unknown provenance coming to journalists in the last weeks of a close election. Journalists should have approached the government with the allegations before going public. Even today, they only claim there is a high likelihood and not absolute certainty that the content is true. That is too low a threshold to send incendiary information to the public in a timeframe in which it will be hard to fully determine the truth.

Taras Kuzio, Non-Resident Fellow at the Foreign Policy Institute at Johns Hopkins-SAIS and Professor at the National University of Kyiv Mohyla Academy: The allegations are very serious as there has been a lot of accusations made about corruption in the military sector but without any concrete evidence; this could therefore be a first if the information is found to be truthful. Nevertheless, I am suspicious at the timing of its release now because there is no time to thoroughly investigate these allegations before election day (and maybe that is the point of its release now). My suspicions increased when I saw the immediate reaction of Yulia Tymoshenko calling for the president’s impeachment without any understanding of the right of people to be judged innocent until proven guilty. I doubt this will lead to the total collapse of Poroshenko’s ratings for two reasons. First, his two main competitors Tymoshenko and Zelenskiy will be unable to convince voters they are better on corruption. Second, for patriotic Ukrainians Poroshenko is the candidate who will make Ukraine’s break from Russia irreversible.

Brian Mefford, Nonresident Senior Fellow and Managing Director of Wooden Horse Strategies, LLC: At this point, the allegations are more sensational than serious. Keep in mind that the allegations are against the son of a business partner of Poroshenko, and not the president himself. For that matter, the allegations don’t even involve a member of the president’s family. If the scandal touched the president directly, that would be different. However, for now, Poroshenko can distance himself from his business partner, just like the Clintons distanced themselves from Jim McDougall over the Whitewater investigation and still won re-election in 1996. Anything short of a video of Poroshenko and Putin talking about the deal, shaking hands, and exchanging cash, will simply be dismissed as election year politics. Voters will vote for Poroshenko because they see him as the best option for taking the country to the West, not because they think he is without ties to corruption.

Kateryna Smagliy, Next Generation Leader, McCain Institute for International Leadership: The scandal has domestic and international implications. Certainly, if allegations are proven true, those guilty of smuggling spare parts for military equipment from Russia must be punished for state treason. Yet, given Russia’s feverish attempts to implement its “anyone but Poroshenko” scenario in the upcoming presidential election, observers should demand disclosure of the source of the materials implicating Poroshenko’s associates. The scandal hit the very core of Poroshenko’s campaign, as he positions himself as a strong defender of Ukraine’s territorial integrity.

Since February 16 when Yulia Tymoshenko promised to present undeniable proof of Poroshenko being the most “pro-Russian presidential candidate in Ukraine,” observers in Kyiv have been waiting for more “kompromat” against Poroshenko. The synchronicity of the Bihus’ publication is indicative of it being part of an anti-Poroshenko smear campaign. Given the role that Russia played in the 2016 US presidential election, the possibility that Russian intelligence is behind the leak cannot be excluded. At the end of the day, most Ukrainian politicians can be implicated on corruption charges, but not all of them can stand up to Putin.   

Ivan Verstyuk, Investigative journalist, Novoe Vremya, Ukrainian weekly magazine: The Bihus report reveals the facts that have previously been known only to a limited circle of Ukroboronprom business partners. Now all the country knows them. The allegations are quite strong, since the messages of those allegedly involved in the scheme are supported with documents and contracts. Poroshenko has made army reform a priority of his presidency, therefore the Bihus investigation hits him quite hard. I expect the revelation to knock Poroshenko’s electoral rating down 1-1.5 percentage points, which is still a lot, given how close he is to Yulia Tymoshenko in the polls. However, I don’t expect any of his associates to be held criminally responsible any time soon, since these sorts of official investigations usually take too much time to conduct and convicts have plenty of time to leave the country.

Melinda Haring is the editor of the UkraineAlert blog and a senior fellow at the Foreign Policy Research Institute. She tweets @melindaharing.

Editor’s note: special thanks to Eurasia Center intern Lana Dumenko who translated comments from Russian to English.

Related Experts: Adrian Karatnycky, John E. Herbst, Michael Carpenter, Melinda Haring, Peter Dickinson, and Brian Mefford

Image: Ukrainian President Petro Poroshenko speaks during the annual Munich Security Conference in Munich, Germany February 16, 2019. REUTERS/Andreas Gebert/File Photo