US sanctions Ukrainian oligarch Kolomoisky for corruption

The United States has imposed sanctions on Ukrainian oligarch Igor Kolomoisky over corruption allegations in an attempt to help Ukrainian President Volodymyr Zelensky uproot the the influence of powerful business clans in the war-torn country.

Secretary of State Antony Blinken said on Friday that the United States had banned visas for Kolomoisky, his wife Irina and two of his children due to “the oligarch’s involvement in significant corruption” as ‘he was governor of the Dnieper region in eastern Ukraine from 2014 to 2015.

During these years – at the height of Ukraine’s war against Russian-led separatists in his east – Kolomoisky “was implicated in acts of corruption which undermined the rule of law and public confidence Ukrainian in democratic institutions and public processes of their government, “Blinken said in a statement. declaration. The businessman notably used “his political influence and official power for personal gain,” Blinken added.

The United States is also concerned about Kolomoisky’s alleged “current and ongoing efforts to undermine Ukraine’s democratic processes and institutions, which pose a serious threat to its future,” Blinken said.

“Ukraine must defeat the oligarch-dominated system” to achieve “economic prosperity and Euro-Atlantic integration,” Zelensky’s office said in a statement, without mentioning Kolomoisky.

“Any just decision in this direction will help Ukraine to become a strong and truly independent state,” the statement added. “We will continue to work to reform every sector and strengthen our relationships, including with our strategic partner, the United States.”

Western backers from Ukraine prompted Zelensky, a former comedian who rose to fame on Kolomoisky TV channels, to sue the oligarch for his involvement in the collapse of PrivatBank, Ukraine’s largest lender, in the one of the biggest bank frauds ever carried out in Europe.

The sanctions give the Ukrainian president a chance to “show that he is not Kolomoisky’s political puppet,” said Maria Zolkina, political analyst at the Kiev-based Foundation for Democratic Initiatives. “Zelensky received a huge political signal that Kolomoisky is not a desired person – inside or outside of Ukraine.”

PrivatBank, formerly co-owned by Kolomoisky and his partner Gennadiy Bogolyubov, was nationalized in 2016 after regulators discovered a $ 5.5 billion hole in its balance sheet. The FBI is investigating Kolomoisky for allegedly embezzling some of PrivatBank’s embezzled funds through commercial and industrial properties in Ohio, Kentucky and Texas.

Kolomoisky, who has denied any wrongdoing, did not immediately respond to a request for comment.

“This puts enormous pressure on Zelensky on the way forward,” said Oleksandr Danilyuk, Zelensky’s former head of national security, who led the charge of nationalizing PrivatBank under the previous Ukrainian government in 2016. “ The message is that Zelensky gets the 5.5 billion dollars back ”. it was lost to taxpayers when the bank collapsed.

“Hopefully Ukraine will finally do its homework,” said Valeria Gontareva, former head of Ukraine’s central bank.

Confronting Kolomoisky is a tall order for the Ukrainian president: the oligarch owns the TV channel where Zelensky made his name known by playing a fictitious president and was one of the main supporters of his rise to power in 2019. Dozens of MPs nominally attached to Zelensky’s party are loyal to Kolomoisky, while former chief aide to President Andriy Bogdan previously represented the oligarch in court cases resulting from the collapse of PrivatBank.

“Kolomoisky thinks he has total impunity – he’s a typical oligarch who controls media assets, buys and controls politicians, and wields enormous influence in courts and law enforcement,” Danilyuk said. .

The American sanctions leave Zelensky “in part free from the obligation to reconsider his common interests with (the oligarch) or their [commercial] relationship, ”Zolkina added.

Last month, Ukraine’s anti-corruption bureau charged three former senior executives at PrivatBank, including its longtime CEO, with embezzlement in the first criminal case since its nationalization.

Kiev too close three TV channels linked to pro-Moscow politician Viktor Medvedchuk, who heads Ukraine’s biggest opposition party, last month before grabbing another assets and an oil pipeline linked to Medvedchuk.

These measures indicated Zelensky’s desire to win favor with the Biden administration in the United States, which has urged Ukraine to crack down on the powerful forces that have long controlled the country behind the scenes.

A person close to the Zelensky administration told the FT that the president was “unlike his predecessors, serious about desoligarchization [and] back up his words with actions. Zelensky also “intends to hold law enforcement accountable” for the “long overdue” indictments, the person added.

Although Zelensky won his post in a landslide on a vow to “break the system,” he was unable to secure crucial multibillion-dollar support from the IMF, the United States and the United States. EU after Kolomoisky’s MPs and Medvedchuk’s party blocked the fight against corruption and economic reforms.

“Zelensky should be grateful because if he has the political will to fight the oligarchs – and given his old business ties with Kolomoisky – Washington has just done some of the dirty work for him,” said Alyona Getmanchuk, director of New Europe Center think tank in Kiev.

“This gives Zelensky more leeway to take the next steps of ‘desoligarchization’.”

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