Timothy Ash: Zelensky’s disappointing response to audiotape scandal
By Timothy Ash.
It was disappointing, in the end, how President Volodymyr Zelensky responded to Prime Minister Oleksiy Honcharuk’s offer to resign after leaked audio recordings of a meeting with top advisers. The audiotapes revealed disparaging remarks about the president’s lack of understanding about the economy.
Honcharuk did nothing wrong – he was taped, and leaked from, a private meeting with his economic team. They were jamming, as everyone does in these kinds of meetings, and some honest things were said. Neither Zelensky nor Honcharuk are trained economists – Zelensky knew that when he hired Honcharuk. Honcharuk just stated the obvious and the fair comment was how does the economy team explain complex issues to lay people, in economics at least, like Zelensky.
The issue is not what was said in meetings, but who leaked the tapes and why. As Honcharuk said most likely it was opponents of reform and those now fighting against the 2015-17 banking reforms.
Honcharuk did the decent thing, offering to resign – albeit unconstitutionally to the president, not the Verkhovna Rada.
Zelensky’s response was to focus more on what was said in the meetings, attacking his Cabinet for perceived underperformance, rather than attacking the anti-reformers who leaked the information. Honcharuk’s authority has been eroded, perhaps terminally.
This was an attack by Zelensky on reformers, including Honcharuk, his cabinet, and the National Bank of Ukraine. He should instead have backed them up for what they have achieved.
Specifically, in an aside to the land reform team, he demoted in effect Economy Minister Tymofiy Mylovanov by taking away his overall management of land reform splitting it between ministries. This is not going to end well and is just going to risk infighting, delay, and sub-optimal outcomes.
Zelensky attacked, in effect, cabinet calls for fair remuneration for ministers. This has been a constant demand by reformers – so they can hire talent and reduce pressure for corruption. Previous governments have got around the issue by little brown packages or envelopes, informally given by political leaders to ministers and their staff. This just breeds political dependency and is a form of corruption. If ministers and their staff have to survive on hundreds of dollars a month, corruption will happen and sub-optimal policy outcomes will result. Corrupt outcomes. Zelensky said any minister who is not happy with the pay can leave. Maybe they will – not everyone is a millionaire entertainer, or has family “wealth.”
And then Zelensky brought up the bonuses due to Naftogaz staff for winning the $2.9 billion Stockholm arbitration ruling against Gazprom. Specifically, this seems now like a direct effort to oust the current reform team – Andiry Kobolyev and Yuriy Vitrenko to whom most of these bonuses are now owed. That would be doing in effect the work of those now fingered in the U.S. impeachment investigations where Naftogas was often mentioned.
Now Kobolyev and Vitrenko are confident guys, some might say arrogant. They have their enemies. But let’s not forget that their personal acumen, their skills, and foresight, brought this huge victory in the gas wars with Russia. No one thought Ukraine had a cat in hell’s chance of victory – I did not. But they pressed on against the odds. They had tenacity in this David versus Goliath battle. And they won for Ukraine. Ukraine benefitted with a huge paycheck of $2.9 billion – near enough a year’s budget deficit financing or half defence spending.
A contract was signed with a winner’s bonus – would anyone have questioned back in 2014/15 paying out a few million to managers on a case that no one expected them to win but where Ukraine could secure billions in a win?
But they worked their arses off and won, and now with cash in the Treasury’s bank account, Zelensky is going back on contracts. So Ukraine under Zelensky does not honor contracts?
I thought that was what the Stockholm ruling was about. Pay these managers what they are due and let them make the decision whether they keep all or some of the money and whether they donate some of this to good causes. But don’t go back on the contract and denigrate real heroes who delivered a huge victory for Ukraine. And certainly don’t use this as an excuse to force talent from office.
All the above again raises the question as to who Zelensky is really working for? What oligarchic interests are really running the show? As yet, Zelensky has not proven himself really independent from all oligarchs. Rather events around the Honcharuk scandal seem to play well for one particular extra special oligarch.