‘Pandora’s box may ruin Zelenskyy’s chances for a second term’

Network of offshore companies revealed by document leak threaten the Ukrainian president’s political future, analysts say.

Zelenskyy was elected president in 2019 on promises to fight corruption and reduce the influence of oligarchs in the ex-Soviet country [File: Stefanie Loos/Pool via Reuters]

Kyiv, Ukraine  Alla Butsko hoped that the comedian whose routines and television series made her laugh for years would also make her proud as Ukraine’s first corruption-free president.

In 2019, the 62-year-old retired librarian cast her ballot for Volodymyr Zelenskyy, head of the District 95 comic troupe, in Ukraine’s most unusual presidential election.

Zelenskyy said at the time that his total political inexperience would help him uproot the country’s omnipresent corruption.

But more than two years in office yielded no results, Butsko believed.

Zelenskyy’s ratings have tanked, while his anti-corruption measures were mostly cosmetic and failed to land anyone notorious in jail, she told Al Jazeera.

On Monday, on her son’s laptop, she watched Offshore 95, a video by Slidstvo.info, a group of Ukraine’s leading investigative reporters, that “finally opened her eyes”.

“I was duped, we all were duped. I’m not voting for him again,” she said.

Offshore companies

The findings were based on the Pandora Papers, a trove of millions of documents from 14 offshore service providers leaked to the International Consortium of Investigative Journalists and its partners, including Slidstvo.info.

The story detailed how Zelenskyy and his partners launched a network of offshore companies in the British Virgin Islands, Belize and Cyprus.

The companies date back to at least 2012, the year District 95 went big in Ukraine with regular shows on a television channel owned by Ihor Kolomoisky, a Ukrainian oligarch sanctioned in the US and the European Union for alleged multibillion fraud, the report claimed.

Zelenskyy’s business partners include Ivan Bakanov, current head of the SBU, Ukraine’s main intelligence agency that often investigates corruption cases, and presidential aide Serhiy Shefir, who administers the offshore companies but shares the profits with Zelenskyy’s wife, the report claims.

At the time of publication, Al Jazeera’s requests for comment from those accused in the leaks were unanswered.

Shefir, in Slidstvo.info’s report, defended their decision to use offshore companies because of Ukraine’s business climate.

“You’d better ask our lawmakers who created this situation, when a business is constantly threatened by bandits who come to power. At the time, it was very important to defend our interests,” he was quoted as saying.

The trio’s control over the assets may ruin Zelenskyy’s reputation in the West; its financial and political support has anchored Ukraine through two political uprisings and an economic meltdown that followed Russia’s 2014 annexation of Crimea.

“To Europeans, to Americans this looks super compromising,” Kyiv-based analyst Mikhail Pogrebinsky told Al Jazeera.

(Al Jazeera)

‘Everyone would steal’

However, tax evasion is a daily reality in Ukraine, where most businesses prefer to operate with cash and where getting a receipt at a small store is often problematic.

Many Ukrainians do not consider what Zelenskyy did a serious transgression, Pogrebinsky said.

“This theft, this tax evasion is not seen by the majority as something that seriously compromises a person, and a huge proportion of people think that everyone would steal in [Zelensky’s] place,” Pogrebisnky said.

A show business insider said that Zelenskyy’s moves can be explained by the industry’s specifics.

“Everyone works in the grey area because it’s all about cash. If you declare all of your income, it attracts the attention of tax inspectors who are worse than bandits,” the insider, who organises live shows of Ukrainian and Western performers in Kyiv, told Al Jazeera on condition of anonymity.

The leak may, however, cost Zelenskyy a second presidential term.

“The Ukrainian public has a very high tolerance to corruption when it comes to the incumbents, and low when it comes to wannabe politicians,” Kyiv-based observer Aleksey Kushch told Al Jazeera.

“That’s why Pandora’s box may ruin Zelenskyy’s chances for a second term, but won’t lead to a wave of public indignation and his early retirement as president,” he said.

Ex-president weighs in

Another factor spices up the appeal of the Offshore 95 video that has been seen more than 700,000 times.

Some of the visuals in the hour-long documentary mimicked something that made Zelenskyy immensely popular and paved the way to his presidency in an art-imitates-life manner.

His Public Servant television series was launched in 2015, ran for three seasons and spawned a feature film. The plot followed a dirt-poor teacher whose angry rant about Ukraine’s corruption and politics made him a YouTube star and propelled him to unexpected presidency.

“To hell with the cavalcades, the suburban mansions … a simple schoolteacher should live like a president! And a president – like a schoolteacher!” was the schoolteacher’s quote prefacing to the documentary.

Zelenskyy used the show’s popularity to launch his presidential campaign in late 2018 – and became the most powerful politician in Ukraine’s post-Soviet history.

His election victory with 73 percent of the vote was followed by the triumph of the hastily assembled Public Servant political party that now dominates the Verkhovna Rada, Ukraine’s lower house of parliament.

In the polarised nation of 43 million, all previous helmsmen never won by a landslide, never had a parliament majority and had to rely on political horse-trading that bred corruption and stalled reforms.

Zelenskyy, however, has been accused of squandering this political capital by failing to start reforms and firing key advisers as his party succumbed to infighting.

After the Pandora Papers’ release, his predecessor did not miss a chance to lambast him.

“Because of President Zelenskyy’s’s actions, the world sees Ukraine as a nation whose leader is involved in global corruption, to laundering the money he stole in Ukraine together with his business partner Kolomoisky,” ex-President Petro Poroshenko, who lost to Zelenskyy in 2018, tweeted on Monday.

But Poroshenko has been involved in multiple corruption scandals, and one of them contributed to his loss to Zelenskyy. In 2018, a media report claimed that Poroshenko’s childhood friend sold weapons and military equipment smuggled from Russia to Ukraine’s military at inflated prices.

Poroshenko’s comment made some Ukrainians laugh.

“He should shut up and keep mum about this scandal. Zelenskyy is but a boy in comparison with how Poroshenko robbed the country blind and got away with everything,” Pavlo Kudryavtsev, who sells souvenirs in central Kyiv, told Al Jazeera.

Zelenskyy’s popularity has plunged since he assumed Ukraine’s presidency [File: Pavel Zmey/Ukrainian Presidential Press Service/Handout via Reuters]
Source: Al Jazeera