The Panama Blunders

Right when I think this blog should be left to rot in peace something inevitably happens that forces me to bring it back from the shed where it belongs. This ‘something’, specifically, has to do with the Panama Papers. I don’t have an ax to grind with investigative journalism in general, it is just that I had stated, time and again, that I much prefer investigative journalism to yellow journalism. One strives for standards; the other strives for sensations, bold print all-caps headlines, that sort of thing. One poses questions that need to be answered; the other provokes public outcry of a feel-good variety, with a lot of smoke and not much in the way of fire.

Why I’m writing this post, right now, instead of enjoying the finer things in life, is that famously, one of the Panama Papers leaks has to do with our chocolate leader, President Poroshenko, and his offshore deal to a grand total of $3085, purportedly in order to sell – or, as it happens, not to sell – the Roshen confectionary empire. Poroshenko’s deal was in there along with President Putin’s $2 billion given to a violinist friend, along with the prime minister of Iceland (who may, or may not, resign over the whole deal), Azerbaijan’s Aliyev, Kazakhstan’s Nazarbayev and many other politicians across the globe.

It is every citizen’s duty to doubt their own government, and to be perfectly honest, there are a few things to doubt with Poroshenko recently: his close associates were implicated in power abuse, his stance on the Prosecutor General’s Office is middling at best (although as of 04.04.2016 Shokin is now officially off the job), and the situation with Roshen doesn’t really help, either. This is notwithstanding people who have a grudge against the current administration, which includes… half of Ukraine’s political scene? This is, again, notwithstanding oligarchs, rabid nationalists (can you say ‘gangsters’? because that’s what Right Sector pretty much is nowadays), common folk with unreasonable expectations and, of course, journalists. Ah, the journalists. Abusing the government is Ukraine’s time-honored tradition, although recently it seems to be getting quite out of hand.

Let’s be honest: Poroshenko isn’t the ideal. Rather, he’s the compromise. He’s the old guard that unwittingly saved Ukraine from oblivion, whether it wanted to or not. He’s been in politics for years: MP, NDSC chair, minister, you name it. He had a hand in creating the Party of Regions, although that was some time before Yanukovych hijacked it, he was Yuschenko’s ally during the Orange Revolution, he even served as Yanukovych’s Foreign Minister – right before getting replaced by a more manageable candidate, no doubt. He’s Frank Underwood of Ukrainian politics, and his becoming President could be seen as a logical next step. Yet for all that Poroshenko probably has the least amount of skeletons in his closet compared to other Ukrainian politicians – especially other presidents. His claim of oligarchdom is more or less reduced to owning the 5th Channel and some dubious legislative lobbying in favor of Bogdan, an automobile and bus-building enterprise he owned before 2009. But the point – or the problem, however you choose to put it – is that he’s what Ukraine has. He’s probably what Ukraine deserves. Ukrainians aren’t saints and certainly are not paragons of virtue. How should a president, elected by the majority of those Ukrainians, be any different?

This is the point I’m getting to: the Panama Papers and the offshore deal. OCCRP’s report was done by investigative journalists – I will be using the term broadly in this case – from all over the world, and information relating to Poroshenko’s offshore was handed over to the Hromadske TV team. Offshores aren’t illegal per se, and tax evasion is a pretty damning accusation: however, Hromadske had one job to do and they’ve completely botched it. Why?

The answer is simple. They – and, unwittingly, OCCRP – decided to tie the War in Donbass into it. Specifically, the infamous Battle of Ilovaysk, by far the most tragic event of the Summer 2014 campaign. Apparently, Hromadske’s Dmytro Gnap claims, while Ukrainian soldiers died, Poroshenko was busy registering offshores to evade taxes.The problem is, however, quite simple. Ilovaysk and the offshore deal have no direct connection with each other. What is worse, Ilovaysk is beside the point entirely; but they just had to shoehorn it in. The result is quite strange: more than half of the report is taken up by the Ilovaysk Massacre, with judiciously spaced comments by one Alexander Gal, the man now in charge of the (in)famous Donbass Battalion. Donbass Battalion’s former commander is one Semen Semenchenko, better known as Konstantin Grishyn, a criminal, con man and purported war criminal who is currently under investigation. Gal wasn’t even commanding the battalion back during Ilovaysk, and his account is frankly suspect: yet Ilovaysk still takes up half the entire report!

The reminder of the report is devoted to the offshore itself, registered in British Virginian Islands, and the whole grand total of $3085 in there. Hromadske goes further and states that the blind trust arrangement which the President had claimed to put Roshen in doesn’t exist, because they didn’t find a trace of that. As it turns out, the lawyer they contacted relating to the blind trust question, Daniel Bilak, chimed in to state that he didn’t comment on Poroshenko’s business affairs, so this makes Hromadske’s account even more suspect. The law firm in charge of Roshen’s assets also contacted Ukrainian media with a statement (in Ukrainian) that the blind trust agreement a) exists; b) was signed as of this writing; and c) the offshore funds weren’t taxed or declared because Ukrainian law doesn’t require that they must be.

Somebody obviously didn’t do their job correctly. Hromadske certainly advertized the leak as major news, but the problem is that in Ukraine, everyone and their dog knows about the Roshen sale. I’m not sure anyone even expects it to go through at this point. In all honesty, Poroshenko shouldn’t even have mentioned Roshen in the first place when he was elected: it would’ve saved him a lot of trouble. As I’ve seen a lot of Western media outlets employ epithets like ‘the Chocolate King’ or ‘Willy Wonka’ referring to Poroshenko, the Roshen sale isn’t major news in the West, either. So, what did the report accomplish?

Well, it certainly made it to the first page in the Netherlands. I mean, just look at this (apologies if you can’t read Dutch):


Poroshenko getting compared to Putin is exactly what Ukraine needs, right before the Association Agreement referendum. What’s worse, some (if not all) Western journalists do not know any better, as evidenced by this tweet by Mashable’s Christopher J. Miller:

This is, again, referring to Ilovaysk’s vastly overstated role in the offshore scandal – a role hastily tacked-on by Hromadske: but it just sounds so great, Mr. Miller simply couldn’t resist. Am I right?

I probably am. Ukraine, after all, is a country full of reform-minded, pro-EU people chafing under the corrupt yoke of Poroshenko the Chocolate Tyrant and his corrupt cronies, worse than Yanukovych, who jail people for tearing up His Chocolate Eminence’s portraits – or, at least, that’s what Mr. Miller would like us to believe. What he and his colleagues fail to recognize, though, is that Ukrainians aren’t cardboard cutouts, but real people – people with a troubled history and diverse opinions. It seems like we went full circle from ‘deeply divided Ukrainians’ to ‘unanimously pro-European Ukrainians’, but the truth isn’t any closer than before.

The truth is that governments – and, by extension, politicians – are the flesh and blood of the people they govern and represent (or, as it happens, claim to represent). The truth is that the average Ukrainian is not entirely too thrilled about the EU: it seems nice, but actively doing something to further that cause is beyond most Ukrainians. Some even say they’d be much better off without the EU – either because the EU didn’t help Ukraine enough (not like the EU prolongs sanctions against Russia or anything), or because the EU saddled Ukraine with the Minsk Agreements (as opposed to, say, a glorious all-out war with Russia), or because the EU is full of pedophiles and homosexuals (Russian rhetorics much?), or just because they’d much prefer cheap electricity and gas like in the olden days (when the country was perpetually bankrupt thanks to low household prices). The truth is that the average Ukrainian is surrounded by corruption so much that he has no incentive to fight it: most of the times it is easier to give bribes than go through official channels, and what’s the point? Nothing has changed, they even say so on TV, so why should we change, anyway? The truth is that many Ukrainians, especially the highly-paid IT professionals, routinely evade taxes by working under the simplified tax system, paying 700 UAH a month from a yearly income of $50 000.

‘Everyone does it’ is not an excuse, that is certainly true. But the truth is, again, that countries don’t change fast. Certainly not in barely three years. People don’t change fast, either, whether they are presidents, IT professionals or common salt of the earth working people. Anyone who expected otherwise had unreasonable expectations at best.

And the truth is that Poroshenko, for all his faults, is nothing compared to his predecessors. President Kuchma handed out government assets to his family members and close associates, and ordered the journalist who reported on that murdered execution style. President Yuschenko bartered Western and nationalist rhetorics while neck-deep in natural gas shipping schemes. President Yanukovych sacked the country dry, tried to sell it down the river and ran away with hard cash and elbow-deep in blood. And the worst investigative journalists managed to dig up about Poroshenko is $3085. Three thousand eighty-five dollars.

Poroshenko is supposed to be worse than Yanukovych? I’m sorry, but this is just laughable.

And Hromadske TV’s credibility may have died a final death with this report. Because journalism must have standards, and while journalism is indispensable in holding politicians responsible, it should be held responsible in turn. And responsibility is something that Ukrainian media – and especially the supposedly-independent Hromanske – seem to lack.

I won’t say that this is a shame.

The Panama Blunders

2 thoughts on “The Panama Blunders

  1. Beltorn says:

    Minor point – IT professionals don’t evade taxes – i’m sure you are aware that implies they don’t pay them and a criminal felony. They pay exactly as much as they are required to just as you point out in next sentence. Poor word choice, but the implication shifts meaning a bit too much.


    1. Problem is that simplified taxation is a legal (!) tax evasion scheme in Ukraine, since IT companies register their employees as individual entrepreneurs so they qualify for simplified taxes.

      End result – IT’s swimming in money while the state is forced to rob Peter to pay Paul.


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