Oligarchs, Putin, and Ukraine's Post-Soviet Power Struggle

Introduction: Berezovsky, Putin, and the Ukrainian Ripple Effect

The expulsion of Boris Berezovsky from Russia under the Putin regime sparked a chain of events that led to Ukraine's upheaval. Though considered an "expulsion" by the Russian billionaire himself, Berezovsky was actually summoned to appear for questioning by the Prosecutor General but chose to remain in exile in the UK and obtain political asylum there (BBC, 2012). The story is worth telling because what followed in the geopolitical dispute between Berezovsky and Putin deeply impacted Ukraine and millions of lives there. The telling also reveals the fragile nature of the democracies of Eastern Europe in general in the post-Soviet era.

It was Berezovsky who vowed revenge against Putin and immediately began meddling in Ukrainian politics as a way of retaliating against the new head of Russia — with the help of various investors, political figures, and other power brokers from both the US and Israel (BBC, 2012). Regardless of where the influence and money came from, the falling out between the man who promised to strip the oligarchs of their political power in Russia and the oligarch who helped install Putin in the Kremlin had an indirect but ultimately disruptive effect on Russia's neighboring state — Ukraine (Mezrich, 2015).

Ukraine is perhaps the best and most devastating example of how elusive the promise of democracy and capitalism has been for Eastern Europe. The reason for this elusiveness is that, at the end of the day, Eastern Europe has essentially been a geopolitical vacuum, into which all the major players on the world stage — from the Bushes to the Bidens to the Berezovskys and Putins — have sought to wield influence (BBC, 2012; Risen, 2019). Since the fall of communism, Ukraine has struggled to develop its own identity independent of both Western and Eastern influence — perhaps not surprising, given that it exists between the two like a middle child uncertain of who or what she can become.

The Fall of Communism and Ukraine's Political Carousel

Ukraine declared its sovereignty in 1990 and its independence in 1991 following the fall of the Berlin Wall — the symbol of communism — in 1989. Elections were held and Leonid Kravchuk came to power. However, economic and political crises soon appeared, and another election was held in 1994, in which Leonid Kuchma was elected with just over half the popular vote. Kuchma opened the door for the International Monetary Fund (IMF) to participate in the country's reconstruction, and in 1996 a new, formal constitution was adopted. Still, throughout the 1990s, the hoped-for economic prosperity failed to materialize; instead, Ukraine lost 60% of its GDP that decade (IMF, 2007). Inflation, crime, and corruption so plagued the country that workers began striking and mass protests erupted.

Kuchma gave way to Berezovsky-backed Viktor Yushchenko, who gave way to Putin-backed Viktor Yanukovych, who gave way to Western-backed Petro Poroshenko (Berezovsky having been found dead in his bathroom in England by that point), who promised to return Crimea to Ukraine — though the Crimean people themselves voted for annexation and a return to Russia. The civil war that ensued ensured a limited tenure for Poroshenko, and he gave way to Volodymyr Zelensky, who subsequently assured the world that President Trump had not pressured him to investigate any improprieties committed by Joe Biden and his son Hunter with regard to Ukraine's natural gas company Burisma Holdings. If it all sounds like an unending melodramatic soap opera, that is because it is exactly that — except that the toll of all this drama has been felt in real loss of life, real destabilization of the nation's economy, and real geopolitical consequences.

Ukraine should have been a natural ally of Russia. But when Russia's Putin and the oligarch "roof" — known in Russian as krysha, as Mezrich (2015) described Berezovsky — fell out with one another, it opened a rift of gigantic proportions and triggered a power play in the Eastern European country where the exiled krysha looked to impose his revenge. In short, the fall of communism did not usher in a period of peace and prosperity for Ukraine. Instead, it opened up an opportunity for a power play in a vacuum that needed to be filled. The IMF first stepped in to fill it. Then Berezovsky looked to wield influence and control a puppet president from behind the scenes. Then Putin pushed back, unwilling to allow the neighboring state to be controlled by the same man he had vowed to push out of politics. Then the West pushed back, unwilling to be left out of the power play. Then Ukraine, splintered into pieces, elected a comedian as president — which shows that the people there are not without a sense of irony.

Why So Many Problems? Oligarchs and the Post-Soviet Vacuum

The problems of Ukraine are essentially the problems that Russia faced under Yeltsin in the 1990s. With the dissolution of the Soviet Union, Russia saw a wholesale looting of the economy by a group of men who became known as the oligarchs — businessmen like Berezovsky, Abramovich, Chubais, Khodorkovsky, and others — who privatized or controlled the nation's industries and accumulated vast wealth for themselves while the state itself disintegrated into ruin and the people fell into despair, even to the point where many longed for the days of Soviet leadership (Alexievich, 2007, 2017; Klebnikov, 2000). The Soviet experiment had ended in disarray and ruin, but compared to what came after — a void into which the most self-enriching elements of society leapt — the Soviet era at least seemed to have maintained a kind of rule of law now completely absent in the new Russia (Suny, 2011).

The same could be said of Ukraine. The oligarchs played a major role in the development of the state's problems in Eastern Europe as well. As Samuels (2019) points out, "it is important to remember that while these ultrawealthy individuals are not formally part of the government, as Aristotle might have envisioned, they are very much in charge of the country's economic, media, and political interests." Samuels (2019) explains the behind-the-scenes dealings that transpired to bring the current — formerly comedian — president to power in Ukraine. The previous president, Petro Poroshenko, had been a thorn in the side of a certain oligarch by the name of Ihor Kolomoisky, founder of PrivatBank in the 1990s during the days when Ukraine was grappling with the establishment of its own statehood. Kolomoisky's PrivatBank "grew to be a key bank in Ukraine, handling more than a third of private deposits and serving approximately half the country's population" (Forbes, 2020).

Just as the oligarchs pounced on the opportunity to leverage chaos to their advantage in Russia when communism collapsed, so too did oligarchs exploit chaos to their advantage in Eastern European countries like Ukraine. Kolomoisky was just one of several to push the envelope in private industry, and so long as the country's political leaders aligned with his ambitions there was no problem. The problem, when it did arise, was that Kolomoisky was not the only oligarch in town. There were many others — and much richer ones at that — who had their own interests to advance, such as Berezovsky.

Berezovsky's ouster from the Kremlin at the hands of Putin was taken not only as a financial blow but also as a personal rebuke — and Berezovsky did not appreciate that the upstart Putin could treat the former godfather of the Kremlin with such disdain. Berezovsky had wormed his way into the establishment through the auto industry and then leveraged his clout by getting close to the Yeltsin family, going so far as to arrange the marriage of one of his own media protégés to the daughter of Boris Yeltsin — a chess move that gave him a virtual "in" with the family from that point on (Mezrich, 2015). Yet, with Yeltsin's health in peril and a rival oligarch making his weight felt on the national stage, the Yeltsin family and Berezovsky together recognized the need for a strategy to ensure their legacy would not be compromised. They turned to Putin, who had previously been placed in power at the head of the FSB. Putin was picked to replace Yeltsin just before the election was to occur, and he instantly won over the people whom Yeltsin had not been able to reach. Yet Putin's words had not been insincere: he did not want the oligarchs meddling in Russian politics any longer. He told them they could keep their money, but if they did not get out of politics, he would throw them in prison or drive them out of the country. Abramovich got the message. Khodorkovsky and Berezovsky did not. The former was arrested and imprisoned for years. Berezovsky fled to avoid a similar fate (Mezrich, 2015). Once granted asylum in the UK, Berezovsky turned to friends in Israel and in the West to help organize a coup in Ukraine and begin his plot of revenge against Putin (BBC, 2012).

Conclusion: Puppeteers, Puppets, and the Persistence of Instability

The civil war in the Donbass region of Ukraine has been an indirect outcome of Putin's war with the oligarchs in Russia. The collapse of communism in Russia created an opportunity for men like Berezovsky to strike it rich as the currency collapsed and hyperinflation set in. Berezovsky made his billions by borrowing large amounts and then waiting for the currency to collapse before paying back his debts, essentially ensuring that he would pay pennies on the dollar (Mezrich, 2015). He then went on to influence politics in Russia by worming his way into the Kremlin. When Putin came to power, however, the game was up, and Berezovsky fled to the UK and launched his war against Putin by supporting a coup in Ukraine. Civil war broke out between Ukraine and pro-Russian forces in the Donbass region; Crimea was annexed by Russia; and Berezovsky died in a bathroom.

The election of Zelensky to the highest office in Ukraine came about as a result of Ukrainian oligarch Kolomoisky wielding his influence and, in particular, his media empire to promote an anti-establishment candidate — much as Donald Trump was presented as one in the United States. Of course, things are never as simple as they appear, and the Trump administration was filled with establishmentarians from the beginning. In Ukraine, the situation is no different. For all the talk of democracy and capitalism, these buzzwords are little more than screens set up so that the real power players can go about their business with as little interruption as possible — until the next round of power grabbing commences.

References

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IMF. (2007). Report for Ukraine. Retrieved from https://www.imf.org/external/pubs/ft/weo/2007/02/weodata/weorept.aspx

Klebnikov, P. (2000). Godfather of the Kremlin. Harcourt.

Mezrich, B. (2015). Once upon a time in Russia. Atria.

Risen, J. (2019). I wrote about the Bidens and Ukraine years ago. Retrieved from https://theintercept.com/2019/09/25/i-wrote-about-the-bidens-and-ukraine-years-ago-then-the-right-wing-spin-machine-turned-the-story-upside-down/

Samuels, J. (2019). How Russian oligarchs changed the country — and not for the better. Retrieved from https://nationalinterest.org/blog/buzz/how-russian-oligarchs-changed-country-and-not-better-97472

Suny, R. (2011). The Soviet experiment. Oxford University Press.