- - Thursday, October 24, 2019

As the 2020 presidential campaign picks up steam, discussion and debate about Hunter Biden, Rudolph W. Giuliani and President Trump have dominated the print and television media. Avid consumers of news can be forgiven for thinking that nothing more important is happening on the Ukraine front these days.

But they would be wrong.

The biggest scandal inside Ukraine — perhaps one of the most consequential in all of Eastern Europe — is a row between a courageous former central banker and a notorious oligarch. It is a high-stakes battle, with a clear cast of good and bad guys.

Last week, the International Monetary Fund halted assistance negotiations with Kyiv over genuine concerns about corruption in Ukraine’s economy, specifically related to the status of PrivatBank. PrivatBank, long Ukraine’s largest commercial bank, was nationalized in 2016 with the vigorous support from the IMF because the bank’s management, led by oligarch Ihor Kolomoysky, was credibly accused of looting it of billions of dollars.

According to an independent report, PrivatBank was beset by self-dealing, theft, money laundering and other malfeasance. Valeria Gontareva, then director of Ukraine’s central bank, made eliminating corruption in the banking sector one of her top priorities. She went on to close more than 80 banks during her three-year tenure. Her crowning achievement was wresting control of Privat Bank from its owners.



Ms. Gontareva’s widely praised reforms, including her commitment to transparency, significantly affected Mr. Kolomoysky, who has a longstanding business relationship with a popular actor-comedian who since May is better known to the world as President Volodymyr Zelensky. The U.S. Attorney’s office in the Northern District of Ohio, along with the FBI, have been investigating Mr. Kolomoysky. Mr. Kolomoysky, who owns the 1+1 television channel on which Mr. Zelensky first rose to fame with his satirical sitcom “Servant of the People,” has been exercising some influence on the staffing of the new Zelensky administration.

The question for Ukraine — and of great interest to the IMF — is whether Mr. Kolomoysky, operating under a legal cloud and living in exile in Israel until May’s vote, will avoid facing justice because of his close relationship with the new president.

This stunning turnabout has made Ms. Gontareva, the central banker, a target of a brutal and vindictive pressure campaign.

She was run over by a car in London where she was teaching at the London School of Economics. Her house in Ukraine was burned down. A car belonging to her daughter-in-law was torched.

A target of Soviet-style intimidation, Ms. Gontareva rightly fears that the targets of her anti-corruption reforms are now targeting her in revenge.

Ms. Gontareva and her backers have said they suspect Mr. Kolomoysky, an accusation he denies. But he’s threatened her before. He recently threatened to bring Ms. Gontareva back to Ukraine “on an individual basis,” meaning perhaps to kidnap her. And lest anyone miss any of this subtlety, a coffin as placed in front of her door while she was still working at the central bank until 2017.

It’s an all-too-familiar pattern for Ukraine — reports of high-level corruption and a questionable relationship between the president and one of the nation’s most powerful oligarchs. And — also par for the course — a judicial hearing about PrivatBank was recently delayed because of a bomb threat. Ironically, Kostiantyn H. Kulyk, the prosecutor who initially investigated Hunter Biden’s work for the state’s gas company Burisma and who is himself a Zelensky supporter, is overseeing the current investigation into Mr. Kolomoysky.

The Zelensky government is rumored to be considering compensating Mr. Kolomoysky for his PrivatBank losses and possibly returning control of the bank to him. The IMF has strongly warned against this.

The unfolding scandal in Ukraine does not involve any Americans, but rather a Ukrainian oligarch allegedly trying to exploit his newfound political influence.

The violent intimidation campaign against Ms. Gontareva, for which the Ukrainian police thus far have not found any culprits, reflects what is most troubling about a critical country’s commitment to the rule of law.

Ultimately, what is at stake is Ukraine’s status as a functioning democracy with a bright economic future and the political stability to qualify as an ally worthy of a long-term strategic partnership.

⦁ Daniel N. Hoffman is a retired clandestine services officer and former chief of station with the Central Intelligence Agency. His combined 30 years of government service included high-level overseas and domestic positions at the CIA. He has been a Fox News contributor since May 2018. Follow him on Twitter @DanielHoffmanDC.

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