Vitaliy Kulik: “The Worthlessness of Ze-Deoligarchization. How Does It Manifest?!”

Vitaliy Kulik: “The Worthlessness of Ze-Deoligarchization. How Does It Manifest?!”

1 July, members of parliament adopted in first reading the presidential bill No. 5599 “On Preventing Threats to National Security Related to the Excessive Influence of Persons Who Have Significant Economic or Political Weight in Public Life (Oligarchs)” and approved in principle bill No. 5600 on amendments to the Tax Code and certain legislative acts of Ukraine to ensure the balance of budget revenues.

Both bills have been dubbed “de-oligarchization laws.” Supporters of Bankova speak with one voice, claiming that these legislative innovations and the votes on them demonstrate that “the policy of de-oligarchization is serious; it is an offensive against oligarchs in the economic sphere”...

So, let’s try to examine this thesis of the regime’s defenders.

The authorities talk about serious intentions to fight the oligarchy. As if the provisions of these bills are indeed aimed at excluding oligarchs from politics... But “as if” is the key word in this construction.

1) If Zelensky were truly serious about fighting oligarchs, they would have used not only NSDC sanctions and special laws, but at a minimum the Antimonopoly Committee.

Instead, Ahiya Zagrebelna provides a chronicle of the Antimonopoly Committee’s deliberate inaction, or more precisely — its facilitation of the oligarchy. She writes: “while Zelensky promises to carry out de-oligarchization, we through the courts force the Antimonopoly Committee under his control to investigate monopolistic abuses by oligarchs. In one day (30 June 2021):"

a) Challenging the Antimonopoly Committee’s inaction regarding its refusal to investigate abuses of monopoly position by the DTEK group of oligarch R. Akhmetov (artificial creation of an electricity shortage this winter) (Commercial Court of Kyiv – the judge closed the preliminary hearing and scheduled the substantive hearing for 26.07);

b) challenging the Antimonopoly Committee’s refusal to accept a consumer complaint against gas companies of oligarch D. Firtash (continuation of applying temperature coefficients after the Antimonopoly Committee’s decision on their illegality), (Commercial Court of Kyiv);

c) challenging NABU the Antimonopoly Committee’s decision to close the case on the Rotterdam+ formula, which provided excess profits to the DTEK group of oligarch R. Akhmetov;

d) challenging the Antimonopoly Committee’s refusal to initiate an investigation upon a consumer’s complaint regarding abuses of monopoly position by the two payment systems Visa and MasterCard (excessive commission rates).”

Key words: “inaction,” “refusal to accept a complaint against an oligarch,” “refusal to investigate a case regarding a monopoly controlled by an oligarch”...

The Antimonopoly Committee is an outfit that does nothing against oligarchs. Can President Volodymyr Zelensky do anything about that?

First, according to the Law on the Antimonopoly Committee of Ukraine, Article 9: “The Chair of the Antimonopoly Committee is appointed to and dismissed from office by the President of Ukraine with the consent of the Verkhovna Rada of Ukraine.” Yes, grounds for the Chair’s dismissal are a court-established crime, a personal resignation letter, and health condition. But didn’t Bankova find “arguments” to make the current Chair of the Antimonopoly Committee, Olha Pishchanska, more “constructive” on issues sensitive for the authorities?

Why don’t the “Servants” react to the pleas of the business ombudsman about the tons of complaints about the Antimonopoly Committee’s inaction in conflicts with oligarchic monopolies?

Why does Zelensky not show the political will to direct the Antimonopoly Committee toward practical combat against manifestations of oligarchic monopolies, but instead agrees to provisions of the bill that further expand the scope for deliberate, now lawful, inaction?

Bill No. 5599 addresses:

a) the Antimonopoly Committee’s right not to initiate an investigation if the authority considers that “now is not the time”;

b) a political procedure for appointing and dismissing the leadership of the Antimonopoly Committee without criteria for candidates, transparency, or external screening;

c) a subjective approach to determining sanctions for violators — whether one hryvnia, a billion, or forced divestiture — decided by politically appointed leadership without courts’ right to review;

d) leaving consumers outside the Antimonopoly Committee’s doors without the right to complain and protect themselves even in court (“we pay for everything, but we have no seat at the table”), etc.

2) If Zelensky truly wanted to overcome the oligarchy, he would keep the Prosecutor General’s Office on a short leash and find “informal” ways to influence the courts, rather than rely on legally dubious NSDC sanctions.

29 June of this year, the Supreme Court refused to satisfy the cassation appeal of the deputy prosecutor general in the case on the transfer of Volynhaz (part of Dmytro Firtash’s group) of the state gas distribution system and the recovery of 117,8 million hryvnias. Thus the court left unchanged the decision of the Northern Commercial Court of Appeal and the Commercial Court of Kyiv, which denied the deputy prosecutor general’s claim filed in the interests of the State Property Fund against Volynhaz and the Ministry of Energy.

Recall that the prosecution sought to invalidate the contract dated 2012 between a private company and the Ministry of Energy on the transfer of the gas distribution system. The plaintiff believes that the Cabinet of Ministers has no right to dispose of the disputed property and transfer it free of charge to a private enterprise.

Witnesses at the Supreme Court hearing of this case say that the prosecutors could not present the judges with coherent legal arguments in their favor. The judges, despite initially being inclined toward a just decision not in Firtash’s favor, could not elicit even a decent prosecutorial position from the prosecutors.

What else is this, if not deliberate collusion with the oligarchy? Are we fighting here, while in court we leave a tasty asset because you need us in the political lineup for the fall?

3) If Bankova truly wanted to deprive oligarchs of political rent, the de-oligarchization law would have provided legal grounds for reprivatization of assets privatized in an unscrupulous manner. And not by a special one-off law, but as a systemic policy, a restoration of economic justice.

You can strip an oligarch of political rent only by threatening reprivatization and nationalization of assets acquired in an unscrupulous manner. All the mantras of our liberals that “de-oligarchization should not be accompanied by reprivatization” are an attempt to save the oligarchic regime.

At one time Russian expert Rostyslav Kapeliushnikov argued that the British experience of a gentlemen’s pact about “fair play” between authorities and business (windfall profit tax) is hardly acceptable for post-Soviet countries. Our oligarchs are not gentlemen; they have a different life experience. They never play “fair.”

No “agreements” or “pacts about fair play” will help here. Only de-privatization or nationalization can force oligarchs to budge or share.

The issue of the legality of privatization and the possibility of returning assets to state ownership was raised back in 2005 by Yulia Tymoshenko. But then the “orange” team did not embark on a revolutionary experiment. The “oligarchic consensus,” which involved most Ukrainian financial-industrial groups and on which the architecture of Viktor Yushchenko’s “dysfunctional” democracy rested, did not allow a major redistribution of property. Today the situation is somewhat different. It might be possible.

4) If the “Servants” wanted to force oligarchs to share, they would not raise taxes on medium-sized business and crush the middle class under the guise of “anti-speculation and anti-oligarch initiatives.”

As rightly written, addressing the “Servants of the People,” by MP from Batkivshchyna Aliona Shkrum: “You promise to remove all obstacles for small business, the stress and paperwork and endless inspections from all state bodies. You promise the tax on distributed profits, lowering taxes and support for processing and exports.

You even seemingly sincerely invite economists, experts, big and small business to the discussion, you write and adopt a decent economic strategy. The government in the strategy even writes about the obligation of ‘tax stability’ and commits not to raise taxes for small business. You sign some memorandums.

And then — you introduce a draft law to ‘raise taxes on everyone’ and give more powers to the Tax Service, more inspections of various kinds;

— for some reason you take away excise and money from local self-government and new communities. Minus 2,9 billion;

— you raise taxes not even on small-scale farming, but on ‘MICROfarming’;

— you increase the cost of housing for Ukrainians, and for some reason do not understand that the sector will move further into the shadows, and that’s it;

— you even raise the cost of mobile internet for citizens;

— you give new ‘cool’ powers to the Tax Service, because obviously it does not get enough from business in extortion now. And everyone who opposes — all business associations, local self-government, farmers, economists, experts,

— you call them all the hand of the oligarchs.”

And all of this is bill No. 5600!

WHAT MORE EVIDENCE IS NEEDED OF THE WORTHLESSNESS OF ZE-DEOLIGARCHIZATION?

The laws about oligarchs are not backed by the practices of the current regime. They serve some other (perhaps understandable only to Andriy Yermak) purposes, not genuinely combating the oligarchy in Ukraine.

In fact, this is not de-oligarchization. It’s a game of “mafia”: now the “sheriff” seems to have woken up, and in the next iteration — everyone will fall asleep and the mafia will wake up again...”