Business Titans Too Rich to Bribe Seek to Ease Fears in East Ukraine
Boris Filatov, whose day job was in luxury shopping malls and other ventures, is now a deputy governor in Dnipropetrovsk, Ukraine. Credit Mauricio Lima for The New York Times
Two months ago, Hennadiy Korban, a millionaire businessman, fled to Israel to escape retribution for siding with opponents of Ukraine’s president, Viktor F. Yanukovych. After Mr. Yanukovych’s ouster, he flew home in triumph aboard a private plane to begin a new life — as a harried civil servant.
Mr. Korban, 44, now works 14 hours a day in a drab Soviet-era office block here for a meager salary that he does not bother to take. Business, he said, was more enjoyable and far less stressful than trying to keep Ukraine together.
But since Russia’s annexation of Crimea in March, and with tens of thousands of Russian troops now massed on Ukraine’s border, to the east of this sprawling industrial city, men like Mr. Korban have become part of a frantic, all-hands-on-deck struggle against President Vladimir V. Putin of Russia.
Unable to throw money at the many problems besieging Ukraine’s bitterly divided east, the fragile and nearly bankrupt government in Kiev, the capital, has instead thrown rich people into a drive to convince the country’s Russian-speaking regions that their future lies not with Russia, but with Ukraine.
A toppled Lenin monument in central Dnipropetrovsk became a memorial for protesters who died during clashes with the police. Credit Mauricio Lima for The New York Times
Mr. Korban’s boss is Ihor Kolomoysky, who was recently appointed governor of the Dnipropetrovsk region by officials in Kiev. Mr. Kolomoysky, a billionaire involved in banking, oil, metals and the media, ranks as the second- or third-wealthiest man in Ukraine, depending on who is counting. He said he has not counted his fortune himself, noting that “a real rich person is someone who does not know how much he has.”
Another of Mr. Kolomoysky’s deputies is Boris Filatov, Mr. Korban’s business partner in luxury shopping malls and other ventures.
Sergei Taruta, a metals magnate worth billions of dollars, is now in charge of the neighboring eastern region of Donetsk. He is trying to reassert Ukrainian authority there after a short-lived pro-Russian putsch led by a self-declared “people’s governor” who is now in jail.
Mr. Taruta, in an interview late last month, dismissed the attempt to seize power as “absurd theater,” suggesting that the script had been written by Moscow and performed by Russians masquerading as locals. On Sunday, however, pro-Russia activists staged a repeat performance, again seizing the Donetsk regional administration building where Mr. Taruta has his office and waving Russian flags from its windows.
The naming of wealthy businessmen to positions of power marks a curious twist in the Ukrainian revolution, which was driven in a large part by public fury at the extensive wealth of a tiny group of plutocrats who prospered under Mr. Yanukovych and, with a few exceptions, stayed on the sidelines throughout three months of protests against him.
Mr. Kolomoysky, who was mostly outside the country during the protests, said he came up with the idea not as a way to entrench himself and other businessmen in power, but as an emergency response to the fears of Russian speakers in the east, terrified by a revolution they saw as dominated by Ukrainian nationalists from the west.
The new governor of Dnipropetrovsk, Ihor Kolomoysky, is one of Ukraine’s wealthiest men. Credit Mauricio Lima for The New York Times
“This is a signal to society,” Mr. Kolomoysky said. “If oligarchs are in power, feel at ease and view their future as being in Ukraine, then ordinary people will feel even more that they are not under threat.” He conceded, however, that average people “might not respect oligarchs or like them.”
But after being bombarded with Russian claims that fascists had seized power, he said, people in the east were heartened to see a move into government by multimillionaires with no interest in extremist turmoil or a neo-Nazi revival, “particularly when they are of Jewish origin.”
Mr. Kolomoysky, a Russian-speaking citizen of both Israel and Ukraine, lived until recently in Switzerland, where his wife and son still live. Mr. Kolomoysky and his deputy, Mr. Korban, are both Jewish.
Mr. Filatov describes himself as “100 percent Russian without a drop of Ukrainian blood.” He, too, fled to Israel in late January.
“Aside for a few marginals, nobody here is going to throw any flowers at Russian tanks,” Mr. Filatov said. He recently persuaded more than 20 local groups, including several pro-Russia outfits that had cheered Moscow’s annexation of Crimea, to sign a declaration in support of Ukraine’s territorial integrity and against Russian aggression.
Pavlo Khazan, a pro-democracy activist here who helped organize a series of rallies against Mr. Yanukovych, said many ordinary people distrusted rich people, including the governor, as a matter of principle. But they realize, he said, “that at this pivotal moment we need a strong guy for the region” who knows how to manage effectively and “doesn’t need to take bribes.”
Hennadiy Korban, left, a multimillionaire and new deputy governor, with Mr. Filatov, center, and Vadim Shabanov, right, in the regional administrative building. Credit Mauricio Lima for The New York Times
While Ukraine’s fractious national government in Kiev has been severely rattled by Russia’s seizure of Crimea and its ominous military maneuvers, the Dnipropetrovsk region has moved swiftly to form its own regional defense council, set up reserve command centers stocked with food and water, and devise detailed plans for what officials, police officers, firefighters and other public servants must do in the event of an invasion.
“While they are arguing in Kiev,” Mr. Korban said, “we are preparing for action.”
The ground floor of the regional administration building has been turned over rent-free to a citizens’ defense organization headed by Yuri Bereza, a retired soldier who fought in Afghanistan for the Soviet Army. His group has signed up more than 7,000 volunteers, aged 16 to 78, ready to fight if Russia invades.
The new governor, Mr. Kolomoysky, has dipped into his own pockets to buy $5 million worth of diesel oil, aviation fuel and batteries for Ukraine’s underfunded and ill-equipped military. The gesture impressed Ukrainians more accustomed to officials stealing from them.
Mr. Korban said he had assured employees of the regional administration that no one would be fired for having supported the previous government, or even for past instances of petty corruption, because “they had to work within the system that existed.” If everyone who ever gave or took a bribe were punished, “we would have to put half the country in jail,” he added. “This is a tolerant revolution, a soft revolution.”
All the same, the new regional leaders have reduced the number of government employees by 10 percent, mostly by cutting people who drew salaries but rarely, if ever, showed up for work — and they plan to trim even more. Mr. Korban insisted that he was motivated not by political vengeance but by a determination to apply the logic of business management to government service.
Some opponents of Ukraine’s former leaders complain that the new government has not gone far enough, and question the motives of Mr. Kolomoysky, who until his appointment in early March spent most of his time abroad and did not publicly challenge Mr. Yanukovych. But a Ukrainian television channel he owns often featured reports favorable to protesters, a stance that drew repeated complaints from the president’s camp and irritated phone calls from Mr. Yanukovych himself.
“We need to change not only people but the whole corrupt system,” said Viktor Oryol, a leader of the local branch of a nationalist group known as Right Sector, which has clashed with the authorities in Kiev over what it sees as the slow pace of change. Mr. Oryol acknowledged that Mr. Kolomoysky had used his own money to help the military but suggested that he had done so only to ensure that an energy company he partly owns won a contract to supply the armed forces with fuel.
Mr. Kolomoysky denied this and said the fuel contract was far from a juicy business deal: It represents a steep discount to market prices and allows the military to take delivery of the fuel without any payment upfront.
The Kremlin has helped fan suspicions of ulterior motives with a steady stream of mostly fanciful reports in Russia’s state-controlled news channels — widely watched here until March 12, when they were ordered off the air — that claimed the new leaders of Dnipropetrovsk were lining their pockets, persecuting ethnic Russians and driving the region to starvation.
As well as waging a propaganda war, Moscow has also sought to undermine Ukraine’s post-Yanukovych order by squeezing the country economically. It has closed its market to a wide variety of Ukrainian goods, including rockets manufactured by Dnipropetrovsk’s flagship company, Uzhmash. With no orders from Russia, Uzhmash has struggled to pay its electricity bills and the salaries of its 10,000 employees.
To calm worries that they moved into government service only to plunder public funds, the Dnipropetrovsk moguls have all agreed to forgo the salaries, cars and bodyguards that come with their jobs.
Mr. Taruta, the new governor of Donetsk, is also working pro bono and, before pro-Russia activists again stormed his government offices on Sunday, had looked forward to a calming of tensions and an eventual return to his previous career in business. Of his job in government, “I did not want it, did not expect it and would never have accepted it if it had not been proposed by such a high level,” he said, referring to the new leadership in Kiev. His family members, he added, were “all against this. They understood the risk.”
