A Den of Corruption
We last wrote about Ukraine in late December, on occasion of the EU’s bizarre decision to do its neo-con vassal duties and extend economic sanctions on Russia to the EU’s own detriment. At the time we remarked on the truly funny spectacle of corrupt Ukrainian politicians hurling insults at each other at a cabinet meeting, in an attempt to clear up which one of them was the greater criminal (a video of the meeting is embedded in the article and is a must see).
Left: Ukraine’s interior minister Arsen Avakov, mainly known for his strong support of the neo-Nazi “Azov Batallion”. Until 2012, he was on Interpol’s international wanted list and actually sat in prison in Italy for fraud when he was “rescued” by the Ukrainian coup (which brought his friends to power) and granted diplomatic immunity; Right: former Georgian prime minister Mikhail Saakashvili, nowadays governor of Odessa in Ukraine. He has received a multi-year prison sentence in Georgia in absentia, for crimes ranging from embezzlement to abuse of power (apparently he was even linked to a murder). These two worthies can’t quite decide which one of them is more corrupt.
Photo via dialog.ua
Naturally, we wouldn’t want to be deprived of such excellent entertainment, but we do have one objection: the tickets to the show are simply way too expensive. European and US tax cows are forced by their governments to involuntarily finance this den of corruption to the tune of 10s of billions. We could have had all of this for free, if only Western governments had allowed Russian president Vladimir Putin to continue to fund the bankrupt Ukrainian political oligarchy, which he was perfectly willing to do prior to the coup (incidentally, there would have been no civil war, and likely no takeover of Crimea either).
Other than that, we see precisely zero difference between the “before” and “after” state of Ukraine. All that has happened is that one group of corrupt oligarchs has been exchanged for another. Of course, there is now a man in charge, who according to diplomatic cables available at Wikileaks, has been “our man in Ukraine” for at least 13 years. This may please Brzezinski-worshiping neo-con empire builders in Washington, but it is little consolation to the serfs who have to pay for it all.
A decidedly not pleased Aivaras Abromavičius, former economics minister of Ukraine, who was imported from Lithuania, apparently due to a lack of non-corrupt candidates for the post in Ukraine itself.
Photo credit: Tobias Schwarz / AFP / Getty
In early February, political corruption in Ukraine was once again subject to unwelcome headlines, when economy minister Aivaras Abromavičius decided he had seen enough and resigned in disgust. The man was a “technocrat” imported from Lithuania, which was supposed to ensure that corruption would be kept in check. However, it turned out that he was powerless to stop it. As the FT reported at the time:
Ukraine’s economy minister resigned in dramatic fashion on Wednesday, accusing a senior presidential ally of blocking his attempts to root out graft and stymieing his plans for reform. Speaking in Kiev, Aivaras Abromavicius said he had no desire “to serve as a cover-up for covert corruption, or become puppets for those who, very much like the old government, are trying to exercise control over the flow of public funds”.
Mr Abromavicius also made an acid reference to his presentation on behalf of Ukraine at the annual gathering of economic and business luminaries at the world economic forum in Switzerland, saying: “I am not willing to travel to Davos and talk about our successes to international investors and partners, all the while knowing that certain individuals are scheming to pursue their own interests behind my back.”
Mr Abromavicius told the Financial Times he decided to resign after his attempts to restructure Ukraine’s state-owned companies ran into resistance from powerful figures with vested interests. “We just hit a wall recently,” Mr Abromavicius said. “We have come to a point where, unfortunately, the technocrats within the government are simply no longer needed.”
Subsequently, president Poroshenko tried to get rid of the government of prime minister Yatsenyuk, as well as of prosecutor-general Viktor Shokin, who was apparently widely seen as a major impediment to cleaning up corruption. “Yats” survived the no-confidence vote in parliament though, and although Poroshenko continues to call on him to resign, he seems quite determined to stay in power. According to him, “a reboot of the government would do no good”. Who knows, he may well be right! In the same article we learn:
“The living standards of ordinary Ukrainians have deteriorated dramatically, and the EU, which is struggling with successive crises, seems unable to respond to the wishes of many Ukrainians to become part of the European family.”
It should be noted that not all Ukrainians are so eager to become part of the “European family”, but those who are have to be bitterly disappointed by the results of the latest revolution. What they perhaps haven’t realized is that their well-being was not very high on anyone’s list of priorities. As far as we are concerned, color us completely unsurprised.
A geopolitical accident
Cartoon by Tom Janssen
Silencing the Critics – by Law
The latest news, which are actually the reason why we have decided to write about Ukraine again, concern the fall-out from the corruption charges leveled by Mr. Abromavičius. What to do about the discontent that the continual stream of revelations about corrupt officials has fostered? One possibility would be to finally combat corruption in earnest. That is easier said than done, but what is the alternative?
Joseph Stalin and NKVD head Lavrentiy Beria (who later got “purged” by Stalin’s successor Khrushchev) – according to some Ukrainian officials, they should be considered the intellectual fathers of the latest Ukrainian government decree (see below)
It seems Ukraine’s government has actually come up with one. While it is busy “joining the European family”, it is letting Stalin back in through the backdoor. The solution to the surge in corruption allegations is not to actually stop corruption, but to stop the allegations. Henceforth employees of the State will be banned from pointing fingers at corrupt officials:
“Ukraine banned government officials on Tuesday from publicly criticizing the work of state institutions and their colleagues, after damaging disclosures last month that highlighted slow progress in fighting corruption.
The move immediately drew criticism from some civil servants who saw it as a blow to freedom of speech at odds with the embattled government’s Western-backed reform drive. The rule on “loyalty” is one of several outlined in a new ethics code that civil servants must follow or face disciplinary action, according to a decree posted on the government website.
“The government has decided to introduce standards of ethical conduct for civil servants to restore public faith in the work of the state bodies and officials,” the decree said. Government employees should “avoid any public criticisms of the work of state institutions and their officials,” the code stipulates, alongside rules on the need for transparency and integrity.
The shock resignations in February of Economy Minister Aivaras Abromavicius and a top prosecutor shone a spotlight on the failure of the Kiev leadership to follow through on promises to eliminate the influence of vested interests on policymaking. In a Facebook post about the new ethics code, Olena Minitch, a department head in the economy ministry, said the new rules appeared to have been “created hastily and adopted quickly” in the wake of Abromavicius’s allegations about corrupt state practices. “The little document … is in the best traditions of the Communist period, more precisely in the traditions of Stalin and Beria,” Minitch said, referring to repressive Soviet leader Josef Stalin and his security chief, Lavrenty Beria.
Others appeared to poke fun at the state’s call for officials to toe the party line. “I’m a loyal public servant. I’m thrilled with the work of state bodies (and) their officials,” Ukraine’s Ambassador-at-Large Dmytro Kuleba tweeted, linking to an article about the ban.
Olena Minitch, responsible for the telecommunication industry in Ukraine’s economics ministry: “A decree in the best traditions of Stalin and Beria.”
Photo Photo from the personal archives
So the very people who are in a position to know most about corrupt activities are to be silenced. We imagine that such a ban might be quite effective in a poor country suffering a severe economic downturn, as most civil servants probably fear greatly for their otherwise fairly secure jobs.
And this is the “democratic revolution” (ahem…) which Western taxpayers are forced to fund?
What we have here is yet another example of interventionism gone wrong. Is there any US or EU foreign policy initiative that isn’t turning into a complete boondoggle in an eye-blink? We understand that many Ukrainians were thoroughly fed up with the previous, very likely even more corrupt government led by president Yanukovich. The method of removing him was less than savory, but that is water under the bridge now.
What we don’t understand is why people who had nothing to do with any of this are now forced to pay for it (whether directly or indirectly). To be sure, this is not the fault of anyone in Ukraine, it is solely the fault of the Western ruling elites. If Ukrainian politicians are unable to get their own mess under control, leave them to it. Let them sort it out without pumping in billions in public funds (read: billions of other people’s money).
There is a message in the recent successes celebrated by Mr. Trump: Western taxpayers and voters no longer have any interest in supporting the geopolitical games played by their ruling elites and their assorted cronies. Voters couldn’t care less if Mr. Biden’s son has a job at the board of a large Ukrainian gas producer or not. Along similar lines, Western elites are perfectly free to poke Mr. Putin into the eye, but let them do it on their own dime.
Cartoon by Tom Stiglich
Dear Readers! We are happy to report that we have reached our turn-of-the-year funding goal and want to extend a special thank you to all of you who have chipped in. We are very grateful for your support! As a general remark, according to usually well informed circles, exercising the donation button in between funding drives is definitely legal and highly appreciated as well.
Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke
Most read in the last 20 days:
- How the Welfare State Dies
Hollande Threatens to Ban Protests Brexit has diverted attention from another little drama playing out in Europe. As of the time of writing, if you Google “Hollande threatens to ban protests” or variations thereof, you will find Russian, South African and even Iranian press reports on the topic. Otherwise, it's basically crickets (sole exception: Politico). Gee, we wonder why? They don't like him anymore: 120.000 protesters recently turned Paris into a war zone. All...
- Free Speech Under Attack
Offending People Left and Right Bill Bonner, whose Diaries we republish here, is well-known for being an equal opportunity offender - meaning that political affiliation, gender, age, or any other defining characteristics won't save worthy targets from getting offended. As far as we are concerned, we generally try not to be unnecessarily rude to people, but occasionally giving offense is not exactly beneath us either. The motto of the equal opportunity...
- Toward Freedom: Will The UK Write History?
Mutating Promises We are less than one week away from the EU referendum, the moment when the British people will be called upon to make a historic decision – will they vote to “Brexit” or to “Bremain”? Both camps have been going at each other with fierce campaigns to tilt the vote in their direction, but according to the latest polls, with the “Leave” camp’s latest surge still within the margin of error, the outcome is too close to call. The battle lines are...
- A Market Ready to Blow and the Flag of the Conquerors
Bold Prediction MICHAELS, Maryland – The flag in front of our hotel flies at half-mast. The little town of St. Michaels is a tourist and conference destination on the Chesapeake Bay. It is far from Orlando, and even farther from Daesh (a.k.a. ISIL) and the Mideast. St. Michaels, Maryland – the town that fooled the British (they say, today). Photo credit: Fletcher6 Out on the river, a sleek sailboat, with lacquered wood trim, glides by, making hardly a...
- Going... Going... Gone! The EU Begins to Splinter
Dark Social Mood Tsunami Washes Ashore Early this morning one might have been forgiven for thinking that Japan had probably just been hit by another tsunami. The Nikkei was down 1,300 points, the yen briefly soared above par. Gold had intermittently gained 100 smackers – if memory serves, the biggest nominal intra-day gain ever recorded (with the possible exception of one or two days in early 1980). Here is a picture of Haruhiko Kuroda in front of his Bloomberg monitor this...
- Rule Britannia
A Glorious Day What a glorious day for Britain and anyone among you who continues to believe in the ideas of liberty, freedom, and sovereign democratic rule. The British people have cast their vote and I have never ever felt so relieved about having been wrong. Against all expectations, the leave camp somehow managed to push the referendum across the center line, with 51.9% of voters counted electing to leave the European Union. Waving good-bye to...
- The Problem with Corporate Debt
Taking Off Like a Rocket There are actually two problems with corporate debt. One is that there is too much of it... the other is that a lot of it appears to be going sour. Harvey had a good time in recent years...well, not so much between mid 2014 and early 2016, but happy days are here again! Cartoon by Frank Modell As a brief report at Marketwatch last week (widely ignored as far as we are aware) informs us: “Businesses racked up debt in the...
- What Could Possibly Go Wrong?
A Convocation Of Gamblers The Wall Street Journal and BloombergView have just run articles on the shadow banking system in China. This has put me in a nostalgic mood. About 35 years ago when I was living in Japan, I made a side trip to Hong Kong. Asia's Sin City, Macau Photo credit: Nattee Chalermtiragool I took the hydrofoil to Macau one afternoon and the same service back early the next morning. On the morning trip, I am sure that I saw many of the...
- A Darwin Award for Capital Allocation
Beyond Human Capacity Distilling down and projecting out the economy’s limitless spectrum of interrelationships is near impossible to do with any regular accuracy. The inputs are too vast. The relationships are too erratic. The economy - complex and ever-changing interrelations. Image credit: Andrea Dionne Quite frankly, keeping tabs on it all is beyond human capacity. This also goes for the federal government. Even with all their data gatherers and...
- Janet Yellen’s $200-Trillion Debt Problem
Blame “Brexit” BALTIMORE – The U.S. stock market broke its losing streak on Thursday [and even more so on Monday, ed.]. After five straight losing sessions, the Dow eked out a 92-point gain. The financial media didn’t know what to say about it. So, we ended up with the typical inanities, myths, and claptrap. “Investors” are pushing the DJIA back up again..apparently any excuse will do at the moment. The idea may backfire though, as exactly the same thing happened...
- The Fed’s Doomsday Device
Bezzle BALTIMORE – Barron’s, in a lather, says the market is facing the “Two Horsemen of the Apocalypse.” Huh? Only two? There were four last time! Supposedly, the so-called Brexit – the vote in Britain this Thursday on whether to leave or remain in the European Union (EU) – and uncertainty over where the Fed will take U.S. interest rates are cutting down stocks faster than a Z-turn mower. But Brexit is a side show. As our contacts in London...
- Gold and Brexit
Going Up for the Wrong Reason Gold is soaring. It should—and a lot—but in my view not for the reason it is. Indeed gold is insurance for uncertain times, a time that Brexit seems to represent. But insurance is an administrative cost — one must minimize its use. August gold contract, daily – gold has been strong of late, but this seems to be driven by “Brexit” fears - click to enlarge. Moreover, insuring against Brexit might ironically be equivalent...