Seeing the wood for the trees – Ukrainian media

April 5, 2016

In yesterday’s entry relating to President Poroshenko and the Panama Papers (as well as Odessa Mayor Trukhanov) a few lines appeared that have raised some curiosity.

“However to simply look at Roshen is to take a narrow view.  What about all the other entities and shares owned by President Poroshenko that seem ill-fitting with Article 103 of the Constitution?”

This entry will briefly expand on those lines for the sake of clarification before move on to other matters.

A reader may ponder, perhaps rightly, why the Ukrainian media is fixated upon the off-shore entities and whether they form part of the machinery for a blind trust on President Poroshenko’s behalf – or not, and yet pay little regard to a very long list of other entities owned by, or in which the President has significant shareholding, that have seen no attempt to distance his influence upon their running.

In short, President Poroshenko’s direct corporate clout and shareholding influence goes far beyond Roshen.  He has significant ownership interests in at least two dozen other entities ranging from agriculture (Agro-MAC, Agrofіrma Іvankіvtsі and Agro-Ukrpromіnvest to name but 3 of those agri entities) to energy, to insurance (Insurance Company “Krajina”).

This notwithstanding Channel 5 TV which, to be fair, was the only entity he stated he would not sell before he became President of Ukraine.

As the entry stated yesterday, it is primarily the mens rea surrounding the creation of the Panama Papers outed off-shore entities that will remain both argued (and ultimately unknown) between those that accept the presidential explanations, and those that don’t, for their existence.

Undoubtedly the prose that will now follow, some regular IP readers will find “unhelpful” politically and/or diplomatically – particularly so when alternatives to President Poroshenko that currently stand the best chance of replacing him would be far, far worse for the national interests than the current incumbent.

The point of this entry however, is not to undermine President Poroshenko.  It is to highlight that the Ukrainian media seem to be lost in the Panama Papers moment and cannot see the wood for the trees – and have rarely gazed at the forrest since the president was sworn into office.


It is perhaps necessary to highlight Article 103 of the Constitution of Ukraine which outlines what a sitting President may or may not do with regard to business interests when holding office.  It rightly sets parameters to separate the office of State from personal interests.

“The president of Ukraine can not have other representative mandate, to hold a position in public authorities or in associations of citizens, and also to carry on other entrepreneurial activity paid or enter in the complement of leading organ or observant advice of enterprise, that has for an object of receipt of income.”

It is not for this blog to charge any unconstitutionality of the current arrangements of President Poroshenko.  It is an insignificant blog.  It has no journalistic ambition or intent.  It does not do “scoops”, nor does it seek to frame Ukrainian domestic opinion.  It has no editor nor editorial policy  It is nothing more than an unpaid hobby that regular readers will note all too frequently struggles even with grammar and vocabulary.

Nevertheless, ever since the President’s inauguration the Ukrainian media has remained fixated upon Roshen and to a lesser extent Channel 5.  Two fine trees, but what about the wood?  Are there separate rules or ethical issues for these entities but not the others?

Neither is it for this blog to interpret with any legal certainty the Constitution with regard to the continued business interests, shareholdings and investments of the President.

Yet it is not simply the Constitution that infers the current situation surrounding the President’s business arrangements as seemingly ill-befitting his office of State.  Articles 3 and 25 of the Law of Ukraine (On prevention of corruption) are less woolly.  For example Article 25 states that the President cannot “engage in other paid (except for teaching, research and creative activities, medical practice, instructor and judicial practices in sport) or entrepreneurial activity, unless otherwise provided by the Constitution or laws of Ukraine”

or be

“members of the Board, other executive or supervisory bodies, supervisory board or an organization with the aim of making a profit (unless the person is carried out on stocks management functions (shares) owned by the state or territorial community, and represents the interests of the state or local community on the board (supervisory board), the Audit Commission of the economic organization), unless otherwise provided by the Constitution or laws of Ukraine.”

Thus it is perhaps necessary to question why so little linage has ever been written with regard to Article 103 or the Constitution or Articles 3 and 25 of the Law of Ukraine “On prevention of corruption” despite the innumerable and transparently held interests of the President that clearly provide for a “receipt of income”, or why all those interests have not been bundled into a blind trust similar to that purported to be used, and long since announced as the plan for Roshen interests, to distance President Poroshenko.

It may very well be that the courts would find sufficient elasticity within the Constitution and relevant statute for all to be deemed legitimate as matters stand.

It may very well be that a(nother) blind trust will be created to remove the suggestion of crossing or rubbing up against existing legal boundaries in which all other Presidential business assets can be dumped.  If so, and if the only model that would provide for a blind trust (due to domestic legislative constraints) is to have yet further off-shore companies created, then perhaps it would be wise to do so in a manner where transparency is somewhat more obvious to all.

Whatever the case, as “exciting” and “revelationary” as the Panama Papers may be for the Ukrainian media, there are perhaps equally “interesting” business related activities surrounding the president that required no data dump, and was, is, and remains visible to even the most naive of on-lookers who do not fixate on Roshen or Channel 5, but are able to see both the wood and the trees in equal focus.

If the intent of the media is to nudge the political and business elite toward abiding by the rule of law then perhaps occasionally, taking a step back and seeing the forest for what it is may assist in that goal?

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