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High profile arrests and seizures – Yezhov (Espionage) and Kolomoisky and Bogolyubov (PrivatBank)

December 21, 2017

Perhaps the news of the arrest of Stanislav Yezhov for espionage on behalf of the Russian Federation would be the most notable incident of 21st December in Ukraine on any normal day (if there is such a thing as a normal day) – particularly so as Mr Yezhov was/is a prominent assistant to Prime Minister Groisman attending almost all his foreign trips.

Further Mr Yezhov had worked within The Bankova (Presidential Administration) and also at the US Embassy in Washington DC.

Naturally all positions in which sensitive information will have been accessed and passed on to Russia – although sensitive does not necessarily equate to highly classified.

It should be noted however, that the arrest does not come as a complete surprise.

Mr Yezhov has long since been a “blip” upon the SBU radar due to the fact his wife is a Russian citizen employed part time for a Russian company working in Washington DC.  That withstanding that his asset declarations for the couple submitted per legislation, displayed over $270,000 held in various Sberbank (Russian) accounts between them.

It is known that for quite some time the SBU have actively investigated him as a person of interest – and for many months Prime Minister Groisman had been aware of that.  Presumably the FBI in Washington DC were also aware of the couple’s Russian secret services involvement too.

The most pertinent question is perhaps not why Mr Yazhov has been arrested – but why now?

For at least a year, probably longer, the SBU will have been quite aware of his activities.  Just because he is known to be an agent of the Russian secret services does not automatically mean arrest is immediate.  Sometimes arrest is never forthcoming – only when any benefits no longer outweigh the negatives

Presumably the SBU feel there is nothing further that can be learned from watching Mr Yazhov and/or the arrest of Mr Yazhov now is required prior to certain events now appearing upon the Ukrainian and/or Groisman and/or Yazhov personal calendar.

Clearly the loss of Mr Yezhov’s services will be felt by the Russian secret services, for few agents will be privy to almost all of the Ukrainian Prime Minister’s private conversations whilst abroad.  How significant that loss is however, is a different question.

The Russian secret services should be assumed to still be deeply infiltrated into every single Ukrainian institution –  from top to bottom.  Ukraine, if sensible, will be working under the impression that it has no secrets (for long).  No doubt the Ukrainian CI team is overwhelmed with persons of interest to investigate and monitor by far too few personnel and a budget that is restrictive.  Counterintelligence the world over will complain of the same issues.

If the SBU CI Department is sensible, it will be working upon the premise that it too is also infiltrated.

The arrest of Mr Yezhov is therefore something of an achievement – owing to the fact he was arrested rather than being tipped off and mysteriously appearing in Belarus or Russia ne’er to return to Ukraine.  A definite “Bravo!” for the counterintelligence unit is in order – and also for Prime Minister Groisman who, having known of the SBU involvement into is aide, did not, through actions or words, unintentionally give the game away.

An incident of significance for Ukraine undoubtedly, but perhaps not the most significant event of 21st December.

The 21st December also witnessed the High Court in London seize and freeze approximately $2.5 billion of assets owned or under the control of Ihor Kolomoisky and  Gennady Bogolyubov during the on-going claims and counter-claims between these men and Ukraine (NBU) surrounding the nationalisation of PrivatBank.

The cynic would perhaps be inclined to believe the “by chance” meeting of Prosecutor General Yuri Lutsenko and Ihor Kolomoisky in Amsterdam in late November will be related to the PrivatBank affair – at least in part.  It is still unclear which presidential candidates Mr Kolomoisky will back – and whether among Kolomoisky backed candidates if President Poroshenko will be one of that number.  There were perhaps a few matters to discuss.

Nevertheless, despite the Prosecutor General’s public claim that the meeting was “by chance”, that a Ukrainian oligarch and the Ukrainian Prosecutor General just happen to “bump into each other by chance” in a city of 1.1 million residents – of which neither is a resident – in the same place, at the same time, and on the same day, is about as believable as Oleg Lyashko’s claim to have won the Ukrainian lottery three times when accounting for his wealth.

Such meetings almost never occur by chance – even if it may appear to one party that it is indeed a chance meeting (or more precisely an unplanned meeting).  Given the location of this meeting, neither party would be naive enough to believe the meeting occurred by chance.  One or the other, or both, arranged for this “chance encounter”.  A pointless lie to pretend otherwise.

Whatever the case, the current situation leaves the Ukrainian courts considering all the Kolomoisky efforts to stop the NBU investigations into the circumstances surrounding PrivatBank nationalisation, and the UK Courts seizing assets slightly above the value of the money the NBU alleges was removed from PrivatBank immediately before the Ukrainian State nationalised it.

While the $2.5 billion of assets temporarily frozen by the UK courts may catch the eye, the issue here is not just the money.  Indeed with presidential elections in March 2019, the issue here is the relationship between Ihor Kolomoisky and President Poroshenko.  Either grubby deals are in the works, or one of these two oligarch will receive some serious wounds come March 2019 outcomes.

This too however, while equally entitled to grab the Ukrainian headlines of 21st November, is not the issue of the day.

The most important political, economic and national security issue addressed on 21st December was the withdrawal of Draft Bill 6011 that relates to the creation of the Anti-Corruption Court.

To be fair, there is nothing majorly wrong with Draft Bill 6011.  The Venice Commission “Opinion” does suggest some text changes – or text deletions in some cases.  It also questions certain lines of thinking, but overall is supportive of the vast majority of the Draft 6011 content.

The removal of this Draft Bill from the Verkhovna Rada agenda was supported by 235 parliamentarians, thus paving the way for a new Draft Bill to be submitted which takes into consideration the Venice Commission Opinion while retaining the bulk of Draft 6011 that easily passed muster – at least that is what is hopefully going to be the case.

No doubt the Bankova and the two majority coalition parliamentary parties still recall the events of the evening of 6th December – and the aftermath.  That however, does not necessarily mean that what will be submitted for consideration instead of Draft 6011 will meet the expectations of the Ukrainian people, civil society, or external supporters of Ukraine.  Generally, if far more political energy was spent it meeting those expectations rather than the political energy spent trying to mitigate, sabotage or subordinate them, Ukraine would have progressed somewhat further than it has these past few years.

The question is now whether any replacement Bill from The Bankova will be submitted prior to the end of the last plenary session of the year – or not?

If it is, and it is voted upon successfully, assuredly most parliamentarians will not have read it, or if they have, will not understand the implications of it – but the holidays beckon.

However, neither vested interests, The Bankova, nor a particular section of the Verkhovna Rada want an independent Anti-Corruption Court – for obvious reasons.  Therefore every opportunity to slow the process down will be taken.

A last moment submission with insufficient time to consider a replacement Bill until mid January 2018 at the earliest would come as no surprise.

This court cannot be fully functioning before the 2019 elections for politically expedient reasons among the Ukrainian elite.  Thus every plenary session missed is time gained.  Likewise the selection process of judges will not be swift (and to be blunt, haste rather than speed is the desired gear to be selected – although “crawler” is almost inevitable).

As is always the case, institutional structure and process, boring as it is, will prove to be far more beneficial to Ukraine than the 21st December excitement of Russian agents being caught for espionage within the Prime Minister’s people, or the prospects of Kolomoisky shenanigans appearing in Ukrainian and London courts simultaneously.

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