Panama Papers, Corruption Hamper Ukraine's Democracy

President Petro Poroshenko on May 26, 2014, just after being elected. The author writes that recent events, such as revelations Poroshenko secretly placed money in a tax haven abroad, have strained Ukrainians’ faith in the twin pillars of the 2014 revolution—closer ties to Europe and the fight against corruption. David Mdzinarishvili/reuters

This article first appeared on the Daily Signal.

The sniper's bullet went into the head of the man standing in front of Valentyn Onyshchenko.

Blood and brain matter sprayed into Onyshchenko's face with enough force to break the then-21-year-old's eyeglasses.

"Like a robot" he weaved through the thousands of protesters gathered in central Kiev, Ukraine, for the February 2014 revolution. He went to a nearby McDonald's, which, despite the bloodshed just outside its doors, was still open for business. In the bathroom, Onyshchenko washed his face and picked human remains from his blood-matted hair.

He took a moment to compose himself, and then he walked back toward the sound of gunfire to rejoin the revolution.

Days later, Ukraine's former president, Viktor Yanukovych, fled to Russia. The revolution was over—but the celebration was short lived.

Weeks later, Russia launched a hybrid warfare campaign in Ukraine's Crimean Peninsula, ultimately annexing the territory in a move that a U.N. General Assembly resolution later declared illegal. The Kremlin also launched subversive military operations in eastern Ukraine, plunging the region into war.

More than two years after the revolution, a bespectacled Onyshchenko sits in an underground bar in Kiev. He speaks quickly and fluently in English.

Onyshchenko was haunted for months by his memories of the revolution. He had nightmares about the man shot by the sniper. The face is gray and lifeless; the man's hands are stretched out, reaching for something.

The nightmares have since faded, but so have Onyshchenko's revolutionary passion and his hope for Ukraine's future.

"During the revolution, especially at the most critical days, you could literally feel that special atmosphere in the air, and maybe for a second you could think, 'Now, as people are united so much, we can achieve anything, we can change the country,'" Onyshchenko says.

"But if we throw away the emotions, I definitely knew that the revolution would only let us get rid of one, two, maybe three corrupted bastards," Onyshchenko says. "It wouldn't change the system, and definitely wouldn't destroy the 'Homo sovieticus' that is, unfortunately, still prospering among our people, especially those 40 plus years old.

"Nothing will change them. No revolution will explain to them that bribing a cop is bad, or taking a bribe is bad. I respect our nation, I really do. But it'll take lots and lots of time until something will really change."

Reality Check

A string of recent events at home and abroad have strained Ukrainians' faith in the twin pillars of the 2014 revolution—closer ties to Europe and the fight against corruption.

In the span of one week beginning April 6, Dutch voters rejected ratification of a long-awaited EU-Ukraine trade deal, putting Ukraine's aspirations of European integration in jeopardy; the Panama Papers exposed Ukrainian President Petro Poroshenko's offshore assets, sparking a media firestorm in Ukraine; and Ukraine's prime minister resigned after months of political turmoil, sparking a political clash in the search for his replacement.

Meanwhile, the ongoing war in Ukraine's eastern Donbas region is steadily worsening, and a ceasefire that never fully took hold is teetering on the edge of collapse.

"No, of course the revolution didn't achieve its goals," Onyshchenko says. "People are definitely frustrated, but they are too tired to make another revolution."

The April 6 Dutch referendum vote was a high profile stumble in Ukraine's incremental westward pivot, and was predictably lauded by the Kremlin. Yet, most Ukrainians and European political observers say a Continent-wide Euroskeptic movement fueled the rejection. Worries about refugees, terrorism and economic malaise trumped any specific aversion to Ukraine, some claim.

"The initiators are driven by anti-government and anti-EU feelings rather than by anti-Ukraine feelings," Marcel Van Herpen, director of the Cicero Foundation, a Dutch think tank, says.

"This movement is clearly a part of the broader anti-EU and anti-refugee movement in other EU countries," Van Herpen says. "People are looking for simple, populist solutions—close the door for refugees from Islamic countries, but also for Ukraine."

Closer to home, the Panama Papers revealed that Poroshenko has assets in a holding company in the British Virgin Islands.

Some politicians and media outlets accused the Ukrainian president of moving his money offshore to skirt paying taxes. Poroshenko denied wrongdoing, claiming he handed over control of his assets to a team of advisers after he took office in 2014. Ukraine's chief prosecutor said Poroshenko had not broken the law.

Despite the media outcry, most Ukrainians shrugged off the allegations against Poroshenko with fatalistic indifference, reflecting an already crumbled confidence in the post-revolution government.

"It didn't surprise me at all," says Bogdan Logvynenko, 27, a Ukrainian journalist and political activist, reacting to Poroshenko's inclusion in the Panama Papers. "He wasn't happy to give his business away when he became president. I don't agree with it, but I understand it."

"Nothing was shocking," Onyshchenko says. "Poroshenko is an oligarch, and what oligarch wouldn't have an offshore account? The real disappointment was a few years ago when he was elected."

Agents of Change

Last week's referendum in the Netherlands was a symbolic blow to Ukraine because the EU-Ukraine trade pact in question was the original impetus for the 2014 revolution.

In November 2013, Yanukovych, Ukraine's pro-Russian former president, made a last minute decision to cancel ratifying the agreement in favor of closer ties with Russia, spurring protests on Kiev's central square, the Maidan.

The pro-EU demonstrations—originally called the "EuroMaidan"—did not call for Yanukovych's ouster at first.

"We were willing to wait until the next election to vote him out," said Dmytro Kryvonog, who participated in the protests, referring to Yanukovych. "But everything changed when they beat up the students."

The tipping point, those who took part in the revolution say, was when the Berkut (a now-disbanded special police force dating from the Soviet era) attacked protesters on November 30, 2013.

The images of bloodied and terrified students, some helplessly sprawled on the ground in fetal positions as packs of Berkut laid into them with nightsticks, ignited pent up anti-government anger nationwide.

"The protests became about the fact that you cannot beat up the students, it became about that," Onyshchenko says. "It started about the EU, but it became about us not being like Russia."

"It wasn't so much about Europe as about not being a part of Russia," Logvynenko told The Daily Signal.

"We know what the Putin regime is, and no one wants that," Logvynenko says. "We saw the example of Belarus, and we saw that their freedoms disappeared. Yeah, the highest inspiration among my friends on the Maidan was to not be like Russia."

Across the country Ukrainians from a broad demographic scope, including those from both predominantly Ukrainian- and Russian-speaking areas, set off for Kiev to join the gathering crowds on the Maidan. Those who couldn't travel organized local protests.

The "EuroMaidan" became known simply as the "Maidan."

"It was not purely about the EU agreement, but it was a trigger," said Svitlana Kisilova, 26, a Ukrainian political activist who was active on the Maidan.

Kisilova added:

For me it was very important to live in a free democratic country, where you can openly express your views. That is why when Yanukovych tried to push on us by limiting our freedom of speech and being totalitarian I knew that my duty was to fight for my rights, my country and the things I believe in.

More than two years after the revolution, corruption still plagues Ukraine.

Paying bribes is a fact of life, practically required for things like passing university exams, finding a parking spot, or seeing a doctor.

Many Ukrainians acknowledge, however, that systemic corruption is not only a political problem. Some say the tolerance for corruption in day-to-day life is a cultural leftover from the Soviet era, when such practices were more about survival than greed.

Some also blame a weak legacy of civil society institutions, as well as national journalism outlets, which operate more like mouthpieces for the various oligarchs that own them rather than watchdogs against government malfeasance.

"Ukraine still has an enormous amount of problems and it will take us a lot of time to fight corruption, up and down, and vice versa; to teach people to be responsible for decisions they are making at the elections and to be responsible citizens," Kisilova says. "We have a very weak civil society and people's engagement into the public sphere is very low. But it's only the beginning of a new society in Ukraine."

The slow pace of change has dimmed support for Ukraine's post-revolution government. A Gallup poll released in December revealed that Ukrainians have less confidence in their government now than they did prior to the 2014 revolution.

"Another challenge the Rada (Ukrainian parliament) faces is that many of the well-known activists who were elected on the wave of the Maidan are now realizing that political activism is not the same thing as governing and legislating," Luke Coffey, director of the Heritage Foundation's foreign policy center, said. "So there is a learning curve, which only adds to the existing challenges."

The New Normal

Despite certain advances after the revolution, most Ukrainians' lives are now occupied with the day-to-day reality of existing on salaries that are worth one-quarter what they were two years ago, as well living in a country hounded by the omnipresent spectre of war and civil unrest.

However, on the streets of Kiev, Ukraine's capital, life appears to be improving. New coffee shops and restaurants seem to be popping up on every street corner. There are fresh art venues, a hipster movement has taken off, and many young people say they want their city to become the "new Berlin."

But most of the visible progress in Kiev is a façade. Across the Dnieper River from central Kiev and its Orthodox cathedrals and blocks of colorful Stalinkas (neoclassical buildings built in the Stalin era) is what Kievans call "sleepy town."

This part of Kiev is a concrete and steel forest of endless rows of Khrushchyovkas—the monolithic, drab apartment blocks that epitomize Soviet sprawl and enforced equality.

During the workweek, the streets in central Kiev are slow until about 10 a.m. while residents from "sleepy town" commute in. Rent is too expensive for most Ukrainians to live in the city center.

Yet, Ferraris, Land Rovers, Mercedes, BMWs, Bugattis and Bentleys are common sights on the streets of central Kiev, a stark reminder of the extravagant lifestyles enjoyed by oligarchs, corrupt public officials and their families (the "golden children") while the rest of the country exits on an average income of about $175 a month.

In rural Ukraine, life is a step back in time. Many homes still have outhouses, livestock wander the streets, and the roads are potholed disasters liable to rip off on axle over 20 miles per hour.

Ukrainians describe the economic demographics of their country as the shape of an apple core—broad at the top and the bottom of the economic spectrum, but with almost no middle class.

In the Soviet Union, civil society was stifled and it was all but impossible for citizens to question government authority and organize grassroots efforts to effect political change. Many say the legacy of Soviet civil society and what Ukrainians call the "ostrich mentality" (keep your head down and don't cause trouble) is a key obstacle to Ukraine's contemporary post-revolution progress.

"It's sad," Helenka, a 23-year-old university student studying public health, says. "I have friends who say they love their parents and grandparents, but they also admit that they're waiting for the day when those generations have died so that we can finally leave the Soviet past behind."

And the War

The war against Russian-backed separatists in eastern Ukraine sucked the oxygen out of anti-corruption reforms after the 2014 revolution.

"Ukrainians are learning that political reform while fighting a war is like building a ship while you're already at sea," Coffey says.

Instead of anti-corruption housecleaning, political triage in Kiev has favored pushing through emergency economic measures to avert an economic tailspin.

According to government data, territory held by pro-Russian separatists in Ukraine's eastern Donbas region accounted for 10 percent of Ukraine's pre-revolution GDP and about 15 percent of the country's industrial output.

The country's economy dropped 10 percent in 2015 and 6.8 percent the year prior. And the national currency, the hryvnia, has depreciated to one-quarter of its value against the dollar from before the revolution.

Despite Ukraine's economic woes, some say the most damaging and least quantifiable consequence of the war has been the diverted energy and patriotism of those who protested on the Maidan.

Rather than holding political leaders accountable to their revolutionary promises, Ukraine's millennial generation, the driving force in 2014, has been focused on supporting the war effort.

Millennials played a key role in forming the volunteer combat battalions that stepped in for a floundering regular military in the early days of the war. And the grassroots volunteer movement, which supports the war effort in myriad ways from building drones to providing post-traumatic stress counseling, is almost entirely dependent on the efforts of Ukrainians aged 18 to 35.

"The past two years have been challenging for the Ukrainian generation of millennials," Iryna Fedets, 28, a research associate with the Institute for Economic Research and Policy Consulting, a Ukrainian think-tank, told the Daily Signal.

Fedets said, "The 2008 recession never really ended for them, as it turned into economic stagnation under Yanukovych, and later, Russian occupation of the Crimea and the war in the east brought down the economy throughout the country."

Stay or Go?

Onyshchenko risked his life in the 2014 revolution. He has a job, a girlfriend, family, and friends in Ukraine. Yet, he admits, if given the chance to live abroad he would take it.

"I'd say 80 percent of my friends are already abroad or plan to move abroad," Onyshchenko says.

Many reform-minded Ukrainian millennials who played a key role in the 2014 revolution now want to leave Ukraine for a new life abroad. Others are determined to stay in Ukraine to fight for change.

"I didn't feel like I could do anything here before the revolution," Logvynenko says. "No one felt like you could change anything. Now change is possible, but many people don't see the opportunities."

At a high school classroom in Kiev, when a group of students was asked if they would rather stay in Ukraine or move abroad, only one student out of a class of 17 preferred to live in Ukraine.

The combination of the war and the slow pace of reform has accelerated a trend of Ukrainian youth opting to leave the country.

According to a 2015 survey jointly funded by the United Nations and the Ukrainian government, 55 percent of Ukrainians aged 14 to 35 said they would like to go abroad temporarily or for good.

Economic opportunities were the top reason for emigrating, followed by the explanation, "there is no real democracy and legality in Ukraine."

War was another key consideration: 34 percent of those surveyed cited the ongoing conflict in the Donbas as a reason for leaving the country.

From 2009 to 2014, the number of Ukrainian students studying abroad increased 79 percent, reflecting a trend that predates the 2014 revolution. In the past two years the number of Ukrainian students going abroad jumped 22 percent, comprising 47,724 Ukrainian students studying in 34 countries, according to CEDOS, a Kiev-based think tank .

"There had been the tendency of a gradual increase of Ukrainian students who were leaving to study abroad, which could be attributed to conventional negative factors: lower quality of education in Ukraine, less economic opportunities, corruption in education, and others," Fedets said.

"But in 2014, new challenges—the war, occupation, and crisis in the country—contributed to the rise of the amount of Ukrainian students abroad," she added.

Undimmed Hope

Despite the post-revolution setbacks, there is a persistent grassroots reform effort in Ukraine, mainly led by millennials who have chosen to commit their futures to the country.

Logvynenko was living in Poland during the Maidan revolution, but decided to return to Ukraine to take advantage of greater economic and political freedoms in the post-Yanukovych era. He says the revolution was a success.

"I'm happy the revolution happened," he says. "If it didn't happen I don't think I would ever have come back to Ukraine. And now I want to stay here."

Kisilova has also taken Ukraine's challenges in stride. She acknowledged that meaningful reforms would take years, perhaps decades to realize. But she pointed to the volunteer and pro-reform movements among millennials as proof that Ukraine is slowly making good on the promises of the 2014 revolution.

"For the last one and a half years I have seen so many young and bright people who are working for our better future, and I believe we will have it," Kisilova told The Daily Signal. "I know it's not enough to change everything in a year or two, because it is the beginning of a hard way."

Fedets added that despite limited economic opportunities and a shaky security situation, many millennials will opt to stay in Ukraine if they believe they have a realistic chance to effect change.

"For reform-minded young people who would like to enter civil service and bring changes in Ukraine, a sign from the government that their initiatives will have impact and their ideas will be heard should be sufficient to be willing to stay in the country," Fedets said.


The top of Institutskaya Street in central Kiev has become hallowed ground.

The laid-brick street steeply ascends from the Maidan around the side of the monolithic Soviet-era Hotel Ukraine.

Trees dot a patch of ground behind a small rise at the top of the street. This is where Berkut snipers gunned down protesters on Feb. 20, 2014. More than two years later, bullet holes still pockmark trees, street signs and planters.

Today, where dozens of protesters vainly crouched behind sign poles and trees for safety, there is a monument to the fallen—two rows of steel-framed photos beneath a cross.

Evidence of the violence that happened here in 2014 seems impossibly out of place on this spring evening.

It has just rained. The sunset-illuminated clouds and the green of the budding leaves on the trees glow in that airbrushed, after-rain way.

Young couples stroll by, some holding hands, some pushing a stroller.

A father leans down to his son, a toddler, pointing to the memorial, whispering something to him.

Two soldiers in uniform pause at the memorial; their faces and gaits are stiff. They stand silently for a moment before carrying on.

Earlier, at a café in downtown Kiev, Onyshchenko adjusted his eyeglasses and explained the duality of his love for, and disappointment in, Ukraine.

"I was trying to make Ukraine better," Onyshchenko said. "I grew up here; I love the people. But I don't think things will improve drastically in the next 10 to 15 years. At the same time, I want to see Ukraine be a success. There is so much potential here."

Nolan Peterson, a former special operations pilot and a combat veteran of Iraq and Afghanistan, is the Daily Signal's foreign correspondent based in Ukraine.

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