“Oligarch’s Return Raises Alarm in Ukraine,” by Andrew E. Kramer, The New York Times, May 16, (https://www.nytimes.com/2019/05/16/world/europe/ukraine-zelensky-kolomoisky.html?smtyp=cur& smid=tw-nytimesworld):
…The Ukrainian government took over … PrivatBank, [co-owned by Ihor Kolomoisky] in the course of a $5.6 billion bailout at a time when lending by the International Monetary Fund, the European Union and the United States was propping up the government.
While the bailout was seen as necessary, the extraordinary cost of what the Ukrainian central bank called Mr. Kolomoisky’s mismanagement became Exhibit A for Western governments in the risk of financially supporting Ukraine despite widespread corruption.
Mr. Zelensky’s campaign was centered around the claim that, beholden to no one, he would be able to clean up Ukraine’s chronic corruption. How Mr. Zelensky handles the Ukrainian authorities’ protracted dispute with Mr. Kolomoisky is a key test of his election promises to break the grip of the oligarchs, who have held sway over the country’s politics almost since independence in 1991.
It will also test relations with Western governments, which are not eager to see more aid money vanish into Mr. Kolomoisky’s business empire.
While Mr. Kolomoisky has said he would “not be the shadow leader of the country and the gray cardinal,” he has spoken openly of his hopes that Mr. Zelensky would fire officials at the central bank who were behind the takeover of PrivatBank. And that was before he returned from exile.
Reflecting Western alarm over Mr. Kolomoisky’s return, Carl Bildt, a former prime minister of Sweden, posted on Twitter that “if he’s not careful this could be the undoing of Zelensky. Selective re-oligarchization would be a disaster for Ukraine.”…
“Zelensky’s First Big Test,” by Basil Kalymon, Ukraine Alert blog, Atlantic Council, May 8 (https://www.atlanticcouncil.org/blogs/ukrainealert/zelenskiy-s-first-big-test):
…Most recently, [Ihor] Kolomoisky successfully obtained a lower court ruling that the nationalization of PrivatBank was illegal. This decision is being appealed to a higher court by both the Ministry of Finance and the NBU…
Under such circumstances, the position of President-elect Zelensky must be unequivocal. He must remove Kolomoisky’s lawyer, [Andriy] Bohdan, from any decision making in his entourage regarding PrivatBank.…
Zelensky’s advisors have said that PrivatBank will not be returned to Kolomoisky. This position must be unambiguously endorsed. …
If Zelensky does not stay the course, the consequences will be grim. There will be a dramatic fall in his approval rating which will result in a significantly lower level of support for the Sluha Narodu [Servant of the People] party in the upcoming Rada elections. Failure to achieve a substantial block of support in the Rada will imply that the Zelensky reform agenda will not have enough support. The international financial institutions, most critically the IMF, will lose confidence and may well withhold further tranches of financing. With the high level of repayments coming due, there is a substantial risk of default and the hryvnia could collapse. Both the fragile stability achieved in the budget and in the banking system will be broken. The stakes are colossal and the hopeful new direction for the country could be dislodged.
“Why the West Must Lean in Now,” by Michael Carpenter, May 16, Ukraine Alert blog, Atlantic Council (https://www.atlanticcouncil.org/blogs/ukrainealert/why-the-west-must-lean-in-now):
…The worst thing the United States could do at this critical juncture is to withdraw its ambassador from Ukraine and have no senior official on hand to engage [Volodymyr] Zelensky and his team. Unfortunately, that is exactly what happened last week as the State Department recalled Ambassador Marie Yovanovitch from her post and with no confirmed successor ready to assume her place. Yovanovitch served with distinction in Ukraine and capably represented the United States as its ambassador in Armenia and Kyrgyzstan during the George W. Bush administration. Recalling her now is a costly diplomatic mistake.
In spite of this, the United States must engage with Zelensky to offer strategic and technical advice; inform his views on diplomatic, security, economic, and governance issues; and convey its readiness to support a credible reform agenda with assistance and expert personnel. …
For Zelensky, the biggest question regarding his willingness to fight corruption revolves around the nature of his relationship with oligarch Ihor Kolomoisky. One of Kolomoisky’s chief lawyers, Andriy Bohdan, has emerged as a key Zelensky advisor. Kolomoisky himself has fed rumors that Zelensky may do his political bidding by declaring his intention to de-nationalize Privat Bank… The Trump administration will need to assert a red line with regard to the de-nationalization of Privat Bank, which would be catastrophic for Ukraine’s finances and credibility. Zelensky should also know that his treatment of Kolomoisky will be watched closely for signs of favoritism.