Buy a seat in the Verkhovna Rada: $3,000,000 to $10,000,000. A good investment

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Tomas Fiala, critical observer of his adopted country

“Ukraine will depend for years on Western loans. This gives foreigners leverage.”


Benjamin Bidder

Der Spiegel online

August 27, 2015

Translated from German by Tom Winter

Sputnik has published a story based on this nterview; again, Fort Russ gives you the actual source. First comes the reporter’s overview, then the interview…


 Original headline: Reforms in Ukraine: “According to my information the seats in parliament were bought”

The assessment on the so-called reformist government in Ukraine: There is too much consideration for corrupt cliques. Thus the investment banker Tomas Fiala, head of the European Business Association in Ukraine. What is going on in Ukraine? Is the government finally engaged in brave reforms? Or is it just the recycling all over again of the old elites, the oligarchs, the corrupt politicians? The answer to these questions is complicated. It reads: Both.

Many of the corrupt cliques are still intact. The fight against corruption among the authorities is proceeding slowly. But there is progress in spots: The chronically corrupt gas market is reformed, professionals have taken the helm at the Ministries of Economy, Finance and with the central bank, virtually for the first time since the country’s independence. The rebuilding of the police has started. The Parliament passed, in first reading, a new law on public funding of political parties. It remains to push back the influence of the oligarchs, who have so far been able to buy political parties and politicians.

Tomas Fiala, 41, knows his way around behind the scenes of the political Kiev. He is the founder of the investment bank Dragon Capital in Kiev and head of the European Business Association in Ukraine. He was born in Brno, Czech Republic and has lived in Kiev since the 90s. The Ukrainian magazine “Focus” has appraised Dragan Capital assets at 180 million dollars. Fiala is rich but no oligarch: he keeps his distance from Kiev’s political intrigues. During the Revolution he demonstrated on the Maidan. On the one hand, Fiala counts the current government the best the land has had. On the other hand, it is still not good enough. A conversation about the mixed bag of reform in Ukraine:

SPIEGEL ONLINE: Why did many top managers and entrepreneurs support the revolution?

Fiala: I can only speak for myself. Ukraine was on the path like it the authoritarian and isolated Belarus. I am Czech, and grew up under socialism. and I never want to go back. I want to be able to say what I think.

SPIEGEL ONLINE: Earlier this year you have criticized the leadership of Prime Minister Arseniy Yatsenyuk and Minister Poroshenko. You said “the fish rots from the head”.

Fiala: The sentence referred to corruption among the political elite. It has since gotten a bit better. In Parliament, there is a a group of new, clean politicians at work. There are perhaps 60. They are not in the majority, but they can have effect. They push back lobbyists. Around one third of ministries turns out to be excellently staffed, especially the areas of economics, finance and infrastructure.

SPIEGEL ONLINE: Many citizens are still dissatisfied with the state of the fight against corruption.

Fiala: Reforms of other countries show that there is a clear recipe for success: you have to cut back on bureaucrats drastically, and fire 90% of the civil servants. Then you have to pay the new civil servants so they don’t have to live on bribes. Unfortunately, Ukraine has waited too long. It took more than a year to establish the new anti-corruption agency. Instead, one would have to reform the General Prosecutor’s Office.

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SPIEGEL ONLINE: What do you mean specifically?

Fiala: The bureaucracy is 19,000 strong. It’s entangled in it instead of fighting it. In the nineties mafias were strong in Ukraine. They have lost influence because their business was taken over by cliques in the Interior Ministry and the Prosecutor’s Office.


SPIEGEL ONLINE: Why has the break with the old system failed to materialize even after the Maidan protests?

Fiala: Take the Prime Minister Arseniy Yatsenyuk. He is a product of the old system himself. He does not give the impression that he is serious about changing it.

SPIEGEL ONLINE: How do you tell?

Fiala: Where bureaucrats would have to be cut by half, he thinks, ten percent. He does not understand why the civil service needs to be radically restructured. Yatsenyuk himself has always worked in the public sector.

SPIEGEL ONLINE: Were you disappointed,  in the candidates who got installed in parliament under Yatsenyuk and Poroshenko?

Fiala: They have set up good candidates up front: military heroes and activists of good repute. But further back on the electoral lists follow many businessmen. According to my information the parliamentary seats were bought for prices between three and ten million dollars apiece. Sure, it’s always been like that in Ukraine. But after Maidan, I would like to have seen it end.

SPIEGEL ONLINE: Who buys the seats?

Fiala: Business people who want to lobby their interests in parliament. For them, it’s an investment.


SPIEGEL ONLINE: Why have Premier and President agreed to it?


Fiala: To finance their election campaigns. Yatsenyuk lacked his own money, and Poroshenko likes hanging on to his fortune. They have made themselves hostage to the old system. Reform advocates have trouble: they are now running in to people who say to them: Your projects are fine, just start your reforms somewhere else and not with me.

SPIEGEL ONLINE: Is there evidence of these allegations?

Fiala: These are well known facts in Ukraine, which are acknowledged in private discussions from both sides, from the buyers as well as the party leaders. If the Attorney General’s office were truly independent of political influence, then it would not be difficult to investigate these allegations.


SPIEGEL ONLINE: Why should the West help Ukraine continue despite corruption?


Fiala: Because this is a good investment. The citizens here do not have to be convinced of the necessity of change. They are willing, even to suffer. The gas tariffs were increased several times over without significant protests. In addition: Ukraine will depend for years on Western loans. This gives foreigners leverage. Money only after fulfillment of the reform guidelines, has to be the motto.

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