UPDATED: Poroshenko's team hit by defence industry corruption scandal, Tymoshenko starts impeachment process

UPDATED: Poroshenko's team hit by defence industry corruption scandal, Tymoshenko starts impeachment process
The son of Ukraine's Oleg Gladkovsky, First Deputy Secretary of National Security and Defence Council has been implicated in a scandal that could end President Poroshenko's chances of re-election in March / wiki
By bne IntelliNews February 27, 2019

President Petro Poroshenko rivals in the upcoming presidential election are accusing him of “profiting from blood” after an investigation revealed that the son of the president’s close business partner has been selling arms to separatist rebels in the breakaway eastern region of Donbas, it was a revealed in a report broadcast on Ukrainian TV on February 26.

Former Prime Minister Yulia Tymoshenko, who leads the influential Batkivshchyna - or All-Ukrainian Union "Fatherland" party started a formal impeachment process against President Petro Poroshenko on February 27, accusing him of treason.

"We believe that what was done and what was disclosed by investigative journalists fall under Article 111 of the Criminal Code of Ukraine State treason," Tymoshenko said referring to the laws that cover treason.

A BIHUS.info report revealed that "top officials of the defence industry" were receiving kickbacks for obtaining contraband military vehicle parts at inflated prices. However, the president was not directly implicated in the accusations of wrong doing. 

However, the process cannot be completed before the March 31 presidential elections in which both politicians are standing and the move is an election gambit. Moreover Tymoshenko’s fraction doesn't have enough seats and so is unlikely to secure an impeachment vote.

Award-winning investigative reporter Denys Bihus aired the results of an investigation on Ukrainian television citing documents and private messages from an anonymous leaker that described a fraud by a group allegedly including Ihor Hladkovskiy (aka Gladkovsky), the 22-year-old son of Oleh Hladkovskiy, who is formerly worked closely with Poroshenko and has been the First Deputy Secretary of National Security and Defence Council (NSCD).

Hladkovskiy senior immediately resigned his post on February 27 as the scandal swept the country that could spell the end to Poroshenko’s re-election hopes. Despite the ties between the men, Poroshenko himself has not been personally implicated in the schemes to sell weapons that are widely seen as Kremlin-proxies and who are fighting the Ukrainian army. More than 10,000 Ukrainian service men have been killed in the four-year long undeclared proxy war against Russia.

“Just wonder if this will be a terminal blow for Poroshenko’s campaign. [Rivals Yulia Tymoshenko] and Zelenskiy will milk this one to the full,” Tim Ash, Senior Sovereign Strategist at BlueBay Asset Management said in an emailed note. “And assume given the focus of [oligarch Ihor] Kolomoisky’s media channels they will look to reveal lots more kompromat. All sides have a lot to lose in this campaign, I guess it is going to be an ugly and dirty campaign. The gloves just came off.

With the presidential election only a month away Poroshenko’s main rivals leapt on the case to lambaste the president.

With a record 44 candidate registered for the poll, the race is seen as a three-way affair between the incumbent president, ex-MP Yulia Tymoshenko and comedian Volodymyr Zelenskiy.

Tymoshenko accusing Poroshenko and his inner circle of "state treason" and called for his immediate impeachment. Zelenskiy said the president and his friends were "profiting on blood."

"This is state treason deliberately committed by a citizen of Ukraine to the detriment of Ukraine's sovereignty, territorial integrity and inviolability, defence capabilities and state and economic security," Tymoshenko said on February 25. "In essence, this is supporting the enemy in destroying the Ukrainian army. This supports the occupier-state in conquering our country. This is absolutely a case for prosecution."

Ihor Hladkovskiy was a direct participant in "schemes in the millions" that stole money from Ukraine’s defence industry complex and illegally profited from the war, according to the Nashi Hroshi investigation broadcasted on February 25.

Among the most outrageous alleged schemes is organising contraband imports of Russian parts for Ukrainian military hardware, and then selling them at highly inflated prices to the armed forces.

The program demonstrated leaked text messages in, which Russian suppliers reached agreements with Hladkovskiy associates, Vitaliy Zhukov and Andriy Rohoza.

These associates also sent texts to the junior Hladkovskiy in order to request that his father resolve contracts, or address these matters with the directors of Ukrainian factories. More than UAH250mn ($9mn) in profit was earned through three shell companies, including one directly owned by Poroshenko at the time, the report alleged. In one text exchange, Rohoza alleged UAH500mn was earned. Another mentioned scheme was reselling parts to the Ukrainian military that were designated for disposal.

"Profit on blood"

The same day, Zelenskiy wrote on his Facebook page that "the people who came to power on blood are making profit on blood". "Now I understand what the 'Army, Language, and Faith' slogan means: robbing the army and artificially dividing the people by language, and therefore there is no faith in you," Zelenskiy added.

Poroshenko has adopted the 'Army, Language, and Faith' slogan during his presidential campaign. The presidential election will take place on March 31.

According to latest surveys, Zelenskiy’s presidential candidacy rating is growing. Specifically, according to the latest poll results published by the Kyiv International Institute of Sociology (KIIS), among decided voters, Zelenskiy has 26.9% support, compared to 17.7% for President Poroshenko and 15.8% for ex-PM Yulia Tymoshenko, according to the poll conducted between January 31 and February 10 of 2,007 respondents.

Zelenskiy would earn 39.6% of votes in the second-round runoff, compared to 18.1% for Poroshenko (a 21.5% gap), according to the poll. Tymoshenko would earn 27.0%, compared to 18.9% for Poroshenko (an 8.1% gap).

Zelenskiy, a close associate of controversial Ukrainian oligarch Ihor Kolomoisky, was officially registered as a presidential candidate by the CEC on January 30. The comedian was nominated by his newly-created party the Servant of the People.

Poroshenko's reaction

Meanwhile, Poroshenko has demanded Ukrainian law enforcements to check information reported by the Nashi Groshi programme and said he supports the temporary removal of First Deputy Secretary of the National Security and Defence Council (NSDC) Oleh Hladkovskiy.

"The President [...] supported the removal of Oleh Hladkovskiy from his duties during the investigation. Poroshenko demands that law enforcement agencies urgently check the information provided in Nashi Groshi's investigation to refute or confirm the report's findings," Interfax news agency quoted the president's spokesman Svyatoslav Tsegolko on February 25.

Zenon Zawada at Kyiv-based brokerage Concorde Capital believes that the scandal has the potential to boost the support for Tymoshenko and Zelenskiy at Poroshenko’s expense.

"Poll ratings released yesterday showed that the candidacy of sketch comedian Zelenskiy has stolen the election momentum of Tymoshenko, whose support has plummeted directly and inversely to Zelenskiy’s rise," he wrote in a note on February 26. "Therefore, Tymoshenko is desperate to give voters new reasons to support her. Illegal profit from the war is a particularly sensitive subject that can stir the emotions of the public, particularly among the military that continues to support Poroshenko, more or less."