(Bloomberg Opinion) -- Ukraine’s transition from a graft-ridden, post-Soviet hellhole to a normal eastern European country can be thought of as starting on Feb. 21, 2014 in Mezhyhirya, a 350-acre estate less than an hour outside Kiev. Today, the place is a unique vantage point for tracking the forces fighting to shape this transition.
On that day five years ago, President Viktor Yanukovych boarded a helicopter from the estate, where he had lived since the early 2000s and which a Kiev court decided in 2017 he had illegally privatized. He left behind enough possessions to fill what is sometimes called a corruption museum. He was about to flee to Russia, fearing for his life after dozens of pro-European protesters and several riot policemen were killed on the streets of a rebellious Kiev. Ukraine’s new life was beginning.
Stubborn Amateurs
The following morning, Denys Tarakhkotelyk, an entrepreneur from western Ukraine, drove to Mezhyhirya with his brother to see how he could help secure the estate. By then, like many other activists, he had spent weeks on Maidan Nezalezhnosti, Kiev’s main square, where a round-the-clock protest camp had been set up. Once the protesters won, Tarakhkotelyk didn’t want that victory to turn into a looting fest. Calm, comfortable and commanding, Tarakhkotelyk started talking to the scared officer calling himself the commandant of the estate. He’d sent his men away and stayed behind to hand over the place to whomever would come to claim it. But no one had any authority to do it properly; all Tarakhkotelyk could do was make sure the property wasn’t mined.
As the day progressed, “self-defense hundreds” from the Maidan and the Right Sector nationalist group occupied the buildings, including Honka, the wooden palace Yanukovych had built for himself, his sons and his mistress. They squabbled over control, and no one knew how anything worked. The estate’s large stock of alcohol was consumed. Serious-looking armed men in masks started arriving by nightfall; no one knew who they were. Shots were fired — only in the air, as far as anyone knew — and stuff was taken out. Still without any authority, Tarakhkotelyk was trying to convince self-defense fighters manning the exits to write down what was leaving Mezhyhirya.
“When I first got home a week later, my wife couldn’t recognize me,” he told me in Mezhyhirya this week. “I’d lost 10 kilograms. I’d forgotten to eat and drink. It was just cigarettes and one situation after another.”
At some point, people started calling him “commandant.” Eventually, the leaders of the squabbling rebel factions recognized his authority and left the property in his care.
Mezhyhirye to Palo Alto
One of the “situations” Tarakhotelyk had to handle was security for investigative journalists from several Ukrainian publications who had fished Mezhyhirya’s financial books out of the adjoining Kiev Reservoir (the files had been dumped there by Yanukovych’s people as they’d fled). They occupied a guesthouse in which Russian President Vladimir Putin had reportedly stayed, spent nights there in sleeping bags and dried the papers in the sauna.
A reporter who was part of that impromptu team, Denys Bihus, has played an important role in the current political campaign leading up to the March 31 presidential election. He unleashed a widely discussed series of televised reports about a corruption scheme in the Ukrainian defense industry that has undermined an important part of President Petro Poroshenko’s campaign claim to be savior of the national military.
Oleksandr Akymenko, whom I hired as head of investigations at the Ukrainian edition of Forbes when I started its online version in 2012, was also on the team. When I visited him in Mezhyhirya in early March, 2014, a kind of informal order had been restored, with volunteers running the place and the prosecutor general’s office in possession of some of paperwork that had been dried out in the sauna. The journalists later published the documents online and used them to reconstruct Yanukovych’s corrupt unofficial bookkeeping.
The following year, Akymenko went to Stanford University on a John S. Knight fellowship. There, he convinced political science professors Francis Fukuyama and Michael McFaul to start a training program for young Ukrainian leaders. Funded in part by Ukrainian rock singer Svyatoslav Vakarchuk, who turned down a realistic chance to run for president but is expected to put together a strong political force for this year’s parliamentary election, the program attracts hundreds of applicants for three places at Stanford each year.
New Technocrats
The first participants in the program included Alexander Starodubtsev, the creator of an online government procurement system that is touted as one of the major successes of post-2014 Ukrainian reform. It’s called ProZorro, a pun involving the Ukrainian word for “transparent.” When I met him in Kiev this week, Starodubtsev told me a story that sounded a lot like Tarakhotelyk’s.
With the vaguest of mandates from Pavlo Sheremeta, who briefly served as economy minister after the 2014 rebellion, Starodubtsev volunteered to tackle state procurement, which at that time seemed irretrievably corrupt, consuming billions of taxpayer dollars in a post-Soviet state with government-run schools, hospitals and thousands of state-owned companies. Starodubtsev, a securities trader, knew nothing about procurement. He found a volunteer computer programmer to start developing an electronic exchange, only to find out that such exchanges already existed. Abandoning the initial effort, he doggedly pushed the exchanges to unite, convinced Transparency International, the global anti-corruption group, to host the system, and lobbied the economy minister who had succeeded Sheremeta, Aivaras Abromavicius, to adopt it.
Abromavicius told me last week that he’d first considered Starodubtsev crazy and regarded him as a pest, but hired him anyway. The former trader fired 20 of the procurement department’s 42 workers and set about convincing regional authorities and government agencies to adopt the online bidding system, which quickly became known as one of the best efforts of its kind. In 2018, 1.1 million tenders were held in the system. Since 2016, it is estimated to have saved the Ukrainian state about $1 billion.
Starodubtsev came out of the experience convinced that public service was more difficult than work in the private sector but that the difficulty was justified. The insight he brought back from studying under Fukuyama at Stanford is that Ukraine needs to work patiently on setting up a professional bureaucracy rather than rely on the naive revolutionary enthusiasm of 2014.
“The system is no cakewalk,” he told me, “but many people came in misguided, thinking they could change it with a few simple operations. I don’t think that euphoria was a good thing. Now people will try to learn the ropes better.”
Starodubtsev’s current project is an electronic system to keep track of Ukraine’s bureaucrats and allow their bosses to set tasks for them transparently. The idea is that, as in procurement, such a project would change the public-service culture.
Another alumnus of the Stanford program, Dmitry Romanovich, also came back with a gradualist vision. At the European Bank for Reconstruction and Development, he runs a project that has embedded support teams with Ukrainian ministries to help draft regulatory documents and legislation, pushing for European practices and ensuring their adoption. “We had inflated expectations after 2014,” he told me last week. “It’s a matter of normal, adequate work as per well-known methods. Then any reform can be down in two or three years – much faster, actually, than these things could be done in an established democracy, but not as fast as some expected.”
‘Some of Them Feel Rage’
Not all of the young professionals who flocked to the Ukrainian government after 2104 have subscribed to this kind of institution-building gradualism. Headhunter Roman Bondar, managing partner at Odgers Berndtson Ukraine, said he helped find about 750 people from private businesses to fill civil service positions after 2014, and 95 percent of them left in disgust or were pushed out. “We have frittered away a historic opportunity,” he said. “A lot of smart 27-to-35-year-olds have had their faces smashed against the pavement. They’ve been traumatized and scarred, and some of them feel an incredible rage.”
According to Bondar, some of these outcasts are plotting to get back into government. All they need is leadership, which some hope will be there if Poroshenko loses the election. Starodubtsev’s former boss, Abromavicius, shares their ambition and is working with the anti-establishment candidate, comedian Volodymyr Zelensky. He doesn’t think the conformism of the Stanford program’s graduates is the answer.
“They are heroes,” he told me, “but I don’t like how some of these guys have integrated into the system under the current bosses, how they decided to compromise and be nice. They weren’t like that at the beginning. If I were their boss now, I’d guide them toward quicker wins and bigger issues.”
There’s something to what he says. Even the new Ukrainian institutions, created with the help of Western experts, haven’t always lived up to expectations as they tried to deal with the plundered nation’s reality. The post-2014 revolutionary enthusiasm was often naive and unprofessional, but in some cases, it worked better than attempts at professionalization.
Last year, a Kiev court handed over Mezhyhirye to Ukraine’s Agency for the Recovery and Management of Assets, set up in 2016 to handle property seized from corrupt officials and business people who run afoul of the law. Until then, Tarakhotelyk ran the place as best he could through a nonprofit organization he’d set up in 2014, National Park Mezhyhirya. It charged entrance fees, arranged tours and used the money to pay about 50 staffers and for charity projects such as summer camps for poor kids and golf practice for disabled veterans of the war in eastern Ukraine.
The government didn’t think much of the nonprofit’s amateurish approach, so it put control of the estate out for bids. Tarakhotelyk’s was rejected, but the only other bidder didn’t exactly inspire confidence.
This January, the investigative journalists who had fished Yanukovych’s books out of the reservoir in 2014 got together again to protest against the firm’s non-transparent selection. In response, the government extended the bidding, then, this month, restarted it with updated terms. Tarakhotelyk continues to run the place as best he can, barely covering the maintenance expenses for the vast estate and hanging on to the commandant’s job out of the same stubbornness that once led him to stick around when the revolution was over and everybody else went home.
Like the asset-recovery agency, other government bodies set up to rid Ukraine of corruption have bogged down in a sticky system in which everybody who isn’t a heavyweight must “belong” to some heavyweight to achieve results.
For all my admiration for the worldliness and process-management expertise of the Stanford-educated leaders, my heart goes out to Tarakhotelyk and Abromavicius, the latter now taking a bold gamble on the television personality Zelensky.
Relying on technocratic skill is all well and good, but in post-Soviet countries, it can be a trap. Putin’s Russia has developed a supremely competent technocracy, which has learned to coexist with the grossest corruption. Ukraine hasn’t yet squandered its chance to avoid a similar fate because of a fundamental difference from Russia: It still has some of those passionate amateurs left.
“We’re a passionate country,” Bondar told me. “In a way, it makes me happy that the war with Russia made us burn our bridges.”
Without the amateurish passion of Tarakhotelyk, the swamp disturbed violently by the 2014 revolution may become impenetrable again with a new institutional basis. If passion is rekindled, though, the accumulated experience of an increasingly competent new class of managers can take the country to a new level — and, eventually, bring it out of the post-Soviet world and into Europe.
To contact the editor responsible for this story: Jonathan Landman at jlandman4@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
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