Zelenskiy, the Washington swamp and the Party of Regions

Hallway in the Capitol building. Washington D.C. Photo: Derek Key (cc) flickr.com

Volodymyr Zelenskiy was inaugurated as Ukraine’s sixth president on May 20th after winning a landslide victory supported by a high anti-establishment vote. Zelenskiy is new to politics in general and barely has an election programme. His ties to Ukrainian oligarch Ihor Kolomoyskyi, whose 1+1 TV channel hosts “Servant of the People”, in which Zelenskiy is the star actor, are well documented. This article investigates Zelenskiy’s ties to Ukrainian politicians, in particular leaders from the Party of Regions who have been in exile in Russia since fleeing there during the Euromaidan Revolution.

Four days before the April 21st second-round election between President Petro Poroshenko and Zelenskiy, Radio Free Europe/Radio Liberty broke news that Zelenskiy’s campaign hired a Washington lobbying firm to “elevate its profile.” News of the campaign’s hiring of Signal Group led to Zelenskiy denying co-operation with the US lobbyists. This news was curious enough, considering Ivan Bakanov, Zelenskiy’s chief of staff, was making his rounds in Washington thanks to help from Signal Group. However, even stranger was the news that the lobbying group was hired on behalf of Zelenskiy by Marcus Cohen, who was then unknown to Ukraine experts.

In another apparent attempt to skirt US Department of Justice (DOJ) regulations on declaring work done on behalf of foreign politicians, Cohen, an attorney who previously worked for the US Department of Commerce’s Bureau of Industry and Security, likely maintains attorney-client privilege with Zelenskiy or a member of Zelenskiy’s campaign, which precludes him from foreign agent registration requirements according to a Washington-based lobbyist with whom I spoke.

This workaround allowed Zelenskiy to initially deny to Ukrainian voters that he hired a US lobbyist as Signal Group hired lawyer Cohen on his behalf. However, this opaque registration by the Signal Group also masks the source of funding for the lobbying operation. “I wonder whether Signal Group conducted all the necessary due diligence and has a clear understanding of the origin of the funds for the contract with Marcus Cohen,” I as told by a financial intelligence expert. We have seen this opaqueness in the hiring US consultants before by Yulia Tymoshenko during her presidential election campaign when she used US limited liability corporation (LLC) laws to her advantage and concealed the source of funding for lobbying done on her behalf by Avenue Strategies and by the Livingston Group.

Yet, Zelenskiy was supposed to bring a new non-corrupt style of politics to Ukraine. Right?  Importantly, Signal Group is a subsidiary of Wiley Rein, a law firm hired by Tymoshenko and her husband Oleksandr for lobbying in Washington. A Ukraine expert based in Washington told me that this connection led him and other analysts to believe that the common link that is funding this lobbying in the US is oligarch Ihor Kolomoyskyi, who we know has long had close ties to Tymoshenko and Zelenskiy.  According to a Washington-based lobbyist I spoke with for this investigative report, Cohen – formerly a lawyer and counsel with Sandler, Travis, and Rosenberg (ST&R) – ended his relationship with the law firm when ST&R management raised concerns about his contacts with individuals who had been sanctioned by the US government. ST&R refused my requests to comment on this.

According to screenshots seen from the mobile messaging application WhatsApp, Cohen notified his sources that he was in contact with Andriy Kluyev, former head of President Viktor Yanukovych’s presidential administration and secretary of the national security and defence council (RNBO), and Serhiy Arbuzov, former first deputy prime minister in Mykola Azarov’s government. Both Kluyev and Arbuzov are “Specially Designated Nationals” (SDNs) by the US Department of Treasury, meaning any business transaction with either of these individuals requires a license; however, payments for legal services to an attorney such as Cohen, are generally exempted.

According to my lobbyist contact in Washington, over the past two years Cohen was also in contact with Russian oligarch Andrey Melnichenko (in an email to New Eastern Europe, representatives of Mr Melnichenko have denied having any contact with Cohen — editor’s note); former Ukrainian Minister of Finance Oleksandr Danylyuk; head of Ukraine’s Specialised Anticorruption Prosecutor’s Office Nazar Kholodnytsky; Polina Deripaska, wife of sanctioned Russian oligarch Oleg Deripaska,; former Ukrainian science and education minister Dmytro Tabachnyk; and former head of the Ukrainian Football Federation (UFF) Andriy Pavelko. According to multiple sources I spoke with in the United States and Ukraine, Cohen works closely with fellow Californian Michael Gordon, an investment adviser with ties to the Russian government. Gordon, who is married to the daughter of former Tajikistan Prime Minister Abdumalik Abdullajanov, has managed the reported $180 million fortune of the Tajik politician. Ukrainian officials detained Abdullajanov at Kyiv’s Boryspil International Airport in February 2013 for questioning related to the assassination attempt against Tajik President Emomail Rahmon.

Gordon has often boasted of his ties to Rosneft’s Chief Executive Officer and Chairman of the Board Igor Sechin – who is also sanctioned by the US government. According to the CV of Michael Gordon obtained during this investigation, in addition to his ties with Russian President Vladimir Putin’s “de facto deputy” Sechin, he has consulted for the Russian Agricultural Bank (RusAg); LSR Group, a Russian real estate development and construction company; and a financial government minister in the Yanukovych-era, most likely Fedir Yaroshenko. Gordon bragged to several prominent Ukrainian businessmen and political figures recently that he was largely responsible for President Donald Trump’s decision to recall US Ambassador to Ukraine Marie Yovanovitch. Cohen and Gordon received a seven-figure consulting fee from Kluyev and Arbuzov for their “legal services”. My source, who is familiar with Gordon’s activities in Ukraine and Russia since the Yanukovych era, claims to have seen bank wire confirmations from off-shore LLCs paid to Cohen’s attorney trust fund account at Wells Fargo bank.

Cohen contacted a US consultant asking him to obtain a letter from a prominent American official on behalf of the granddaughter of Yanukovych-era government official Volodymyr Sivkovych recommending her application for admission to the Pechersk International School in Kyiv. Cohen and Gordon have been in contact with Sivkovych since at least July 2017 and claimed to have met with him and both Russian and Ukrainian SDNs on multiple occasions in Europe. Sivkovych was known as “Putin’s man in Kyiv” and according to a former Yanukovych official cited in a Transparency International report, the mastermind behind the buying up of parliamentary deputies. Sivkovych’s ally Tabachnyk, a notorious Ukrainophobe, is notorious for his scandalous time as education minister. Kluyev meanwhile, is believed to be the one who gave the orders for Berkut to violently attack the peaceful protestors on the Maidan on November 30th 2013.

Because of Cohen and Gordon’s ties with former senior Yanukovych era leaders Sivkovych, Kluyev and Arbuzov, who all live in exile in Moscow, US officials are very concerned about who is currently influencing Zelenskiy and his team. US officials have many questions for Cohen and Gordon, including how funds designated for legal services are being used for lobbying is a serious violation of sanctions law. In addition, Cohen offering legal services to sanctioned individuals Kluyev or Arbuzov is unethical.

In an addendum to Signal Group’s initial registration as a foreign agent of Zelenskiy, filed through the Department of Justice’s Foreign Agent Registration Act (FARA), Signal Group’s Chief Financial Officer Jessica Rihani signed a contract with Cohen. This includes a clause stipulating: “Cohen on behalf of Zelenskiy confirms that none of the funds to be paid for the services provided under this Agreement have been obtained from any person on the Prohibited Parties List or the Sanctioned Parties List, and that none of the funds originate from persons or entities located in or organized under the laws of the countries subject to US sanctions, where the involvement of such a person or entity would violate the sanctions laws of the United States.”

This suggests that the origin of the funds is a concern for the US lobbying firm. Zelenskiy, or a representative of Zelenskiy’s election campaign, signed the contract included in the addendum which means Zelenskiy had knowledge of the lobbying activities conducted on his behalf in Washington. As with Tymoshenko, Zelenskiy has misled Ukrainian voters about his US lobbying activities and is trying to hide how those who have been hired have contacts to senior officials from the Party of Regions in exile in Russia. Ukrainian journalists will undoubtedly continue to investigate the connections highlighted in this article between the “Washington Swamp”, Zelenskiy and his team and notorious Party of Regions leaders. With anti-western forces with grudges against the US government influencing Zelenskiy’s team, there is unlikely to be the same degree of commitment to a robust US-Ukrainian strategic partnership as during the previous Poroshenko presidency.

Taras Kuzio is a professor in the Department of Political Science, National University of Kyiv Mohyla Academy and a Non-Resident Fellow, Foreign Policy Institute, School of Advanced International Studies, Johns Hopkins University.

Party of Regions, Ukraine, Ukrainian politics, US influence, Volodymyr Zelenskiy