Ukraine’s New Problem: An Oligarch with a Private Army
Policy + Politics

Ukraine’s New Problem: An Oligarch with a Private Army

Rarely has the warning ‘Be careful what you wish for’ applied more completely to a situation than it does to the relationship of the Ukrainian government and Igor Kolomoisky, a billionaire oligarch with his own private army.

Until Wednesday, Kolomoisky was the governor of Ukraine’s Dnipropetrovsk Oblast. He emerged last year in Ukraine’s time of need with the ability and willingness to help the central government in Kiev. The government needed to push back against the Russia-backed rebels who were trying to carve out an autonomous region in the eastern part of the country where it borders on Russia.

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Kolomoisky is the founder of Ukraine’s largest bank and head of the Privat Group, a majority owner in multiple oil and steel companies – and one of the country’s richest men. He was an ardent foe of the separatists and was willing to take on a job not many people wanted: running the heavily Russian-speaking Dnipropetrovsk Oblast.

He committed to the task with a vengeance, both with his time and his money. The former banker also bankrolled his own army, outfitting at least 2,000 troops with weapons and uniforms and keeping a reported 20,000 men in reserve.

At first, Kolomoisky and his fighters were more than welcome. As the rebels took over much of Ukraine’s Donbass region, Kolomoisky and his fighters pushed back, fighting side-by-side with government soldiers.

With most of the fighting stalled because of a tenuous peace deal, the Ukrainian government is now apparently re-thinking the wisdom of allowing its richest citizen to control private armies.

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Last week the Ukrainian government removed the director of the joint-stock company Ukrtransnafta, which manages major oil pipelines in Ukraine. The director had been a key ally of Kolomoisky, who until last week owned a controlling interest in the company. The government in Kiev also changed the rules under which control of joint-stock firms is determined –  undercutting his influence on Ukrtransnafta’s operations.

Last Friday, armed men in masks, widely believed to be members of the militia organized and funded by Kolomoisky, took over the company’s offices in Kiev. The situation was ultimately resolved peacefully – but it created a problem for Ukrainian President Petro Poroshenko. However useful Kolomoisky’s zeal might be on the battlefield, the fact that a regional governor could deploy his own armed forces to the capital city to take over a company greatly undercut the credibility of the Ukrainian central government.

On Wednesday, Poroshenko fired Kolomoisky – or according to some reports, “accepted his resignation.”

The Ukrainian president said, “We will not have any regional governor with their own pocket army.” He has kept his word. Kolomoisky is no longer a governor. Yet he still has the private army and significant business interests that, as he has shown, he is willing to defend aggressively.

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A battle between oligarchs and the central government is clearly not something the Ukrainian government needs at this point. The ceasefire that took hold last month is only barely holding – sporadic shelling and fighting continue.

Meanwhile, the Russian government continues to send heavy weapons into the part of Ukraine currently held by the rebels, according to the North Atlantic Treaty Organization. Russian officials have repeatedly expressed interest in placing nuclear weapons in Ukraine’s Crimean peninsula, which Russia invaded last year and then annexed, a move Western governments refuse to recognize.

The Ukrainian government has no obvious reason to worry that Kolomoisky will switch sides and begin supporting the Russia-backed rebels. Last year he referred to Russian President Vladimir Putin as a “schizophrenic of short stature.” Still, private armies are not something that democracies typically tolerate – and part of Ukraine’s appeal to the West is that it offers a democratic alternative to Putin’s increasingly autocratic rule of Russia.

It’s an issue Poroshenko and his government will have to deal with, likely in short order.

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