Poroshenko engaged in suspicious financial transactions as president, FinCEN says

At least four global banks have informed the Financial
Crimes Enforcement Network at the U.S. Treasury Department of suspicious
transactions totaling USD 65 mln involving four offshore companies with alleged
ties to former President Poroshenko, as reported on Oct. 9 by the slidstvo.info
news site. During his term as president, Poroshenko may have created these
offshore firms without reporting them in his required electronic declaration of
assets and income. The documents also imply that he engaged in illicit business
activity as president while insisting he wasn’t, even placing assets into a
trust. “The companies identified by FinCEN were in the sights of Ukrainian law
enforcement authorities for years. Investigators suspect them of laundering
funds and evading taxes. And they tried to gain access to the bank accounts of
these firms,” the report said, citing judicial rulings that journalists gained
access to.

The four offshore firms were established in the
British Virgin Islands with a Ukrainian village resident as the formal owner,
the report said. These four firms created at least 400 subsidiaries, which is a
typical sign of intermediary shell companies, whose main goal is to conceal the
ultimate owner of a business. One of the four firms, Genesis Local Ventures
(GLV), received about USD 60 mln in 2016-2017, prompting Deutsche Bank to close
its accounts owing to an absence of transparency. GLV was liquidated a week
before President Poroshenko ended his presidency in May 2019. Some of the firms
identified by FinCEN were also mentioned in the famous Panama Papers document
leak in 2016.

In response to the report, the European Solidarity
party led by Poroshenko issued a statement declaring he doesn’t own any
offshore companies at all. It also stressed that “owning business assets is not
the same as administering business processes.” The report’s claim that the
president continued to engage in personal business affairs after being elected
president “creates the impression that the investigation is biased and
politically motivated, particularly in view of the election campaign,” the
statement said.

Zenon Zawada: Many
questions arise with this news report. Why has the U.S. not opened a criminal
case against Poroshenko if this information has been around for years? Our
answer is that he had political immunity having fully submitted his foreign
policy to the U.S. That begs the question of, why now? And we don’t think it’s
related to elections since the slidstvo.info project gets its financing from
Western funds (and not Ihor Kolomoisky, Poroshenko’s nemesis).

Speak of the devil, it will be interesting to see
whether the U.S. government ever opens a criminal case against Poroshenko, as
it is currently moving to do against Kolomoisky.
A criminal case against Poroshenko would offer some indication the U.S.
government isn’t politically biased in addressing high profile crimes in
Ukraine (which has both positive and negative implications for Ukraine). Other
entirely separate factors would affect this decision as well, such as the
strength of the available evidence.

Among the negative consequences of a U.S. criminal
case against Poroshenko is it would throw open the floodgates to the dozens of
criminal cases waiting in the pipeline against the former president from
Ukrainian prosecutors. For this reason alone, we would expect U.S. prosecutors
to refrain from any criminal charges. They are also aware that Poroshenko is
the leader of Ukraine’s pro-Western forces. Though we can’t rule out they could
reach the decision that it’s time to help replace him with a fresh face.