From oligarchs to rebels, it is politics the Ukraine way

A member of the Donetsk Referendum electoral commission in front of the central police station in Mariupol, Eastern Ukraine. Photo: Kate Geraghty
A member of the Donetsk Referendum electoral commission in front of the central police station in Mariupol, Eastern Ukraine. Photo: Kate Geraghty

Charred beyond recognition, it was impossible to identify the building just off the central square in this steel and chemical town on the north shore of the Azov Sea.

But locals knew that it had served as a bank, who owned it and why it had been torched - in a word, payback.

Until last week it had been a thriving branch of Privat Bank, Ukraine's biggest and part of the business empire of oligarch Igor Kolomoysky.

The fate of its branch in Mariupol is a thread which, when pulled, unravels the conventional portrayals of this crisis as a contest between east and west in the post-Soviet world.

The oligarchs don't simply participate in the political process - they own it, just as they own banks and steel mills and the media combines that inform Ukrainians about themselves, their society and the world.

We were drawn to Mariupol by reports that the city's new police chief, Valeriy Andrushko, had been killed late last week - abducted by separatists and hanged on the outskirts of the city, Ukrainian news reports claimed.

The reports of Mr Andrushko's death proved exaggerated. Appointed just days earlier, the police chief had turned up in hospital, ''alive but in critical condition - traumatic brain injury, broken ribs, a lot of bruises on his body'', according to a Facebook page in the name of ultra-nationalist MP Oleg Lyashko.

Kiev's story is that in attacking the police station, separatists had commandeered its sizeable store of weapons, which they then turned on government forces.

Locals tell a different story - that Mariupol's rank-and-file cops had refused to follow Mr Andrushko's order to open fire. ''They refused to act on his criminal orders,'' according to Vladimir Litovchenko, a 52-year-old volunteer with the separatists.

Another leather-jacketed rebel we found pacing the steps of the burnt-out city administrative building - he gave his name only as Maxim - claimed that Mr Andrushko barricaded himself in the police building and sent an SOS for national forces to come to his rescue.

Turning their big guns on the building, it was units of the national army that had inflicted Mr Andrushko's injuries and in the process ignited a fire that virtually destroyed the building.

Mr Andrushko previously featured on the security staff of none other than Igor Kolomoysky who, in a gamble by Kiev in March, was appointed governor of the adjoining Dnipropetrovsk district in the country's restive east.

Mr Kolomoysky is believed to be the mastermind behind a mercenary security operation named Dnieper, after Ukraine's longest river. Its teams of masked, uniformed gunmen arrive mysteriously at conflict hotspots - always to defend Kiev's interests.

At Krasnoarmeysk, a coalmining town 65 kilometres north-west of Donetsk, townspeople on Tuesday told of gunmen summoned by the town's mayor as voting took place in Sunday's secession ''referendum''. The gunmen had tried to steal ballot papers and in the process had killed two voters. They had arrived in vehicles in the livery of Mr Kolomoysky's Privat Bank and on being challenged to identify themselves, one told locals: ''We are Dnieper.''

The idea of appointing oligarchs as governors is being attributed by Kiev commentators to former prime minister Yulia Tymoshenko, also a presidential candidate, whose political campaigns were funded by Mr Kolomoysky until a falling-out in 2010.

In his first days as governor, Mr Kolomoysky got down and dirty with Vladimir Putin, needling the Russian leader as a ''dwarf gone mad with his effort to re-establish the Russian Empire''. Clearly stung, President Putin denounced Mr Kolomoysky as a ''unique crook''.

Mr Kolomoysky's mouth might win applause in Ukraine, but judges in the US and Britain have been withering about his business conduct.

In 2009, a US court declared of Privat's conduct: ''The court has become increasingly sceptical of these [Privat] gentlemen and the credibility of their statements.'' In a separate case in London, the judge concluded there were ''strong grounds for doubting the honesty of Mr Kolomoysky''.

That's how they mix business and politics in Ukraine.

This story From oligarchs to rebels, it is politics the Ukraine way first appeared on The Sydney Morning Herald.