A process of no progress

The frontline has been fairly calm since the beginning of 2018. The shooting has grown less intense, although Ukrainian army keeps reporting losses. Talks are underway to have peacekeepers in the war zone. For now, all parties accept the idea, but there is no agreement on the format. Russia insists on a mission to protect the OSCE mission and peacekeepers that will stick to the contact line. Backed by the US, Ukraine wants control over its border back.

There is no agreement on who can join the mission. Moscow would be pleased to see peacekeepers from Belarus in the Donbas. Ukraine finds this option unacceptable. Belarus is a de facto satellite of Russia and has no independence in its foreign policy decisions. Belarusian peacekeepers would obviously act in the interests of the Kremlin.

Therefore, there is little hope that the Blue Helmets will show up in the steppe of the Donbas anytime soon. Kurt Volker, U.S. Special Representative for Ukraine, speaks along these lines too. He said on February 28 that Russia would not take any decisions on solutions for the Donbas until the presidential election. No positive results in talks with it so far, he added.

Meanwhile, the occupied regions of Donetsk and Luhansk oblats (ORDiLO) are preparing to mark the fourth anniversary of the Russian Spring. They are setting up monuments to the separatists killed in the fights with the Ukrainian army, force people to get personal documents of the unrecognized republics, and local car number plates which are good for nothing anywhere beyond them.

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The residents of Luhansk must have been happy to see a new monument recently. The statue for the “Russian volunteers” that popped up in the city center turned out to be an exact replica of the monument for the militants of the infamous Vagner private military company that had earlier appeared in Syria. Another bad signal is the shutdown of Vodafone in the occupied territory. According to Oleksandr Zakharchenko, the self-proclaimed leader of the “Donetsk People’s Republic”, it will not be restored there anytime soon.

The locals are forced to use the services of Phoenix, a local operator working on the equipment stolen from Ukrainian companies. The quality of its services is extremely poor as it has no capacity to handle the inflow of clients after the shutdown of Ukrainian operators. People are cursing Phoenix in social media and complain that it takes several dozen attempts to make a call. Public moods do not bother the leaders of the “DPR” and “LPR” who live their lives and pay no attention to the rightless residents. The militants keep fighting over money and power. The latest scandal came from the “DPR” in late February. Zakharchenko ordered an arrest of Eduard Holenko, “DPR Coal Minister”, and a number of people from his close circle, including directors of coal unions. They are now accused of siphoning off assets.

According to the “DPR Interior Ministry” reports, the members of this alleged organized crime group have stolen over RUR 100mn since January 2017.  “DPR Interior Ministry has opened a series of criminal cases on massive theft by the members of the organized crime group. As a result of a special operation, 22 officials of different levels have been detained,” the report goes.

The actual reason for Holenko’s arrest and purges at the “Coal Ministry” is hardly corruption. Any theft of this scale could not have taken place without supervision of Zakharchenko and Oleksandr Tymofeyev, “DPR’s” second man responsible for the quasi-republic’s finance. The “DPR”-controlled territory is a parcel of land where everyone knows and sees each other. Therefore, the most likely reason for the latest developments is another redistribution of money.

According to Kostiantyn Dolgov, Zakharchenko’s one-time spin doctor who fell out of favor and fled to Moscow, Tymofeyev and Zakharchenko replaced Holenko because he could remove their middleman entity from the corruption scheme.

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“Holenko was inconvenient because he proposed setting up a state enterprise to sell coal without intermediaries. This did not suit Zakharchenko and Tymofeyev. The latter had set up The Donbas Coal, a special intermediary, to make sure that the mark-up on the coal sold ends up in the pockets of the tandem in power. They want to replace Holenko with their man, Alekseiy Sosnovski. That one is facing criminal charges in Russia,” Dolgov wrote in social media.

A similar scenario had unfolded in Luhansk before. In 2015, the people of Leonid Pasichnik, the current leader of “LPR”, arrested Dmytro Liamin, the “Energy Minister” and a close ally of the then “LPR” leader Igor Plotnitsky. Plotnitsky helped get Liamin released. Eduard Holenko has no influential protectorate or curators.

By contrast to Donetsk, Luhansk is now all calm. With Plotnitsky out, the group of Pasichnik and Kornet has taken over. It now enjoys undivided control of the region. Not everyone is happy about it. The new “government” is criticized from Russia by Vladlen Zaruba, former deputy for Valeriy Bolotov, the first self-proclaimed leader of the “LPR”. Zaruba fled Luhansk a long time ago.

In a recent interview he stated that Pasichnik and Kornet are in fact no better than Plotnitsky; that they had been involved in all of his criminal and corruption activities, and in assassinations of the militant leaders. According to Zaruba, Plotnitsky himself is under arrest and testifying in Russia.

Interestingly, Zaruba also mentioned a recent arrest in Russia of Oleg Mkrtchan, a founder of the Industrial Union of Donbas (Serhiy Taruta is a co-founder). This arrest is linked to the funding of the “LPR” militants as instructed by the Russians.  

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“After Plotnitsky’s testimony in Russia, his curator was arrested. He co-owns Alchevsk Metallurgical Plant,” Zaruba shared. According to a statement from Mkrtchan back in December 2018, the Industrial Union of Donbas lost control over it around that time. Mkrtchan was indeed arrested in Moscow on February 7, 2018. Officially, he is accused of siphoning off the assets lent to the Industrial Union of Donbas by a Russian bank.

So far, no way out is in sight from the swamp in which the Donbas has found itself after pro-Russian military formations took over ORDiLO. Quite on the contrary, the quasi-republics are rooting deeper into it as time flows. While “LPR/DPR” supporters are somewhat concerned about the Russian elections and a prospect of Putin giving up on them, that scenario is highly unlikely. Putin will hardly change once reappointed as Russian president yet again.