Why are Ukraine's protesters so angry at President Yanukovych's 'Family'?

The president's closest political and business allies have benefited during his term – as has his son, a dentist who's become a multimillionaire businessman.

The protesters who have waited out the freezing temperatures on Kiev’s central Independence Square for more than 75 days are not of a single mind.

Even within the tent camps, supporters of the Maidan protests will complain that the movement lacks a clear leader, a concrete plan of action, or even firm goals that would bring an end to Ukraine’s political crisis.

But if there's one thing they can agree on, it is the sentiment captured in their rallying cry, one that can be heard every day: “Bandu het!” or “Bandits, get out!” And there is no difference of opinion about who those "bandits" are: President Viktor Yanukovych and his closest political and business allies, a group that has become commonly known as "the Family."

Analysts say that while corruption is hardly new to Ukraine, Mr. Yanukovych and his allies used the levers of power to funnel choice political positions and government contracts to themselves, allowing them to amass personal fortunes.

“Corruption under Yanukovych has increased significantly in the sense that during the previous administrations, the country’s corruption was diversified – every oligarch had their own section of the corruption pie,” says Oleksandr Akymenko, a former editor for Forbes Ukraine. “Under Yanukovych, corruption has been centralized.”

The Family

One of the prime targets for protesters' ire is Yanukovych’s son, Oleksandr, whose fortunes have been estimated to be worth as much as $510 million, according to a November 2013 Forbes Ukraine list of the richest residents of Donetsk, his hometown in the eastern region of the country.

The younger Yanukovych studied dentistry in Donetsk, but is now the head of a large construction conglomerate called MAKO. Forbes Ukraine reported also that he has majority shares in the Ukrainian Development Bank, several coal refinery plants in Donetsk, and large hotels in Crimea.

“I can understand how Bill Gates became a rich man by his mind and intelligence. But a dentist as a millionaire?” says Valeriy Zaychikov, a school director in Kiev who was at Maidan on Thursday. Mr. Zaychikov adds that media reports about Oleksandr’s personal helicopter just made him angrier.

Mr. Yanukovych’s mansion north of Kiev has also drawn public scrutiny. In 2011, he apparently got so fed up with the constant speculation about the mansion’s “gilded” interiors that he invited a handful of select journalists for a tour.

"The Family" extends beyond the bloodlines of Mr. Yanukovych, according to a February 2013 report in the popular weekly magazine Korrespondent, which featured an expose on the Family on its cover, and listed names of members who have received key appointments since Yanukovych’s election in 2010, including:

• Serhiy Arbuzov, the current acting prime minster and previously the head of the Central Bank;
• Oleksandr Klymenko, the minister of revenue and duties, Ukraine’s tax authority;
• Vitaliy Zakharchenko, the interior minister.

Some of the members also hail from the eastern Donbas region, Ukraine’s mostly Russian-speaking, industrial heartland and the support base of Yanukovych. 

Others not listed in the magazine, but whom many believe to be part of the same group include Yuriy Kolobov, the finance minister, and Andriy Klyuyev, Yanukovych’s chief of staff and previous head of the National Security and Defense Council.

Appointing close colleagues and friends is not unusual in many governments, and corruption in the halls of the Ukrainian government is nothing new. Previous presidents, including the Orange Revolution's Viktor Yushchenko, were voted out of office after voters grew tired of what they said was the growth of crony capitalism. 

“Corruption in Ukraine dates back to before independence to the Soviet times, when there was a sort of ‘societal corruption,’ ” says Viktor Zamiatin, a political analyst at the Razumkov Centre, a Ukraine public policy think tank.  For instance, during the Soviet Union, “it would have been normal for a doctor to ask a local party official friend to help him secure a place for his son in the state university.”

During the past 30 years, corruption has become the basis for the whole structure of the country, from the economy to politics, Mr. Zamiatin says. Transparency International in 2013 ranked Ukraine 144 out of 175 countries in its Corruption Perception Index.

'Centralized corruption'

What makes the current situation different is that under Mr. Yanukovych, those holding the power are the ones getting rich quick, not just the oligarchs working outside of government offices, says Mr. Akymenko, the former Forbes Ukraine editor, and now the director of an Internet startup.

Akymenko was one of 23 journalists who resigned from Forbes Ukraine last year after another member of the Donetsk Family, Serhei Kurchenko, bought the media company that owned it and the Korrespondent newsweekly. The journalists accused the new management of censoring their editorial choices in order to silence critics against Mr. Yanukovych and his associates.

Political analysts often point to Mr. Yanukovych’s creation of a “vertical of power” in Ukraine, much like the system Russian President Vladimir Putin is accused of creating in the Kremlin, Akymenko says. 

As an example, Akymenko points to the Constitutional Court's decision in Yanukovych’s first year in office to reject an amendment, adopted as a compromise during the Orange Revolution, to create a parliamentary republic. The decision gave the president sweeping powers. The president was able to appoint key government positions such as tax inspection, security agencies, the courts, and the prime minister.

In Ukraine, Yanukovych has created the same power vertical in business, Akymenko says.

In 2012, Yanukovych signed a law eliminating the need for state enterprises to issue public tenders for contracts, meaning “there is now no transparency over billions of dollars in government contracts,” Akymenko says.

Opposition leaders earlier this week proposed returning the country to a parliamentary republic as a key resolution in the country’s political crisis, but the ruling Party of Regions, which supports Yanukovych, faction refused to put the proposed bill to the floor.

“What is Yanukovych struggling for?" Mr. Zamiatin says. "I think he is not struggling for Ukraine under his rule, but Ukraine under his personal property.”