'He wanted his own principality'. The role of Ukrainian big business in the war in Donbass, 2014-2022
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Among leftwing analysis people often talk about how ‘wars are fought so that big capitalists can profit’ and so on. This has always frustrated me in its crudeness. The war in Ukraine has involved a decrease in the wealth of Ukrainian big business, the physical destruction of their assets and the closure of much of the very important Russian market. I think that in understanding why the war in Ukraine hasn’t ended, it is often just as important to look at social contradictions at the regional level, the interests of petit-bourgeois paramilitary groups, whose incomes genuinely do depend on the continuation of war, smuggling operations, and, of course, foreign geo-economic interests.
Nevertheless, local big business does play an important role. Below is my translation of 2 short pieces about the role of the richest man in Ukraine – Rinat Akhmetov – in sponsoring the ‘DNR’ paramilitary ‘Vostok’. For context, they were published on a website of Ukrainian industrialists, so their bias is certainly on the side of the Ukrainian government. When the term ‘terrorists’ is used, they mean political and paramilitary figures of the ‘People’s Republics’. My commentary is at the end.
"Vostok" is almost gone
[11:50 09 June 2018] [Ernest RODIMTSEV, Nikita AFANASIEV]
The “field commander” of Akhmetov in the occupied territory of the Donetsk region suddenly disappeared from the radar. An intrigue arises, who will represent the interests of the richest Ukrainian in the pseudo-elections of the “head of the DNR” this fall, if not Khodakovsky?
Like most terrorist leaders, almost nothing was known about Alexander Khodakovsky until 2014. However, from the moment he appeared in the informational field as the leader of the Vostok battalion, he has been clearly associated in public opinion with Rinat Akhmetov.
For almost a month (since May 11, the anniversary of the referendum on the “DNR”), Khodakovsky has ceased all activity both on social networks and on his own website, Patriotic Forces of Donbass. This, in particular, was reported by the pro-Russian militant Alexander Zhuchkovsky.
“Something bad is happening in the DNR. First, he curtailed his information activity (for a month already) and Khodakovsky disappeared - they say that he left for the Russian Federation because of threats to his life and health. Recently, several people from Gubarev's [a Novorossia activist who became the original ‘people’s governor’ of Donetsk region in 3 March 2014] close circle were detained, they were tortured and they are sewing up a story about either a “Ukrainian DRG [diversionary group]” or “terrorism”.
It is unclear whether this is a purge of the political space before the autumn elections (of heads of the DNR and to the People’s Council) or the dying agonies of the current team in power, which is threatened with displacement in the coming months.”
This interesting turn of events, among other things, may indicate that Rinat Akhmetov's entourage has lost its remnants of influence over processes in the occupied territories.
In order to better understand the role of Akhmetov and Khodakovsky in the war in the Donbass and the essence of their relationship, it is worth going back a bit to history.
At the beginning of 2014, trying to ride the “Russian spring” in the Donbass, the Donetsk oligarch relied on his connections in the law enforcement agencies of the region - it's no secret that until 2014, not a single appointment in the Ministry of Internal Affairs and even the SBU [Security Services of Ukraine] at the regional level took place without the consent of the oligarch.
Around May, Akhmetov relied on the creation of his own controlled armed formation within the framework of the so-called “Donetsk People's Republic”. So, in the political and military alignments of Donbass, the “Vostok battalion” appeared, which was headed by the commander of the Donetsk division of the SBU “Alpha” division, Alexander Khodakovsky, who participated on the side of law enforcement in Maidan during the storming of the Kiev House of Trade Unions. Dozens of well-trained fighters from Berkut [Ukrainian riot police that famously clashed with maidan militants] and Alfa “suddenly” appeared under his command, joined by Caucasian mercenaries from Russia, primarily from North Ossetia.
It is quite obvious that through Akhmetov Khodakovsky received quite serious support from Moscow. Thus, the first organized groups of Russian volunteers with colossal combat experience were sent precisely to the disposal of the Vostok commanders. All this allowed Khodakovsky (who took the nickname “Scythian”) already at the first press conferences to speak extremely negatively about the “people’s governor” Gubarev, and at the same time to act as an active opponent of the seizure of government buildings in Donetsk.
At that time, this fit well with Akhmetov's policy of "sitting on two chairs" with an eye for the "federalization of Ukraine." At the same time, Rinat tried to control the intensity of the armed confrontation in at least two key cities of the region — Donetsk and Mariupol.
In the latter case, thanks to the conclusion of the so-called “Memorandum on Order and Security” on May 15, the reason for which was the bloody assault [the identity of those involved is disputed] on the internal affairs department in Mariupol (during which 13 Ukrainian security officials and residents of the region were killed). The initiators of the signing of the document were the heads of the metallurgical plants "Metinvest” (named after Ilyich and "Azovstal") Akhmetov, Yuri Zinchenko and Enver Tskitishvili, as well as the leader of the supporters of the "DNR" in Mariupol Denis Kuzmenko. Akhmetov supported the exit of Ukrainian troops from the city, and its control by the ‘DNR’ and his company, metinvest. As a result, a fragile truce was established in the city until June 13, when the Azov battalion, with the support of armored vehicles, drove the DNR from all the buildings held by them in Mariupol and the Ukrainian flag was raised over the city.
In Donetsk, there was no real armed force whose leaders wanted to go to war with the rest of Ukraine. - everyone was cheerfully engaged in the redistribution of business flows. And only the Russians who arrived with their mind set on a “war against Bandera” were an unpredictable factor that could interfere with the typical “Donetsk alignments”.
On May 25, Russian curators, dissatisfied with the apathy of local militants and their main sponsor, decided to escalate. About a thousand, including armed, people came to the Donetsk residence of Akhmetov in the Botanical Garden. The protesters chanted “Akhmetov - Enemy of the people. We will return the Donbass to the people” and demanded a tour of the residence. Several attempts were made to open the massive gates and get into the residence of the oligarch.
Khodakovsky had to urgently save the situation. He stopped the attempts to storm the Akhmetov residence as best he could and set another large-scale goal for the armed militants - the capture of the then-working Donetsk airport. The result of this operation, which was personally planned by Khodakovsky, is well known - more than 80 dead militants, mostly from Russia. Moreover, some of them died as a result of "friendly fire": the fighters of "Vostok" shot two KAMAZ trucks, on which Russian mercenaries left the battlefield.
Most often, when analyzing these events, the name of Yuri Goluban pops up, nickname “Vampire” - an employee of the Donetsk SBU and the “right hand” of Khodakovsky. Judging by the numerous interviews with the militants who took part in the events of May 25-26, it was Goluban who contacted the commander of the group of Russians (“Iskra”) and warned that they would have to break through the militants of “Right Sector” [‘pravoseki’, infamous Ukrainian nationalists]. And he brought information to the garrison of the checkpoint that "pravoseki" were breaking out from the airport. As a result, the two most combat-ready units in Donetsk stupidly shot each other. Outcome - about 50 dead. Moreover, for the most part, they were Russian volunteers with combat experience - which, in the conditions of the collapse of the Ukrainian army, was an extremely important resource.
This fact is indirectly confirmed by the further fate of Goluban. At some point, he left for Ukraine and was calmly issued with a pension. And then in July 2014 he “suddenly” volunteered for the volunteer battalion of the Ministry of Internal Affairs "Kyiv-1". He took an active part in the hostilities of 2014-15, was wounded, underwent a difficult operation. And again, "suddenly" - in June 2016, he heads a special police company of the Main Directorate of the National Police in the Donetsk region [under control of the Ukrainian government]. In the spring of 2017, he received the Order of Merit, III degree, from the hands of President Petro Poroshenko.
After that, a scandal arose in Ukrainian media, as Goluban was identified in one of the videos in May 2014. However, the leadership of the Ministry of Internal Affairs of Ukraine ‘monolithically’ stood up for his defense. After the scandal, he “stopped shining” in the information space , but it is quite obvious that he remained in good standing.
Then there was an even more disastrous operation on June 5, when Khodakovsky 's Vostok attempted to storm the Marinovka border crossing. Apparently having operational information, the border post was reinforced by a special forces detachment and a trap was prepared in cooperation with the military. At the decisive moment of the clash, the militants were hit with an air strike by a single Su-25 attack aircraft.
As a result, at least three people died, and all the armored vehicles that were in short supply at that time (BTR-80 and two Armored KAMAZ vehicles) were lost. And the most important thing - 80 people, including foreign journalists, whom it is not clear why “the Scythian” took on a sortie, crossed over to Russian territory. For the first time, the international community received clear evidence of cooperation between illegal armed groups and Russia.
Together with the attempt to capture the Donetsk airport on May 25-26, this battle seriously undermined Khodakovsky 's military authority. Some of the terrorists accused him of at least being unprofessional and, at most, “working for Kyiv.” Last year, one of the founders of the DNR, Russian FSB officer Alexander Borodai, who oversaw the militants at the initial stage of the conflict, gave an interview in which he talked about how Akhmetov sponsored militants from the Khodakovsky’s Vostok detachment.
“Khodakovsky sat on financing by Akhmetov. One time, he tried to bring me a suitcase with 0.5 million dollars from Rinat Akhmetov in front of other people. I returned this suitcase to Khodakovsky, and he allegedly spent it on financing the Vostok battalion. I confess, I perceived him as a temporary ally. I understood that Khodakovsky was playing his own game together with Rinat Akhmetov”
According to Borodai, Akhmetov needed the “DNR” to balance between Kyiv and Moscow, and also to counter Igor Kolomoisky [another one of Ukraine’s richest businessmen]: "He needed his own principality."
One way or another, but in any case, after the military failures, Khodakovsky stopped positioning himself as a "field commander", completely switching to protecting Akhmetov's assets. On July 9, 2014 (after the arrival in Donetsk of one of Strelkov’s – Igor Girkin’s – detachments, defeated in Slavyansk), he moved to Makeevka (where he occupied the building of “ Makeevugol ”, a coal enterprise) and Yasinovataya, taking control of all the railway traffic of the “DNR”. At the same time, a split occurred in the “Vostok battalion” - only half of his “battalion” left with Khodakovsky , while the rest swore allegiance to the then “Minister of Defense of the DNR”, Strelkov.
Thanks to Akhmetov’s connections, the leader of “Vostok” was appointed to the position “head of the DNR security council” created “under him”. Having a powerful financial resource behind him, Khodakovsky tried to play “his own game”, openly conflicting with the “head of the DNR” Alexander Zakharchenko and organizing a network of branches of the “Patriotic Forces of Donbass” social movement in opposition to “ Zakharchenko’s” “Donetsk Republic”.
Even in articles debunking ties to Akhmetov, Khodakovsky managed to look like a puppet of a Ukrainian oligarch. Here are two quotes from his interview:
“Here, for example, is the same mine named after Zasyadko. It was focused on the Avdiivka Coke and Chemical Plant. The mine is located on the territory of the DNR, and the plant is on Ukrainian territory. Much was said about the fact that it was returned to the property of the people. But if these people do not sell coal to Rinat Akhmetov, the owner of the plant, then the entire workforce of the mine will be left without work, and the mine itself will simply cease to exist. And Akhmetov processed this coal at his plant and, in turn, sent coke to the Yenakievsky metallurgical plant, which is located on our territory. That is, they are all tied in one chain. And all such relationships had to be treated carefully enough not to behave like bears in a china shop.
“I am in favor of building a new social contract with all asset holders on the territory of the DNR. Their political influence here should be leveled as much as possible, but the economy that they create here has been preserved. At this stage, this is quite reasonable, because we do not have new markets yet. If Akhmetov has been seeking his markets for years, and these are the countries of Europe, America, now, if we nationalize his enterprises, we can only count on Russia. But Russia is already oversaturated with metallurgical products. If, of course, they give us a certain quota, then we can talk about something seriously. But Russia is not yet ready to allocate any quotas. It is easy to announce nationalization, but then end up in a Pyrrhic victory situation. We will take it and think about what to do with all this if it does not work. We could face the same fate that befell our industrial potential in the mid-1990s.”
As a result, in February 2016, Khodakovsky was dismissed from the post of “head of the Security and Defense Council” in the “DPR” and automatically lost his “deputy” mandate. Then he froze his activities and his “Patriotic Forces of Donbass”. It would seem that this was the end.
However, after the terrorists seized all of Akhmetov’s assets in the occupied territories last spring, Khodakovsky again “surfaced” and launched a serious campaign both to discredit the current “authority” in the “DNR”, and to simultaneously promote himself as an alternative in the upcoming “elections” in the fall of 2018.
To what extent this position was coordinated with the Kremlin, especially with those people who supervised the “young republics”, is not clear for the time being. Considering the date of Khodakovsky 's "disappearance", it can be assumed that the career of Akhmetov’s field commander was closely connected with Putin's adviser Vladislav Surkov, who from the very beginning oversaw the war in the Donbass. However, only in May it became known about his resignation.
It is possible that Khodakovsky has a chance to reincarnate under a new curator from the Kremlin. In any case, it will be more likely not his merit, but the result of another of Akhmetov’s losses to one of the “towers of the Kremlin”.
Khodakovsky settles scores with Akhmetov at Azovstal
[08:20 03 April 2022 ] [Nikita Afanasiev]
For 8 years, the ex-leader of the Vostok battalion went through a rather predictable evolution from an SBU officer, “pulling chestnuts out of the fire” for the richest Ukrainian, to his disgruntled opponent, seeking with special cynicism to destroy the pearl of Rinat’s industrial empire.
Recall that in early 2014, trying to saddle the “Russian spring” in the Donbass, the Donetsk oligarch relied on his connections in the law enforcement agencies of the region - it is no secret that until 2014, not a single appointment to the Ministry of Internal Affairs and even the SBU at the regional level did not take place without coordination with Akhmetov.
Akhmetov finally lost interest in Khodakovsky in the spring of 2017, when all the oligarch’s enterprises were “nationalized” in the occupied territory. There was nothing to protect the “Scythian”. So Rinat could cancel his allowance.
It is not surprising that after some time Khodakovsky began to “merge” Akhmetov what?. For example, in the fall of 2021, the Scythian claimed that Putin’s aide Vladislav Surkov (who led the Russian aggression in Donbas from 2014 to 2018) did not let the separatist forces take Mariupol , because he did not want to lose the support of Akhmetov in the region.
With the start of full-scale military aggression against Ukraine, Khodakovsky became not just one of the main media faces of the “storming of Mariupol”. It is he who today is the key speaker of the “DNR” on the topic of the ‘destruction of “ Azovstal” .
“We have now changed not our tactics, but our strategy. For example, [in 2014-15] we left industrial areas for later. Let them [Ukrainian soldiers] concentrate themselves there. We do not have such a reverent attitude as in 2014 to the industrial potential of Mariupol, or whatever will remain there for us. As a matter of fact, assessment of the economic potential shows that somehow we will live and manage without it…”
Of course they will. But look how the views of our “hero” have changed compared to the 2015 interview.
The current logic of Khodakovsky is fully explained by a recent comment by Metinvest CEO Yuri Ryzhenkov , who believes that in the event of the occupation of Mariupol, Russia will never launch Azovstal and the Ilyich Iron and Steel Works, because these plants simply interfere with it. “The Russian market is too small for their own metallurgical enterprises, and if two more giants are added - MMKI and Azovstal, well, this is simply unrealistic”
Therefore, Azovstal will be razed to the ground. And Khodakovsky is here "at the forefront of the attack." For him, this is an opportunity, on the one hand, to curry favor with the Kremlin, on the other hand, to prove that nothing connects him with the former owner. The victims and suffering of the half-million Mariupol on this peculiar “path of the samurai” of the ex-leader of the “Vostok” won’t be grieved for at all.
My commentary
Clearly, the reality of big business’s role in the war is not so reducible to platitude about how ‘war pays’. One could say that Akhmetov was one of the initiators of the war, since Ukrainian big business, including Akhmetov, supported the euromaidan movement to get rid of or at least moderate Yanukovych, who was trying to centralize economic and political power in his hands, rather than that of the ‘oligarchs’, and the war was to an important extent a reaction [on the part of donbass local interests and Russia] to the results of euromaidan.
But as we have seen, much of Akhmetov’s motivation in funding paramilitary groups on the side of the ‘DNR’ (he also funded Ukrainian nationalist paramilitaries) was one of ‘hedging one’s bets’. No matter who ended up winning on a broader scale, a smart businessman always knows that it’s a good idea to stay on the good side of the winning team – and hence sponsor all teams.
Furthermore, post-soviet Ukrainian politics has often developed through the armed takeover of competing assets –Akhmetov, himself originally a petty criminal from a poor miner family in the donbass, became rich through such methods and knew that the maidan and post-maidan period of instability would be used by opponents to increase their capital at the expense of competitors. Akhmetov had important assets on either side of the frontline and hence funded armed protection for these assets. In 2014, another of Ukraine’s richest men, Igor Kolomoisky, was appropriating rival business assets with the help of nationalist paramilitaries he funded in Ukraine, such as right sector, aidar batallion and azov batallion.
In other words, Akhmetov’s role in the war was reactive and opportunistic. And his actions were also conditioned and transformed by the actions of Ukrainian paramilitary groups, whose economic motives [the smuggling business, which Akhmetov ended up having a say about as well] another longer piece I am currently translating addresses. When, in 2017, armed Ukrainian veteran groups enacted a blockade of the non-Kyiv controlled regions – ‘no more funding the enemy’ – the ‘DNR/LNR’ no longer had need of trade connections with Akhmetov, and ‘nationalized’ his assets. In turn, Akhmetov stopped funding separatist figures. And now the very same separatist figure he once funded is bombing into rubble probably his most important economic asset. Meanwhile, Akhmetov is irreproachably ‘patriotic’ nowadays, being an important sponsor of the hawkish NATO thinktank the Atlantic Council.
Another interesting topic is Akhmetov’s support for the federalization of Ukraine. This slogan was supported by the donbass regions and Russia, and correspondingly attacked by Ukrainian nationalists and post-maidan Ukrainian ‘civil society’. It is also often associated with the Minsk agreements, since they involve clauses about the devolution of ‘economic, political and juridical power’ to parts of the donbass. Both the minsk agreements and the slogan of federalization are often attacked in Ukrainian media and politics – and these ideas have received correspondingly low ratings in opinion polls. They are usually attacked because it is said that reintegrating the separatist regions into the Ukrainian state with their own autonomous rights would lead to a new separatist war in the future.
But why did Akmetov support federalization? Most commentators agree that such an outcome would result in the Donetsk capitalists like Akhmetov keeping more of their income, instead of it going to Kyiv as taxes. This is probably why he supported the DNR in Mariupol in 2014 – they would control the city alongside his ‘metinvest’ company, allowing Akhmetov to consolidate his independence from the capital. As the article puts it, Akhmetov wanted his own feudal principality.
Akhmetov also probably wanted the war to stop since it allowed anti-oligarch political radicalization to flourish, nationalizations took place, and his assets were militarily destroyed. Once it became clearer that it wasn’t particularly viable to have one’s fingers in all the pies – both due to economic threats like nationalization in the ‘DNR’, and due to the level of political polarization in Ukraine –, that it was necessary to pick a side, Akhmetov correspondingly stopped supporting of federalization (even though it’s likely that Akhmetov, as a businessman, wouldn’t be averse to such an outcome). The Atlantic Council, sponsored by Akhmetov, regularly publishes vitriolic pieces against this ‘capitulation to Russia’.
Khodorkovsky’s conclusion that ‘we will live and manage without’ the industrial potential of donbass, that it is acceptable to destroy it if necessary to take control of the area, implies some interesting things about how the forces of the ‘DNR/LNR’ have changed in character since 2014. Since Khodakovsky was Akhmetov’s man in 2014, it made sense to be careful about destroying his boss’s industrial assets. And if in 2014 the separatist movement was to a large extent based on the economies worries of the local industrial workforce that Ukraine’s new EU-integration path would threaten their employment, it made double sense to try avoid destroying too much of this industrial infrastructure. But now, the DNR/LNR forces are much more integrated under the central command of Russia, and the latter’s military/geopolitical aims take priority over the interests of Ukrainian businessmen or domestic social concerns.
The early relation between Russia and the various anti-maidan forces in donbass (the term ‘separatist’ wasn’t always accurate, especially at the beginning) is also well illustrated by Khodakovsky’s relation to Gubarev. Gubarev, fairly soon purged by elements more directly controlled by Russia, who seemed to represent local ‘populistic’ tendencies, was opposed by Khodakovsky for his storming of regional government administration buildings. At the beginning, both Russia and Akhmetov probably preferred some kind of scenario where there wasn’t a real separatist movement in donbass (which would be – and has been – very expensive for Russia to support, and puts – and put - Akhmetov’s assets under threat), but rather simply a movement to put pressure on the new post-maidan Kiev government to fulfill the interests of the Russian government or Akhmetov, but within the Ukrainian political system. Which, of course, was essentially what the minsk agreements were about – which were supported by Russia and Akhmetov, and opposed by the more radical political leaders of the ‘DNR/LNR’, not to speak of Ukrainian ‘civil society’.
But the interests of Russia and Akhmetov diverged more and more, with Khodakovsky remaining under the control of the latter until 2016. As Ukraine decided to militarily react to the anti-maidan movement in donbass, it became clearer to Russia that it would no longer be possible to sponsor groups that could peacefully lobby for Russian interests within Ukraine. Akhmetov wanted to protect his business assets – which could probably be most easily done within the context of a relatively peaceful, united Ukraine, federal or not. Russia had broader goals, like stopping any possibility of Ukraine’s entry into NATO, which ultimately could only be achieved militarily.
Which is why Russia sponsored – or allowed to take place – groups that aimed to militarily confront the post-maidan Ukrainian regime and even turned a blind eye at first to the more populistic tendencies of the movement, since by storming Akhmetov’s business assets the region would be cutting off its ties to Ukraine. All of which – destructive, full-scale war and the nationalization of his assets – were unacceptable to Akhmetov, which is why his sponsored militant sabotaged the war effort of the ‘republics’ and lobbied to respect Akhmetov’s business empire.
The last thing I’d like to say is that these pieces show how complicated the whole story of the war in Donbass war. Especially in the first months, domestic mass social unrest, regional business interests, Russian interests, and Kiev government responses all reacted with each other to produce unpredictable results. At the beginning, very few really expected war.