COMMENT: The anatomy of Ukraine’s Constitutional Court crisis

COMMENT: The anatomy of Ukraine’s Constitutional Court crisis
President Volodymyr Zelenskiy is facing the greatest political and constitutional crisis since the end of the Revolution of Dignity
By Robert Homans in Washington DC November 3, 2020

Recent decisions handed down by Ukraine’s Constitutional Court have presented Ukraine, and President Volodymyr Zelenskiy, the greatest political and constitutional crisis since the end of the Revolution of Dignity, and the Russian invasion and occupation of Crimea and the invasion of the Donbas in 2014.

Since the election of Zelenskiy last year Ukrainian voters, 73% of whom voted for him, most of them in the hope that he would tackle pervasive corruption that exists at all levels of Ukraine’s government, have seen their hopes shredded.  Perhaps the recent Court decisions, and Zelenskiy’s reaction to them, represent an opportunity to re-focus on the task of tackling endemic corruption.

On October 27 Ukraine’s Constitutional Court, the sole body allowed to interpret Ukraine’s Constitution, and where members of Parliament file actions to overturn laws they oppose, voted to strip the National Agency on Corruption Prevention (NACP) of its authority to require public officials to make annual electronic asset declarations and, in addition, struck down a law that makes filing false declarations a criminal offense.  The petitioners were several Members of Parliament belonging to factions considered to be pro-Russian that is headed by Viktor Medvedchuk, the head of the Political Council of the Opposition Platform, For Life Party .

President Zelenskiy, in an op-ed in Sunday’s Financial Times, stated that this ruling, plus another recent ruling concerning the legitimacy of the leadership of the National Anti-Corruption Bureau (NABU), “are part of a systematic effort to undermine the rule of law, push back against the progress made in our fight against corruption, weaken our society and economy and, last but not least, stop Ukraine’s Euro-Atlantic integration.”  

Based on his actions since becoming President, Zelenskiy seems to be coming late to the threat he now articulates.  Since naming a largely reformist government in July 2019, Zelenskiy has:

  • On March 4  he dismissed most of the government put in place in 2019, and replaced it with individuals whose reformist credentials are not as strong their predecessors.
  • Removed the reformist prosecutor general, Ruslan Ryaboshapka by a Parliamentary vote of no-confidence, and replaced him with Iryna Venedyktova, seen at the time as being someone willing to go along with the prosecution of former President Petro Poroshenko.
  • Zelenskiy’s Party, Servant of the People (SOTP), came into Parliament with an absolute majority, but SOTP has since broken apart, with the remaining portion of SOTP loyal to Zelenskiy often allying itself with Medvedchuk’s pro-Russian Opposition Party-For Life. Medvedchuk was described by Vladimir Putin as his “favorite Ukrainian,” and is a frequent visitor to the Kremlin.
  • Dismissed several reformers within the Ministries, including Maksym Nefyodov, former Head of Customs, Alex Starodubtsev, former Head of the Civil Service Commission, and many others.
  • Effectively neutered the international supervisory boards of a number of state-owned enterprises, by failing to pay board members.
  • Forced the resignation of Yakiv Smolii, Governor of the National Bank of Ukraine, and the disciplining or demotion of two of his deputies, Kateryna Rozhkova and Dmytro Sologub, all of whom were instrumental in turning the NBU into a well-respected institution, as well as being responsible for the closing/taking over of a 100 banks, including PrivatBank formerly co-owned by Zelenskiy’s former patron, oligarch Ihor Kolomoisky.

In other words, Zelenskiy has spent most of his time in office effectively acting on behalf of Kolomoisky and possibly Medvedchuk, by dismantling the reform institutions that it has taken Ukraine several years to establish, institutions that Zelenskiy claimed to support at the time, and now claims to support once again. Partly as a result, during his time in office Zelenskiy has experienced declining popular support and, last October 25, SOTP experienced disappointing results in local elections that were held throughout Ukraine.

Whether it is his declining popular support, recent election reversals, or the shock of the recent rulings by the Constitutional Court, Zelenskiy seems to have had a sudden epiphany.  In his Financial Times op-ed, he called the Constitutional Court a “Kangaroo Court,” further stating that the petitioners in these cases, “is a coalition of Russian proxies and some prominent Ukrainian oligarchs who feel threatened by the activities of our anti-corruption institutions. They oppose EU and Nato integration, Ukraine’s co-operation with the IMF and a rule-based society that would benefit the 99%, not just the 1%.” I assume that the “prominent Ukrainian oligarchs” Zelenskiy refers to includes his former patron, Kolomoisky.

Ever since Ukraine’s independence the Judiciary has been the most significant barrier against Ukraine achieving the complete rule of law, primarily because, in Ukraine the Judiciary answers to the President and the Prosecutor General, a system that largely goes back to Tsar Peter I. The fear is that any effort to reform the Constitutional Court, by forcibly removing judges for example, without reforming the underlying judicial system, will be doomed to failure.

The Constitutional Court is made up of 18 judges, each serving a term of 9 years. There are currently 15 sitting judges, with three vacancies. One-third is selected by the Parliament, one-third by the President of Ukraine, and one-third by the Congress of Judges.  Many of the sitting judges making up the Constitutional Court were appointed either by Parliament or former President Yanukovych, and some will be serving until 2023.  A few sitting judges have conflicts of interest as they are objects of legal actions by NACP, the same agency that the Constitutional Court, by its recent ruling, on asset declaration, has effectively emasculated.

There have been previous crises involving the Constitutional Court, and they serve as a warning that reforming the Constitutional Court must be done in a way that is lasting, and not subject to reversal by a future president.  In the spring of 2007 there was an assault by former President Yanukovych, then Prime Minister, on the “Imperative Mandate,” a Constitutional amendment requiring that Members of Parliament continue to serve in the factions to, which they were elected. Then Prime Minister Yanukovych got several members of Yushchenko’s Party,” Our Ukraine” to switch to Yanukovych’s “Party of Regions.” Yushchenko countered by trying to dissolve Parliament, precipitating an appeal to the Constitutional Court.  The Constitutional Court never handed down a ruling, because the parties agreed to hold a snap Parliamentary election. That election, held on October 1, 2007, resulted in Yanukovych losing Parliamentary majority and, in December 2007, Yulia Tymoshenko became Prime Minister.

In February 2010 newly elected President Yanukovych returned the favour. He got 28 members of Prime Minister Tymoshenko’s Party to switch sides, plus several members from Yushchenko’s Party, and he then proceeded to force through a successful no-confidence vote against Tymoshenko.

There are other important cases on the docket of the Constitutional Court.  As the Kyiv Post recently reported one pending case, to be heard this week, could result in the dissolution of Ukraine’s Deposit Guarantee Fund. Working much like the Federal Deposit Insurance Corporation in the United States, the Deposit Guarantee Fund has the responsibility of guaranteeing deposits in Ukraine’s banks, with the near certainty that a major banking crisis would follow any ruling against the Deposit Guarantee Fund.  Such a ruling could also force Ukraine to compensate owners of the 90+ banks that were shut down by the NBU or, like Kolomoisky’s PrivatBank, were taken over.

Other cases pending before the Constitutional Court include recent legislation allowing for limited sales of agricultural land and reform of Ukraine’s healthcare system.  The potential damage to Ukraine, and its anti-corruption drive, cannot be over-stated.

There have been several proposals on how to solve the damage that the Constitutional Court is doing to Ukraine’s progress toward achieving the Rule of Law, none of them good.

The options are extensively summarized in an article prepared by the Anti-Corruption Action Centre (AnTac) of Ukraine.  The least risky, in terms of potentially upsetting Constitutional and judicial norms, would be replacing judges through the completion of their terms, along with voluntary resignations.  However, this alternative would take time for its desired effect to be felt.  Also, as the AnTac article points out, judges who resign can later petition to be re-instated, on the grounds that they were forced to resign.

Another, riskier, option is the adoption by Parliament of Draft Law 4288, scheduled to be debated in Parliament this week. According to AnTac, Draft Law 4288 would do the following:

1) declare the CCU’s decision of October 27 null and void;

2) automatic restore all abolished legislation, including provisions on criminal liability;

3) dissolve the current CCU;

4) start the process to select new CCU judges by the appointing authorities.  

According to AnTac Draft Law 4288 is, as written, deeply flawed, because:

·      The current system of electing new judges would remain intact.

·      There is no assurance that Draft Law 4288 would have sufficient support in Parliament.

·      If passed and signed by the President, Draft Law 4288 would likely be declared unconstitutional by the same Constitutional Court judges whom the Law attempts to replace.  

Perhaps Zelenskiy feels as if he has come to edge of the abyss. He looks over the edge, and he sees the risk of Ukraine becoming a large trough, from which oligarchs will feed. In turn, Ukraine’s becoming an oligarchic fiefdom will mean that the leadership of the Russian Federation would no longer be threatened by the likelihood of Ukraine becoming an example to Russians of a country on Russia’s doorstep living under the rule of law.

There have been rumours of yet another government shake-up. A shake-up would be a good place to start, as a means return to the reform trajectory that Ukraine was on prior to the last government shake-up in early March, but only if any new government would contain reformers of a quality commensurate with the status of those who were previously replaced. In addition, taken alone, yet another government shake-up wouldn’t solve the underlying problem of judicial reform, of which the Constitutional Court is only a part.

 

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Robert Homans is an international financial sector consultant based in Washington DC and tweets at @rhomansjr

 

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