Attack on Poroshenko Reporting is PR, Not Analysis

Published: 04 June 2016

By Tom King

The Politico Europe opinion article authored by Adrian Karatnycky and Alan Riley defending Ukrainian President Petro Poroshenko over his involvement in the Panama Papers might have been faintly amusing, if it did not also raise serious concerns. 

We are disappointed that rather than issue corrections or retract the story, Politico only gave consent for us to provide a short letter in reply. The article in question is an obvious puff piece. It is disappointing to see a respected magazine publishing PR posing as analysis. The overall tone of the piece suggests a worrying attempt to whitewash the reputation of a president who rose to power on sweeping promises of decisive action to prevent widespread corruption. We hope that in future Politico will hold commentators to the same standards to which we are held.

Adrian Karatnycky has written many articles implying support for the now-discredited Yanukovych regime, before pivoting to defend Poroshenko when he rose to the presidency. This is no surprise given that Karatnycky’s firm – Myrmidon Group LLC – sets out its purpose as “connecting you to opportunities in Ukraine”. Myrmidon is also registered with the US Department of Justice under the Foreign Agents Registration Act so that it can represent the Government of Republika Srpska in Bosnia, including its President, Milorad Dodik. (OCCRP has previously reported on allegations against Dodik over financial embezzlement.) Why does this matter? Because Karatnycky is a lobbyist, not a journalist.

The article claims that a story published by the Organized Crime and Corruption Reporting Project (OCCRP) was “not the product of an international consortium of journalists with expertise in business law and financial transactions”. This is a strange thing to say about OCCRP – as we are, in fact, an international consortium of journalists with expertise in exactly those areas. It is strange, too, that the article points out the quality of other Panama Papers stories on close friends of Vladimir Putin, the family of Azerbaijan’s President Ilham Aliyev and the family of Kazakhstan’s President Nursultan Nazarbayev; these stories were reported by OCCRP.

If the implication is that this was not an OCCRP piece but a local piece, the authors are mistaken: we support and claim credit for these stories, and they come from an extremely well-respected international network.

We have won many awards for our rigorous and innovative reporting: in 2015/16 we received the European Press Prize, the IRE's Tom Renner Award and a GIJN Global Shining Light Award. You don’t get this far in investigative reporting without a commitment to the highest ethical standards, and a constant willingness to continue learning about the complexity of global criminality.

This goes particularly for the authors of the articles being questioned. Vlad Lavrov, Anna Babinets and Dmytro Gnap’s Ukrainian nationality does not somehow disqualify them from being experienced investigative journalists. Vlad and Anna are both worthy OCCRP editors and Dmytro is a long-time contributor. A few minutes’ research will reveal their standing as internationally-recognized reporters, all of whom were involved in the Yanukovych Leaks investigation that gave the excesses and corrupt activities of the former President the attention they deserved. That project deservedly won a citation of excellence at the Global Shining Light Awards last October. OCCRP is proud to work with them.

Moreover, the assessment of the reporting done for these stories is inaccurate. It is implied that OCCRP does not seek right of reply prior to publishing. This is demonstrably untrue – the original story on Poroshenko (published April 3rd) includes extensive direct quotes from the President’s financial advisers, after the reporters were referred to them by the President’s office.

The follow-on story, published May 20th, again quotes the advisers and makes clear that the President himself refused to speak to OCCRP journalists. Poroshenko's advisors also refused to meet for an interview this time, or to provide any documents backing up their claims. They started releasing unsigned fragments of documents only after the story went live.

In each case, it is also clear that reporters secured and quoted opinion from international lawyers and tax experts, including international law firm CMS Cameron McKenna and the offshore intermediary Honest & Bright. There are also comments from respected anti-corruption NGO Transparency International.

Perhaps most damningly, the article attempts to dismiss OCCRP’s findings by quoting President Poroshenko’s lawyers and business advisers, claiming that their “repeated explanations” got lost in “the cacophony of unfounded suppositions”. They also mention a report from the President’s financial advisers – but provide no link to the report itself.

In reality, the explanations they mention – such as those of Avellum, a law firm involved in setting up the offshore structures - were given full coverage in our stories, and weighed against the other evidence available.

This is a simple story. The President said he was putting his business in a trust. That could be done under Ukrainian law. Instead, he chose to move it offshore, giving him a potential tax advantage. He also only admitted he had done so after our original Panama Papers story. It’s legitimate to raise questions over this, as President Poroshenko has openly decried the use of offshores. 

His advisers then said that the companies were just paper companies holding no assets. To transfer money abroad requires a licence that the President does not appear to have. However, OCCRP identified that he capitalized the companies abroad and then transferred “cash and in-kind transfers” according to official records in Cyprus. You cannot transfer or wire cash abroad unless there is a bank account, so we are once again raising the question.

In response to all the issues raised, the President and his advisers have changed their story numerous times and attacked us. They could have simply released all the documents from Cyprus and other places, but they did not. Instead they use proxies to play the man, not the ball, claiming we do not understand the issues. But even the proxies have based their analysis on incomplete information.

We are asking questions and they are not being answered except with statements that have turned out to be wrong or unsubstantiated. We have no political interest. But when a sitting President who is allegedly fighting offshores and tax evasion appears to set up an offshore to avoid taxes, we would be failing in our duty as journalists if we ignored the story.

Attacks on the media are designed to distract people from the main question: what did President Poroshenko actually do? Honesty and transparency a month ago could have made all of this go away. Instead, the spread of misinformation and outright lies only adds to public suspicion.

We welcome serious attempts to test the accuracy and integrity of our reporting. No media organization deserves blind trust. But if the authors of this article really want to challenge the findings our reporters publish in their stories, they should begin by reading them.

An edited version of this statement was published on Politico's website and is available here.