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Two Blows Are Dealt to Ukrainian Leader’s Clean-Government Image

KIEV, Ukraine — A delegation from the International Monetary Fund left Ukraine Friday without announcing a lending agreement, dealing President Volodymyr Zelensky a setback in his efforts to win a quick endorsement from foreign donors for his clean government pledges.

The inconclusive I.M.F. talks coincided Friday with the resignation of the most senior official handling national security in Mr. Zelensky’s administration, reportedly over worries of corrupt influence at senior levels of government.

It wasn’t clear that either development related directly to the center-stage role of the Ukrainian president, a former comedian, in the impeachment inquiry getting underway in the United States Congress. Committees in the House are investigating whether President Trump abused his powers in asking Mr. Zelensky for a political “favor” — an investigation in Ukraine into leading Democrats.

Mr. Trump’s personal lawyer, Rudolph W. Giuliani, had for months pressured members of Mr. Zelensky’s administration to pursue investigations into former Vice President Joseph R. Biden Jr. and his son Hunter Biden, who was on the board of an energy company owned by a Ukrainian oligarch.

Mr. Giuliani’s outreach had focused mostly on a faction in Mr. Zelensky’s government that includes his friends from the comedy industry and the associates of a Ukrainian billionaire, Ihor Kolomoisky, a former business partner of Mr. Zelensky’s.

This group also appeared to be at the center of the day’s I.M.F. developments in Kiev.

Ukraine has been seeking the I.M.F.’s continued commitment to bailing out its struggling economy, which has seen only a weak recovery after a deep post-revolution recession. The potential funding is significant: A previous four-year I.M.F. lending program had promised $ 17 billion.

But the I.M.F. mission, which links its lending to the government’s action against corruption, issued a glum statement on Friday, noting “shortcomings in the legal framework, pervasive corruption, and large parts of the economy dominated by inefficient state-owned enterprises or by oligarchs.”

The statement also included a dry reference to what Ukrainian news reports said were worries about influence over government by Mr. Kolomoisky.

The delegation said it had conveyed to Ukrainian officials “the need to make every effort to minimize the fiscal costs of bank resolutions.” The Ukrainian government in 2016 nationalized a bank co-owned by Mr. Kolomoisky in a bailout that cost $ 5.6 billion.

Still, Mr. Kolomoisky enjoys wide popular support in Ukraine for financing a pro-government militia, Dnipro-1, in the early days of the war with Russian-backed separatists. The militia helped hold the battle lines before the regular army could deploy enough troops equipped with weapons and winter clothing to keep the separatists at bay.

Liga, a Ukrainian news outlet, reported that the I.M.F. talks broke down over concerns about Mr. Kolomoisky’s clout in Mr. Zelensky’s government. A phone number used previously to reach Mr. Kolomoisky went unanswered on Friday.

The departure of the senior security official, Oleksandr Danylyuk, was also a blow to Mr. Zelensky’s image as a champion of good government. Mr. Danylyuk, the director of Ukraine’s National Security Council, had resigned a ministerial post in a previous Ukrainian government, citing corruption as the reason.

Mr. Danylyuk handed in his resignation before Mr. Zelensky departed for this week’s United Nations General Assembly in New York, a government statement said. The timing suggested that he did not resign in response to this week’s release of notes from the July phone conversation in which Mr. Trump asked the Ukrainian leader for a “favor.”

Novoye Vremya, a Ukrainian political affairs magazine, reported that Mr. Danylyuk resigned to protest efforts by Mr. Kolomoisky and a former lawyer for the billionaire, Andriy Bohdan, to influence bank regulation policy and gain sway over the National Security Council. Mr. Bohdan is now Mr. Zelensky’s chief of staff.

Mr. Danylyuk had accompanied Andriy Yermak, a presidential aide, on a trip to Washington in July to meet with State Department and national security officials. Mr. Yermak had been the main point of contact for Mr. Giuliani in the Zelensky government.

Mr. Yermak later called Mr. Giuliani to discuss investigation of the Bidens in a conversation arranged by Kurt Volker, the American envoy to settlement talks in the Ukraine war. There is no indication that Mr. Danylyuk discussed the investigations.

Before Mr. Volker made that introduction, two associates of Mr. Giuliani had tried another route: They sought to contact Mr. Zelensky by first meeting Mr. Kolomoisky.

“They came to me in Israel and told me how I needed to communicate with Zelensky,” Mr. Kolomoisky said in an interview with Radio Liberty. “I said I have nothing to do with Zelensky. After that, they disappeared. And this is where all these provocations began with Giuliani.”

Source: NYT > World News

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