The most important speech Volodymyr Zelensky gave while in New York last week took place not at the United Nations, but in a private room a few blocks away.
“Investing in Ukraine must be good for you and good for us. I understand capitalism,” said the Ukrainian president, a billionaire financier, as well as Henry Kissinger and New York. He told me it was a “star-struck” group of England Patriots owner Robert Kraft and celebrity chef Jose Andres.
President Zelenskiy, of course, was in town to address the United Nations, a largely unrelated multinational organization that meets every September here in New York City. He was a rock star on the world stage, fighting against the evils of Vlad Putin in his two-year fight to keep Ukraine from falling under the dictator’s control.
But his speech at the United Nations was strangely lethargic. He raged about Russian aggression and his country’s need for continued aid. He attacked the United Nations as reckless. It would give authoritarian states like Russia a seat at the table, which is why the war cannot be stopped.
Tell us something we don’t know yet.
It took a few days later on a Thursday around mid-afternoon to see it fly to the wall for any real action. Under cover of secrecy, President Zelenskiy met with some of the world’s richest men at the Ukrainian government mission. Zelenskiy needs the US government’s help to continue fighting the good fight against Putin (he flew to Washington, D.C. later that night), but also to ensure that Ukraine can survive and prosper after the fighting ends. To do that, we need the people in the room and their funding.
I wasn’t that accurate, but my sources were. That’s why the meeting arranged by megabank JP Morgan turned out to be not so secret. Asset manager Mary Erdos and her No. 2 Vince La Padula came up with the idea to host Zelenskiy and his moneymen during the United Nations session. They both literally know this country inside and out. Mr. Eldees has spent his time building orphanages in the western part of the country. La Padura dodged a bomb while touring Kiev in February.
They are hired as financial advisors for the country, and their job is to raise private investment funds to rebuild Ukraine and collect some money from the people in the room.
And you know that at least a lot of money was interested in rolling the dice on Ukraine, even though the “poorest” billionaire is worth only $ 2.1 billion. That would be Dan Lubetzky, who runs the company that created the KIND nutrition bar.
He was seated near former mayor and financial data entrepreneur Mike Bloomberg, who is worth an estimated $96 billion. Ken Griffin, whose Citadel investment empire is worth about $35 billion. Former Google CEO Eric Schmidt is worth about $20 billion. The aforementioned Kraft is worth $11 billion. Jonathan Gray, president of private equity giant Blackstone and likely to succeed Stephen Schwartzman, is worth about $7 billion. They are Barry Sternlicht of Starwood Capital, who has $4 billion in the bank, and Bill Ackman, a prominent hedge fund operator with about $3.6 billion in assets.
Henry Kissinger was invited, of course, not for the money, but because he was Henry Kissinger. Mr. Kraft is a JPMorgan client and, like Mr. Andres, has also been involved in domestic humanitarian work. Larry Fink, the head of BlackRock, did not attend, but I heard that another BlackRock executive was sent to attend. The CEO of the world’s largest money management company met privately one-on-one with Zelensky to resolve the country’s private finance dilemma.
Bloomberg was most enthusiastic, peppering Zelenskiy with questions about the economy and the historical significance of standing up to dictators. Mr. Zelenskiy appears to have said all the right things in his pitch to make money and to keep fighting. He likened negotiations with Putin to early, ill-fated negotiations with Hitler in Europe. He also said he understands that without the rule of law, capitalism can’t really work. Private capital demands something in return, but when it is siphoned off by a vast system of corruption, there is no return.
Of course Ukraine is not Russia. Putin runs this place like a mafia don, and the business leaders run it under Putin’s protection and raise money for the godfather. Failure to do so will often result in death. Ukraine’s brand of crony capitalism is a little softer. Again, not as bad as the Russian variety, but large private investments are also not possible.
I’ve heard that the corruption issue was raised by Mr. Ackman, whose hedge funds often sniff out investment fraud, but Mr. Zelensky’s fuller answer should give financial men pause before opening their checkbooks. In answering, he used the Ukrainian word for “wall,” which his aides later translated into English for him and the group. As Mr. Zelenskyy said, based on the country’s governance system, there were limits, “walls,” so to speak, that prevented him from doing everything he wanted on the issue of corruption.
My sources say the comment did not elicit a direct response. Again, no one made firm financial commitments. The conversation then turned to Zelenskiy’s more persuasive pitch. The war will end, and Ukraine has an educated workforce and a resilient population. The western part of the country is peaceful and open for business.
It’s hard not to support Zelenskiy. I hear that everyone in that room wants to play a role in rebuilding this country. It is said that we must first remove that wall.