KYIV – When it comes to reforms, Ukrainians are more concerned about corruption than any other issue, according to a poll conducted in late July by Kyiv’s Razumkov Center and the Kucheriv Democratic Initiatives Fund.
When asked to choose five spheres of reform as most important, about 65 percent of the 2,011 respondents cited anti-corruption reform, about 58 percent cited legal reforms and about 40 percent selected pension and social security reform.
Yet the very leaders of Ukrainian politics and business remain as engrossed in corruption as ever, if the accusations they’re flinging at each other on a weekly basis are to be believed. The latest such attack came on September 15 from Vice Prime Minister Valerii Voshchevskyi when alleging to the Verkhovna Rada, Ukraine’s Parliament, that the president exclusively controls the energy ministry.
“The rivalry between the two heads of the executive government is so obvious that they are not only disrupting the energy sphere, but all of Ukraine,” said Mr. Voshchevskyi, a member of Oleh Liashko’s Radical Party who submitted his resignation on September 1.
“In that locomotive called the government, there are two conductors: one on Bankova, and the other on Hrushevskoho. And each is driving but that locomotive isn’t going anywhere. It’s standing. That’s the problem today.”
[Editor’s Note – “Bankova” is a reference to the Presidential Administration while “Hrushevskoho” refers to the Cabinet of Ministers.]It’s the failure of Ukraine’s top leaders to deal with their own rivalries, and the corruption at the center of these rivalries, that has hindered attempts to address graft on all other levels of society, observers said.
“Corrupt politicians were trusted with the fight against corruption, which is at the root of the problem,” said Petro Oleshchuk, a political science lecturer at Shevchenko National University in Kyiv.
The corruption has gotten so bad that in his remarks, Mr. Voshchevskyi called for the government to resign, as did former Prime Minister Yulia Tymoshenko, the leader of the Batkivshchyna parliamentary faction, just a day earlier.
“Either this coalition ends its corruption and dismisses this absolutely unprofessional and corrupt government, and forms a new government with people who have dignity, morality, honor and intellect to build the country,” she said. “Or we don’t see what such a coalition is doing and what good is it for the country.”
Just as the latest accusations were lobbed came the latest wave of arrests of allegedly corrupt officials. Among them was Yaroslav Kashuba, the head of the State Employment Service, who was arrested – along with two of his deputies – on charges of bribery and stealing state funds on September 14, just nearly two months after the agency was created.
Two days later, Social Policy Minister Pavlo Rozenko announced he dismissed all of the service’s central and regional directors.
In addition, the latest batch of anti-corruption legislation came through the Parliament’s pipeline this week.
Though it failed to muster enough votes to accept Mr. Voshchenskyi’s resignation, the Verkhovna Rada approved a bill on September 15 that reforms state tenders (auctions of state assets) to confirm with international standards, which will limit corruption risks and enhance public access.
For instance, the bill improves transparency by requiring the disclosure of the final owners of companies participating in state tenders.
Yet these measures don’t impress Mr. Oleshchuk. Very few arrested state officials are put on trial or convicted, he said, “and they’re usually replaced with someone more desired.”
Meanwhile, transparency in tenders doesn’t mean much when prosecutors and judges won’t do anything with this information.
“Nothing will come of the fight against corruption without a complete overhaul of the entire legal system along the lines of Georgia,” Mr. Olehshchuk said. “They’re simply using this fight against corruption as a smokescreen for resolving their own personal issues.”
Petro Poroshenko
The Ukrainian president is under constant criticism for pursuing his business interests while serving as president, which is forbidden for state officials to do in most developed countries.
His Roshen confectionary retail chain has swelled since he became president, opening new stores in Kyiv, Kharkiv and throughout Ukraine, even reaching towns such as Liubar in the Zhytomyr region. The company didn’t respond to a request by The Ukrainian Weekly to confirm how many new stores have been opened.
He’s also been exposed for pursuing shady business deals, such as his plans to build a snack cake factory in Boryspil, as exposed by the Skhemy television news program on September 9, produced by Radio Free Europe/Radio Free Liberty (RFE/RL) and the First National television network.
Instead of buying a land plot in Boryspil on an open auction, as required by law, the Roshen company decided to sublet it from a city-owned enterprise, thereby avoiding the purchase, which would have required paying taxes and fees to the city. The company confirmed to RFE/RL that it pursued this approach.
It was the Boryspil City Council that authorized in July the transfer of 49 acres to the enterprise at the request of Roshen, which also avoided several key procedures, such as holding a public meeting to discuss the construction and clearing inspections with environmental agencies.
Mr. Poroshenko was also exposed by the Skhemy news program in December for pursuing a construction project on 1.5 acres that he owns, situated within the territory of the St. Sophia Cathedral-Caves Monastery, a UNESCO World Heritage Site, without having gained the required permission from the Culture Ministry.
The work was ordered by state officials to be stopped in 2013 because it had ruined part of a land fortification for a bastion lunette that forms the Kyiv Fortress, which is designated an architectural monument of national significance by the Ukrainian government.
An investigation was launched by the Procurator General of Ukraine in early 2013 for the criminal act of ruining a monument of cultural inheritance. It was conveniently closed in November 2014, without any criminal charges, once Mr. Poroshenko was elected as president.
The Presidential Administration declined to comment on the situation, only issuing a document indicating that the construction will go ahead as planned.
The accusations of corruption aren’t limited to Mr. Poroshenko’s personal business. Oleh Liashko accused the president on September 16 of orchestrating attempts to bribe the national deputies of his parliamentary faction to remain in the coalition government, after he declared its exit on September 1.
He said at least one of his deputies, Artem Vitko, informed him of his decision to remain in the coalition.
“President Poroshenko brought political corruption to the Parliament hall,” Mr. Liashko said, claiming the president personally ordered the bribery of his deputies using intimidation and incentives.
“A minimum of five national deputies with the Radical Party faction informed me that (Poroshenko Bloc National Deputy) Oleksandr Tretiakov personally conducted talks with them, promising money, places in the early parliamentary elections, if only they left the faction.”
The Presidential Administration didn’t issue a response to the accusations as of September 17.
The recent accusations from the radicals come on the heels of Dmytro Firtash’s admission in a Viennese court in April that he brokered a year earlier a political alliance with Mr. Poroshenko and Vitali Klitschko, who agreed to run for Kyiv mayor in 2014 instead of competing for the presidency.
Parliament failed in June to support a request for information on possible agreements Mr. Poroshenko made with Mr. Firtash, the billionaire natural gas trader, during that meeting and any remaining obligations that he may have before the oligarch.
In the government’s declared “deoligarchization,” it has been Prime Minister Arseniy Yatsenyuk who has taken action against Mr. Firtash, allowing the Internal Affairs Ministry to arrest 86 of his gas-related assets in June. That was two weeks after Mr. Firtash declared he would work towards Mr. Yatsenyuk’s dismissal.
Arseniy Yatsenyuk
The prime minister has his own fair share of corruption scandals, the most recent being the accusations flung by Mikheil Saakashvili, the Odesa state oblast administration head.
Mr. Yatsenyuk was serving the interests of Mr. Kolomoisky when he refused to review his report alleging State Aviation Service Head Denys Antoniuk was allowing the oligarch to monopolize international flights, he alleged in a September 3 interview on the Channel 5 television network (owned by President Poroshenko).
“Yesterday Yatsenyuk made a decision in favor of Kolomoisky, just as he regularly made decisions in favor of Akhmetov and others,” Mr. Saakashvili said. “All the oligarch interests control the Ukrainian government. As long as Antoniuk sits in his office, that service won’t make any decision against Kolomoisky.”
Mr. Antoniuk has returned to his position, where he will remain in charge of setting fares for flights, after being placed on leave pending an investigation at Mr. Saakashvili’s initiative.
“This money will go to Kolomoisky’s pockets,” he said, adding, “We can only imagine with whom he will divvy them up.”
Mr. Saakashvili also offered the example of Economy Minister Aivaras Abromavicius being unable to dismiss the directors of two state enterprises that serve the interests of mega-millionaire, fuel trader Mykola Martynenko, widely recognized as a close associate to Mr. Yatsenyuk.
These enterprises have cost the state $4.9 billion in losses so far this year, he said.
Mr. Yatsenyuk dismissed the accusations the next day.
“I understand how hard it is for him,” he said. “It’s hard for everyone. We’re all united here. Emotions, baseless accusations, only play into the hands of those who are against reforms and realistic change in Ukraine. Moreover, it’s not suitable to rush to deceitful accusations. And I’m his first ally.”
Mr. Saakashvili’s emotional report on his anti-corruption efforts marked merely the latest scandal in which Mr. Martynenko’s name surfaced alongside Mr. Yatsenyuk’s.
In late April, the Cabinet of Ministers led by Mr. Yatsenyuk approved the appointment of Serhii Perelom as head of the supervisory board of the Odesa Portside Plant, as reported by the biz.liga.net news site in late July.
The plant is Ukraine’s largest producer of ammonium nitrate. Meanwhile, Mr. Perelom is a business partner to Mr. Martynenko.
After Mr. Perelom’s appointment, the plant introduced intermediaries into its ammonium nitrate and natural gas sales abroad that are controlled by Mr. Martynenko.
The biz.liga.net news site conducted its investigation based on allegations of corruption made by former Presidential Administration Head Serhii Lyovochkin.
Moreover, members of the Poroshenko Bloc have also set up their own ammonium nitrate intermediaries, which are alleged to be engaged in price inflation schemes that were common in the post-Soviet sphere, the report confirmed. A Poroshenko Bloc deputy even tried to block Mr. Perelom’s appointment in April.
Mr. Martynenko currently faces criminal charges from the Swiss government for taking a bribe of 30 million francs from a Czech supplier of nuclear-powered electric station equipment, according to National Deputy Serhiy Leshchenko.
Meanwhile, it was Mr. Leshchenko who uncovered in late August a business link between Messrs. Yatsenyuk and Akhmetov.
The prime minister hired the Washington public relations firm APCO Worldwide Inc. to handle public relations work for his visits to the U.S. The $35,000 bill was paid for by a Ukrainian organization that is co-directed by Oleksandr Kharchenko, the head of a Kyiv think tank financed by Mr. Akhmetov.
The same firm was hired to handle the U.S. visit of Finance Minister Natalie Jaresko. Yet she claimed the bill would be paid by members of the Ukrainian diaspora, not Mr. Kharchenko’s organization. She didn’t clarify who from the diaspora would foot the bill, which involved an hourly rate capped at $75,000.
“If Yatsenyuk wants to have business with APCO – and I welcome that choice because they have strong experts – he should have amended the legislation in such a way that the government could hire such services without a tender, or by making an exception,” Mr. Leshchenko wrote on his blog on pravda.com.ua on August 25.
“Instead Yatsenyuk didn’t consider this. So an entirely different question is posed to him: who pays your bills in Washington? Western donors (who don’t identify themselves for some reason), Rinat Akhmetov or simply your personal slush fund, collected from kickbacks from the management of state companies?”