KYIV – The Constitutional Court of Ukraine on February 27 removed a key clause in the criminal code designed to prosecute corrupt public officials that had also helped the country secure crucial lending from the International Monetary Fund and for its citizens to enjoy visa-free travel privileges to the European Union.
The nation’s highest court ruled that the “illicit enrichment” clause was unconstitutional, saying that it violates the principle of presumed innocence and lays the burden of proof on the accused. The decision came just one month before presidential elections will be held on March 31 amid widespread public disapproval of efforts to combat corruption since the 2014 Euro-Maidan revolution.
The crime-fighting National Anti-Corruption Bureau (NABU), as well as anti-graft groups, said that some 65 cases will retroactively be closed.
In a statement released on the same day, NABU said the ruling was a “step back” and “politically motivated,” adding that it runs counter to Ukraine’s commitments to the IMF and the EU, and to the U.N. Convention against Corruption.
Eleven non-profit groups, including prominent watchdogs Transparency Interna-tional Ukraine and the Anti-corruption Action Center, released a joint statement that said the “decriminalization of illegal enrichment will in effect mean providing impunity for officials at the expense of significant financial problems for all Ukrainians.”
When electronic asset declarations were made mandatory in 2016 for a large swath of public officials, including lawmakers, the public discovered to what extent their lifestyles didn’t match what was officially disclosed. The law on ill-gotten wealth was supposed to compel them to prove the source of their wealth, but now that has been revoked.
President Petro Poroshenko on February 28 submitted his version of a bill to reinstate the illegal enrichment clause while on a work visit to Kirovohrad Oblast, according to the state-run news agency Ukrinform.
“It will be airtight” and “calm everybody down,” he said the previous day while visiting Zaporizhia Oblast, located 500 kilometers southeast of Kyiv.
Neither the IMF nor the EU has released a statement regarding the court ruling as of February 28. It’s not clear whether lending conditions will be stiffened or if visa-free travel privileges to the EU are now endangered.
Presidential Administration of Ukraine
President Petro Poroshenko is saluted upon arrival in Kirovohrad Oblast on February 28 during a working visit.
Prosecutor General Yuriy Lutsenko criticized the clause for not being “effective in practice” during a briefing on February 27 and on his Facebook page, although he was one of the bill’s initiators in early 2015 when it was adopted.
“Lawyers call such [legal] articles ‘dead,’ that is, those that cannot be applied in practice… [The] norms of a poorly drafted law did not work… Obviously, it is necessary to correct the law and act decisively in this direction,” he said.
Since the clause’s adoption four years ago, not a single verdict has been delivered based on it.
Fifty-nine lawmakers started to dispute the constitutionality of the clause in late 2017. Some of those who appealed had initially voted for it, while others were facing charges under the law.
Shady defense industry contracts
Preceding the court ruling, an alleged scheme was unveiled in the defense industrial complex on February 25 that involved kickbacks worth more than $9 million. The revelations came in a video and a subsequent article published by the investigative journalism group Bihus.info.
Allegedly, it implicates the son of a Poroshenko ally and longtime business partner, and a company that once belonged to the president.
Starting in 2015, the conspiracy allegedly involved the sale of Russian-made parts to state-run defense companies, many of which still haven’t closed their production cycles off from Russia.
Twenty-five-year-old Ihor Hladkovskyi, whose father, Oleh Hladkovskyi, is the first deputy secretary of the National Security and Defense Council and a junior business partner of Mr. Poroshenko, was allegedly one of the scheme’s ringleaders.
He and two others purportedly would obtain contraband Russian parts and sell them at inflated prices of two to four times their value to contractors who were allegedly complicit and accepted kickbacks. A company that at the time belonged to Mr. Poroshenko allegedly was used to funnel some of the money.
The president hasn’t addressed the alleged use of his former company for shifting funds.
However, while visiting Kirovohrad on February 28, he promised that any wrongdoing in defense industry procurement will be punished.
“The army is Ukraine’s greatest value,” Mr. Poroshenko said. “If the facts are confirmed, then, of course, neither the name nor the position will save anyone. As soon as the information appeared, I signed an… order to law enforcement agencies.”
The president also said he had submitted a draft bill that takes into account the court ruling, “but preserves the key position – the inevitability of criminal punishment for illicit enrichment.”
Oleh Hladkovskyi denied any wrongdoing on February 27 in a televised interview and more than 10 times called the investigative journalism report a “dirty campaign” ahead of the presidential election.
He also took a leave of absence pending an investigation into defense complex procurements. He asked law enforcement agencies to verify and investigate what the investigative journalists alleged.
Ihor Hladkovskyi told the Interfax news agency on February 26 that he will sue the journalists in court and ask for a correction, adding that “the accusations are unsubstantiated.”
Meanwhile, NABU said that it has been investigating some of the corrupt aspects of the scheme for some time and that more cases were opened on February 26 on the ones they previously weren’t aware of.
Ukroboronprom, the state-run defense industry concern, announced on February 27 that it had dismissed two directors of its subsidiary companies after the journalists’ report was released, while accusing the reporters of “manipulation.”