The successes and downfalls of Ukraine’s war against corruption

Employees of the NABU, the National Anti-Corruption Bureau of Ukraine, one of the new anti-corruption institutions

Employees of the NABU, the National Anti-Corruption Bureau of Ukraine, one of the new anti-corruption institutions 

2016/07/06 • News

“Corruption” is a word that is strongly associated with Ukraine, the country holding the 130th place (out of 168) for most corrupt country in Transparency International’s 2015 Corruption Perceptions Index. Corruption affects Ukrainians on different levels – starting from ordinary patients of state hospitals giving bribes to doctors with extremely low salaries (in average, $115 monthly), ending with the leaders of top enterprises, top-officials and politicians. It is often explained by the experience of living in a totalitarian society, but in 2015, only three post-Soviet countries scored worse than Ukraine in the Corruption Perceptions Index (Tajikistan, Turkmenistan, and Uzbekistan). To break the system, the country needs strong reforms as well as maturing of society.

The Reanimation Package of Reforms, a civic platform which focuses on development and implementation of key reforms in Ukraine, named the Top-12 achievements of Ukrainian reforms. According to the experts, the most important one is that in 2015 three new anticorruption institutions were launched:

  1. The National Anticorruption Bureau of Ukraine (NABU). Functions: preventing, detecting, terminating, and investigating corruption-related crimes);
  2. The Specialized Anticorruption Prosecution (SAP). Functions: procedural oversight of criminal investigation conducted by NABU detectives, public prosecution in court;
  3. The National Agency for the Prevention of Corruption (NAPC). Functions: developing and implementing the governmental anticorruption policy, verifying declarations, and monitoring lifestyles of officials to identify lies in their declarations and unjust enrichment.

The NABU reported that over 7 months of activity of NABU and SAP, 148 proceedings have been instituted against leaders of state-owned enterprises, prosecutors, judges, civil servants of “A” category, and other officials, 35 notes of suspicion have been served, bills of indictments concerning 19 people have been prepared; 15 cases have been assigned (of which 8 cases concern judges).

Corruption scheme in the State Sanitary and Epidemiological Service revealed

Ukraine’s Head of the State Sanitary and Epidemiological Service Sviatoaslav Protas. Photo: dt.ua

One of the last successful cases of NABU together with prosecutors of SAP was revealing a corruption scheme of the leaders of the State Sanitary and Epidemiological Service, who were about to steal budget funds under the guise of distributing bonuses to (severely underpaid) medical workers on the Day of health care worker of Ukraine.

The head of the institution Sviatoslav Protas gave a criminal order to a number of heads of Oblast institutions. According to it, the heads and their deputies received bonuses in the amount of  two monthly salaries. They were obliged to give one of them to Protas.

According to the Minister of Internal Affairs Arsen Avakov, those involved in the fraud were detained during receiving of the first tranche amounted UAH 400,000  ($16,114).

About 80 people have been involved in the scheme. According to the minister, the total amount of appropriated funds was several million hryvnias. The detectives followed up with searches in Ukrainian oblasts, and the case is undergoing a pretrial investigation, being celebrated as a victory of Ukraine’s new anti-corruption initiatives.

When the slightly corrupt help weed out the more corrupt

Kostiantyn Kulyk, a prosecutor who investigated the notable case of oligarch Kurchenko, is accused of having illegal assets Photo: tsn.ua

Almost simultaneously with the case of the State Health Service, another investigation of the NABU took place. And it was much more controversial.

The NABU and SAB accused military prosecutor of the Anti-Terrorist Operation Kostyantyn Kulyk of corruption, because of his expenditures exceeding revenues, and also because he was hiding an expensive new purchase.

The text of the suspicion says that from 2011 to April 2015 his expenditures exceeded his revenues by UAH 2.6mn ($105,000).

Media wrote about Kulyk belonging to corruption clans long before the accusations of NABU.  In particular, Prokurorska Pravda accused the prosecutor of receiving his cushy position thanks to connections among high officials and in creating a business empire with illegally gained funds. Actually, the empire belongs not to him, but to his unofficial wife.

However, it  happened that the investigation against Kulyk started at the time when the court hearings against people linked to the oligarch Serhiy Kurchenko were planned. Kulyk is responsible for the investigation against him. This fact raised discussion on whether the case against Kulyk is political.

NABU investigators have not found evidence that had been planned to find under the court order in the apartment of the prosecutor. However, he has been suspended from his position for 2 months, until September 4.

Kulyk himself considers the case to be ordered by those who defend Serhiy  Kurchenko. Talking about names in the interview to RFE/RL’s Ukrainian service, Kulyk accuses Vitaliy Kasko, ex-deputy General Prosecutor, and Nazar Holodnuckiy, the head of the Special Anticorruption Prosecutor Office, of waging a war against him. However, NABU denies any political motives in the case of Kulyk.

Who is Kurchenko?

Serhiy Kurchenko used to be the youngest oligarch in Ukraine Photo: Forbes

Serhiy Kurchenko is the youngest oligarch of Ukraine. In 2013, when he was 28 years old, the oligarch was rated as the seventh richest Ukrainian by the Korrespondent magazine. He made his fortune of $2.4bn by working predominantly in energy – his main business was the Eastern European Energy company. However, he had other businesses too. For example, the magazine Korrespondent is (still) a part of his media holding UMH.

In the beginning of 2014, the Security Service of Ukraine together with the General Prosecutor’s Office announced that Kurchenko created and headed a criminal organization which harmed the state in the oil and banking fields by UAH 5bn ($201mn). After Euromaidan, the young oligarch ran away from the country, and the Security Service of Ukraine revealed that Kurchenko received Russian citizenship. Media reports came in about him hiding in the premises of the Russian oligarch Oleg Derypaska and renting premises in an elite settlement near Moscow.   

Kulyk gave an interview to Obozrevatel just before investigations were opened against him. In it, he told that he, together with colleagues, managed to find many documents and record witness testimonies in the case of Kurchenko while working in the General Prosecutor’s office, which gave the opportunity to move forward and find evidence.

“Kurchenko divested up to UAH 8bn (about $33mn) from Ukraine. This was officially confirmed by judicial and economic expertise. However, it’s not all. According to current information, another $2bn were divested only through Chornomornaftohaz and Naftohaz of Ukraine [oil companies],” said Kulyk.

Moreover, according to the words of the prosecutor, Kurchenko was providing cash to pro-Russian militants, in return for them enabling him to work in the fuel sector of so-called “Donetsk People’s Republic” and “Luhansk People’s Republic,” and to smuggle contraband.

A suspicious coincidence

The court hearing on the case of Kulyk. Ukrainian media reported that there was a cross-fire between military prosecutors who support Kulyk and veterans of the Donbas battalion who are against him  in the court   Photo: dsnews.ua

The NABU detectives came to Kulyk’s house on June 29. At the same day, the appeal hearing on the cases of the accomplices of Kurchenko Oleksandr Suhomlyn and Andriy Koshel should have taken place.

Commenting the situation, Valeriy Karpuncov, a Petro Poroshenko Bloc deputy, said that the NABU is failing Kurchenko’s case, either willingly or unwillingly.

“I do not want to believe that NABU is politically biased. Rather, somebody influential hiding in the backstage is using the guys from NABU for his own bad use,” wrote Georgiy Tuka, deputy minister on the temporarily occupied territories and IDP’s of Ukraine.

Taking this case into consideration, it becomes clear that those who won’t benefit from the work of NABU will try to use all means  possible to avoid bringing to justice those who robbed Ukraine over many years. The situation becomes even more complicated when NABU detectives, going after some cases, can lose much bigger fish.

“When will there be cases of notable arrests?” is one of the questions that the NABU hears most often. The answer on the site of the institution says that “a team of motivated people came to work to NABU. They want changes in the country and are making every effort to combat powerful corruption powerful system. However, corruption schemes of top officials rarely mean taking bribes from hands to hands. In order to prove the guilt of the corrupt, you must obtain strong evidence that will be accepted and taken into account by the court. That’s why the work of NABU is not about notable arrests, but convicting corrupt officials in court.”

Bringing those who are most guilty of abusing Ukrainian law to justice is a demand of society. And the case of Kurchenko could be a good example which demonstrates that such justice is possible.

One of the most important branches in the chain of fair decisions are courts. Artem Syrotiuk, head of NABU, said that a creation of a Specialized anti-corruption court is needed under conditions of a total corruption of the judicial branch of power. Fair decisions can be made if there will be a transparent competition for the positions of judge among candidates who don’t have a corruption-related past. Also, Syrotiuk admitted that security guarantees for these anti-corruption judges must also be provided.

Selecting priorities

It’s hard to find a field not penetrated by corruption in Ukraine. And sometimes those slightly corrupt help weed out those that are extremely corrupt. This does not make the NABU’s work any easier. A declarative “fight against corruption” can actually be a fight against opponents, meaning NABU employees can fall into a manipulative trap. The words of Prosecutor General  Yuriy Lutsenko give hope that the Kurchenko case will not be dropped even though Kulyk will not be dealing with it in the near future.

“I personally will consult with the heads of NABU, so that this checking [of Kulyk] will not cramp our common work about resonant crimes of top officials. I am not going to defend Kulyk. He will answer for accusations against him  like any other  citizen of Ukraine,” said Lutsenko.

Whether the words of the prosecutor are true can be only seen after some time, when there either will be or will not be a progress on the Kurchenko case.

Edited by: Alya Shandra

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