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Corruption you can’t imagine

What Ukrainian babies died for: Yanukovych’s palace.
Corruption you can’t imagine

by Thomas C. Theiner –

In December 2013 Ukrainians rose up against the government of Viktor Yanukovych, who had won the 2010 presidential elections. Since he fled Kyiv last February journalists and pundits form the West have declared the Ukrainian revolution to be a geopolitical revolution or a pro-EU revolution; while propaganda from Moscow tries to paint the Ukrainian revolution as a fascist putsch. They are all wrong!

The spark that lit the Ukrainian revolution was Yanukovych’s rejection of a trade pact with the European Union, yet the reason for the revolution was the population’s despair with the most omnipresent, all-encompassing and brutal system of corruption ever established on this planet. A system established by the government of Viktor Yanukovych, using all the resources of all branches of government and so greedy it cost thousands their lives.

Nobody from the West, not even the most well-informed, can even imagine how this system strangled the lives of the Ukrainian people and to describe it in full would require hundreds of pages. Here below I will describe just some of the typical ways Yanukovych and his criminal associates plundered Ukraine and brought its people first to despair and then to revolution – a revolution of dignity!

After coming to power Yanukovych quickly staffed the Supreme Court with loyalists and those he could easily bribe. The Supreme Court then granted Yanukovych unprecedented powers, which allowed two old allies of Yanukovych, Viktor Pshonka as General Prosecutor and Oleksandr Lavrynovych as justice minister, to cleanse the justice system of all prosecutors, judges and investigators, who were not loyal to Yanukovych or unwilling to accept bribes. This perversion of the justice system into an organization willing to bend the laws to enrich Yanukovych and persecute his enemies saw i.e. a 27 year-old girl with no experience nominated as supreme economic judge for the city of Kyiv.

After having ensured the justice system would never challenge his criminal dominion, Yanukovych and his allies set out to reorganize the remaining state institutions: the tax service was turned into an national extortion service, the national police became the regime’s goon squad, the National Bank of Ukraine the gang’s main money launderer, the customs service a smuggling ring, the national gas monopoly and finance ministry pumping endlessly money  to the criminal empire, the national intelligence agency SBU an instrument to harass and spy on victims of the regime… the list goes on. No government entity remained untouched. From top to bottom, they all worked with only one goal: to enrich Yanukovych and his family.

Some examples how the Yanukovych system of corruption worked:

  • Border posts received price lists how much truck drivers had to pay in bribes to pass the border: a few hundred dollars (varying by cargo) to pass the border quickly, a few hundreds more to pass the border without inspection of the trucks contents, a few thousand dollars to pass the border without having to pay customs. Once a week at each border post emissaries from Yanukovych showed up to collect the week’s bribes and bring them to Kyiv. Border Guards refusing to participate, naturally, were fired.
  • Police Officers serving in central Kyiv, on Odesa’s beachfront, and other touristic destinations were given weekly quotas as to how much money they had to press out of tourists, street vendors and unlucky Ukrainians. Officers failing the quota were reassigned to poor and dangerous precincts.
  • The tax service created the most complicated tax code on the planet, to ensure businesses would easily run afoul of obscure rules. Weekly tax inspections of recalcitrant businesses resulted always in the threat of outrageous high fines, unless the business paid a bribe to the tax inspector right away or struck a deal to pay a weekly bribe to a representative of the Yanukovych regime.
  • Export companies, which by law were entitled to have the Value Added Tax refunded, never got such refunds, unless they paid anywhere from 30% to 50% of the refunds value as bribe to the regime. The percentage depended on how much the company already paid in other bribes. Companies refusing to pay were visited daily by government agencies out to harass the company into submission. Ukraine’s largest foreign investor Mittal Steel was forced to create an entire corporate division only dealing with such harassment visits by the tax service, health inspectorate, work safety agency, fire safety agency, environmental agency, etc. etc. etc.

Besides robbing Ukrainian business every day through the authority of the state the regime also stole massive amounts directly from the state budget:

  • Every single government auction of state property resulted in a shell company with unknown owners acquiring prized assets at a fraction of the true value. If the state received 20% of the true value it was considered a success. Needless to say that the real buyers were in all cases either the regimes exponents themselves or their chums and allies.
  • Every government tender was won by recently set up obscure shell companies, who charged three times the market price to provide services and goods to the government.
  • Many times the regime just ignored its own corruption-friendly laws and just handed itself billion $ deals right into its own pockets. Alone in January of this year, with the revolution in full swing, Yanukovych’s son was handed government contracts for over a billion USD without tenders.
  • And sometimes the regime just let its members privatize government owned companies by simply faking ownership documents, which were eagerly rubberstamped by the regimes crony judges.

If you are shocked by now and believe this can’t get any worse… you are wrong, the worse is yet to come!

  • The biggest money the regime made when it employed the full power of the state to destroy free markets. In 2011 the agriculture ministry out decided of the blue that Ukraine, despite a record harvest, was at risk of falling short of the grain needed to feed its people. So export quotas were introduced, which would be auctioned off – but in fact had all been already auctioned off to a recently founded entirely unknown company Khlib Investbud with mysterious owners. Every grain producer in Ukraine was now left with two options: either buy quotas from Khlib Investbud for outrageous prices, or sell its grain on the Ukrainian market, which crashed because of the millions of tons of non-exportable grain. Khlib Investbudmade billions selling quotas and buying up grain at low prices in Ukraine and exporting it. The revelation by the Kyiv Post about the deep connections between the Agricultural Minister Mykola Prysyazhnyuk and Khlib Investbudled to a massive government attack on the Kyiv Post, which was only thwarted because US Senators visiting Kyiv at the time pressured the regime to leave the Kyiv Post alone.
  • The same game the regime played with steel export quotas, gas import quotas, etc. Needless to say the companies of the regimes two main financial backers and money launderers Dmytro Firtash and Rinat Akhmetov were exempt from these shenanigans and exported freely and used the distorted market to buy up rivals, that had less intimate ties to Yanukovych and his gang.
  • This coziness between Firtash, Akhmetov, and Yanukovych went so far that the national gas monopoly Naftogaz provided both oligarchs with billons of dollars worth of gas at subsidized household level prices. The massive deficit such sales generated for Naftogaz, were financed by the Ukrainian government though the issue of bonds. Yet even receiving gas at a quarter of world market prices wasn’t good enough for Firtash and Akhmetov, who both never paid for the delivered gas and Naftogaz never tried to collect these debts. That both Firtash and Akhmetov also acquired double and triple the subsidized gas they actually needed and then sold the surplus gas at market prices to European companies, while failing to pay export taxes, customs and duties just shows how insanely Ukraine was milked by the regime.
  • After having amassed dozens of billions of $ and laundered them with the help of Austrian banks the regime in 2012 began to raid companies. The Regime simply wasn’t content to extort 10% to 20% of GDP out of Ukraine’s businesses a year anymore, and it wasn’t satisfied with stealing over half of the nations budget and almost all remaining state assets – it wanted more. Therefore, at the end of 2012 a national campaign to raid successful business commenced. Owners were informed that they were either to sell their business for half its value to regime members or their straw men, or would lose their businesses altogether. Owners brave enough to refuse soon found their premises occupied by burly, athletic men in ski masks, with the regime’s police protecting these athletic men and the regime’s judges approving and registering faked contracts that showed the owner had sold his company willingly for a fraction of the real value. Lucky were those owners that still got some money. So much did raiding profitable and strategic businesses become a core activity of the regime that even Valeriy Khoroshkovskyi, a longtime ally of Yanukovych and vice prime minister, was not able to fend off a raiding attack by Firtash on his business and was forced to sell his business, Ukraine’s biggest Media and TV group Inter, for a third of its value.

With businesses being extorted, raided, and destroyed systematically, investment and business activity in Ukraine grinded to a halt in 2013 and the country was in recession long before Euromaidan began. The regime’s mad dash to plunder the country also deeply affected the people of Ukraine. Not only were their taxes stolen, their employers destroyed, and the nations wealth privatized in criminal deals, each and every Ukrainian saw life standards fall during the Yanukovych years. Even worse, it saw people suffer and die.

  • To launder the dozens of billion USD the regime stole, it founded dozens of banks. When European and American regulators took a closer look at these banks because of their wild business behavior, the regime stripped the banks of all assets and handed them over to the National Bank of Ukraine (NBU) to recapitalize. After having opened and burned dozens of banks the regime began to raid existing banks. Once Yanukovych’s straw men had taken control of a bank, it was used to launder money in a hurry and at the same time completely asset stripped within a few weeks. The bank was then handed over to the NBU to recapitalize. Yet as Yanukovych and his gang also asset stripped the NBU (under the eyes of IMF and World Bank!) hundred thousands of Ukrainians now find their accounts frozen and their savings lost as the NBU can’t recapitalize the many banks Yanukovych plundered.
  • The entire justice system became a farce. Police only investigated crimes that did not involve regime figures and only pursued cases involving regime adversaries with vigor. Judges auctioned their decisions: the party capable to pay the higher bribe won the case. Criminals with deep pockets, even those accused to have ordered more than 30 murders, were let go if they paid a bribe to the regime. By 2013 the regime had begun to arrest and accuse innocent people in a bid to extort money from their families to drop the case. Innocent people were sent to prison for not being able to pay the demanded bribe, while hardened criminals were given two years probation for attempted murder.
  • Furthermore, the regime began a drive to raid private residences in the centers of big cities by 2013. Families found burly, athletic men at their door in the morning that threw the families out of their flats, showing faked ownership deeds, which were enforced by police and corrupt judges. In this way, many of Yanukovych’s parliamentarians acquired prime residences in the center of Kyiv near parliament. Even the National Association of Writers was raided in this way.
  • Yet the worst crimes the regime committed against the weakest members of society. I am not just talking about the millions of pensioners, who have to subsist on $ 70 a month to survive, but the sick and young. The massive raiding of state coffers led to teachers, nurses and doctors being paid just from $ 100 to $ 200 a month. Competent teachers resigned, young teachers looked elsewhere for jobs, and the remaining teachers and university lecturers sold grades and exams for sex or money. Nurses and doctors left the state hospitals for private clinics for the affluent few, leaving the nations health care system short of personnel. Yet that didn’t kill thousands. Thousands died because the regime stole billions from the healthcare budget. The money destined for medicines, equipment, for treatments and for rehabilitation was all stolen. Hospitals never saw any of the equipment acquired at triple the market rate, as it was sold at below market rates to private clinics for the benefit of the criminals running the health ministry. Medicines were bought in bulk for the entire nation at triple their real price, but never reached clinics as they were sold to criminal gangs, who controlled vast chains of pharmacies. Thus patients were forced to buy their own medicines, and patients to poor to buy the needed medicines were left to die. I know this, as I have seen it.

I have seen it. I saw dying cancer patients in horrible pain for whom the doctors had no pain medication, while Yanukovych spend 2,7 million € on a lamp. I saw mothers bury their babies as they could not afford $5 a day for the needed antibiotics, while Akhmetov spent 200 million GBP on a flat in London, I saw children die of cancer as doctors could not treat them without equipment, while Yanukovych’s son bough a Yacht for $100 million. I saw the overcrowded orphanages, I saw old people freezing and starving to  death in the streets, I saw hordes of street children, I saw young mothers prostituting themselves to feed their children, I saw the hundreds of Ferraris of the elite.

Nobody, who has not lived through the Yanukovych years in Ukraine, can understand what omnipresent, all-encompassing and brutal system of corruption he and his gang blanketed Ukraine with. No one was untouched, everyone suffered, and many died for the greed of this man. Ukrainians had put all their hope in the Ukraine-European Union Association agreement hoping that it would check the greed of the regime, yet when Yanukovych abandoned the agreement he devastated the nation. The brutal police attack on the few students that came out to protest then lit the revolutionary spark as Ukrainians understood that if they did not raise up now, Yanukovych would never leave power, would never stop robbing the nation, and would destroy everybody’s future .

Ukrainians rose up against corruption, lawlessness, mafia rule and the threat of dictatorship. Only when Putin offered Yanukovych a $15 billion bribe to subjugate Ukraine once more to Moscow’s rule, did the revolution also become a national awakening of the Ukrainian people. Yet too few in the West understand what led to the Ukrainian revolution and for what reasons and for what goals the people rose up. The EU stands for a dignified life in a non-corrupt environment; therefore Ukrainians adopted the European Union flag as their symbol. Russia stands for the kind of oppression and corruption Yanukovych’s regime brought to Ukraine, therefore Ukrainians reject Putin and his idea of a Eurasian Union. The Ukrainian revolution was not for the EU and not against Russia or Russians, the people rose up for European values and against Putin’s values.

And while too few in the West understand the real reasons for the Ukrainian revolution, Putin understands them perfectly and as these reasons do also appeal to the Russians, his subjects,  Putin unleashed war on Ukraine. A war nobody in Ukraine wants. A war facilitated by morose Western leaders, who neither understand the Ukrainians motivation to rise up and unite nor Putin’s motives to wage war and thus give Putin a free hand to murder thousands.

I am from the EU. I supported the European idea all my life. I saw Ukrainians suffer under Yanukovych, I saw them rise up and reclaim their dignity, their destinies, their nation. I saw Europe curry favor with Yanukovych even after he had over 100 people shot mere meters from where he and Steinmeier were lunching. Now I see Europe subjugate itself to Putin’s whims, being to his mercy, even after he has the blood of a thousand Ukrainians on his hand. I see the European idea sacrificed for corporate profit, I see the dignity of Europe thrown away for Russian gas, I see human values abandoned for pleasing a murderous dictator. Yet I see Ukrainians fight and die for their nation in the East, while building a peaceful, liberal and free nation all over their country. I see Ukrainians coming together to create a country free from greed, fear, oppression and yet free and open for all. I see! And you?

Слава Україні!

In italiano

Auf Deutsch

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