Eka Zguladze, First Deputy Minister of Internal Affairs of Ukraine, congratulates Kyiv’s newly minted patrol police. Hopes are high that they will bring integrity back to the force. The well-trained and professional group will hit the streets on July 4th. Photo: Ministry of Internal Affairs of Ukraine

The VoxUkraine Corruption Brief: The Good, the Bad, and the Murky

By: Mike Duane

Special thanks to: Viktoriia Gnatenko and Anton Marchuk

Events unfolded rapidly over the past few weeks, with important developments seen on multiple fronts in the fight against corruption. Ukraine’s National Anti-Corruption Bureau is finally taking shape, notorious Yanukovych ally Serhiy Klyuyev lost his parliamentary immunity and is now in hiding, Kyiv’s police force has got a makeover, and former Georgian President and corruption fighter Mikheil Saakashvili has been named governor of Odesa oblast.

National Anti-Corruption Bureau (NABU)

Birth of an Agency

In Ukraine, the Maidan revolution was considered a revolution of dignity. For many protestors, that meant cleansing the country of both petty and political corruption. One of the key elements of that struggle, and a major promise coming out of Maidan, was a National Anti-Corruption Bureau. The agency is starting to take shape and has a mandate to fight high-level political corruption and restore integrity and accountability to the political process. Civil Society Organizations like Reanimation Package of Reforms and the Anti-Corruption Action Centre were key players in making the new agency a reality.

After a rigorous selection process, President Petro Poroshenko appointed Artem Sytnyk to direct the new agency in April 2015. Mr. Sytnyk is a lawyer who gained a name for himself by resigning from the Kyiv City prosecutor’s office over concerns that former president Viktor Yanukovych was criminalizing law enforcement agencies. Since his appointment, the National Anti-Corruption Bureau (NABU) has been provided a permanent office and has begun the process of hiring what will eventually be a staff of 700. The agency’s employees will be among the highest paid civil servants in the Ukrainian government, a move that is designed to draw the best and the brightest and insulate them from corrupting influences.

Kyiv Post: Sytnyk appointed Ukraine’s first anti-corruption bureau chief

A Sputtering Start

After appointing a director for NABU, the second order of business was to hold elections for the Council of Public Control, which is tasked with exercising civilian control over the agency to ensure proper management and transparency. In keeping with the spirit of transparency, the Council was to be elected by the public via an online voting process. There were 48 candidates for the Council who represented various organizations involved in the fight against corruption.

However, the first round of voting created a social media firestorm when it became clear that the initial voting system allowed multiple votes from a single computer. After many prominent candidates threatened to withdraw their candidacy, the NABU agreed to hold a new round of voting. Impressively, the candidates for the Council and their supporters self-organized and developed a secure voting system. With the new system in place, 15 prominent anti-corruption activists were elected to the Council of Public Control. During the first meeting, which was streamed live, Vitaliy Shabunin, of the Anti-Corruption Action Centre, was elected as the chair of the Council.

Stacking the odds?

While some of the major pieces are now in place for the National Anti-Corruption Bureau (NABU), there are still concerns that without an effective prosecutor the agency will be toothless. According to Daria Kalenyuk, Executive Director of the Anticorruption Action Centre, the key to effective prosecution rests in political independence. This is why she decried a recent move by the parliament that changed the composition of the committee charged with selecting the agency’s lead prosecutor. She fears that President Poroshenko will now have undue influence over the proceedings, which in a worst-case scenario would undermine NABU. There should be no sacred cows, and the success of NABU will hinge on its ability to investigate and prosecute anyone suspected of corruption, regardless of their political affiliation.

New graft-fighting agency has corrupt start, activists say

Growing Pains for Auditing Agency

In an effort to prevent mission drift and maintain NABU’s strict focus on investigating corruption, a second agency has been established to audit the income and asset declarations of politicians and civil servants. This auditing agency will be known as the National Agency for Prevention of Corruption (NAPC). However, political meddling has threatened the integrity of the agency before it can even get off the ground.

The NAPC is still in its fledgling state and the first order of business has been to establish a selection committee, which will appoint the agency’s management team. Pains were taken to ensure the composition of the committee was fair and balanced. It would consist of 8 members, with four members representing different government branches and 4 members representing civil society organizations specializing in anti-corruption work. While the government branches would appoint their own representatives, the remaining seats allotted for civil society would be elected through a democratic process. All participating civil society organizations would elect four leaders from among their ranks as representatives.

However, trouble arose when the Cabinet of Ministers crowded out well-known and respected organizations with anti-corruption experience by unilaterally introducing a number of agencies with questionable credentials. The suspicion is that the Cabinet introduced these agencies to silence opposing viewpoints and exercise control over the process of vetting and appointing the NAPC’s management team. If these suspicions bear fruit, the integrity of the agency will be seriously jeopardized.

In response, Transparency International Ukraine has launched a lawsuit against the government in an attempt to reverse the controversial move. Other civil society groups decrying the government’s move include the Anticorruption Action Centre, Reanimation Package of Reforms, and the Centre of Political Studies and Analytics.

Other Developments

A Breath of Fresh Air

Ukraine’s police force is notoriously corrupt and is perhaps best known for its officers soliciting petty bribes during routine traffic stops. To drive the point home, just a few weeks ago the country’s top traffic cop was forced to resign amid allegations of corruption. But on July 4th, Kyiv’s police force is set to get an overhaul.

In February 2015, Ukraine’s ministry of the interior began the process of recruiting 2,000 new patrol police for the city Kyiv. The rigorous selection process included a battery of physical, psychological and intelligence testing; it also required applicants to have a clean record with at least a high school diploma. The United States, Canada and Japan have been strongly supportive of the effort and have provided transitional funding for the new project. The U.S. has also sent police officers to assist during the new recruit’s 3-month training program.

There are high hopes for this new police force both in Ukraine and with its western partners. In her recent speech in Kyiv, US Ambassador to the United Nations Samantha Powers highlighted the effort, particularly the inclusion of women on the force, as a step in the right direction. The stringent selection criteria, coupled with a salary of approximately $500 per month (5 times that of the current police force), should act as bulwarks against the corrosive culture of taking petty bribes. Plans are currently in the works to expand the Kyiv model to other regions in Ukraine including Lviv, Kharkiv and Odesa.

Arsen Avakov Presented Future Heads of The New Patrol Police

Another One Bites The Dust?

It can often be hard to grasp the maddening contradictions of Ukrainian politics, and the story of notorious parliamentarian and oligarch Serhiy Klyuyev offers a case in point. Mr. Klyuyev has been plagued by allegations of criminal activity and his close ties with the Yanukovych regime have landed him on the EU sanctions list. However, due to Ukraine’s legal code that provides parliamentarians immunity from criminal prosecution, and a lack of political will, he has not been brought to justice.

Instead, he has brazenly continued to represent his home region of Donetsk and to operate his various businesses. That is until June 3rd, when a determined campaign by key civil society organizations and supportive parliamentarians succeeded in revoking Mr. Klyuyev’s immunity. He promptly disappeared and accusations flew that the General Prosecutor’s office may have intentionally allowed him time to escape. His whereabouts remain unknown and an international warrant for his arrest has been issued.

So Who is Serhiy Klyuyev?

Serhiy Klyuyev is one of Ukraine’s wealthiest men and a former member of President Yanukovych’s Party of Regions. He is perhaps best known for running a company with his brother and former Yanukovych Chief of Staff, Andriy Klyuyev, that financed the construction the former President’s opulent palace Mezhyhirya. At a time when Ukraine was crippled by the global economic crisis, the Klyuyev brothers conspired with the former president to embezzle funds from government coffers for the compound’s construction.

While in power, Mr. Yanukovych’s lavish lifestyle and illegally constructed residence was veiled from public view. It wasn’t until he fled the country and protesters breached the compound walls that Ukrainians saw how billions of dollars had been wasted. They were outraged, and video reports by Vice and the New York Times captured their anger and disbelief. Considering his clear involvement in fraudulent activity tied to the old regime, how is it that Mr. Klyuyev has not been brought to justice?

Immunity: A Double-Edged Sword

When Mr. Yanukovych fled the country, Andriy Klyuyev followed close behind fearing prosecution. However, Serhiy Klyuyev has been protected by Ukraine’s unique law, which provides parliamentarians with immunity from criminal prosecution. The law is intended to protect lawmakers from politically motivated witch-hunts, which could derail a fragile and transitioning democracy. However, the downside of this protection is that it can be abused by wealthy and powerful elites. This has been more of the rule than the exception in Ukrainian politics, and has allowed Mr. Klyuyev to continue to operate freely.

Civil Society Carries the Day

Despite the dissatisfaction of Ukrainian citizens and prodding by country’s Western partners, few Yanukovych allies have faced charges. However, when the EU sent signals in the Spring of 2015 that it would consider removing key figures from its sanctions list, including Serhiy Klyuyev, Ukraine’s civil society organizations jumped into action. In a series of editorials Vitaliy Shabunin of the Anticorruption Action Center — and newly elected head of the NABU’s Council of Public Control — detailed Mr. Klyuyev’s criminal activity. This was followed by street actions and coordinated lobbying by the Anticorruption Action Centre, activists from AutoMaidan, and supportive parliamentarians. The determined action of these groups succeeded in revoking Mr. Klyuyev’s immunity. Is this just a flash in the pan, or is Mr. Klyuyev the first domino in a long line of Yanukovych allies awaiting justice?

Kyiv Post: After he disappears, ex-Yanukovych ally Klyuyev put on wanted list

Mixed Reviews for Saakashvili

In a move that took everyone by surprise, Ukrainian President Petro Poroshenko appointed former Georgian President, Mikheil Saakashvili, Governor of Ukraine’s Odesa region. In Ukraine, reaction to the move ranged from outrage to optimism, with many taking a wait and see approach. Western media outlets, notably the Economist, fretted that the move was intended to provoke Russia at exactly the wrong time. So what’s all the fuss?

The Positive

Mr. Saakashvili served as the President of Georgia between 2004 and 2013. He was a leader of that country’s Rose Revolution, which ushered in an era of reforms and a move toward the West. During his time as President, he dealt with a brief war with Russia and the resulting frozen conflict that resembles the situation in Eastern Ukraine. With his charismatic style, enthusiasm for reforms, and support from Kyiv there is reason to believe he will successfully fulfill his promise of rooting out corruption and realizing Odesa’s rich economic potential. As a staunch critic of Russia, he is well positioned to keep the region firmly under Ukrainian control.

The Negative

While Mr. Saakashvili brings a wealth of experience, it rubs some in Ukraine the wrong way that a foreigner has been brought in to run one of the country’s regions. They also question whether this is just a stepping-stone for his personal ambitions to national office in Ukraine. He also comes with baggage from his time in Georgia, where he is facing criminal charges that some say are politically motivated. There is speculation that the move could provoke Russia, whose President Vladimir Putin has a long standing and antagonistic relationship with Mr. Saakashvili. Russia may also be concerned that their military lifeline to the disputed region of Transnistria, Moldova may be jeopardized.

At the same time, many wonder if Mr. Saakashvili has the political standing within the region to achieve his goals. For years, Ukrainian oligarch Ihor Kolomoisky has exercised political control over the Odesa region, during which time corruption has flourished and the region’s economy has languished. However, he was left fuming when President Poroshenko appointed Mr. Saakashvili to head the region. The previous governor, Ihor Palystsya, had been the oligarch’s close ally and the move may represent a continuation of the power struggle between President Poroshenko and Mr. Kolomoisky. In response, Mr. Kolomoisky has already launched a smear campaign against Mr. Saakashvili, via his media outlet “1+1”, which is aimed at undermining the new governor’s leadership. It will take all of Mr. Saakashvili’s skill as a politician, and strong support from Kyiv, to overcome these challenges.

What does the future hold?

Odesa is a region badly in need of reform and economic revitalization. Its rich ports and beautiful beaches for tourists are a source of untapped potential. If Mr. Saakashvili can deliver on his promises to stamp out corruption, overhaul the police force (he has already appointed a new police chief), and revitalize the economy, the move could be a huge win for the region and the country. However, if he fails, it will have serious ramifications both for citizens and President Poroshenko, who has staked his reputation on the move. Mr. Saakashvili will be facing tall odds as he works against an entrenched power structure and the machinations of Mr. Kolomoisky. Under the circumstances, Ukrainians can only take a wait and see approach and hope for the best.

Developing: Security Chief Forced Out

On June 18th, Ukraine’s Parliament dismissed the head of the country’s intelligence agency (the SBU), Valentyn Nalyvaichenko, at President Poroshenko’s request. The move comes amid an escalating disagreement between Mr. Nalyvaichenko and the Prosecutor General’s Office, in which he alleged that they had covered up a corruption scheme at the oil company BRSM-Nafta. Meanwhile, a respected former journalist and current MP with Bloc Poroshenko, Serhiy Leshchenko, alleged that Mr. Nalyvaichenko was closely tied to notorious oligarch Dmytro Firtash. The story is still developing and we will continue to bring updates and analysis as the situation unfolds.

Kyiv Post: Security chief, prosecutor clash over alleged cover-up of corruption

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