Sergiy Bochkovsky, former Director of Ukraine’s Emergency Services Ministry, was arrested in March on corruption related charges. He is still awaiting trial. Photo: ABC News

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

By: Mike Duane

Special thanks to: Viktoriia Gnatenko

VoxUkraine is pleased to launch a new brief on corruption in Ukraine. Our goal is to bring the most relevant news to our English speaking audience, with coverage of both the challenges and the progress in Ukraine’s fight against corruption.

More of the Same?

More than a year after the ouster of former President Viktor Yanukovych, Ukraine is still struggling to convert its post-Maidan optimism into effective reforms. Ordinary citizens have become disillusioned as political scandals unfold and the nation’s political elite avoid important reforms. Some analysts argue that the slow progress should be expected, and that the establishment of new agencies, like the Anti-Corruption Bureau, is encouraging. Indeed, changing an entrenched Soviet-style system will take time. Citizens are still learning how to capitalize on their newfound political power as they work to create a new political system that is not tainted by corruption. The following article by the New York Times provides an overview of the challenges facing Ukraine as the country works towards reform in the midst of a crumbling economy and a war on its eastern border.

Traffic Chief’s Downfall

The newly minted head of Ukraine’s Traffic Police, Oleksandr Yershov, resigned last week as details emerged of his family’s lavish lifestyle. Media reports revealed that during his tenure as Kharkiv’s traffic chief, Mr. Yershov and his family splurged on cars and vacations. On an annual salary of little more than $13,000 the family owned over $400,000 worth of cars. It may have been Mr. Yershov’s own daughters that proved his undoing as they posted images of their birthday presents, a Porsche Cayenne and a Range Rover, on their social media accounts. This is a headache that Interior Minister Arsen Avakov could do without and an example of the common scandals that Ukrainians find exasperating.

In Case You Missed It

Last week VoxUkraine brought you the story of Deputy Minister of Internal Affairs, Sergey Chebotar, who resigned on May 13 amid allegations of corruption. Mr. Chebotar had been entrusted with fighting corruption and this development is another black eye for the Ministry. Meanwhile, Interior Minister Arsen Avakov is perceived to be stonewalling a full investigation.

Another aspect of this story is the mistreatment of Ukrainian investigative journalists. While filming as part of their investigation into Mr. Chebotar and his family, journalists with the Ukrainian investigative outlet “Nashi Groshi” were attacked. Although the journalists captured the faces and license plate numbers of their assailants on video the local police have made no arrests. This continues a worrying trend of violence against journalists and lacklustre responses from authorities.

No income? No problem.

It appears that at the highest levels of Ukrainian political life the rules may be a little more lenient. As reported by Radio Free Europe, former Prime Minister Yulia Tymoshenko purchased a $78,000 Mercedes Benz last year while declaring no income on her tax returns.

Perhaps more worrisome are the lax disclosure laws for income generated from investments and dividends. Two MP’s mentioned in the article earned between $500,000 and $1 million from their investments in 2014, but were not required to disclose their source. With these loose disclosure laws citizens should be concerned about the role of special interests in politics. Where do the politician’s loyalties lie — with the people or with their business partners?

The Meaning of “Endemic”

For a western sensibility, it can be difficult to comprehend the pervasive culture of corruption in Ukraine. This long-form article published in the Guardian focuses on the country’s broken healthcare system. Although the country’s medical system is officially socialized, chronic underfunding has led doctors to take bribes from patients to cover budget shortfalls — or so they claim. Attempts to reform the system have been ineffective and previous efforts to expose wrongdoing have been met with intimidation and violence. If you want to learn more about the challenge of addressing pervasive corruption, this is a must read.

All for Show?

In March 2015, Ukraine’s TV audience was treated to a rare show. In a dramatic arrest staged for the cameras, the country’s director of the emergency services ministry and his deputy were taken into custody during a live television broadcast. The two were charged with embezzlement and abuse of power. After they were led away, Prime Minister Arseniy Yatsenyuk gave a speech reiterating that corruption would not be tolerated. The move was meant to highlight government efforts to fight corruption, but after only two days the two were released due to insufficient evidence. The charges have not been dropped and Mr. Bochkovsky is awaiting trial while under house arrest. Is this a case of reform minded politicians overplaying their hand and arresting the ministers without proper evidence? Or should Ukrainians be concerned that a backroom deal will allow two corrupt officials to avoid prosecution?

Crocodile Tears?

For his part, Mr. Yatsenyuk’s has not been immune to accusations of corruption. Mykola Hordienko a former head of the State Financial Supervision Authority, whom Mr. Yatsenyuk dismissed on suspicion of corruption, accused the Prime Minister and his government of embezzling 7.5 billion hryvnia, or about $325 million. Following a special parliamentary investigation, Mr. Yatsenyuk was exonerated of wrongdoing. However cases like these continue to erode confidence in the Prime Minister’s government.

Kyiv Post: A group of lawmakers wants Yatsenyuk corruption charges investigated

Surprising Appointment?

Ukraine’s Cabinet of Ministers appointed Ihor Bilous to head the State Property Fund, where he will lead the privatization of an estimated $805 million in government assets. The move is a head scratcher as Mr. Bilous was recently embroiled in a scandal that led to his resignation as the head the State Financial Service. He and his deputies were charged with doing little to change the agency’s culture of corruption. In spite of a questionable track record, Ukraine’s parliament chose Mr. Bilous out of 67 candidates for the position.

Kyiv Post: Finance Ministry shortlists 47 out of 67 candidates for fiscal service head’s position

Shady Land Deals Grab Headlines

President Petro Poroshenko came under fire this week over a controversial construction project on land that he owns in the historic Pechersk district of Kyiv. Allegations surfaced that the President may have used his political influence to halt an investigation into the destruction of a historical site during construction.

Earlier in the month, Kyiv Mayor Vitali Klitschko found himself in a challenging position regarding the controversial “Sunny Riviera” development on a strip of prime real estate along the Dnipro River. It appears that the company developing the land secured their permit by skirting the system. The company’s management team has close ties to Mr. Klitschko, who at this time has not been accused of any wrongdoing in the matter. However, the question is whether the mayor is willing to move against his influential supporters in the name of the public good.

The issue of questionable land grabs is particularly relevant this week as protests erupted near the Osokorky metro station. A controversial shopping center is under construction, and protestors contend that the building permits were illegally procured. It is believed that the developer, which is linked to a member of the Kyiv City Council, was able to use political influence to skirt zoning laws. Kyiv Mayor Vitali Klitschko has ordered construction to stop, however this appears to be only the first step in a long battle over the rights to the land.

Concerns were also raised over the brutal treatment of protestors at the hands of a private security group. The group had been hired by the developer to protect the construction site. As the security force violently dispersed protestors, police declined to intervene.

Don’t Forget about the Regions

Regional bosses got a wake-up call last week when the Chairman of the Dzerzhinsk District Council of the city Kryvyi Rih, Sergey Dmitrievich Stepaniuc, was arrested on bribery charges. He is accused of soliciting bribes to the tune of $600,000. Interior Minister Arsen Avakov posted the news on his Facebook page, signing off with a warning to other bribe takers, saying “who’s next?” Is this just a flash in the pan or a real commitment to cleaning up the regions?

A Friendlier Place for Business?

Ukraine’s Business Ombudsman Council launched operations on May 20. The Obudsman, Algirdas Šemeta, was appointed by the government in December 2014. Mr. Semeta’s mission is to provide a method for businesses to make confidential complaints about corruption. All complaints will be passed to the new Anti-Corruption Bureau for investigation.

The Forest and the Trees

The recent spate of high profile cases may indicate that the Ukrainian government is getting serious about fighting corruption. A more skeptical view would be that scapegoating a limited number of officials takes the focus away from addressing the real issue of endemic corruption. Future VoxUkraine briefs will look to shed light on these and other issues, by bringing you unique perspectives from Ukrainian news outlets and investigative journalists. We will also follow the efforts of advocacy groups and civil society as they work through the government to combat corruption.

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