Anticorruption newsletter #13. February-March 2017

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«Street protests gain momentum in Ukraine once more. The main issue fueling them is the public outrage over preservation of the high profile corruption. It is essential to use this energy for the establishment of a new anti-corruption legislation and the anti-corruption court».

The following is the latest news for February-March 2017.

The veterans of the war with Russia began to block the railway to the occupied territories. Their main demands are the prohibition of trade and the release of prisoners. As a result of the blockade, the intruder administrations of Donetsk and Luhansk, propped up by Russia, seized control of the majority of Rinat Akhmetov’s factories, located there. This tycoon controls 70% of thermal power plants in Ukraine.

The blockade drew attention to a crafty deal, for which all Ukrainians are paying dearly. Since April 2016 the tariff for electricity, produced from coal, looms at a Rotterdam import price plus costs of delivery to Ukraine. However, the reality is that coal is imported either from Russia or Russia-occupied Donbas. The difference in price is a staggering two to five timefold. Trade in other goods from the occupied territories was also advantageous for schemers because of the blown-out prices difference, justified by the war, and the absence of effective customs controls. The blockade has received great support of the nation. The arrest of 43 participants near Kryvyi Torets in Donbas area conducted 13th March by the special Police forces and Security Service has provoked protests in Kyiv and other large cities.  

Unfortunately, the right to peaceful protest was marred by clashes near Independence Square, that took place on 19^th of February. The demonstrators supporting the trade blockade of the occupied territories clashed with police, who prevented them from setting out a tent in the street adjacent to the Presidential Administration building. I personally was blocked by the Police which is directly forbidden by Ukrainian legislation. 

I, along with the party "Samopomich", support the blockade. We strongly believe that maintaining trade with the occupied territories is immoral. In addition, it provides the pro-Russian intruder administrations with resources for new attacks on our people and corrupts the leaders of the Armed Forces and the Security Service of Ukraine, embroiled in the trade oversight. We propose to adopt a law, recognizing the occupied territories as such and restricting trade therewith to selling exclusively food and essential commodities.

The means of blockade were used during the struggle of people for justice for top corrupt officials. In early March, the head of the State Fiscal Service Roman Nasirov was detained by the Anti-Corruption Bureau detectives on suspicion of illegally providing incentives to companies related to the defendant in another case of the Bureau – MP Oleksandr Onyshchenko, who’s been in hiding in London since last summer. Lawyers of Nasirov were able to drag out the proceedings to exhaust the 72-hours period of detention. But hundreds of angry citizens surrounded the court in the central area of ​​Kyiv and remained there for a day and a half, until the decision was made to place the chief tax official under arrest.

The indictment of the Head of the State Fiscal Service Roman Nasirov and his subsequent arrest mark yet another great achievement of the Anti-Corruption Bureau and the Anti-Corruption Prosecutor's Office, brought about in December 2015. The aforementioned investigation as well as their other cases on corruption of the CEC chairman, embezzlement of the chief prosecutor of the combat zone and fraudulent appropriation of the Odessa port plant and PJSC UkrGasVydobuvannya gives the investigators multiple leads, all the way up to the state leaders.

Similarly, the Bureau announced that it launched an investigation of public funds abuse, evident through declarations of two members of Parliament and head of a government agency. In general, there are on-going Anti-Corruption Bureau investigations into the declarations’ deceit or illicit enrichment on 34 officials. Of these, 15 are judges, 8 - parliamentarians, 2 - heads of executive bodies, 2 - heads of district administrations, plus the deputy head of the regional council, representatives of the Department of Justice, law enforcement, prosecution, the State Fiscal Service and the Armed Forces.

Hence, it should be apparent that all of the mentioned above is the reason behind an unexpected attempt to appoint Nigel Brown, a lawyer from the UK, as the auditor of the Anti-Corruption Bureau. According to our laws, the Head of the Anti-Corruption Bureau can be let go based on the negative assessment of the auditors. There must be three auditors, representing the Parliament, the President and the Government. Our anti-corruption parliamentary committee held an open competition and reached out to the embassies of the US, EU and the UK to facilitate the selection of worthy candidates. The US embassy advised on Robert Storch, the Deputy Inspector General in the US Department of Justice, the EU offered Giovanni Kessler, Head of the European Anti-Fraud Office (OLAF). We unanimously advised the Parliament to appoint Storch and referred Kessler’s candidacy to the Government. But during the parliamentary session the leader of Petro Poroshenko’s Bloc Igor Hryniv unexpectedly on behalf of his faction and the faction "Narodnyi Front" put forth Nigel Brown as a candidate. During the Q&A that candidate didn’t manage to explain by whom and how he was invited. However, during the vote he got three times more votes than Storch, who has experience in auditing FBI. Brown lacked only 12 votes to receive approval. According to the "Schemy" media team, Brown created a company ISC Global, that provided service to Russian oligarchs Berezovsky, Gusinsky and Khodorkovsky. There exists a risk of a second attempt to appoint him. 14th March three members of the Presidential faction in Parliament were delegated to out Parliamentary Committee. 

The High Council of Justice has recognized as inexpedient the draft law on the formation of the Anti-Corruption Court, which a group of MPs, including yours truly, registered in the Parliament on 1st of February. The draft law proposes the creation of a specialized court for authorization of wiretapping, detention, arrest and sentencing of the accused of highest level corruption, on the grounds of investigation of the Anti-Corruption Bureau and Anti-Corruption Prosecutor's Office. We recommend to involve representatives of the US, EU and the UK in the selection of the Anti-Corruption Court judges, to ensure the integrity and transparency.

It’s quite telling then, that two weeks earlier, the very same High Council of Justice refused to discharge their member Pavlo Hrechkivskyi, who was arrested by the Prosecutor General's Office in September 2016 while trying to extort $ 500,000 for sway of judgment.

National Agency for the Prevention of Corruption finally started the verification of declarations, which Ukrainian officials began to publish via a special Internet portal in September and October of 2016. Previously, the agency lagged the approval of the rules of such verification. However, the approved rules allow to skip the mathematical analysis of consistency of the already-submitted declarations of officials. I asked the agency to check the completeness of the declaration of the President Petro Poroshenko. Lawyers of our parliamentary committee have grounds to believe that he broke the law in failing to declare the villa in Spain, owned by his company.

The Agency keeps on delaying giving access to declarations to the Anti-Corruption Bureau, ignoring the fact that this access had to be granted in February.

Administrators of the portal on spending of taxpayers’ money have created a handy web-tool for finding links between organizations that spend and receive the money. Adopted in 2015, the law on transparency in use of public funds requires disclosure of all such payments on this portal.

The Ministry of Justice failed, a second time in a row, to select the candidate for the Head of lustration department position. This demonstrates the reluctance of professional lawyers to venture into public service in given dire conditions of low wages and lack of will of the country's leaders to purify the state machine.

The Civic Lustration Committee, an NGO which was formed right after Euromaidan and was the raw nerve behind the lustration legislation, began to collect and publish info on officials, who cannot explain the origin of their fortune.  According to the Law On Government Cleansing, this is the lustration criteria.

Head of the Parliament Andriy Parubiy persistently refuses to put to the vote the draft law that we have drawn up in the spring of 2015, that incorporates recommendations of the Venice Commission on lustration legislation. He replies to my numerous inquiries with the claim that it will not get enough votes. The draft law also obligates the candidates in the forthcoming elections of the President and Parliament to inform electorate whether they meet the requirements of the law on lustration. Our parliamentary committee urges the Head of Verkhovna Rada to appoint a date for consideration of legislative acts on lustration, including the one mentioned above.

In response to the urge from our party "Samopomich" and a group of MPs from other factions, the Parliament did not support a solution that would re-legalize the existence of the tax police. The hasty approval of the budget law for 2017 at 4:53 am on December 21^st meant that the provision on the existence of the police was wiped from the law. For most businessmen tax police is a symbol of repression and extortion. That is why we suggest to establish a new service without the enforcement unit.

As of now 414 communities merged in Ukraine on the scope that makes them viable and increases their financial autonomy. Most such communities are located in Ternopil, Zhytomyr and Dnipro regions.