Transparency International scathing over government commissioned “audit of Tymoshenko’s government


Former Prime Minister Tymoshenko has been accused of misappropriating half a billion dollars by “auditors” commissioned by the government. Transparency International believes that the so-called “audit” discredits the fight against corruption.

Deutsche Welle reports that the investigation was carried out by the Washington –based Trout Cacheris PLLC which Ukrainian information agencies and most media outlets call an “auditing company”. The firm itself is more modest, stating that it is “a small legal firm which specializes in complex court proceedings, both civil and criminal”. It has 9 lawyers.  By comparison the international auditors Ernst & Young have offices in 140 countries and 144 thousand lawyers and financial specialists.

Investigation or witch hunt?

The government nevertheless opted for a small firm from Washington. Prime Minister Azarov claims that the American’s discoveries will help rid the country of corruption.

Transparency International, however, believes that the “Washington audit” only discredits the fight against corruption in Ukraine.  Nicholaus Marshall, the organization’s Regional Director,  told Deutsche Welle: "We welcome the fight against misuse of taxpayer money in Ukraine. Any government official in a democratic country should be held accountable. But judging by the information coming from Ukraine, the recently released audit has serious flaws and in my view was not independent.  It was carried out at the bidding of a new government against its predecessors. It is very difficult to assert that we are dealing here with a fully-fledged investigation and not a witch hunt”.

All governments over the last 20 years should be held accountable

Nicholaus Marshall sees no sense in thus “uncovering” your political opponents as soon as you’ve got to power. The problem of corrupt State authorities at various levels is by no means a new one. He says that it would be hard to assert that only the last government was involved in such machinations. According to their annual reports there have been non-transparent dealings with public funding for the last 20 years.  He points out that the country has been at the bottom of the ratings regarding corruption. “Therefore, in my view, if Ms Tymoshenko misappropriated money, she must answer for it, however then so much all her predecessors”.

Nicholaus Marshall points out that in law-based states investigations into cases of corruption among the higher state authorities are dealt with not by governments which replace one another, but by independent law enforcement bodies. He stresses that the fight against corruption should be carried out on a constant basis, and the appropriate mechanisms for this should finally be created.

“The current investigation carried out by a law firm linked with one party is populism. We all know that the Ukrainian economy is corrupt through and through. It’s not difficult to find abuses. It’s not worth singling out any particular politician, it’s a general phenomenon.”

Better come to grips with the Head of the SBU

Instead of political manoeuvres which discredit the fight against corruption, Nicholaus Marshall believes, the government should deal with dubious anomalies within the present governing team and set about constructing an institutional system of restraints and balances.

“If you look at Ukraine, you see numerous conflicts of interest where there is no clear dividing line between private and public interests. As we all know, the Head of the Security Service [SBU] is one of the richest media owners in the country. He is at the same time on State bodies regulating broadcasting. This is a serious problem” 

Asked if he would have taken part in investigating possible cases of corruption by the previous government in Ukraine if asked by the Ukrainian government, Nicholaus Marshall answered: “Transparency International is a nongovernment organization, not the prosecutor. We are always ready to provide consultations on how to reduce the level of corruption in the country. We don’t want to be an instrument of political confrontation”.

From the report here,,6114026,00.html

Associated Press on Thursday reported that the audit by Trout Cacheris PLLC, Akin Gump Strauss Hauer&Feld LLP and Kroll Inc., which covered the period from 2008 to the beginning of this year, claimed that Tymoshenko’s Cabinet spent $140 million (€101 million) on German minivans for alleged medical use by the Health Ministry that were later used in Tymoshenko’s mobile campaign advertisements.
It also said the former Ukrainian government misappropriated some $280 million (€200 million) that was received for the sale of carbon credits as part of the Kyoto protocol. That money was used by the country’s Pension Fund, which was strapped for cash amid a severe recession, the audit said.
In addition, the study claimed that Tymoshenko’s government misspent $24 million (€17 million) on sugar that was never delivered to Ukraine, and misappropriated $44 million (€32 million) while importing vaccines and medical equipment.
"The investigation revealed evidence of misapplication of state funds and apparent fraud involving the highest levels of the previous administration, specific ministries, and private corporations," the auditors said in a statement. "We have gathered powerful circumstantial evidence of conduct that is not typical of honest officials and business people."


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