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Fighting corruption the Ukrainian way: new elements

Yevhen Zakharov
Overview of the activities of the National Anti-Corruption Bureau and of the difficulties it encounters when carrying out its functions


Corruption has been declared virtually the main problem in Ukraine, on a par with the occupation of Crimea and military conflict in the East.  Nonetheless, at first glance it seems as though everything is as it was: oligarch clans use their representatives in government to avoid paying tax; public funding is laundered through corrupt tender procedure; state monopoly holdings remove money and property through daughter companies and money used not as targeted; counter-espionage is flourishing; the police provide ‘protection’ for criminal business; positions are for sale; and the cost of bribes is only increasing… As before, the view is domination in the public consciousness that you need to put as many people involved in corruption behind bars as you can.  Each cases where corrupt crimes are uncovered arouses general praise, yet co-exists fine with mass everyday corruption.

However, on closer examination, you can see that the picture is not so simple and gloomy, but rather mosaic-like. Here are some examples of action in fighting corruption. The Justice Ministry has opened up most of its registers, and there is now open access to information in the registers regarding ownership. This creates the basis for comparison of income and expenditure of civil services, and it is this that the National Agency for Preventing Corruption [NAPC] which has just begun working will be engaged in.  A system of electronic declarations has been introduced, that led to the dismissal of officials who don’t want to fill in such electronic declarations.  A law on state funding of political parties and election campaigns has been adopted, with this aimed at reducing political corruption. A law has been passed on the National Agency for uncovering, searching for and managing criminal assets and the creation has begun of a new agency for returning assets obtained illegally. A law has been passed on the State Bureau of Investigations. Anti-corruption bodies have begun functioning and the National Anti-Corruption Bureau [NABU] has produced its first results.  The Specialized Anti-Corruption Prosecutor [SAP] and the National Council on Anti-Corruption Policy under the President [the Council].  The number of officials prosecuted for corruption offences has noticeably increase.

The system of kleptocracy, aimed at retaining the existing system of power for personal enrichment, has felt the danger to its existence and is resisting through various means the attack on its power. The aim of this text is to provide an overview of these processes.


National Council on Anti-Corruption Policy


The National Council on Anti-Corruption Policy under the President of Ukraine is a special consultative-advisory body under the President on issues linked with the definition, updating and improvement of anti-corruption strategy. . It has been functioning for around a year, with the first meeting on Oct 8, 2015, however the Presidential Decree on its creation was issued back on Oct 14, 2014. A year was spent establishing the makeup of the Council. It is headed by MP Mustafa Dzhemiliev, a renowned Soviet dissident and national leader of the Crimean Tatar people. The 22 Council members include two deputy heads of the President’s Administration; MPs, government officials; police representatives; experts, scientists and civic activists.  We would note that NABU is not represented in the Council, while the Prosecutor General’s Office is represented by the First Deputy Prosecutor General.

The Council meets once every three months. So far there have been 4 meetings, with the last in May of this year. President Petro Poroshenko took part in three of the sessions.  At the first he said that he “awaits suggestions on determining, updating and improving anti-corruption strategy, preventing and countering corruption in Ukraine.” It turned out that the President was waiting for the swift adoption by the Verkhovna Rada of the law on the State Bureau of Investigations; swift formation by the Interior Ministry of the management of the National Police; from the Prosecutor’s Office: the filling of the posts of anti-corruption prosecutors back in October 2015; from the national Anti-Corruption Bureau – specific cases for one month already. Yet at the same time the President expect that the Verkhovna Rada would swiftly pass a law on cancelling bail for those suspected of corruption offences, and that is already a violation of Article 5 of the European Convention! The lack of bail will force judges to use remand in custody of all those charged with corruption offences.  In the end, bail was retained.

Criticism from experts and civic activists met with resentment and irritation. It is telling that the President’s site only contains a report about the first Council session. One has the impression that for the moment it is having little impact on fighting corruption.


The formation of NABU


NABU is a law enforcement body which is empowered to forestall; identify; stop; investigate and solve corruption offences committed at high state levels, specifically by civil servants of 1 and 2 rank.

On April 16, 2015, as a result of the first public competition, the President appointed 35-year-old lawyer Artem Sytnyk head of NABU.  He had worked from 2001 to 2011 as a prosecutor’s office investigator. On the same day the President signed a decree about the creation of NABU.

NABU was created from scratch. On May 14, the government decided to allocate NABU renovated premises of 7, 000 m², and on May 26 it was taken under protection.  A Public Monitoring Council attached to the NABU was formed on June 6, and the competition to fill the vacant posts began. On Sept 15, the first 25 NABU detectives gave their oath. On Oct 1, 70 detectives began their jobs.  Their work was, however, hampered for two months by the lack of a Special Anti-Corruption Prosecutor’s Office without which NABU cannot perform its functions. SAP Head Nazar Kholodnitsky was appointed on Nov 30, and already on Dec 4, NABU detectives added the first 4 criminal proceedings to the Single Register of Pre-Trial Investigations. By the beginning of January, NABU detectives had already initiated over 20 proceedings, including against the chief military prosecutor for ATO (the military operation in Donbas) Kostyantin Kulyk.  He was unable to explain the origin of the money with which he and close relatives had purchased several elite flats and cars in 2014-2015. By the beginning of Feb, the NABU was already investigating 50 proceedings with the offences worth 1 billion UAH.

From the beginning NABU was criticism for how slowly it was created. Yet careful selection of all staff via a completion system with the participation of the Public Monitoring Council is the best selection mechanism, and this takes time. There is no competition in Ukraine as complicated as that for NABU. Candidates go through tests for their knowledge of legislation and general skills and only those who get good results in both tests are invited for an interview. During the interview, members of the competition commission who work in NABU asked the candidates more about their professional work, while members of the Public Monitoring Council examined their biography and their income declaration. Perhaps this demanding approach was the reason that many young people, aged 23-25 are working in NABU. All candidates whom the commission recommended for appointment, also went through a lie detector test, and then a special check.

27 thousand candidates took part in the NABU competition, however over a small number of trained people were found whom a kleptocratic state system has not managed to corrupt.  A large part of the candidates were knocked out at testing stage, getting bad marks. For example, at the second competition for detectives, it was planned to select 100, but only 60 could be accepted. As a result, as of Sept. 11, 2016, out of 700 employees (the upper limit of NABU staff), 517 have been appointed, with 201 of these detectives. There are still over 90 vacancies for detectives.  For the moment, regional branches of NABU in Lviv, Odesa and Kharkiv have not yet been created. Each has 25 employees of whom 17 are detectives. The head of the Lviv section has already been appointed. He is 33-year-old lawyer Taras Lopushansky who has three higher educations and has never before held a civil service post. The competition for the heads in Kharkiv and Odesa are continuing. In Lviv the competition for posts of regional department staff should be concluded by the end of September.

There are 17 autonomous structural divisions within the central office of NABU – these are: detective units: information – analytical; technical operations swift response; and ensuring safety for participants in criminal proceedings; staff of the Bureau; department of internal control; human resources and public liaison units, legal and other.

The largest NABU section is that of detectives, with this running criminal proceedings. It began work in January 2016.  A group is formed for each case, with former operations officers and investigators.  This resolves the problem of detective activities, which need to combine both functions.  However, there is so far no legislation on detectives, and professional training has not yet been introduced.

As of Sept 11, 2016 there were 206 criminal proceedings run by NABU detectives. There had been 102 notifications that a person was suspected of a crime.  Indictments had been drawn up against 33 people, and 31 cases had been passed to the court.  A further 40 cases are expected to be sent to the court by the end of September. 5 court verdicts have already been passed on NABU cases.

The first funds – 45 million UAH – have been returned to the state coffers as a result of investigations. 10 million UAH were voluntarily repaid in a case over officials from the State Grain Company, and 35 million – in a case over officials from the Zaporizhya regional energy company, in which charges have been laid against former MP Dmytro Kryuchkov. A further 100 million UAH is due to be returned in this case since five suits have been accepted, and orders issued.  The rulings should be implemented in the near future.

In general, a considerable amount of money and property held by people involved in criminal proceedings – over 1 billion UAH – has been frozen at the application of NABU.  It is a question of when the courts finish examining the cases when the frozen assets reach the state coffers. Unfortunately, the courts are dragging out the examination and one has the impression that sometimes this is done deliberately  

It would therefore be sensible to introduce special anti-corruption courts with the participation of foreign specialists. This idea was supported by the EU as the European Commissioner on European Neighbourhood Policy Johannes Gan stated openly.  He promised help in drawing up the relevant legislation and selection of judges. On another issue, the EU would support NABU and SAB, namely on receiving the possibility of directly tapping phones (not through the SBU) in order to safeguard the flow of information when, for example, the NABU is investigating corruption cases linked with the SBU. The relevant draft bill needs to be passed by the Verkhovna Rada for this to happen.

The Department for analysis and processing of information is working in close cooperation with the detectives.  30 employees check the accuracy of information on income declarations, with the declarations of over 1, 000 judges already checked. Having access to the registers for property ownership, land, vehicles, the register of power of attorney, and others, the analysts have established that about 30% of the judges’ declarations contain inaccurate information. Those judges did not get through re-attestation and were not reappointed to their posts. The process of checking the declarations was considerably simplified thanks to the electronic declaration system introduced from Sept 1, 2016. One should note that employees of this unit have had training from British experts on financial intelligence, fighting corruption and money-laundering. The training courses were conducted in English.

The best example of the change in the country with respect to fighting corruption was seen in the high-profile NABU case exposing methods of embezzling state funding by the Ukrhazodobyvannya company.  An influence MP Oleksandr Onyshchenko is suspected of involvement in this. The NABU managed in a short space of time to detain 12 suspects. Five of these have given testimony and agreed to cooperate with the investigators. However, it proved an insurmountable task to arrest the main suspect. Onyshchenko twice blocked a parliamentary decision to strip him of his parliamentary immunity, and when he understood that the decision would be passed the third time around, he fled the country and is currently seeking political asylum in the UK. In October Interpol is due to issue its verdict, namely whether or not to place him on the international wanted list.

Another high-profile NABU case was the documenting of a bribe worth 150 thousand USD taken by a notorious Kyiv judge Mykola Chaus. However, he also used his immunity and fled to occupied Crimea.

However, many high-ranking officials have not managed to avoid answering before the investigators and the courts for their corrupt offences.


Risks and challenges


The existence of NABU destroyed the monopoly of the prosecutor’s office on investigating crimes committed by civil servants, including on the sensitive question of those committed by prosecutors. When the Prosecutor General’s Office saw the uncompromising position and successfulness of the NABU work, there was noticeable concern.  This was passed to other bodies of power as well, all perturbed by the independence of the new department with whom they couldn’t ‘reach agreement’. This was seen mainly in the media, where each time progress was beginning on certain investigations, there were attempts to discredit NABU and its management through commissioned articles and scurrilous reports. However, this is only consolidating public trust in the NABU.

There have also been attempts to directly obstruct NABU’s work. It would have been paralyzed if the Prosecutor General’s Office [PGO] had passed the old corruption cases to NABU.  There are 25 thousand of these in all. However, parliament passed amendments to the Criminal Procedure Code, according to which NABU investigates only corruption offences committed after its creation. Criminal proceedings initiated earlier should be continued by prosecutor investigators until the pre-trial investigation is concluded. Nonetheless, PGO is still trying to pass NABU cases which do not contain features of corruption offences, for example, the cases of the former ex-Deputy Prosecutor General Rinat Kuzmin and the PGO investigator Serhiy Volchenko.

Another means of obstructing NABU work is the investigation of crimes which should be run by NABU, but are carried out by other bodies of the prosecutor’s office or SB, with infringements of jurisdiction. For example, the investigation into the case of the Mayor of Vyshhorod Oleksiy Momot who is accused of having taken a particularly large bribe, should be run by NABU, and not by the Kyiv oblast prosecutor’s office since the amount of the bribe is more than 750 thousand UAH, with this known from the outset.  There is an analogous situation with the proceedings against the management of the Kyiv Oblast State Administration. In such cases the proof should be recognized by the court as inadmissible since it was not obtained by the correct body, and as a result of procedural infringements, the person should be acquitted.  With respect to the case of the Deputy Health Minister Roman Vasylyshyn, accused of bribe-taking, Nazar Kholodnytsky stated: “We are again seeing how bodies not authorized by the law are loudly reporting the arrest of a top official for bribe-taking, clearly violating jurisdiction, and then quietly trying to pass the case to SAP for it to be concluded. However, our position is clear: it is the Kyiv prosecutor’s office that should carry out proceedings it initiated to their logical conclusion – a court verdict”. As of July 18, SAP had recorded over 10 attempts to pass the NABU cases which other law enforcement bodies had begun investigating. All cases have been returned.

There has even been direct conflict between law enforcement departments. On Aug 5 the deputy head of the PGO Department for Investigating Particularly Important Economic Cases Dmytro Sus arrived at NABU with an investigative-operations group to carry out a search. They produced a court ruling which stated that the grounds for the search were an investigation into illegal tapping by the NABU of telephone conversations of individuals involved in one criminal prosecution which NABU is investigating. The court order did not identify the specific proceedings nor suspect, which it illegal. NABU handed over copies of several documents “which they deemed necessary”, and did not allow the search to be carried out. Near the NABU premises, a crowd of NABU supporters immediately gathered, with up to two thousand participants. It later transpired that this was about unlawful tapping of an outside person within the framework of the former deputy prosecutor of the Kyiv oblast Oleksandr Kolesnyk, who is accused of embezzling sugar worth over 400 million UAH.

On August 12 there were confrontations between employees of NABU and PGO. Dmytro Sus had noticed the surveillance with respect to him and other employees from his department, being carried out from an apartment in a building opposite their office. They went to this flat and established the point of stationary observation with equipment for tapping. The prosecutors began establishing who was carrying out the surveillance.  They detained two men and took them to the PGO building. Meanwhile NABU special forces [spetsnaz] people arrive and got out two other men whom the prosecutors had not had time to detain. They were NABU detectives. Both the NABU Director Artem Sytnyk and the Prosecutor General Yury Lutsenko were away from Kyiv that day. They were however informed of what had happened, and Sytnyk phoned Lutsenko who promised to free the men, who were in fact NABU staff. The call was at around 17.00 yet the Prosecutor General’s order was carried out by his subordinates at night, with both detained mean being brought to the NABU offices at around 1 a.m.  Both were in a bad state, beaten and frightened.

It turned out that prosecutors from that department had illegally held the men for 11 hours without drawing up any protocol of detention. Their personal belongings, technology and documents were taken away without a witness being present. They were not allowed to call a lawyer, were tortured, with threats to gauge out their eye with a knife, and being beaten with a bag held over their head, and so forth. The prosecutors were away that both detained men were NABU employees.

Artem Sytnyk and Yury Lutsenko held a joint briefing at which Sytnyk stated that the actions of the NABU had been lawful, with the surveillance carried out in accordance with a court order linked to information about possible corruption by staff of that PGO department. He added that such covert investigative activities would continue. Lutsenko stated that both law enforcement bodies had committed unlawful actions. He instructed an investigation to be carried out into the conflict by the SBU. 6 weeks later Sus and two other prosecutors from that department were suspended pending the end of the investigation. On Sept 22 NABU detained a senior investigator into particularly important cases from that same department on suspicion of stealing others property through abuse of his official position.

On Sept. 10 Artem Sytnyk stated publicly that provocation and a mass campaign against NABU are planned for the autumn but that he and his colleagues will properly deal with it. NABU has indeed shown itself to be uncompromising in fighting corruption regardless of the political affiliations of the corrupt individuals involved. NABU’s actions are undoubtedly supported by western countries and the level of public trust in the Bureau is the highest of all Ukrainian bodies of power.

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