Joe Biden warned of it a year ago. Corruption is corroding Ukraine. As one fund manager battling the government over a haircut on bond prices recently told me, "Ukraine is a mine field."
Transparency International ranks it worse than Russia on its corruption perception index. Two years ago, Ukraine oligarchs led by Victor Pinchuk argued that the crisis there was caused by Russia and was going to spread throughout Europe. Kiev has Washington on its side. But would prefer a less corrupt government, as Biden's warning suggests. Just how well is the Petro Poroshenko government doing in tackling the system -- a revolving door of wealthy business leaders and their allies in government.
I spoke with Transparency International’s executive director in Ukraine, Yaroslav Yurchyshyn about the country's corruption woes. Here are some takeaways from that interview.
Ken Rapoza: What has been the Poroshenko government's greatest success in tackling corruption?
Yaroslav Yurchyshyn: The establishment of the National Anti-Corruption Bureau in 2014. The adoption of necessary anti-corruption legislation. Public procurement reform in Ukraine, including the establishment of the ProZorro system and I'd add the start of state financing of political parties in Ukraine instead of private money.
Rapoza: What impact does the ongoing disputes with Russia have on the government's focus on more transparency, less rule by oligarchy?
Yurchyshyn: The wars in eastern Ukraine, in Dobass, are not a serious reason to not fight corruption. Looked at from another point of view, fighting corruption is also about values. If public servants have a high level of integrity, then their current salaries would suffice. But if most of them are corrupt, there is no realistic wage in the world to cover their huge expenses. Most of Ukraine’s top-officials prefer new cars, luxury goods and big real estate, which is the main problem: greed.
Rapoza: Who is more responsible for tackling corruption, is that Poroshenko's task or Prime Minister Volodymyr Groysman?
Yurchyshyn: It's the Ukrainian anti-corruption system itself, which is run by the government and includes investigative like NABU and police, and preventive like The National Agency on Corruption Prevention in this case. According to the constitutional amendments, an anti-corruption court should have also been established. Additionally the Prosecutor General’s Office is responsible for fighting corruption as an investigative coordinator and, the Security Service of Ukraine as assistant body for investigative institutions in technical and special aspects. There are really anti-corruption structures inside all governmental bodies, local councils, and state and community-owned enterprises that are responsible for adoption and implementation of anti-corruption programs. So, we cannot simply say that solely the President or the Prime Minister are responsible for fighting corruption in Ukraine. It is also Parliament's responsibility. Surely, Poroshenko and Groysman are the key players in this sphere. But any Ukrainian President is going to appoint the General Prosecutor and the Head of the Ukrainian Security Service of Ukraine to look after these matters. The PM is responsible for the work of the National Police, the State Bureau of Investigations, and the National Agency on Corruption Prevention. The Parliament, the President and the PM together are all responsible for minimizing impacts of corruption on the economy.
Rapoza: Is is better now than it was under pro-Russia leader Viktor Yanukovych?
Yurchyshyn: During Yanukovych’s period, there was no anti-corruption investigations conducted and as a result, corrupt officials were unpunished. Cases were politically motivated always. This means that the Government created a corrupt regime in the country and was itself corrupt by using anti-corruption tools against political opponents only.
Rapoza: Name the top three Poroshenko crime-fighting success stories.
Yurchyshyn: The Mykola Martynenko case (Note from me: friend of "our guy Yats") He is suspected of taking bribes amounting to 30 million Swiss Francs when purchasing equipment for National Nuclear Energy Generating Company of Ukraine, known as Energoatom, from Czech company Skoda. A lot of work has been done at the international level and presently the investigation is at the final stage. Martynenko resigned. Another is Andrii Pasichnyk, former Executive Chief of Naftogaz being accused of putting pressure on the Minister of Economic Development and Trade of Ukraine Aivaras Abromavicius. As of today, the indictment in the criminal proceeding concerning Pasishnyk is ongoing. And lastly I'd say, former Head of State Emergency Service Sergei Bochkovskyi and his deputy Vasyl Stoietskyi. Both men are accused of creating a corruption scheme for personal gain involving public procurement of fuel and lubricants from Russia's Lukoil. They are also accused of demanding property assets from their colleagues in return for certain benefits (like government contracts). As of today the case is still in court. They were released on bail but have been placed under house arrest.
Rapoza: Is this really a big plus? What's Transparency's overall assessment on the ground?
Yurchyshyn: Taking into account the above, I'd say the situation has changed radically. New anti-corruption bodies were established in Ukraine and there is a certain political will to fight against big corruption. Though, this will is partial. The authorities are ready to defend their business partners and allies. However, there are high-profile cases here giving hope for an effective fight against corruption in the future.
