Archive for August, 2016

h1

Corruption conviction statistics – MOJ publish them anywhere?

August 30, 2016

Never has this blog written an open letter or public request to any of the many Presidents, Prime Ministers or Cabinets whose governance (for want of a better description) it has lived under over the past decade and more in Ukraine.

The first reason for doing so is that once a reader has seen one Verkhovna Rada or Gov UA email address, it is very simple to work out the email address for any of them (no differently from working out the email address for somebody at the State Department or FCO etc.) and private communication has always remain the preferred channel of this blog.

Secondly, it would indeed be conceited to think that such a lowly foreign language hobby blog may get more than an infrequent and/or accidental visit from policymakers and/or legislators in Kyiv (discounting the diplomatic corps that seeks out what little English language “non-party line” commentary that spews forth from Odessa due to the absence of major “western” consulates in the region.  In short an OSINT source with friendly “useful idiocy” potential).

However, even lowly hobby bloggers occasionally write for money – and naturally to a far higher and heavily cited standard than that which appears in a free blog.  Indeed that writing can be academic and has been published by academic journals.

Facts and statistics even in a post-fact political world still have some resonance.  Being sarcastic, how else to produce unreliable facts from reliable figures – or vice versa?

Undoubtedly the Ministry of Justice is very busy.  Its reform agenda is vast and the obstructionism it faces is as robust as it is never ending.  Yet the role of the Ministry of Justice in combating corruption cannot be overstated.

Clearly there is pressure upon the “rule of law” ministries and State institutions to deliver anti-corruption results.  Indeed the blog’s social media time line and “favourite sites” are forever recording and highlighting the arrests of politicians and civil servants for corruption.  The beginning of a process for each and every cases- but not a result.

The Ukrainian anti-corruption fight will not be measured in the number of arrests, but in the number of convictions.

Naturally media and political attention focuses upon the high profile cases – or currently upon the absolute lack of convictions in high profile cases.  Important as they are, they too will only make up part of the picture when it comes to the fight against corruption.

Having searched in reasonable English, average Russian, and admittedly woeful Ukrainian, the blog is yet to find a consolidated list of corruption convictions – be it official statistics or a “best capture” effort by bloggers/civil society/media.

keep-calm-its-only-statistics-1

Somebody in the Ministry of Justice must have a list of every conviction for corruption of political and civil service figures across the entirety of Ukraine – if for no other reason to have a list of names that will subsequently be banned from holding office for a period of time following any conviction.

It would perhaps assist Ukraine in making its case that it is indeed fighting corruption and not just orating rhetoric and passing legislation that remains unimplemented – and certainly assist academic observation, even if empirical in nature – to provide easily located, easily accessible simple corruption conviction statistics.

The number of convictions for corruption per month (or per annum at least).  The judicial verdict/punishment handed down.  The region/oblast.  Ideally the specific court and/or the judge too would be enough.

How else can even empirical observation consider why one region may be far more active in arriving at convictions than another?  Is there a consistency in the sentencing – regionally or nationally?  What of proportionality?  Is one court far more “forgiving”/lenient than another?  Would any “unofficial punishment banding” become empirically apparent correlating to the level of the convicted in the bureaucratic machinery – or alternatively to the level of bribe received for their nefarious acts?

Naturally nobody would expect the Minister to know these statistics without having to refer to somebody in the “boiler room” of the Ministry of Justice – but somebody in the “boiler room” will know – and if nobody knows, then how is the Ministry of Justice (or any other ministry) measuring the fight against corruption where it counts – and the reactive side of the equation counts only in convictions (hopefully with proportionate and consistent sentencing).

(Admittedly it is far more difficult to accurately measure the proactive preventative side of the fight against corruption because if proactively preventing it then logically it didn’t happen to be measured – an inaccurate science no different in difficultly to accurately measuring any crime prevention initiative.)

Thus this entry is aimed at those that may have contact within Ministry of Justice (rather than personally at the Minister of Justice who won’t read it) – hopefully one of the fairly frequent diplomats that drop by will raise the question of where to locate collated, official, easily accessible, frequently updated statistics regarding convictions (not arrests) for corruption and accurately recorded sentencing handed down.

Perhaps somebody within the EU, EU Member States, US or Canada that are rightly spending taxpayers money to support the fight against corruption have such statistics available?  If not, how are they measuring the fight against corruption if convictions are not part of that benchmarking?

There is surely publicly available, updated statistics for the convictions and sentencing of public servants – for they are a matter of public record somewhere – and as headline grabbing as even a solitary conviction and sentencing of a sacrificial “big fish” will be (if it happens), the statistics sufficient to paint a much broader empirical picture, by region and nationally, would be gratefully received.

In the fairly certain knowledge that there will be no response to this plea/ admission of search engine defeat, perhaps the erudite readers will perchance furnish links to such hidden statistical knowledge that despite searches in 3 languages have thus far failed to produce the desired results?

Obliged in advance to any that may assist.

h1

The imminent changes at the top occurred – Now what?

August 29, 2016

A few days ago an entry appeared forewarning of changes at the top within the Ukrainian political and civil service elite – forecasting that Boris Lozhkin would move on from Head of the Presidential Administration (as he has been trying to do for some time, wanting to return to the business world) and that in all probability Igor Rainin would cease to act as Head of Kharkiv Regional Administration and replace Mr Lozhkin (due to Mr Rainin being the least controversial choice for those that will be remaining within the Presidential Administration – and also the easiest to replace holding an Oblast level position).

It went on further to suggest Mr Lozhkin would not be completely released from the Presidential grasp/circle but could very well be appointed head of the newly invigorated National Investment Council.

Lo, all such predictions came to pass on 29th August – with the minor deviation of Mr Lozhkin assuming the position of Secretary to the National Investment Council.  (Nevertheless, hopefully most readers would agree the predictions made were close enough for a free to read blog.)

Mr Rainin will be a competent, adequately discreet (and fairly discrete) safe pair of hands as Head of the Presidential Administration.  Shocks to the system he will not cause.

Mr Lozhkin thereby leaves the Civil Service (prior to e-declarations going live with effect from 1st September) yet remains within the Presidential grasp and therefore presidential team no matter how indirectly it may appear.  Regardless of title and position, his unofficial “shadow rank” within the elite of the Ukrainian elite firmly keeps him within the inner sanctum of trusted Presidential advisers with easy access to the body (President).

He is now therefore free to return to the business world without annoying e-declarations and other such bureaucratic requirements, whilst also promoting (and to be blunt he will be driving) the National Investment Council.

Presumably the existing Investment Support Office will be rapidly (although probably not officially) subordinated to the NIC – and by extension to Mr Lozhkin.  Reading between the lines of Prime Minister Groysman’s statement regarding Mr Lozhkin’s new position such inference can certainly be drawn.

Boz

A reader may ponder who Mr Lozhkin will attract to the newly invigorated National Investment Council as he is very well though of internally and externally of Ukraine – and it was he that invited and convinced the foreigners that formed part of the Yatseniuk Cabinet.  Ergo it would be no surprise to see some very competent people appear as leading lights within the NIC.

Clearly with Ukrainian GDP growing at about 1.5% per annum that is not enough to provide a “feel good” factor among the electorate to return President Poroshenko (and parliamentary team) to power when elections arrive.  Annual growth of approximately 5% however could well (and probably would) do so as long as elections can be kept to their projected timelines per statute and not forced to arrive early.

Although it may be wishful thinking, 2.5 years with GDP growth of 5% (or more) consecutively wins a lot of votes – especially in mercantile cities like Odessa.

Mr Lozhkin will therefore be faced with the same existing statute that prevents significant FDI that has frustrated Governor Saakashvili, whose long list of legislation that requires repealing and/or amending has seen no traction within the Verkhovna Rada.

It seems unlikely that Mr Lozhkin will succeed without forcing some (if not the majority) of the very same statutory and de-regulatory issues already raised and submitted to the Verkhovna Rada by the Odessa Governor.  The question therefore is whether Mr Lozhkin can gather Verkhovna Rada momentum swiftly in order to give himself a chance of changing the economic fortunes in time to support the president by the time elections come around?

Further where is FDI going to be most effective when it comes to national development (and no doubt also in his mind, winning the Poroshenko political entities votes)?

The days of mining and metals as economy leaders, and with both being major employers (and exporters) are on the wain.  Road and rail infrastructure projects, of which there are innumerable, are potentially significant employers.

The necessity to bring the Ukrainian Military Industrial Complex to the modern day also presents significant opportunity.

The IT industry which suffers no oligarchy market capture, and boasts a significantly high proportion of globally recognised qualified people, simply has to be left to do its innovative thing – with support where necessary/possible, but otherwise unobstructed or interfered with.

Agriculture is and will remain a major economic driver (and should any reader have $150 million(ish) for investment in a 230 hectare, high tech farming corporation – this blog is aware of one discreetly for sale “off market”).  Thus the agro-industrial complex will have to be a top priority for FDI if the sector is to become more efficient.

The Ukrainian aerospace industry appears to be doing fairly well, but can do much better with some smart investment and a “harder” sales initiative.

The continuing clean-up of the banking sector by the NBU presents an ever-improving market place for entry (and if a reader has $40 million(ish) the blog is aware of a particularly healthy bank for sale “off market”).

There is of course the impoverished yet potentially massive tourism industry (perhaps with the “added incentive” of legalised gambling returning one day).  The blog is aware of numerous experienced international gambling entities waiting to enter Ukraine – Turkey, Israel, Georgia etc have all contacted the blog regarding legislative updates and visited potential locations for casinos in the past 9 months.  FDI money for this there is – legislation prevents.  (Should a reader have $12 million(ish) the blog is aware of a small gated and profitable beach front resort for sale “off market”).

There is also the expansion of the existing pharmaceutical and chemical industry that should not be overlooked – neither should energy extraction/production/infrastructure.

(Getting out of the way of SME’s wherever possible will also bring about swift local economy benefits, but clearly this falls outside of the competence of a National Investment Council charged with finding and protecting big money investment.)

Thus it is not only going to be a question of how many $ billions Mr Lozhkin can attract (and protect) by way of FDI (and in what time scale), but also what areas are deemed a governmental priority and his ability to nudge investors that way.  Investors can be strange creatures and want to invest in areas that are not governmental priorities – unsurprisingly.  Some have no interest in PPP, others only in PPP.  Some are quite rigid in their internal governance and expectations, EBRD etc., where as others, for example “Investment Fund X”, may be far more flexible.

Having now written all this, a reader may perhaps ponder just how much time Mr Lozhkin will have to return to his own businesses, and the business world – which was the reason for his wanting to leave the Presidential Administration in the first place.

(As an aside – Teasers for the “off market” assets mentioned (and others) are available for investors subject to the usual NDA/contractual requirements.)

h1

If music be the food of love – play on!

August 28, 2016

The Bard knew a thing or two about humanity and life’s bemusement and intrigues – as all great writers do, for an acute sense of observation is somewhat key to prose able to retain interest (and with great prose distinctly lacking, it is why this blog will never have readers counted in millions).

Act 1 Scene 1, The Twelfth Night :  (The Duke) “If music be the food of love, play on.  (Give me excess of it; that surfeiting, the appetite may sicken, and so die.”)

The issue of Eurovision 2017 and which city will host it remains unresolved, despite a promised announcement on 1st August.  Then another canceled announcement on 24th August.  Time ticks away – and with it preparatory time for whichever city will eventually be announced as host.

That announcements continue to be postponed is not entirely unsurprising when the cynical gene within a reader is well aware that nefarious local governance in Kyiv, Dnipro and Odessa all to eagerly awaits the €15 million that will be allocated to insure the host city does Ukraine proud.  Continued delays in an announcement simply provides the cynical with the impression that horse trading and dirty deeds are occurring behind the political curtain.

odessa

Odessa has a strong case being a cultural and tourist centre already.  It also was a city that was not chosen to host the Euro 2012 football championships unlike Dnipro and Kyiv.  Further Kyiv hosts international ice hockey championships at the same time as Eurovision.  The usually fractious, indeed internally hostile (as outlined in a recent entry about tourism policy – or the lack of it due to the dysfunctional governance) leadership of Odessa feels Ukraine owes it to the city.

Yet it is perhaps the openly fractious and extremely hostile relationships between Mayor and Governor, City and Oblast administrations that is the major reason to doubt the awarding of Eurovision to Odessa.  Indeed in another recent entry outlining the many woes of Mayor Trukhanov (and questioning his grip on City Hall), Odessa landing Eurovision may very well take pressure off, rather than place pressure upon the Mayor – “All of that said, there simply doesn’t “feel” to be any real desire to remove Mayor Trukhanov – yet.  Undoubtedly if Odessa is chosen to host Eurovision, then there will be no desire to do so until after the event anyway whilst the Ukrainian elite put on, and intensely buff, a veneer of respectability to the world peering in.  The ugliness and nefariousness of removing Mayor Trukhanov prior to that event if held in Odessa would be simply unthinkable.”

In short, if Odessa is chosen Mayor Trukhanov will undoubtedly remain unchallenged until after the event in May 2017 – to remove him before would be unthinkable.  Likewise the blatant political maneuvering by the parliamentarians of Odessa to remove Governor Saakashvili would be equally unthinkable.

Considering the outright animosity between Governor and Mayor and their respective administrations, the 28th August witnessed an exceptionally rare sight.  Extraordinary in fact.

The Governor and Mayor called a joint press conference promoting Odessa as the host city of choice for Eurovision 2017 and putting on something approaching political unity over the issue.

mish

It is a significant effort on their part to stand shoulder to shoulder and share the same press conference.  The last time they shared a press conference and stood shoulder to shoulder was on the 30th June 2015 – some 14 months ago.

Naturally since that time they have attended numerous functions as guests – for example at the recent film festival both were present – and sat 6 seats apart.  At a US Sea Breeze event aboard ship, when both attended, one more or less stood at the stern whilst the other at the bow.  The distance between them at all such functions about as far as possible, with ne’er a word spoken between them – the blog knows as the blog receives invitations to these events too and is acquainted with both men.

Official joint press events however, are as rare as rocking horse shit – thus this is a noteworthy event.

Ergo, this joint press conference, standing shoulder to shoulder to champion Odessa is a significant effort on their part to display to the leadership in Kyiv that they are willing to put Odessa first when it comes to hosting Eurovision.

If so there are potentially benefits for all – especially Kyiv, in granting hosting right to Odessa.

For Kyiv, something of a truce between them, no matter how temporary that armistice, would be something of a good result.  With no obvious alternatives to Mayor Trukhanov (without jailing him and keeping him out of any electoral race) there appears little option but to leave him in post – for now.  If Governor Saakashvili is also preoccupied with Eurovision, he may become just busy enough to relieve some pressure upon the current Cabinet through his persistent calls for early Verkhovna Rada elections, and also his consistent calls to throw Mayor Trukhanov out of office.

Also for Kyiv, the political efforts of the parliamentarians of Odessa to oust the Governor would also have to be put on ice.

For Odessa, even limited communication and cooperation between Oblast and City administrations would be a change from the current unhelpful situation – and may lead to cooperation in certain other areas too – at least until Eurovision 2017 concludes.   A window of opportunity, (albeit certainly a limited window until mid-May 2017 when open warfare would resume), with regard to cooperation between City and Oblast administrations presents itself, and despite their serious differences and barbed commentary about each other, both men in their own way would wish to put the best possible shine upon both a city and oblast they actually do care about (in their own ways).

The Bard will probably be proven astute once more, for if Odessa is successful, from the announcement until the Eurovision finale, “If music be the food of love, play on.” 

Thereafter however a return to the current political situation seems assured “Give me excess of it; that surfeiting, the appetite may sicken, and so die.”

T’will be interesting to see, should no announcement be forthcoming by 2nd September and the City’s birthday, whether both Governor and Mayor will appear together once again that day to insure the message to Kyiv is understood.

(Then again, it is perhaps at Kyiv’s orchestration that both men appeared together in a show of unity prior to any announcements.)

h1

Changes at the top imminent?

August 27, 2016

Rumour has it that there are to be changes at the top imminently (within 7 – 10 days).

There are several choices in guessing who is likely to move and/or move on when rumours of changes at the top circulate.  Such rumour has to include possibility of the eventual release of Boris Lozhkin.

It has been some months since the blog last mentioned Head of the Presidential Administration, Boris Lozhkin.  That entry highlighting the desire of Mr Lozhkin to leave his current role.

“…….the desire to get out of the Presidential Administration remains – back to business beckons.

Why he remains in post now is perhaps not due to his desire to remain, but due to a lack of desire to release him as Head of the Presidential Administration.  Candidates to replace him are few (to be charitable)…..”

ch

To be blunt there remains but few capable candidates to replace him that enjoy the trust of the President – and loyalty to the President seems to be an attribute far more important than that of ability to carry out the role effectively if past appointments are any indication.

The most obvious replacement is Mr Lozhkin’s current Deputy, Vitaliy Kovalchuk – but in appointing Mr Kovalchuk the President stands a significant risk of seriously irking both Prime Minister Groisman and Mayor of Kyiv, Vitaly Klitschko, neither of which are admirers of Mr Kovalchuk.  (To be frank he has very few admirers.)

Another option would be the current Ukrainian Ambassador to the USA, Valeriy Chaliy, formerly the Foreign Affairs Deputy Head of the Presidential Administration – however, Mr Chaliy was sent to Washington not only for his ability to represent Ukraine in a capital that Ukraine has to influence, but as stated when he was appointed there may have been other drivers for his appointment – “Another possibility is (and there will surely be an element of this, for it is the nature of the political animal) that Mr Chaly had thus far refused the position much preferring to have the eyes and ears of the President on a daily basis.  Simply put, it has taken this long to pressure/ease him into accepting the role.  Let’s be quite honest, few give up their seat at the top of the presidential domestic political table for a position abroad, for their daily influence dwindles over time whilst their replacement’s influence grows.

Mr Chaly is young (45) – capable and ambitious.  It may therefore be that he has been sent to Washington to “makes friends” and gain traction within “the beltway” with an eye upon future positions far greater than that held held until yesterday within the Presidential Administration.

Alternatively, because he is young, ambitious and intelligent, he may have been moved from the centre quite deliberately for more self-serving reasons within the centre of gravity, rather than for reasons of “growing” Mr Chaly’s “western” influence for future domestic political use.

A “horizontal promotion” away from decision/policy making, or a deliberate move to enhance the résumé of a prodigy?”

Another understudy of Mr Lozhkin within the Presidential Administration for a while, is the current Chairman of Kharkiv Regional State Administration Igor Rainin, certainly the least likely to make waves within or without the Presidential Administration if appointed – and possibly the easiest to replace if exiting his current role.  He is therefore the most sensible, if not inspirational, of choices.

The very private figure of Makar Pasenyuk remains a possibility should he want to enter the political fray.  He has the trust of the President.

Mr Lozhkin however, may not yet be fully allowed to leave the Presidential conclave despite his desire to do so.  The President is not surrounded by a large number of trusted and capable people (in that order) allowing for Mr Lozhkin to simply walk out of the door.

Mr Lozhkin’s desire to return to the business world and leave presidential politics behind may yet be tempered by an appointment designed to keep him somewhat close and at presidential beck and call.  An appointment as Head of the National Investment Council could very well await him, thus allowing his return to business and overt exit from daily politics, but remaining the head of an entity created by Presidential Decree, and thus at beck and call of the President.

Further, there is also (reliable) noise stating that Dmitry Shimkiv and Alexy Fildatov are seeking exit from the Presidential Administration too – undoubtedly their desire to leave will increase should Mr Lozhkin finally be released.

(To be fair to these men, none would have chosen the roles that befell them following the events of 2014, and none would have expected or wanted to remain in those roles for long.  In some cases, more than 2 years on, the desire to return to their previous careers is entirely understandable.)

There is also the declared intention to retire with effect from 1st September of Chief Military Prosecutor Anatoli Matios whom a loyal replacement will also have to be found.  (A reader may ponder why at 47 years of age retirement is chosen – perhaps the new e-declaration requirements for public officials have something to do with it?  Perhaps he wants some time off and will enter politics at the next elections – his sister, the gifted writer Maria Matios is a Poroshenko MP.)

Perhaps there are other possible moves at the very top being pondered and that will be actioned within the next 10 days, which thus far escape the watchful eye – thus the possibilities/probabilities listed above will prove false prophecy.  There may be a surprise ahead?  (Although unlikely under a predictable manager such as President Poroshenko.)

Whatever the case, rumour of imminent change at the very top is strong – and if change is to occur it seems likely to happen prior to the return of the Verkhovna Rada and the next parliamentary session.

All of that said, whatever the changes, it will be debatable whether anything will actually change as a result.  Ineffective policy implementation, complete lack of policy in some areas, incredibly poor domestic communication, and all the other usual ailments are likely to remain.

h1

Appeals for the SBU to investigate former Governor Skoryk -2014 events

August 25, 2016

A few days ago Ukraine released audio intercepts of telephone calls between Sergey Glazyev, Krill Frolov and others plotting and scheming the undermining of Ukraine in 2014.

That Sergey Glazyev was a leading figure at the time is hardly a surprise.  Indeed, in an essay written in 2014 by this blog for Routledge/Taylor-Francis with the imaginative title “The Separatist Movements In Eastern Ukraine And Their Association With Russian State Structures”, Mr Glazyev was mentioned within the text of the very first page.  (The essay is unfortunately copyright to the publisher so a reader is forced to buy the weighty tome in which it appears or find it at their website.)

More than two years later, there was no revelation to be found within the released intercepts – the timing of the release perhaps having far more to do with preparatory framing prior to the G20 Summit and influencing any “sidelines/fringes” tête-à-tête that may occur.

Nevertheless the telephone intercepts whilst breaking no new ground or providing no previously unknown information have prompted a reaction in Odessa.

Without going into unnecessary detail the telephone conversations released, and the parts that specifically related to Odessa, have reminded certain parties that the pro-Kremlin elements of the political class in 2014 (and currently) have yet to be held to account for their actions in any way whatsoever – for example be it Kivalov for his titushki and anti-Maidan entities, or the actions of then Governor Mykola Skoryk – the latter being the subject of this entry.  Suffice to say that with both being parliamentarians and thus enjoying impunity and immunity, whilst generally ignored by the local constituency, and the constituency generally ignored by them, little else has happened.  Only occasionally when one or both make a statement that is perceived as a call for separatism – such as promoting the “Odessa Free Port/Porto Franco Operation” both attempted to create in 2014, and still attempt to achieve  post arrival of President Poroshenko.

That Odessa would benefit from a Porto Franco regime/Special Economic Zone status is quite likely – but there are porto franco/SEZs such as Copenhagen or Southampton etc fully under the control of the State., and then there are porto nfranco/SEZs such as those proposed by Messrs Kivalov, Skoryk and Pressman that equate to nothing less than a federal, almost autonomous region.  It is perhaps only because it is these untrustworthy individuals proposing such a scheme that it has not gained traction with a local constituency that is known for being mercantile.

Within the 2014 telephone intercepts released, Mr Glazyev laid down some ground rules to create the necessary smoke and mirrors for Kremlin support – including regional oblast building seizures and votes favourable to the Kremlin narrative.

Mykola Skoryk

Mykola Skoryk

Unsurprisingly former Governor Skoryk indeed called an extraordinary meeting of the Regional Council per the Kremlin play book with a single issue for deliberation – a “State of the Union” styled debate.  A debate entirely beyond the competency of both then Governor Skoryk or the authority of the Regional Council.  Fortunately then Governor Skoryk and the Kremlin play book failed to find a particularly willing or compliant Regional Council.

It appears that what was already known, but is now publicly available as of a few days ago “from the horses mouth” so to speak, has reinvigorated both public and political ire toward Mykola Skoryk – quite rightly.

Skoryk 1

Skoryk 2

An official appeal to the SBU to investigate former-Governor Skoryk’s actions leading up to, and of that March 2014 extraordinary meeting, has been requested – and not before time – but unfortunately it does not go far enough, for Mr Skoryk’s grievous actions against the interests of the Ukrainian State did not end with the failed outcome of that extraordinary meeting in March 2014.

As has been inferred quite heavily in several historical entries, Mr Skoryk has much more to answer for than that – his actions in the lead up to the 2nd May 2014 tragedy are not insignificant.  Those actions are no doubt under investigation now there is a renewed vigour to be found by those investigating that tragic event and the circumstances surrounding it.  Indeed there are several investigations regarding that event but there are questions looming large over their integrity and diligence (notwithstanding timeliness – or lack thereof).

Thus perhaps it would prove to be wise to include that period in any SBU investigation into the actions of former-Governor Skoryk too.

Having written all this, a reader is naturally pondering, when the Ukrainian authorities have obviously had the intercepts since the telephone conversations occurred in 2014, why has no SBU investigation into Mr Skoryk occurred before?  His actions, his affiliations, and his loyalties are all well known in Odessa – as are his business interests and those interests that he manages for others (Messrs Firtash and Lyovochkin) in the region.

It will be interesting to see whether the SBU will pick up the gauntlet officially thrown before it – and if it does, just how diligent that investigation will be.

h1

State Fiscal Service – A much tighter leash required?

August 24, 2016

Last week the blog had a chat with an old friend not seen in several years – The Chatham House Rule applies.

This friends also happens to be an acquaintance of Roman Nasirov the Head of the State Fiscal Service – and the man responsible for 4 (and counting) reprimands issued to Yulia Marushevska, Head of Odessa Customs – and thorn in the side of long-standing nefarious and criminal schemes therein.

There is open warfare between Ms Marushevska (representing something approaching transparency and progress) and Mr Nasirov (representing the retarded, cancerous and corrupt old system).  Their Facebook diplomacy is bitter and barbed – as their timelines unambiguously document.

Ad hoc commentary regarding this on-going battle can be found sprinkled throughout historical entries of the blog – just use the “Search” option on the “Home Page” if interested.

Anyway, the chat revealed a Roman Nasirov that is incredibly bright, was a very good  and high earning professional in the private sector, and generally a reasonable and reliable individual – that is until he was offered and accepted the role as head of the State Fiscal Service where upon the blog’s acquaintance says of Mr Nasirov that he has become an entirely different and thoroughly odious person.  The conclusion being that he has sold his soul (for a lot of money) and continues to do so.

It happens.

Mr Nasirov is not the problem, but is the current face of the problem.  Those to whom his soul was sold are the problem.  That is not to excuse Mr Nasirov of his crimes (literally) whilst doing the bidding of others.  He is entirely responsible for the choices he has made, and continues to make.

There are of course many “interests” that would like to see Ms Marushevska sacked, yet thus far Mr Nasirov has not had the courage to do so.  To be fair, in doing so the ire of the very active activists, (not to mention militants) within the civil society of Odessa would certainly result.  The US, which is very supportive of the anti-corruption efforts made by the team led by Ms Marushevska, would also be far from impressed to see those reformist gains rolled back following any sacking.  The EU would also raise a concerned eyebrow should progress be reversed.

However the SFS under Mr Nasirov’s control is naturally not entirely focused on ousting Ms Marushevska – especially as for the time being it can, and is, circumventing her.  The ports of Odessa are also not the only area in which the SFS has a particularly cancerous touch and from where fortunes can be solicited.

The issuance – or not – of VAT is a major problem for those that have to deal with the SFS seeking legitimate refund, and also a major source of corruption for those that abuse the VAT system.

A simple example of such abuse regularly occurs within agriculture.  A “farmer” harvests 5000 tonnes of grain – although nobody ever checks – so he claims to have harvested 25,000 tonnes of grain.  This grain is placed in a number of silos and exported as part of a much larger quantity.  VAT is claimed for the 25,000 tonnes of grain that was not harvested and duly refunded to the “farmer” – with the corrupt farmer and accomplice SFS officials making millions from the fraudulent VAT returns.  A very simple method from among many far more complex schemes.

For those much larger entities, particularly reliant e-VAT systems, failure to insure the SFS gets “its share” results in being targeted by the SFS as occurred in Odessa on 23rd August – prima facie running against the current agreement between Government UA and the major taxpayers in the nation.

When the declared policy of the government is to redirect the Ukrainian economy toward the drivers of IT, and agriculture, the SFS pressuring IT and agriculture would seem to be entirely counterproductive to government policy – yet that is clearly beginning to occur.

nasirov

A reader may ponder why Mr Nasirov is not sacked considering his orchestrated efforts to frustrate any form of transparency or adhere to the governmental policy line  – as sacked he most definitely should be.

Indeed he has been “called out” numerous times by business, diplomats and civil society for his lies and nefariousness both publicly and privately, so why is he still running the SFS?  The answer naturally lies behind the grubby political curtain in Kyiv.  Not only do the corrupt in Kyiv do very, very well from the continuing corrupt money channels of Odessa, but the retaining of Mr Nasirov as head of the SFS was apparently a requirement of the Will of the People Party (an Ihor Kolomoisky production) to vote in line with the slim majority of the current coalition when it matters.

A reader may wait in excited anticipation for Mr Nasirov’s e-declaration submission of assets on 1st September (when the e-system is supposedly back “on-line” having stupidly been activated before it was fit for purpose).  Most will anticipate a work of science fiction – perhaps rightly – equal only in its plausibility to the limp excuses Mr Nasirov offers when caught actively obstructing both transparency and actual government policy.

Whatever the case it seems unlikely that Mr Nasirov can yet be removed from office despite the fact that the SFS remains an entirely unreformed and a thoroughly cancerous State institution which is seemingly out of control under the leadership of Mr Nasirov.  It remains to be seen how Prime Minister Groisman will manage to “manage” a man clearly tasked with undermining reform and prolonging the old scams.

As the very disillusioned friend stated, it was that in the private sector when shaking hands with Mr Nasirov, a deal was done – now however it seems that when shaking hands with him in the public sector, it is necessary to check to see whether you still have your watch.   Power corrupts etc.

h1

National Agency for the Investigation & Disposal of Assets

August 22, 2016

Having written often about the National Anti-Corruption Bureau (NABU) and also the National Agency to Prevent Corruption (NAPC), there has been no mention as yet of the National Agency for the Investigation and Disposal of Assets (obtained through corruption and other crime).  That is due to the fact that the NAIDA doesn’t yet exist.

Logically however, if the NAPC is a largely preventative independent entity, and NABU is an independent investigative/prosecuting agency, questions arise regarding not only with what to do with nefariously and criminally acquired and subsequently recovered assets, but also who is to be charged with actually dealing with the disposal of those assets – transparently, legitimately and with institutional integrity.  This is the role of NAIDA – or it will be.  It’s role is not only domestic, but to interact with external actors too with regard to recovery etc.

asset_recovery

As the current methods of asset arrest and eventual disposal, to be charitable is inefficient and somewhat opaque, with $billions in misappropriated assets potentially to be subjected to arrest and disposal, notwithstanding that which already is, it would seem rather prudent to get on with creating this agency post haste.

Public selection of candidates via public applications for this agency tentatively begins in the immediate future, with the goal of an operational agency of 100 personnel by the year end.  The plan is to have a public register of what has been arrested, what has been deemed by the court necessary for disposal, what has been disposed of, how and for how much if sold/auctioned,as well as detailing what has been returned following judicial rulings – which should make it quite a popular e-register.

Perhaps bets should be placed upon whether the NAIDA register will manage to generate figures larger than the annual national budget.

%d bloggers like this: