Is State Fiscal Service chief Roman Nasirov the nation’s whipping boy for tax & customs corruption, or a deserving target of all the criticism heaped upon him?
The business community is rife with complaints about his performance. Members of parliament regularly criticize him, while some have managed to persuade prosecutors to open a criminal investigation into him for negligence and inaction. Some critics point-blank say he’s the front man for corrupt tax-skimming schemes and tax favors to insiders.
Even Prime Minister Volodymyr Groysman criticized Nasirov’s work in September, comparing the customs service to a whorehouse.
So why is he still in office?
“Stupid question,” according to Nasirov.
The Kyiv Post met with Nasirov at the State Fiscal Service’s heavily guarded offices on Lvivska Square on Dec. 2. Nasirov has led the country’s fiscal service, which oversees tax and customs collection, since May 2015.
During that time, he has had a well-publicized conflict with former Odesa customs chief Yulia Marushevska’s attempt to streamline Odesa customs. Marushevska claims he halted efforts to lustrate corrupt officials while allowing graft to continue en masse. He has also been accused of acting with the political cover of Vidrodzhennya member of parliament Vitaliy Khomutynnik.
And about all of this, Nasirov says he has “no regrets.”
Political project
At the start of November, Odesa Governor Mikheil Saakashvili resigned, blaming the Kyiv government for blocking his attempts to rid the southern Black Sea oblast of corruption.
Nasirov took the brunt of Saakashvili’s complaints, largely due to the State Fiscal Service chief’s conflict with Marushevska.
Marushevska, a Saakashvili appointee who gained fame during the EuroMaidan Revolutin for her viral “I am a Ukrainian” video, spent her time as Odesa customs chief attempting to modernize the local customs service. She tried to accomplish this by raising staff salaries and arranging for all incoming shipments to be processed by one customs official in one place, thereby reducing the opportunity for corruption.
But Marushevska claimed Nasirov blocked her throughout, preventing her from appointing officials to needed positions while ordering the State Fiscal Service to raid Marushevska’s offices.
Nasirov called Marushevska’s attempt at reform a “political project.”
“She did nothing,” he said. “There should be something proposed, there was nothing proposed. That’s it.”
When asked why he did not fire Marushevska, Nasirov replied: “she had political protection.”
Controlled from afar?
But many observers, including Marushevska’s former boss Saakashvili, have alleged that Nasirov himself benefits from so-called “political protection.”
Specifically, Khomutynnik, a business partner of oligarch Ihor Kolomoisky, is alleged to provide cover for Nasirov as part of an elaborate political horse trade.
President Petro Poroshenko has control over the General Prosecutor’s Office, while the State Fiscal Service is given to Kolomoisky through Khomutynnik.
“There is no relationship,” Nasirov said of Khomutynnik. “I know him as a parliament member, I knew him as a committee member.”
Nasirov denies that Khomutynnik provides him political protection.
“What I have is a belief from the prime minister, from the government, from the president, from the coalition, that the things we’re doing are the right things.”
E-declarations
One thing that Nasirov has been ordered to do is investigate the declarations of public officials for evidence of tax avoidance.
After the International Monetary Fund pressured Ukraine into instituting a public registry of assets and income for public officials, many Ukrainians were disgusted by how many civil servants had managed to accumulate fortunes while drawing paltry government pay.
Nasirov said that his taxmen “don’t look at them as parliament members or anyone else. We look at them as taxpayers… if, when the analytics are done, someone’s income doesn’t match their savings or assets, then there is a legal procedure.”
From there, the State Fiscal Service will ask for an explanation, “not of where the cash is from, but whether their income reflects the assets that the person has declared.”
Nasirov himself keeps more than $1 million in cash and, according to his declaration, keeps very little money in Ukrainian banks.
“Look at the people who put their money into Bank Mikhailivsky – they don’t have any money. I wouldn’t want to have the same problem,” he said.
Nasirov added that he thinks “there is no public responsibility whatsoever” for a Ukrainian official to keep money in local banks.
Contraband man
Government officials in the Ministry of Finance complain that Nasirov has a tendency to block access to customs data. Under Ukrainian law, customs information is a state secret, meaning that Nasirov’s State Fiscal Service must approve every external request to access the data.
Officials attempting to reform the customs service argue that this is a serious barrier to determining what is actually going on in Ukrainian customs.
“Someone told you this from the Ministry of Finance?” Nasirov said. “If they told you, then they lied.”
He added: “They don’t need permission from us,” before immediately contradicting himself: “There are specific state rules of how to get access to this data that are written in the legislation.”
Nasirov addressed the specific issues of lumber and cigarette smuggling – the former is contributing to the destruction of Ukraine’s forests, and the latter has made Ukraine one of the main suppliers of illegal cigarettes to Europe.
“We identify in absolutely most cases where they are trying to manipulate the export of lumber,” Nasirov said, adding that many businesses will intentionally mislabel the kind of wood they export. “But the problem starts with business trying to smuggle,” he said.
A border guard inspects an empty truck along the Ukraine-Moldova border in August 2016. (Volodymyr Petrov)
When asked if he had an obligation to enforce the law, Nasirov replied: “First of all, it’s their obligation to try not to break the law.”
Nasirov then went on to blame the customs services of Ukraine’s European neighbors for the issue of cigarette smuggling.
“If Ukraine is considered to be a big source, why do they allow the cigarettes to be brought in?” Nasirov asked, apparently rhetorically.
Political favors, cases
Nasirov has also been involved in the ongoing scandal surrounding former Rada Deputy Oleksandr Onyshchenko.
The former People’s Will deputy fled the country amid an investigation into corruption at Ukrgazvydobuvannya, in which Onyshchenko is alleged to have siphoned millions out of the state-owned gas extractor.
But months before the scheme was revealed, Nasirov allowed the politician’s companies to delay rent payments that amounted to Hr 1.3 billion ($49.3 million).
Nasirov called this a “restructuring,” and said that it was commonplace.
“We were giving it to literally all oil and gas producers, including Ukrgazvydobuvannya,” Nasirov said, while refusing to confirm a Ukrainian media report that the Prosecutor General’s Office interrogated him about the matter.
But he did not appear inclined to give such a break to Ukrnafta, the state-owned oil producer that is currently around Hr 12 billion ($455 million) in debt to the fiscal service. The company is able to earn enough to prevent the debt from drastically increasing, but lacks funds to turn itself around.
Parliamentarians, including Energy Committee Secretary Viktoriya Voitsitska, have alleged that the larger plan is to bankrupt the company and sell it off on the cheap. The current debacle with the tax authorities will supposedly allow that to occur.
“They’ve been covering if not all, then absolutely most of their current liabilities,” said Nasirov with satisfaction.
The Kyiv Post spoke with Nasirov one day after TV host Savik Shuster announced that he would have to close his television channel due to financial issues. Shuster had been under investigation by the tax police, claiming that it was politically motivated harassment from the government.
Nasirov denied it, throwing the accusation back at Shuster: “I think the whole of Savik Shuster’s show is politically motivated.”
He added: “We don’t do any political cases. We would be very busy nowadays if we did political cases.” n
