Ranking the biggest corruption scandals of 2018

As a nation ranking 130th in Transparency International’s Corruption Perceptions Index, Ukraine has had quite a few corruption scandals in 2018. Here’s our top 5:

1. Yanukovych assets

The fate of the assets of ex-President Viktor Yanukovych and his allies triggered several scandals. Given that many of Yanukovych’s allies have escaped prosecution for corruption, speculation is rife that they have reached shady deals with incumbent top officials.

The assets of All-Ukrainian Development Bank, controlled by Yanukovych’s son Oleksandr, were frozen as part of corruption cases against him. However, they were unfrozen by Ukrainian courts in 2016 to 2017, and ex-employees of the bank transferred about Hr 2 billion from accounts at the bank to President Petro Poroshenko’s International Investment Bank, according to a Nov. 9 investigation by the Schemes television show.

International Investment Bank told Schemes that the information constituted a bank secret and denied involvement in any money laundering schemes.

Meanwhile, Vitaly Kropachyov, a protege of Poroshenko’s top ally and lawmaker Igor Kononenko, has taken over coal and natural gas assets linked to Yanukovych, according to investigations by the Ukrainska Pravda newspaper and RBC Ukraine news site published earlier this year. According to Ukrainska Pravda, Kropachyov has become Kononenko’s point man in charge of the energy industry, although Kropachyov denied this. Kononenko did not respond to a request for comment.

Kropachyov’s firm was a leading bidder for state power producer Tsentrenergo during its privatization auction scheduled for Dec. 13. However, the auction was canceled.

Fugitive lawmaker Oleksandr Onyshchenko, a suspect in a corruption case, told the Kyiv Post that he had been paying a Hr 2,000 bribe per 1,000 cubic meters to Kononenko to supply natural gas to Tsentrenergo. Onyshchenko also claimed that Kononenko had been getting $20 per ton from coal supplies coming from Russian-occupied Donbas.

Kononenko denied the accusations.

Another scandal concerned a 2017 court ruling on the confiscation of $1.5 billion linked to Yanukovych. The ruling was made secret but it was leaked to Al Jazeera in January 2018. According to the ruling, investment bank ICU, which provides services to Poroshenko and is run by his associates, served as a financial broker for several offshore companies that belonged to Serhiy Kurchenko, a now-exiled oligarch who was dubbed “Yanukovych’s wallet.” Valeria Gontareva, a co-founder of ICU and ex-head of the National Bank of Ukraine, said that ICU “saw nothing suspicious” about transactions it handled for Kurchenko’s firms.

2. Judicial corruption

The appointment and prosecution of tainted judges has been a major controversy throughout the year.

The Congress of Judges on Dec. 19-20 appointed four members of the High Council of Justice: Svitlana Shelest, Larysa Ivanova, Oleh Prudyvus, Natalya Krasnoshchokova. Shelest, Ivanova and Prudyvus face accusations of corruption and passing unlawful rulings but deny them.

Kateryna Butko, an activist at the AutoMaidan anti-corruption watchdog, leaked their names before the appointment, saying they were candidates pushed by the authorities.

One of the new council members, Ivanova, owns a 400 square meter luxury house near Kyiv and was vetoed by the Public Integrity Council when she ran for a Supreme Court job in 2017.

Explaining the origin of her wealth, she said at a High Qualification Commission meeting that she had earned necessary capital as a stoker and collector of strawberries in socialist East Germany.

Meanwhile, the family of Viktor Tatkov, a fugitive Ukrainian ex-judge who faces criminal charges, own luxury property in Spain, according to an investigation by the Schemes investigative project published on Dec. 6.
Tatkov and his ex-deputy Artur Yemelyanov have been charged with illegally interfering in the automatic distribution of cases and issuing unlawful rulings under Yanukovych.

Bohdan Lvov, current deputy head of the Supreme Court and a former judge at the High Commercial Court under Tatkov, and several other current Supreme Court judges who used to work at the High Commercial Court are also under investigation in the Tatkov-Yemelyanov case. However, they have not been officially charged yet and have denied the accusations of wrongdoing.

Several ex-High Commercial Court judges who are under investigation in the case are currently competing for extra jobs at the Supreme Court.

Corrupt candidates may also be appointed to the yet-to-be-created High Anti-Corruption Court. The Chesno civil society watchdog on Nov. 29 identified 43 candidates for the High Anti-Corruption Court who it says do not meet integrity and professional ethics standards. Most of the “unsuitable” candidates violated asset declaration rules, according to Chesno.

3. Odesa mob rule

Odesa Mayor Hennady Trukhanov and his allies Alexander Angret and Vladimir Galanternik have been accused of turning the city into their private fiefdom, awarding the most lucrative land and municipal contracts to their own companies. Trukhanov’s press office called the accusations “rumors and speculation.”

In February, Trukhanov and four of his associates were charged by the NABU with embezzling Hr 100 million. Trukhanov was arrested, but soon released without bail.

Trukhanov is accused of organizing a city council vote to buy the old Krayan factory administrative building for Hr 185 million ($7.04 million) in September 2016, when it had at the beginning of the year been bought by another firm for only Hr 4 million ($152,000), strongly suggesting the deal was a scheme to embezzle money from the city.

According to an Italian police dossier, Trukhanov and Angert were members of an Odessa mafia gang involved in extortion, arms trafficking, and the planning of murders.

Meanwhile, Trukhanov’s Russian citizenship has been confirmed by the official site of Russia’s Federal Tax Service despite his repeated denials.

4. Obstruction

In April the National Anti-Corruption Bureau of Ukraine released audio recordings in which Chief Anti-Corruption Prosecutor Nazar Kholodnytsky is heard pressuring anti-corruption prosecutors and courts to stall cases, urging a witness to give false testimony, and tipping off suspects about future searches. Kholodnytsky confirmed that the tapes were authentic but said they had been taken out of context.

In July, Kholodnytsky’s office also closed the embezzlement case against Interior Minister Arsen Avakov’s son, Oleksandr Avakov, and the minister’s ex-deputy Serhiy Chebotar despite massive evidence against them, including alleged video footage of them discussing a corrupt deal. They denied the accusations of wrongdoing.

Another high-profile suspect, Kharkiv Mayor Hennady Kernes, has been investigated in a major corruption case involving the distribution of land plots in Kharkiv Oblast. But he faced no charges for the alleged theft of as much as $984 million from the allocation of state land plots to people close to the mayor.

Kernes had also been on trial for three years on charges of kidnapping, torturing and threatening to murder EuroMaidan Revolution activists. But a Ukrainian court suddenly closed the case on Aug. 10 without any kind of verdict or conclusion.

Kernes denied all the accusations.

5. Fiscal service

The State Fiscal Service is also rife with corruption.

The Kyiv District Administrative Court on Dec. 11 reinstated ex-State Fiscal Service Chief Roman Nasirov, a suspect in a major corruption case, and required that he must be given compensation for wrongful dismissal.

Nasirov was fired in March 2017 on the formal grounds that he has British citizenship, but the court claimed on Dec. 11 that this was unlawful. Under Ukrainian law, officials are banned from having dual citizenship.

In March 2017 Nasirov, an ex-lawmaker from President Petro Poroshenko’s Bloc, was charged with abusing his powers by illegally allowing participants of an alleged corrupt scheme at state gas producer Ukrgazvydobuvannya to delay tax payments, causing losses to the state of Hr 2 billion ($74 million.). He was fired, and a trial against him began in December 2017.

Fugitive lawmaker Oleksandr Onyshchenko, a suspect in the same corruption case that involves Nasirov, has claimed that Poroshenko instructed Nasirov to delay tax payments for Onyshchenko’s gas firms and used the unpaid tax money to finance Poroshenko’s political projects.

Poroshenko has repeatedly denied Onyshchenko’s allegations, dismissing them as a smear campaign orchestrated by the Kremlin.

Meanwhile, in November Nasirov’s successor on the job, Myroslav Prodan, was charged with unlawful enrichment worth Hr 89 million ($3.2 million). Kyiv’s Solomyansky District Court on Dec. 3 released Prodan without bail, triggering civil society’s indignation.