Publishing a scoop about top-level corruption is the kind of public service that journalism is supposed to perform.
But rather than receive gratitude, investigative journalists get threats.
That is what happened to Ukraine’s leading weekly news magazine Novoye Vremya (New Time).
The cover story of its April 5 issue was an investigation of the alleged corruption of two top defense officials: Serhiy Pashynskiy, a lawmaker with the 81-member People’s Front party and the head of the parliament’s defense committee, and Oleg Gladkovskiy, deputy head of Ukraine’s Security and Defense Council.
The magazine alleged that the two were stealing from the state defense budget through corrupt schemes in defense production and procurement. One of the reported schemes involved buying armored vehicles at an inflated price.
Corruption in defense sector has been a sensitive topic for Ukraine’s officials. Since Russia began its war against the country in 2014, Ukraine has been rapidly increasing its defense budget.
In 2018, it will spend 6 percent of its gross domestic product, or roughly $6 billion, on defense needs. However, a significant portion of this enormous budget is spent in secrecy and, it appears, corruptly.
Defense procurement isn’t conducted publicly, unlike any other state purchases.
This is how, according to the Novoye Vremya story, Pashynskiy and Gladkovskiy were able to steal millions on procurement deals.
Gladkovskiy didn’t respond to the accusations.
Pashynskiy, however, denied any wrongdoing and called the story baseless and fake.
Then he went further.
‘They’ll tear you up’
Lawyers who said they were representing Pashynskiy came to the Novoye Vremya newsroom on April 12, a week after the story ran.
According to chief editor Vitaly Sych, they demanded that the magazine runs a five-page response op-ed by Pashynskiy and puts his photo on the cover of the issue. They had a print-out of the photo ready.
Otherwise, they said, Pashynskiy’s people would “tear up” the magazine.
“I don’t think that in Ukraine of 2018, anyone can be offering journalists to choose between getting ‘torn apart’ or publishing the investigation subject’s story and photo on the cover,” Sych said in a Facebook post about the pressure on his team.
Pashynskiy said that if Novoe Vremya felt threatened, they should go to the police.
Instead, the journalists went to the National Anti-Corruption Bureau of Ukraine to report the alleged corruption they uncovered. The bureau is no stranger to investigating UkrOboronProm: Since 2017, it has been examining its sale of aircraft parts to the Iraqi defense ministry worth of $39 million on suspicion of corruption.
As for Gladkovskiy and Pashynskiy, their names have been coming up in media reports on defense corruption perennially, but no official investigation has ever looked into their activities.
Both Gladkovskiy and Pashynskiy are the high-ranking representatives of two main camps ruling Ukraine.
Pashynskiy is one of the top lawmakers of the People’s Front headed by ex-Prime Minister Arseniy Yatsenyuk. Gladkovskiy is a long-time business partner of President Petro Poroshenko, who appointed him to the Security and Defense Council in 2015 even though he had no background in defense or public service.
Poroshenko famously said in 2017 that he was going to “cut the hands of those stealing from the army.”
What was in the story
Novoye Vremya investigated the Defense Ministry’s contract to buy armored vehicles (BMP-1) from Zhytomyr Military Armor Plant, a subsidiary of UkrOboronProm state defense holding, in 2016-2017.
According to the story, Zhytomyr Plant was buying decommissioned BMP-1 made in the 1980s from a Polish company Wtorplast that trades recyclable materials, including metal scrap like ammunition.
Wtorplast, in turn, was buying the decommissioned BMPs from the Czech Republic company Excalibur Army for 20,000 – 25,000 euros for a vehicle, a scrap metal price. Wtorplast dismantled the BMPs and resold them to the Ukrainian plant.
The Zhytomyr Plant was buying the dismantled vehicles as scrap metal, but paying $165,000 each with taxpayer money. Then Ukropronbrom’s subsidiary would bilk taxpayers $40,000 to repair each vehicle.
So in the end, each of the 20,000 euros BMP cost the Ukrainian state budget $205,000, Novoye Vremya wrote.
In 2017 alone, 200 vehicles worth $41 million were bought in this fashion.
Novoye Vremya cited several commentators, including an anonymous source involved in the BMPs purchase, pointing at Pashynskiy as a beneficiary of the scheme. Pashynskiy denied it.
In a different contract reported in the story, a different subsidiary of UkrOboronProm sold detonators to an offshore Cyprus-registered company PH Strategic Business Limited for 95,000 euros. The offshore company then resold it to a Czech company for 684,000 euros – Novoye Vremya says it was the market price for the detonators and someone must have pocketed the difference of nearly 600,000 euros.
According to Novoye Vremya, in UkrOboronProm, the contract was verified by its deputy head Svitlana Khromets, who used to work for Gladkovskiy in his car manufacturer Bogdan.
Bogdan, in its turn, has got lucrative defense contracts of its own. In 2017, Bogdan supplied special military ambulance cars to the army. Gladkovskiy continues to own Bogdan even as he holds public office.
Poroshenko co-founded Bogdan and was among the owners until 2013.
Hit back
UkrOboronProm called the Novoye Vremya investigation unbalanced and baseless. It also said there were “no complaints from soldiers” regarding the quality of the purchased armored vehicles.
The UkrOboronProm press service accused the magazine of not publishing the company’s position.
The story’s author, Ivan Verstyuk, confirmed he didn’t seek comment from UkrOboronProm and said he regrets it.
“I was going after Pashynskiy and Gladkovskiy in my story, not UkrOboronProm. But I should have sought their comment too,” said Verstyuk, a former Kyiv Post business editor.
Verstyuk said that, since the story ran, he and his colleagues are under pressure.
He said that Pashynskiy and some others have been threatening to take the magazine to court.
Apart from sending his lawyers to the magazine, Pashynskiy also portrayed the story as hurting Ukraine, saying it was “an attack not even on myself but on Ukraine’s attempts to increase the defense potential of its army.”
Pashynskiy invited the chief editor and the author of the story to discuss the report on April 18 at the meeting of the parliament’s defense committee that he heads. But the journalists refused to come.
“We don’t think that Serhiy Pashynskiy can investigate Serhiy Pashynskiy,” Sych said.
