Friday, 7 December 2018

European Union Corruption Case Study: Ukraine


European Union Corruption Case Study: Ukraine
December 06, 2018
By Ollie Richardson for The Saker Blog
Over the past 4 years, since the coup d’etat in Kiev in 2014 orchestrated by the “civilised” West, a “team of reformers” has been at work in Ukraine. They promised to implement so-called “anti-corruption reforms” in cooperation with European countries, such as France and Germany, who, by the way, both placed a stake on installing project “anti-Russia” aka Euromaidan. But here is where things get interesting. The level of corruption in Ukraine has not decreased!!!! According to independent experts, the virus of corruption has spread even further!!!! In fact, corruption has also captured new anti-corruption bodies that were create post 2014, including the “National Agency of Ukraine for finding, tracing and management of assets derived from corruption and other crimes”, also known as ARMA. On paper, it was conceived to combat unscrupulous business, but in practice it works under the protection of officials and has itself become a hotbed of corruption and lawlessness. But how did this happen?
The creation of so-called anti-corruption bodies in Ukraine, including ARMA, took place at the request and with the assistance of the institutions of the European Union. ARMA was created within the framework of the recommendations of the Organisation for Economic Co-operation and Development, the implementation of which was mandatory for Ukraine in order to obtain the carrot on a stick known as the visa-free regime.
The prerequisites imposed by the West concerning the creation of ARMA were Ukraine’s obligations to implement the UN Convention against Corruption and other acts of international law, to implement the recommendations of GRECO and FATF, as well as one of the main criteria for Ukraine – to implement the Action Plan on visa liberalisation with the EU and one of the conditions for Ukraine to receive macro-financial assistance from the European Union.
However, according to official statements, in the current Ukrainian realities ARMA does not function in the way that the “well-intended” European partners of Ukraine had expected. According to EU officials, it was created as a body to fight corruption in the best European practices, but in reality, ARMA has become a stronghold of corruption and a tool for literally looting local Ukrainian businesses. According to Ukrainian experts, this may be directly related to the person who leads ARMA – Anton Yanchuk, who influences the work of the agency, as well as the companies that are chosen to manage the confiscated assets. According to an internal document that I had the chance to study, Yanchuk is not an independent leader at all. He is someone whose appointment was lobbied by the “People’s Front” party, which is a part of the parliamentary coalition and is known as the “party of war”, since most of its members were responsible for illegally launching the war in Donbass. Members of “People’s Front” hold key positions in the Verkhovna Rada, the Cabinet of Ministers, and the National Security and Defense Council. They have been repeatedly accused of being involved in legislative and other initiatives related to the political persecution of those who can be described as “anti-Maidan”, attacks on freedom of speech, and violations of other rights and freedoms enshrined in not only Ukraine’s constitution, but all such treaties ratified by Ukraine as the European Convention on Human Rights. Therefore, it is natural that ARMA is also engaged in persecuting people and enterprises on political grounds.
Who became a victim of ARMA and who was chosen as its contractors?
An indicative example of the work of ARMA in this sense was the attack on the office of the “Vesti Ukraine” media company, which can be described as being anti-Poroshenko. ARMA arrested the property that this media agency rented on the 32nd floor of the “Gulliver” business center in Kiev (what a coincidence, from all the businesses that operate here!). Prior to this, the journalists of “Vesti Ukraine” had repeatedly investigated the activities of representatives of “People’s Front”, the chief military prosecutor’s officeАRМА, Yanchuk himself, as well as other structures and persons that are in the higher echelons of power. The active role played by state bodies in the attack on “Vesti Ukraine” give grounds to consider this attack as a way of putting pressure on media agencies whose position is inconvenient for the junta in Kiev.
At the beginning of February 2018 at about 6:00 a.m. representatives of the Military Prosecutor’s Office, the National Police, ARMA, the company that was granted the right to manage the assets confiscated by ARMA – “Navigator business center“, and unidentified persons in civilian clothes and masks (at least 50 people) forcefully occupied the office of “Vesti Ukraine” located in the “Gulliver” business center. The premises that “Vesti Ukraine” rented was arrested and transferred to the management of ARMA. At the same time, all the equipment belonging to “Vesti Ukraine” was stolen and destroyed. All property – including furniture, equipment, expensive radio equipment, and even the personal belongings of employees that were in the premises – belonged to “Vesti Ukraine” and was not burdened with any judicial arrests. Access to the premises and workplaces for journalists of the radio, paper newspaper, and website departments of “Vesti Ukraine” were blocked, and the newsrooms and broadcasting studios of the radio facility were occupied by the SBU, which made it impossible to broadcast the radio station live on the air. Journalists were in fact deprived of their right to carry out their legitimate professional activities, about 200 media employees lost access to the office infrastructure, working equipment, office equipment, and their personal belongings. The seizure of “Vesti Ukraine” also resulted in the editorial office being smashed up.
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Refusing any contact and to provide access to the personal belongings of the employees of “Vesti Ukraine”, a gas substance was sprayed at the journalists. There was smoke in the office of the agency, the fire alarm system was triggered, and the employees working in the entire premises of the business center were evacuated. The editor-in-chief of the “Vesti Ukraine” website Anastasiya Reyn suffered 1st degree retinal burns.
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In the aftermath of the seizure unknown persons in balaclavas – hired, as it turned out later, by ARMA’s managing company “Navigator business center” – settled in the office of the editorial staff. They barricaded themselves indoors and trashed the equipment of journalists and the expensive equipment of the “Vesti Ukraine” radio station. Surveillance cameras also captured the junta’s mob drinking alcohol. This situation lasted for several months. During all of this time there were unknown people on the 32nd floor who plundered the property of the editorial office, threw the personal belongings and documents of journalists out of the window, and proverbially bulldozed the offices that they allegedly “managed”. The guards of the “Gulliver” business center detained some men who tried to bring weapons inside the building, while others were detained when they tried to remove cameras, batteries, and even hand cream from the “Vesti Ukraine” office… As a result, a number of criminal cases were initiated. Officially, ARMA assures that this process was the transferral of assets – the room where the “Vesti Ukraine” editors are based – to the managing company. At the same time, ARMA and its managers refuse to be held accountable for the damage caused to property and the losses incurred by “Vesti Ukraine”, which are estimated in the tens of millions of hryvnia.
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The head of ARMA Anton Yanchuk dodges communication with journalists and refuses to comment on this situation. Meanwhile, the owners of the “Gulliver” business center and “Vesti Ukraine” appealed to another “bastion of democracy” – the National Anti-corruption Bureau (which is de facto headed by the CIA and used to keep the Maidan wolves in the pen) – with a request to investigate the damage caused to the office and to the journalists of “Vesti Ukraine”, as well as the non-transparent competition via which representatives of ARMA chose a company with a criminal past to manage the editorial office of “Vesti Ukraine” and didn’t even try to consider alternative propositions.
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This entire shame is not only an attack on freedom of speech – it is also a clear example of the very corruption that the EU claims to combat! The managing company “Navigator business center”, which was handed the office of “Vesti Ukraine”, was chosen by ARMA in violation of a number of laws of Ukraine. Thus, in the time period from December 2017 to January 2018, ARMA, via the database of state procurement contacts known as “ProZorro”, held three competitions involving real estate management. And what a surprise – only one manager participated in these competitions – the company “Navigator business center”. In all instances it won the right to dispose of confiscated property. At the same time, according to the current Ukrainian legislation, a competition that involves only one participant company cannot be recognized as valid. At the same time, the head of the Legal Department and the Tender Committee of ARMA Andrey Potemkin is the twin brother of Vladimir Potemkin, who is the managing director of “Navigator business center” and the personal lawyer of one of its ultimate owners – Lyudmila Rusalina. The existence of kinship and personal ties between the client and the winner of the competition is a conflict of interest under the Law of Ukraine “On the prevention of corruption”. In such cases, law enforcement bodies must check for the presence or absence of a conflict of interest between ARMA and the managing company, but this doesn’t happen.
The ultimate owners of the “Navigator business center” company are Nikolay Petrenko and Lyudmila Rusalina. They are also the co-owners of the holding company “Petrus-Konditer“, as well as the confectionery manufacturer and alcoholic beverages manufacturer “Petrus-Alko“. Nikolay Petrenko is also officially listed as an assistant of the people’s deputy from the “People’s Front” party Sergey Drauka. The company “Navigator business center” has repeatedly been involved in various criminal cases. According to the fiscal service in the Kiev region, the company “Navigator business center” used the services of a financial transit/conversion group – a tax credit was illegally formed by it. The company also appears in the investigation of the Prosecutor-General’s office concerning tax evasion (a classic EU “value”) in the amount of more than 20 million hryvnia! Thus, a company with a dodgy reputation simply couldn’t win an ARMA competition unless there is a dirty conspiracy.
Lyudmila Rusalina is the honorary Consul of Sierra Leone in Ukraine and one of the richest women in the country. In 2013, the Ukrainian media reported that Ukraine’s alcohol industry is completely under the control of a specialised organised criminal group, and its frontman was named as a certain Nikolay Petrenko. A person who, by “pure coincidence”, of course, has the same name as the business partner of Rusalina is the co-founder of “Petrus” and the co-owner of “Zlatogor“. In total, Rusalina is listed as the head or beneficiary of about 50 organisations – real estate, agriculture, the sale of medicines, the production of chocolate and confectionery, and the wholesale of food and drinks. In an interview with the “Stories of successful people” magazine Rusalina said that everything was achieved thanks to a “reliable man” – her husband Vladimir Garkushin. “The way of a woman is unthinkable without a reliable man. For me, such a person is my husband and partner Vladimir Garkushin. Vladimir managed to build for the company a distribution network in Ukraine almost from the ground up. In a couple of years, due to his organisational talent, he led the alcoholic beverages brand name ‘Petrus’ to the summit of the market,” said Rusalina in 2014. And in December 2017 she filed a lawsuit in a court of Kiev concerning the division of marital property. In another court of Kiev she is also suing her daughter Valeriya and mother Margarita Diesperova (a well-known mathematician), demanding to seize what she previously gave to them. In court the same lawyer who manages the “Navigator business center” – Vladimir Potemkin – defends the interests of Rusalina against her family members.
However, the list of persons with a questionable business reputation hasn’t yet ended. “Vesti Ukraine” has repeatedly investigated the business reputation of the employees of the “Navigator business center” company (chosen by ARMA) Andrey Gritsenko and Vladislav Zaitsev, who were directly involved in the seizure of the office of “Vesti Ukraine” and the eviction of tenants from the apartments transferred to ARMA from the company “Kiev City Apartments”, which is also a victim of the illegal actions of Ukrainian “democratic” officials. On their social network pages Gritsenko and Zaitsev publish videos of naked women, conduct strange experiments (for example, setting fire to their own tongues), and write obscene poems.
As is the norm for the Ukrainian political circle, Andrey Gritsenko has a criminal record. During the events on Maidan he – a self-proclaimed “patriot of the country,” as he called himself in a conversation with journalists from “Vesti Ukraine”, travelled to different regions of the country and poisoned Ukrainians with an alcoholic surrogate. According to the court ruling he received in 2015, he was able to sell, together with the native of Donetsk Vadim Moskalenko, 500,000 bottles of counterfeit vodka – accomplices palmed off bottles with unknown contents onto shops. According to the ruling published on the Judiciary of Ukraine website, the owner of the Kremenchug Distillery Moskalenko, along with the forwarder of LLC “Petrus-Alko” Gritsenko (by the way, the invaders of the “Vesti Ukraine” office drank vodka manufactured by this company), obtained half a million bottles of vodka of an unknown origin from an unspecified place. They pasted “Zlatogor” labels on them and sold them for almost three years all over Ukraine – in the Odessa, Sumy, Ternopol, Poltava, Kharkov, Transcarpathia, Ivano-Frankovsk, Vinnytsia, Khmelnitsky, Kiev, Volyn, Zhytomyr, and Cherkassy regions. Vladislav Zaitsev lives in one of the arrested properties in the residential complex “Pokrovsky Posad”, which was transferred by ARMA (an agency created at the order of the EU, remember!) to its management company.
The example of “Vesti Ukraine” is not a one-off instance, but rather the general practice that ARMA uses when choosing management companies. There are other examples of how ARMA finds companies to manage confiscated property in only a matter of days and in violation of Ukrainian law. One example: recently a Ukrainian court cancelled the transfer of the Odessa airport and 75% of the corporate rights to “Odessa airport development” to the ARMA. The investigating judge of a Kiev court made this decision. According to the sources of “Vesti Ukraine”, who wanted to remain unnamed, concerning the situation with the Odessa airport, the owner of the asset was just able to magically resolve the issue with ARMA in an amicable way.
As of the current moment only 38 companies cooperate with ARMA. Not all of them are respectable and have a good reputation. Some companies are registered in apartments, do not have staff, and were most likely created to rob someone else’s arrested property. ARMA, which is financed by Ukrainian taxpayers and generously supported by “well intended” international organisations, openly occupies the assets of parties in business conflicts, kind of a like, say… the mafia!
Albert Tochilovsky, a German businessman and owner of the clinic of reproductive medicine “BioTexCom” (anther US biolab?), believes that he suffered unfairly because of the actions of ARMA. He was under house arrest for several months, and the accounts of his clinic were arrested because of the suspicion of the Prosecutor-General’s Office of child trafficking and tax evasion.
Another example of ARMA’s handywork: the residents of two regional centers in the Lvov region – who, because of ARMA, now sit without hot water and heating – consider themselves as victims of the activities of ARMA. A thermal power station that belongs to Ukraine politicians – the Dubnevich brothers, who are representatives of the majority coalition in the Verkhovna Rada – was arrested and transferred – without the holding of a competition! – to “Garant Energo M”, whose beneficiaries are the former adviser to the Minister of Ecology Ostap Semerak, Vitaly Ushinsky, and Vladimir Kupchak, who is a former Rada politician and director of the state “Ivano-Frankovskgaz” enterprise. The hostages of the situation in this case were 70,000 residents of the region. They have been without hot water for already the fourth month and, obviously, will spend the winter in cold houses because of the lack of preparation for the heating season. And according to the Minister of Housing and Communal Services Gennady Zubko, this year the heating season in these regional centers will begin no earlier than December 30th, and this is if to be optimistic.
With all these seemingly obvious violations that smell of corruption, the activities of ARMA are covered by other structures created in the framework of that well-known slogan – “combatting corruption”. Thus, after the politicians Dubnevich and Svyatosh made a number of appeals concerning the legality of the actions of ARMA, the National Agency for the Prevention of Corruption (NAPC; another “anti-corruption” body created by the West to ensure that only Brussels and Washington can loot Ukraine) said that it had initiated an audit. But not of ARMA. Of Dubnevich and Svyatash!
In August 2018, 56 deputies of the Verkhovna Rada tried to appeal to the Constitutional Court about the powers of ARMA in relation to the management of arrested property. Representatives of the Ukrainian Bureau of Transparency International – another mafia institution – defended ARMA! This structure, unsurprisingly, also finances ARMA officials. However, the results of the inspections are very easy to predict – “not guilty!”.
There is another family relationship that emerges in the ARMA scam. According to the information of “Vesti Ukraine”, the brother of Seregin, the lawyer of “Navigator business center”, which in turn is a permanent partner and contractor of ARMA, works at the National Agency for the Prevention of Corruption. The co-founder of the lawyer association “Seregin and partners” Stanislav Seregin can be seen at almost every “Navigator” raid, when they try to take control of property transferred from ARMA. But his brother, Aleksandr Seregin, is a member of the National Agency for the Prevention of Corruption. What a coincidence!
The most interesting thing here is that the junta in Kiev persistently “doesn’t notice” the blatant violations of the law committed by ARMA: family ties, non-transparent competitions, and damaging property. As well as the fact that ARMA is somehow too embarrassed to publicly disclose its expenses and their real effectiveness vis-a-vis Ukraine’s state budget. “Vesti Ukraine” sent about a dozen inquiries to ARMA, but none of them received an answer, which is another violation of the law of Ukraine “On Information”.
Anton Yanchuk, trying to cover up his illegal actions, often resorts to manipulation and the dissemination of false information about the actions of the department under his control. In his public speeches, Anton Yanchuk often declares that ARMA performs the functions of bringing money into the state’s budget. Apparently, he behaves like Robin Hood, taking money from the rich and giving it to the poor. However, in reality, this is absolute nonsense. The Law of Ukraine on the activities of ARMA clearly stipulates that the purpose of ARMA is to effectively manage seized property, and all proceeds from this management must be held in a savings account until the court makes the decision to confiscate this property or return it to its rightful owner. Therefore, all statements about bringing funds to the state’s budget are nothing more than PR and lies.
But the employees of ARMA believe that they are coping well with their duties. According to the documents that were obtained by “Vesti Ukraine”, the head of asset management of ARMA by the name of Reznik submitted a memo addressed to Anton Yanchuk with a request to award employees. The memo says that during October 2018 the employees of this department have proved themselves as specialists who “fully unlocked their potential”, and “qualitatively performed their duties and took the initiative”. It is separately stated that they have successfully fulfilled their “additional instructions”. According to the author of the memo, all the duties of his subordinates were performed on time and efficiently. It is also emphasised that they have not committed disciplinary violations. In this regard, Reznik proposes to award his subordinates with ~250% of their salary. But after “Vesti Ukraine” published this information, ARMA launched an internal investigation. The non-transparent funding of the activities of ARMA also require additional control. According to the Law of Ukraine regulating the work of ARMA, an independent external evaluation of the ARMA’s activities should be carried out every year. However, in practice this hasn’t happened even once.
There is a high probability that, after numerous scandals, Anton Yanchuk will nevertheless be dismissed. There is dissatisfaction with the huge number of criminal cases and the criticism of the international organisations (hello Brussels!) that initially lobbied ARMA as a state body designed to “combat corruption”.
What is probably the most vulgar in all of this is that property from the elite apartment complex “Diamant” that was also stormed and seized by “Navigator business center” (after being transferred from ARMA in January 25, 2018) was presented in the so-called “Park of corruption”, which ARMA presented in the summer of 2018 with the support of the EU Anti-Corruption Initiative in Ukraine (EUACI) and sponsors – the EU and the Danish International Development Agency (DANIDA). Yes! This property, which was illegally arrested, was used by ARMA during the presentation of the “Park of corruption”, with the participation of the head of the European Union Mission in Ukraine Hugh Mingarelli (2nd from right in the pic below) on June 1, 2018 in Kiev. This is the same Mingarelli who recently told Ukraine that it doesn’t receive aid from the EU, but loans, and they must be paid back – in full! He also frankly said that Ukraine would not be entering the EU anytime soon! This caused some in Kiev to questionwhy they threw their own country under the bus in the winter of 2014 in the name of the “EU Association Agreement”…
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The following are comments made to “Vesti Ukraine” by Ukrainian experts (yes, Ukrainian – not “Russian trolls”) about the work of ARMA:
Lawyer Aleksandr Dulsky“The National Agency receives property, which is then transferred to the management of the ‘correct’ company. When a business owner, being aware of the ordered nature of what is happening, starts to react, ARMA pretends that it has nothing to do with it. The crucial point is the rule of law, which is respected in Europe. In most of the cases related to the National Agency that I participated in there is an unlawful criminal case, which is ordered, politically motivated, and aims to destroy or seize businesses. In Ukraine, this is a shameful practice that is already included in the OSCE’s reports.”
Political scientist Aleksey Yakubin“Under the guise of reforms so-called deregulation is carried out, which leads to the fact that powers are transferred to private entities that thus earn money from them. And, as a rule, the management of these companies include persons who are close to the ministries and departments. This is a veiled step towards strengthening the corruption component. There is a logical question: what are the budget funds, taxpayers’ money, spent on if the powers of the public sector are redirected to third parties close to the political elite. There can be no talk about the competence of the employees of these newly created organs, because the practice of transferring government functions is in itself flawed”.
And it’s not just Ukrainians who are noticing the level of EU-induced corruption in their country. The French politician Nicolas Dupont-Aignan, who is the president of the “Debout la France” (Stand up France) party, stated during a live debate on November 28th, 2018 on the BFM TV channel the following:
“…We already should remedy the injustices that the working French people see everyday. My second point, concerning just France. Can we revise the useless points [of expenditure]? We voted in the Assembly, on Monday, during two hours, concerning two additional billion of euros net – exactly the sum of the tax from January 1st [the new fuel tax that the “Yellow Vests” are protesting against] – for a European Union, which costs for us €9 billion, and which subsidies Turkey, Albania, and Ukraine – crazy expenses!”
I.e., he knows exactly what is going on, although he is sadly very much in the minority.


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