Landromat of the “Great Construction”: who spent billions on roads and why Yuriy Holyk has avoided responsibility for years

Billions of hryvnias spent on roads, high-profile journalistic investigations, criminal proceedings by NABU, searches and dismissals of officials — but not a single conviction. Despite a resonant case that has been in the sights of anti-corruption agencies for years, one of its key figures — Yuriy Holyk — still retains influence over state processes, and his closest associates continue to work in government. The story that began as an investigation into possible embezzlement of more than 1,5 billion UAH of budget funds increasingly resembles an example of how high-profile anti-corruption cases can stall for years without any real consequences for their main participants.

We publish the investigation to remind readers how one of the most high-profile road stories of recent years formed and why billion-hryvnia schemes remain unpunished:

War does not change dishonest people either at the center or locally; it only makes them more cynical. It will soon be a year since the head of the Dnipropetrovsk Regional Military Administration, Valentyn Reznichenko, became the center of a corruption scandal that cast a shadow over the president’s inner circle. Now at least four offices in the country — the president’s, the National Anti-Corruption Bureau (NABU), the Specialized Anti-Corruption Prosecutor’s Office (SAPO), and the Dnipropetrovsk Regional Police — know about Reznichenko’s lucrative connection to fitness trainer Yana Khlanta and several conspicuous points in their lives. We are talking about a car, shared flights and 1,5 billion UAH that the Dnipropetrovsk RMA directed to the company Budinvest Engineering (managed by Khlanta) for road repairs.

But while the president immediately made a public show of dismissing NABU’s criminal case figure Reznichenko from the post of head of the frontline Dnipropetrovsk region, Yuriy Holyk — the constant consultant to the Office of the President, who is linked to Budinvest Engineering LLC — has already managed to return to Bankova Street. As always, he arrives there in his Brabus Mercedes or Toyota Sequoia, has his own office now opposite Deputy Head of the Office of the President Oleksiy Kuleba, and exerts considerable influence over the heads of regional military administrations, keeping a hand on the throat of the Dnipropetrovsk region. That region, by the way, recently again stood out with billion-hryvnia contracts for road repairs under the new RMA head Serhiy Lysak. Smells a lot like Odesa, doesn’t it?

It’s also interesting that in this story with many well-known and shifting actors, some figures have completely disappeared over the year of investigation. For example, former curator of the “Great Construction” Kyrylo Tymoshenko, whom Yuriy Holyk advised in his senior role as Deputy Head of the Office of the President. Our sources say there was a moment when the fates of these three public figures (two of whom are not even civil servants and are not required to declare their assets) could have intersected in the same pre-trial detention center. Yet none of them were detained.

What is happening in the anti-corruption sphere ahead of the publication of Ukraine’s report on meeting EU accession criteria? Why did the regional police intervene in the case that NABU was investigating? Why is NABU investigating the case so slowly? Have the damages caused to the state by Reznichenko and his associates been determined? How long and influential could the list of figures in this case become if NABU and SAPO manage to resist pressure from government offices effectively?

To find answers to these questions, we filed requests with anti-corruption and law enforcement agencies, spoke with sources in government offices, and asked questions of representatives of a number of state bodies.

A brief history of an almost big stroke of luck

On 2 November 2022 a criminal case was opened by the Main Directorate of the National Police in the Dnipropetrovsk region against “officials of the Dnipropetrovsk Regional Military Administration.” The criminal proceedings included two articles: abuse of power and office and money laundering of proceeds from crime. It would seem unremarkable, except for one “but.” The case that the Dnipro police began handling concerned the head of the Dnipropetrovsk RMA Valentyn Reznichenko and more than one and a half billion hryvnias of budget funds. And it was not within the jurisdiction of the National Police but of NABU, which at that time was already conducting an investigation into this matter.

The case of carefully arranged road works in the Dnipropetrovsk region is known to anyone who followed the news in November last year. It began back in 2021 when the outlet Nashi Hroshi first published a story about the meteoric rise of Budinvest Engineering LLC, which consistently won one regional tender after another and became one of the favorites of the State Agency for Motor Roads (Ukravtodor). The journalists at Nashi Hroshi proved persistent and kept following the company’s activities. Exactly a year later, when the Armed Forces of Ukraine had already liberated Kyiv region from the Russian army and there was a little more than a month until news about the liberation of occupied Kharkiv region, the outlet published a follow-up story on Budinvest Engineering.

New data that Nashi Hroshi highlighted showed that between May and July of 2022 Budinvest Engineering LLC received 1,2 billion UAH from the Department of Housing and Communal Services (HCS) and Construction of the Dnipropetrovsk RMA. Some of the concluded contracts were not published on the Prozorro procurement site. It was also impossible to find out which roads were being repaired during martial law in a frontline region. After that investigation, transactions between the company and the State Treasury stopped, but they resumed in mid-September last year. That continued until 2 November, when the media published two investigations about the same people: the head of the Dnipropetrovsk RMA Valentyn Reznichenko and his alleged partner Yana Khlanta, who was the owner of Budinvest Engineering. It is worth recalling the ownership history of this LLC.

Budinvest Engineering was founded in 2017 by Iryna Vorobiova. Coincidentally, that same year Valentyn Reznichenko first headed the Dnipropetrovsk Regional State Administration. Reznichenko’s advisor was his long-time acquaintance Yuriy Holyk. And while Valentyn Reznichenko remained head of the regional administration for eight years (with the beginning of the full-scale invasion, regional state administrations were transformed by presidential decree into regional military administrations), albeit under a different president and after surviving one dismissal, the fate of his assistant took a different turn. After the presidential elections in 2019, Yuriy Holyk became a consultant (he did not hold government positions and was not a civil servant) for the presidential program “Great Construction.” Before the full-scale Russian invasion the program was funded by the budget and covered reconstruction of roads, schools and kindergartens with billions in budget funds. It became clearer later what exactly the chief consultant Holyk was overseeing.

Shell game

Apparently reacting to the Nashi Hroshi investigation about Budinvest Engineering’s won tenders for road repairs in the Dnipropetrovsk region totaling over 1,5 billion UAH, NABU and SAPO opened a criminal case. The case was initially qualified under articles 364 (abuse of power and office) and 209 (money laundering) of the Criminal Code of Ukraine. But after some time, the National Police opened its own unlawful duplicate case.

Why did the police open a case when it knew: if the story involves 1,5 billion UAH — it is definitely NABU’s jurisdiction, since NABU’s jurisdiction for cases starts from 30 thousand dollars? Why was the case opened on 2 November 2022, when the media had published confirmation that Valentyn Reznichenko and Yana Khlanta were in close contact? What was the hurry? And who advised to immediately conduct searches at the Dnipropetrovsk RMA to seize original documents that they then intended to destroy?

ZN.UA sent an information request to the Dnipropetrovsk Regional Police asking them to explain why they investigated a case outside their jurisdiction. The National Police in Dnipro replied tersely that in January 2023 the case was transferred to NABU.

But the time gained was not wasted. Our sources told the editorial office that the Dnipropetrovsk Regional Police wanted to conduct a handwriting examination of the documents that the National Police had seized from the Dnipropetrovsk RMA and Budinvest Engineering LLC. Those documents allegedly confirmed the connection between RMA head Valentyn Reznichenko and Budinvest Engineering. After the examination, law enforcement intended to destroy all original documents. However, they did not manage to do so. Anti-corruption agencies saved the documents.

By the way, in September of this year Police General of the Third Rank Anatoliy Shchadylo, who at that time headed the Main Directorate of the National Police in the Dnipropetrovsk region, was transferred to Kyiv. A promotion.

There is an investigation, but no suspicions

A year ago, former head of NABU’s main detective unit Andriy Kaluzhynskyi told ZN.UA about the Dnipropetrovsk road case registered by SAPO: “One thing is to prove something by the standards of a typical journalistic investigation, to shape some impressions for society about particular circumstances. Quite another is to bring the case to the point of first notifying someone of suspicion and then having a court issue an appropriate verdict.” Unfortunately, after Semen Kryvonos became NABU director, Andriy Kaluzhynskyi no longer works there. Nor do a number of professional detectives who left the bureau. It’s hard to say now how this fact will affect the investigation that interests us, but it’s reasonable to assume that such rapid staff turnover in a key anti-corruption body is already a bad sign.

There were two searches conducted in Yuriy Holyk’s house over the year: first in the Konik settlement (at the same time detectives also searched the former head of the Dnipropetrovsk RMA Valentyn Reznichenko). During the second search NABU seized Holyk’s phone. According to sources in the president’s office, Yuriy Holyk’s lawyers are trying to recover the device. Those at Bankova are also convinced that Kyrylo Tymoshenko, who before the full-scale invasion was the curator of the “Great Construction,” does not appear at all in the proceedings. Although detectives are also checking his involvement in tenders at the Dnipropetrovsk RMA.

As for the official position of the investigation, ZN.UA turned to the National Anti-Corruption Bureau asking whether Tymoshenko is indeed not in the proceedings and whether anyone who was in last year’s headlines is present in the case now. NABU replied that while the investigation is ongoing, they cannot comment. One thing in the anti-corruption bureau’s response is obvious — the investigation continues, but indictments are still far off.

However, from our sources we learned that the proceedings currently include several episodes. Some relate to road repairs in the Dnipropetrovsk region. In addition, anti-corruption agencies are investigating facts of illicit enrichment and false asset declaration by employees of the Dnipropetrovsk RMA. NABU and SAPO are also checking at least 11 firms that were contractors of Budinvest Engineering. This involves tracing the flow of funds between companies and how they are connected. Some of these firms are also being examined to see whether they are linked to employees of the Dnipropetrovsk RMA.

Expertise and audit, or one hand washes the other

Perhaps the most important question NABU is working on, our sources say, is proving the damages. And until the bureau has its own expert institution to conduct these examinations — which would greatly speed up progress in a large number of criminal proceedings — anti-corruption agencies must queue up to obtain the results of the necessary expertise. But if the issue were only the queue. First, as always, the head of the Kyiv Research Institute of Forensic Examinations, Oleksandr Ruvin, influences the outcome of expert conclusions. How exactly he influences it has been told and written about enough (including by ZN.UA). Second, other circumstances in this case hinder not only proving the damages but even the stage that precedes it. The matter concerns the position of the State Audit Service of Ukraine. Pay attention: for NABU to conduct an expertise of damages in the case, the bureau needs an audit of the road repair expenditures for which the HCS department of the Dnipropetrovsk RMA allocated funds.

That audit is carried out by the State Audit Service. It is precisely this agency that checks how effectively budget funds are spent. A perfectly necessary review, you would agree. Such an audit in the NABU case began. The audit procedure in NABU cases by the State Audit Service looks like this: an expert, during the pre-trial investigation, works together with the investigation on the materials they need to analyze. In effect, a person from the audit service becomes directly familiar with the investigation materials. And when the audit in the Dnipropetrovsk RMA and Budinvest Engineering case was performed, and the State Audit Service official who conducted it found damages and was to write a conclusion, strange things began to happen. The State Audit Service began to delay providing the conclusion to the investigators, which NABU needed for further work and for an expertise intended to summarize the pre-trial investigation.

This information can be interpreted in different ways. But there is a significant fact that cannot be ignored: legally the State Audit Service is directly subordinated to the Ministry of Finance of Ukraine, whose head Serhiy Marchenko is a sports partner and good friend of Yuriy Holyk.

So imagine the situation: law enforcement is investigating a case of possible illegal actions by Holyk, and the audit together with all the collected pre-trial investigation materials necessary for subsequent expert examinations is being processed in an agency subordinated to his friend.

Isn’t that a conflict of interest? And who here can recuse themselves? Yet the factor of a friend in the Ministry of Finance, who most likely acts as a button for people higher up, is not the only issue.

The institutional trick of the State Road Research Institute (DerzhdorNDI)

The story of the Dnipropetrovsk RMA and Budinvest Engineering revolves around whether the road repairs for which the HCS department allocated funds were carried out at inflated prices. If so, the company caused damage to the state.

But these damages, if they exist, must be proven. Ukraine has a state enterprise, the State Road Research Institute named after M. Shulhyne (SE DerzhdorNDI), which collects information about prices for construction materials from all regions. In other words, it is one large database of various construction goods.

The institute, by the way, is subordinated to Ukravtodor. Journalists and experts who work with the DerzhdorNDI database say that suppliers of various construction materials can provide state enterprise with prices that include a certain markup.

For example, if there is a firm that sells cement for construction or road repairs and that firm is friendly with someone among the administration employees responsible for tenders, then the information in DerzhdorNDI will certainly be distorted — that is, the price will be inflated.

And if that price is published in the DerzhdorNDI database, it creates a snowball effect where the fictitiously inflated price becomes the norm and other suppliers begin to use it as the basis. In other words, corruption begins already at the stage of forming prices, not at the stage of so-called kickbacks. And if you negotiate with the cement supplier who might be the only one in the region, you can legally inflate the price.

Deputy Director for European Integration of SE DerzhdorNDI Stanislav Hvozdikov, whom we also contacted with questions, is confident that claims about inflated prices embedded in the DerzhdorNDI databases are not true. According to him, this risk has been mitigated by the pricing methodology for road works that came into force on 17 October last year.

“This methodology reflects internationally accepted procurement and pricing practices,” he explains.

“Now the cost of materials is separated from delivery costs. Applying the methodology allows the customer to control expenses at all stages of the project, from planning to completion of works. Agency recovery services in the regions and, in certain cases, regional state administrations when ordering design and estimate documentation are obliged, among other things, to indicate the source of information about material costs and delivery distance,” he continues.

And today, in the vast majority of cases, Hvozdikov says, the source of information about material costs is only the DerzhdorNDI database, which is formed from many information sources, not only suppliers. This brought the cost of materials closer to the market level today, which in turn promotes better understanding and control over the real project cost.

“Release price information comes from suppliers of raw materials from quarries in the form of their commercial offers, which separately contain information about delivery costs,” continues Stanislav Hvozdikov. “Our DerzhdorNDI analysts also take historical data, for example information from Prozorro on already paid completed contracts and from tender proposals of procurement participants. In addition, we have a database of operating quarries and we independently call them. All sources of information can be viewed in our price database. The supplier is only one source.

“When we calculate the average price we compute it from at least 4–5 sources for objectivity,” Hvozdikov explains and assures that the corrupt factor in inflating prices at the stages of forming the expected cost by the customer, contract conclusion and settlements with contractors for completed works was fully eliminated last year thanks to the methodology’s implementation.

Is that really the case? That is probably a subject for a separate investigation and article. But it turns out the methodology was implemented after the HCS department of the Dnipropetrovsk RMA transferred 1,5 billion UAH to Budinvest Engineering. And were the prices in the Prozorro contracts already not inflated through this scheme?

So is there a prospect for the case?

The pace of the investigation does not match society’s impatient expectations for suspicions against its probable figures. Expectations are heightened because the story slaps you in the face with its brazenness and simplicity. Of course, none of the owners whose names appeared in sensational headlines are guilty until a court issues a verdict. But we tried to outline the horizon on which the case may, possibly, be brought to court.

Which will prove stronger in this story — the law or the power “roof” — will be another signal of what is really happening in our anti-corruption block. And whom to thank for it.