“The Laundry” of the “Great Construction”: who allocated billions for road projects and why Yuriy Holyk has avoided responsibility for years

Billions of hryvnias spent on roads, high-profile journalistic investigations, NABU criminal proceedings, searches and dismissals of officials — but not a single conviction. Despite a resonant case that has been in the sight 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 power. A 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 loudest road-related scandals of recent years formed and why billion-hryvnia schemes remain unpunished:

War does not change dishonest people either in the center or locally; instead it makes them even more cynical. Soon it will be a year since the head of the Dnipropetrovsk Regional Military Administration, Valentyn Reznichenko, found himself at 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 (SAP), and the Dnipropetrovsk Regional Police — know about Reznichenko’s lucrative connection with fitness trainer Yana Khlanta and several vivid points of their lives. We are talking about a car, joint flights and 1,5 billion UAH that the Dnipropetrovsk RMA directed to the company Budinvest Engineering (run by Khlanta) for road repairs.

But while the president immediately demonstratively removed NABU’s criminal case figure Reznichenko from the post of head of the frontline Dnipropetrovsk region, Yuriy Holyk — the permanent 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 Mercedes Brabus 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. By the way, that region recently again stood out with billion-hryvnia road repair contracts 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 known and changing figures, some characters disappeared entirely over the year of investigation. For example, former curator of the “Great Construction” Kyrylo Tymoshenko, whom Yuriy Holyk advised in the high-ranked post of Deputy Head of the Office of the President. Our sources claim there was a moment when the fates of these three state actors (two of whom are not even civil servants and therefore not required to declare their assets) could have intersected in the same pretrial detention center. Yet none of them were detained.

What is happening overall in the anti-corruption sphere on the eve of publishing Ukraine’s report on meeting EU accession criteria? Why did the regional police interfere in the case investigated by NABU? Why is NABU investigating the case so slowly? Have the damages caused to the state by Reznichenko and associated persons been determined? How long and how influential could the list of figures in this case become if NABU and SAP manage to resist pressure from the corridors of power?

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

A brief history of an almost big fortune

In 2 November 2022, the Main Directorate of the National Police in Dnipropetrovsk region opened a criminal case against “officials of the Dnipropetrovsk Regional Military Administration.” The criminal proceeding included two articles: abuse of power and official position, and money laundering of proceeds obtained by criminal means. It would seem unremarkable — if not for one “but.” The case 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 investigating this fact.

The case of carefully arranged roadworks in the Dnipropetrovsk region is known to everyone who read the news in November last year. It began back in 2021 when the publication Nashi Hroshi first published the story about the meteoric rise of Budinvest Engineering LLC, which skillfully kept winning one regional tender after another and became a favorite of the State Agency of Automobile Roads (Ukravtodor). The journalists at Nashi Hroshi were persistent and kept tracking the company’s activities. And exactly a year later, when the Armed Forces of Ukraine had already liberated Kyiv region from the Russian army and there remained slightly more than a month until news of Kharkiv region’s liberation, the outlet published a follow-up on Budinvest Engineering.

New data noticed by Nashi Hroshi indicated that between May and July 2022, Budinvest Engineering 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 is also impossible to know which roads were repaired during martial law in the frontline region. After that investigation there were no operations between the company and the State Treasury, but in mid-September last year payments resumed. 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. The story of the owners of this LLC is also worth recalling.

Budinvest Engineering LLC was founded in 2017 by Iryna Vorobiova. Coincidentally, that same year Valentyn Reznichenko first headed the Dnipropetrovsk ODA. Reznichenko’s advisor was his longtime acquaintance Yuriy Holyk. And while Valentyn Reznichenko remained head of the Dnipropetrovsk ODA for eight years (with the start of the full-scale invasion regional state administrations were transformed by presidential decree into regional military administrations), although under a different president and after surviving one dismissal, the fate of his aide took a different path. After the presidential elections in 2019, Yuriy Holyk became a consultant (he did not hold a state post and was not a civil servant) to the presidential program “Great Construction.” Prior to the full-scale Russian invasion, the program was implemented with budget funds and covered reconstruction of roads, schools and kindergartens worth billions in public money. What exactly the senior consultant Holyk oversaw became clear a little later.

Shell game

Apparently responding to Nashi Hroshi’s investigation into Budinvest Engineering’s won tenders for road repairs in Dnipropetrovsk region totaling more than 1,5 billion UAH, NABU and SAP opened a criminal proceeding. The case was initially qualified under articles 364 (abuse of power and official position) and 209 (money laundering) of the Criminal Code of Ukraine. But after a time, the National Police opened its own illegal duplicate.

Why did the police open the case when it knew: if 1,5 billion UAH is involved, this is definitely NABU’s jurisdiction, since NABU’s jurisdiction starts from 30 thousand dollars? Why was the case opened on 2 November 2022, when the media published confirmation that Valentyn Reznichenko and Yana Khlanta were in close contact? Where was the rush? And who advised immediately conducting searches in the Dnipropetrovsk RMA to seize original documents that they then wanted 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. And the Dnipro National Police replied tersely that in January 2023 the case was transferred to NABU.

But the time they gained was not wasted. From our sources we learned that the Dnipropetrovsk Regional Police wanted to conduct a handwriting expert examination of documents the National Police seized from the Dnipropetrovsk RMA and Budinvest Engineering LLC. Those documents allegedly confirmed the connection between the head of the Dnipropetrovsk RMA, Valentyn Reznichenko, and Budinvest Engineering. After the expertise, the law enforcement officers intended to destroy all original documents. However, they did not succeed. Anti-corruption agencies saved the documents.

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

There is an investigation, but no suspicions

A year ago, the former head of NABU’s main detective unit, Andriy Kaluzhynskyi, told ZN.UA regarding the road-related proceeding in Dnipropetrovsk region registered by SAP: “One thing is to prove something by standards of a typical journalistic investigation, to form some ideas about certain circumstances in society. Quite another is to actually bring it 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 precisely how this fact will affect the investigation we are interested in, but it’s reasonable to assume that such rapid staff turnover in a key anti-corruption body is a bad sign.

In the past year there were two searches at Yuriy Holyk’s home: first at the Konik estate (at the same time detectives conducted searches at former head of the Dnipropetrovsk RMA Valentyn Reznichenko’s house). During the second search NABU seized Holyk’s phone. According to sources in the Office of the President, Yuriy Holyk’s lawyers are trying to return the device. Also, people on Bankova are confident that Kyrylo Tymoshenko, who before the full-scale invasion was the curator of the “Great Construction,” is not at all a figure in the proceeding. Although detectives are also checking his involvement in tenders at the Dnipropetrovsk RMA.

Regarding the official position of the investigators, ZN.UA asked NABU whether Tymoshenko is indeed not in the proceeding, and whether anyone who featured in last year’s headlines in connection with this story is included. NABU replied that while the investigation is ongoing, they cannot comment. One thing is clear from the anti-corruption bureau’s answer — the investigation continues, and it is still far from suspicions.

However, from our sources we learned that the proceeding currently contains several episodes. Some of them concern road repairs in Dnipropetrovsk region. In addition, anti-corruption agencies are investigating facts of unlawful enrichment and false asset declarations by employees of the Dnipropetrovsk RMA. NABU and SAP are also checking at least 11 firms that were contractors of Budinvest Engineering. This involves reviewing cash flows between companies and how they are linked. Some of these firms are also being checked for ties to employees of the Dnipropetrovsk RMA.

Forensics and audit, or one hand washes the other

Perhaps the most important question NABU is working on, according to sources, is proving the damages. And until the bureau has its own expert institution for conducting these very expert examinations — which would greatly speed up progress in a large number of criminal proceedings — anti-corruption agencies must “queue” to obtain the results of the necessary expertise. But if it were only a matter of waiting. First, as always, the result of an expertise is influenced by the head of the Kyiv Research Institute of Forensic Examinations, Oleksandr Ruvin. How exactly he influences it has been described and written about (including by ZN.UA) quite a lot. Second, in this case there are other circumstances that block not only proving damages but even the preceding step. The issue concerns the position of the State Audit Service of Ukraine. Pay attention. For NABU to carry out an expertise on damages in the case, the bureau needs an audit of the expenses for road repairs financed by the HCS Department of the Dnipropetrovsk ODA.

This audit is performed by the State Audit Service. That agency checks how efficiently budget funds are spent. Agreeably, this is a necessary check. And such an audit in the case began. The audit procedure in NABU’s cases by the State Audit Service looks like this: an auditor, during the pretrial investigation, together with the investigation, works on the materials he needs to analyze. In effect, a person from the audit service becomes directly familiar with the materials of the investigation. And when the audit in the Dnipropetrovsk ODA and Budinvest Engineering case was carried out, and the State Audit Service employee who conducted it found damages and was to write a report, strange things began to happen. The State Audit Service began delaying the delivery of the conclusion to the investigation, which NABU needed for further work and for conducting the expertise meant to conclude the pretrial investigation.

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

So imagine the situation: law enforcement is investigating possible unlawful actions by Holyk, and the audit, together with all the collected pretrial materials needed for further expert work, is sitting at an agency subordinate to his friend.

Isn’t that a conflict of interest? And who here can recuse themselves? However, the factor of a friend at the Ministry of Finance — who most likely acts as a button for people higher up — is not all there is.

The institutional trick of the State Road Research Institute

The story of the Dnipropetrovsk RMA and Budinvest Engineering revolves around whether the road repairs funded by the HCS department were carried out at inflated prices. If so, the company caused damages 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. Shulhin (SE “DerzhdorNDI”), which collects information on prices of construction materials from all regions. In other words, it is one large database of various construction goods.

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

For example, if there is a firm selling cement for construction or road repairs and that firm is friends with someone among the staff responsible for conducting tenders at the ODA, 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, then a kind of snowball effect occurs: the fictitiously inflated price becomes the norm and other suppliers begin to take it as a basis. Corruption thus begins already at the price formation stage, not only at the so-called kickback stage. And if you come to terms with the supplier of the same cement, who may be the only one in the region, you can raise the price and it will be legal.

The 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 was neutralized by the pricing methodology for road works that came into effect on 17 October last year.

“This methodology reflects globally accepted procurement and price formation practices,” he explains.

“Now the cost of materials is separated from delivery costs. Applying the methodology allows the customer to control expenses at all project stages, from planning to completion. The agency’s restoration services in the regions and, in some cases, regional state administrations, when ordering design and estimate documentation, are required, among other things, to specify the source of information about material costs and delivery distance.”

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

“Supply prices come from raw material suppliers at quarries as their commercial proposals, which separately contain information about delivery costs,” Stanislav Hvozdikov continues. “Our analysts also use historical data — for example, information from Prozorro on already paid completed contracts and tender bids from procurement participants. In addition, we have a database of active quarries and we call them ourselves. All sources of information can be viewed in our price database. The supplier is only one source.

When we calculate the average price — we count it from at least 4–5 sources, for objectivity,” Hvozdikov explains, assuring that the corrupt factor in inflating prices at stages of forming the expected cost for the customer, contract conclusion and settlements with contractors for completed works was completely eliminated last year thanks to the introduction of the methodology.

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

So is there any prospect for the case?

The pace of the investigation does not match the public’s impatient expectations for suspects to be named. Expectations are inflated because the story hits you in the face with brazen simplicity. Of course, none of the owners whose surnames appeared in loud headlines is guilty until a court says otherwise. But we tried to outline the horizon line on which the case may eventually be sent to court.

Whether law or the protection of the powerful will prove stronger in this story will be another signal of what is really happening in our anti-corruption sector. And whom we should thank for it.