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Automatically translated version. May contain inaccuracies compared to the original.
Billions of hryvnias flowed into road construction, high-profile investigative reports were published, NABU opened criminal proceedings, searches were conducted and officials were dismissed — yet to date there have been no convictions.
Despite the sensational case that stood under the scrutiny of anti-corruption authorities for years, one of its key figures, Yuriy Holyk, continues to influence state processes, while his closest confidants remain in government positions. The story, which began as an investigation into the alleged embezzlement of more than 1,5 billion UAH of the budget, increasingly resembles an example of how large anti-corruption cases can stall for years without real consequences for their main participants.
We are re-publishing this investigation to remind readers how one of the largest road-building scandals of recent years developed and why billions of hryvnias schemes still go unpunished.
War does not make immoral people decent, neither in the center nor in the regions; it only makes them more cynical.
Soon it will be a year since the head of the Dnipropetrovsk regional military administration, Valentyn Reznichenko, landed at the center of a corruption scandal that cast a shadow over the president’s inner circle. By now at least four state bodies — the Presidential Office, the National Anti-Corruption Bureau (NABU), the Specialized Anti-Corruption Prosecutor’s Office (SAPO), and the regional police of Dnipropetrovsk — are aware of Reznichenko’s lucrative ties to fitness trainer Yana Khlanta and several notable details of her life, including a car, shared flights, and 1,5 billion UAH that the regional military administration of Dnipropetrovsk directed to the company “Budinvest Engineering” (owned by Khlanta) for road repairs.
But while President Zelenskiy promptly and publicly removed Reznichenko, a figure in NABU’s criminal case, from his post as head of the frontline region, Yuriy Holyk — a permanent adviser to the Presidential Administration with connections to LLC “Budinvest Engineering” — has managed to return to Bankova Street. As usual, he arrives there in his “Mercedes Brabus” or “Toyota Sequoia,” now has his own office opposite the deputy head of the Presidential Administration, Oleksiy Kuleba, and exercises substantial influence over the heads of regional military administrations, keeping the Dnipropetrovsk region firmly in his grip. By the way, this region recently again hit the headlines under the new head of the military administration, Serhiy Lysak, with billions for road repair contracts. Doesn’t that scent a bit like Odesa? Doesn’t it?
Interestingly, in this story with many familiar and shifting characters, some figures have vanished from the scene during the year-long investigation. For example Kyrylo Tymoshenko, the former overseer of the “Great Construction Site” program, who had been advised by Yuriy Holyk in his high position as deputy head of the Presidential Administration. According to our sources, there was a moment when the fates of these three public figures (two of whom are not even officials and are not required to disclose their assets) could have intersected in a pretrial detention center. However, none of them were arrested.
Interestingly, in this story with many well-known and changing characters, some figures disappeared entirely during the year-long investigative period. For example Kyrylo Tymoschenko, the former overseer of the “Great Construction Site” program, who had been advised by Yuriy Holyk in his high position as deputy head of the Presidential Administration. According to our sources, there was a moment when the fates of these three public figures (two of whom are not even officials and do not have to disclose their assets) could have met in a pretrial detention facility. However, none of them were arrested.
What is actually happening in the field of anti-corruption ahead of the publication of the report on Ukraine’s progress toward EU accession criteria? Why did the regional police get involved in a case that NABU was investigating? Why is NABU investigating this case so slowly? Have the damages incurred by Resnitschenko and related individuals been quantified? How long and influential could the list of suspects in this case prove to be if NABU and SAPO manage to withstand pressure from government offices?
To find answers to these questions, we sent inquiries to anti-corruption and law enforcement authorities, spoke with sources in government offices, and questioned representatives of several state bodies.
A short story of an almost great success
On 2. November 2022 the Main Directorate of the National Police in the Dnipropetrovsk region opened a criminal case against “Officials of the Military Administration of the Dnipropetrovsk Region.” The case involved two charges: abuse of office and legalization (money laundering) of proceeds from crime. It seemed unremarkable, except for one caveat: the case, taken up by the Dnipro police, concerned the head of the Dnipropetrovsk regional military administration, Valentyn Resnitschenko, and more than 1,5 billion UAH in budget funds. It did not fall under the jurisdiction of the National Police but under NABU, which was already investigating this matter at the time.
The case of diligent maintenance of roads in the Dnipropetrovsk region is well known to anyone following the news even roughly last November. It began in 2021, when the media outlet “Our Money” published a story about the meteoric rise of LLC “Budinvest Engineering,” which skillfully won tenders one after another in the region and became a favorite of the State Agency for Automobile Roads of Ukraine (“Ukravtodor”). The journalists of “Our Money” proved persistent and continued to monitor the company’s activities. Exactly one year later, when Ukrainian forces had already liberated Kyiv region from the Russian army and there was a little more than a month until reports about the liberation of the occupied Kharkiv region, the outlet published a continuation of the story about “Budinvest Engineering.”
New data highlighted by “Our Money” indicated that LLC “Budinvest Engineering” received between May and July 2022 1,2 billion UAH from the Department of Housing and Communal Services and Construction of the Dnipropetrovsk regional military administration. Some of the contracts were not published on the ProZorro procurement website. It is also impossible to determine which roads were repaired during wartime in the frontline region. After this investigation there were no more transactions between the company and the state institute, but in mid-September last year they resumed. This lasted until 2. November, when two media investigations mentioned the same people: the head of the Dnipropetrovsk regional military administration Valentyn Resnitschenko and his alleged partner Yana Khlanta, owner of Budinvest Engineering. It is also worth recalling the history of the owners of this LLC.
The company Budinvest Engineering was 2017 founded by Iryna Vorobyova. By a great coincidence, Valentyn Resnitschenko became head of the state regional administration of Dnipropetrovsk for the first time in the same year. Resnitschenko’s adviser was his longtime associate Yuriy Holyk. While Valentyn Resnitschenko remained the head of the regional administration for over eight years (until the full invasion, when regional administrations were transformed into regional military administrations by decree of the president) — and this even under a different president and after surviving a dismissal — the fate of his assistant unfolded differently. After the presidential elections 2019, Yuriy Holyk became a adviser (he held no public office and was not a civil servant) for the presidential program “Great Construction Site.” Until the start of the full-scale Russian invasion, the program was implemented with budget funds and encompassed the reconstruction of roads, schools, and kindergartens worth billions of hryvnias. What exactly Holyk was responsible for became clear a bit later.
A shell game
Apparently NABU and SAPO, in response to Our Money’s reporting, opened a criminal case into the tenders won by Budinvest Engineering for road repairs in the Dnipropetrovsk region worth over 1,5 billion UAH. The case was initially classified under articles 364 (abuse of office and abuse of official position) and 209 (money laundering) of the Criminal Code of Ukraine. But after some time the National Police opened its own illegal duplicate proceeding.
Why did the police open a case even though they knew that a story involving 1,5 billion UAH clearly fell under NABU’s jurisdiction, since its cases begin at 30.000 USD? Why was the case opened on 2. November 2022 — exactly the day media confirmed the close connection between Valentyn Resnitschenko and Yana Khlanta? Where did the rush come from? And who advised to immediately conduct searches at the state regional administration of Dnipropetrovsk to seize original documents that would later be destroyed?
ZN.UA sent a request to the Dnipropetrovsk regional police asking why they were investigating a case outside their jurisdiction. The National Police of Dnipro replied briefly that the case had been transferred to NABU in January 2023.
But the time gained was not wasted. From our own sources, the editorial staff learned that the Dnipropetrovsk regional police planned to conduct a document expert examination of papers seized by the National Police from the Dnipropetrovsk regional administration and Budinvest Engineering. These documents allegedly confirmed the link between Valentyn Resnitschenko and the Budinvest Engineering company. After analysis, the authorities planned to destroy all original documents. However, the anti-corruption authorities saved the documents.
By the way, in September of this year Anatoliy Shchadilo, a police general 3. ranks, who at that time headed the main directorate of the National Police in Dnipropetrovsk Oblast, was relocated to Kyiv. For a promotion.
Investigation exists, but no probable-cause notices
A year ago the former head of NABU’s main detective unit, Andriy Kaluzhynskyi, told ZN.UA in an interview about the SAPO-registered case of the road-construction story in the Dnipropetrovsk region: “It is one thing to prove something according to the standards of a conditional journalistic investigation to shape certain public perceptions of the circumstances. It is another to prove it so much that a notice of suspicion is delivered first and then a court issues a verdict.” Unfortunately, Andriy Kaluzhynskyi no longer works there, after Semen Kryvonos became NABU director. Nor do many other professional detectives who have left the bureau. It is unlikely that one can now precisely predict how this fact will affect the investigation of the case we are interested in, but one can already suspect that such rapid turnover of personnel in a central anti-corruption body is a bad sign.
During the year there were two searches of Yuriy Holyk’s residence: first at the Konyk residential complex (at the same time detectives also searched the home of Valentyn Resnitschenko, the former head of the Dnipropetrovsk regional military administration). In the second raid on Holyk, NABU seized his phone. Sources in the Presidential Office say Holyk’s lawyers are trying to recover the device. Also on Bankova Street there is confidence that Kyrylo Tymoshenko, who oversaw the “Great Construction Site” before the full-scale invasion, is not involved in the case at all, although investigators are also examining his ties to tenders at the Dnipropetrovsk regional military administration.
As for the official position of investigative authorities, ZN.UA asked the National Anti-Corruption Bureau: Is it true that Tymoshenko is currently not involved in the case? And is there anyone among the accused who appeared in the media headlines about this story a year ago? NABU replied that it cannot comment during ongoing investigations. One thing is clear from NABU’s response: investigations are ongoing, but concrete suspects are still far off.
From our own sources we also learned that the case currently includes several episodes. Some concern road repairs in the Dnipropetrovsk region. In addition, NABU and SAPO are examining cases of illicit enrichment and false asset declarations by employees of the Dnipropetrovsk regional military administration. NABU and SAPO are also reviewing at least 11 companies that were Budinvest Engineering contracting partners, looking at money movements between these companies and their interconnections. Some of these firms are also being investigated for possible connections to employees of the Dnipropetrovsk regional military administration.
Audit and auditing, or one hand washes the other
One of the most critical problems NABU faces, according to sources, is proving the incurred damage. Until the bureau has its own auditing institution to perform such assessments — which would significantly speed up progress in many criminal cases — anti-corruption authorities must “stand in line” to obtain the results of required expert opinions. And even if it’s just about the queue... First, the result of the assessment is influenced, as already described at length (including by ZN.UA), by Oleksandr Ruvin, head of the Kyiv Scientific Research Institute of Forensic Examinations. Second, there are other circumstances that hinder not only the damage proof but also the stage that precedes it. The problem lies in the attitude of the State Audit Service of Ukraine. Please note: for NABU to obtain a damage assessment in this case, the bureau must audit expenditures on road repairs funded by the Department of Housing and Communal Services of the Dnipropetrovsk regional administration.
This audit is conducted by the State Audit Service. This body checks how effectively budget funds are used. A completely necessary audit, you’ll agree. And such an accounting check has begun in this case. The audit procedure of the State Audit Service in NABU cases works as follows: an expert works during the investigation together with investigators on the materials to be analyzed. In essence, the person is directly familiar with the investigative files. When the audit of the Dnipropetrovsk regional administration and Budinvest Engineering was conducted and the auditor of the State Audit Service identified damages and was to draft a conclusion, strange things began to happen. The State Audit Service began delaying providing the report to investigators — the report NABU needed for further work and to conduct the final assessment in the investigative process.
These interpretations can vary. But one significant fact cannot be ignored: legally, the State Audit Service is directly subordinate to the Ministry of Finance of Ukraine, whose head Serhiy Marchenko is a financial partner and close friend of Yuriy Holyk.
Imagine the scenario: law enforcement is investigating possible illegal actions by Holyk, and the audit — along with all the investigative materials required for further expert assessment — is conducted by a body subordinate to his friend.
Isn’t this a conflict of interest? And who could file a challenge or recuse themselves? The factor of a friend from the Finance Ministry, who most likely plays the role of an underling for higher-ranking people, is not all.
Institutional peculiarity of the “DerzhdorNDI” (State Road Research Institute)
The story around the Dnipropetrovsk regional military administration and Budinvest Engineering centers on whether the road repairs funded by the Department of Housing and Communal Services were carried out at inflated prices. If so, the company caused damage to the state.
This damage must, however, be proven if it exists. In Ukraine there is the state-owned company “State Enterprise Research Institute for Road Construction named after M. Shulhin” (SE “DerzhdorNDI”), which gathers information about the prices of building materials from all regions. Essentially, it is a large database for various construction-related goods.
By the way, the institute “Ukravtodor” is subordinate to it. Journalists and experts working with the DerzhdorNDI database report that suppliers of various building materials can report prices to the state company that already include a certain markup.
If there is, for example, a company selling cement for road construction or road repairs, and this company is friends with someone among the employees of the regional administration responsible for tenders, then the information in the DerzhdorNDI is guaranteed to be skewed — meaning the price is artificially inflated.
If that price is published in the DerzhdorNDI database, a kind of snowball effect occurs: the fictitiously inflated price becomes the norm, and other suppliers begin to use it as a basis. Thus corruption starts at the price-formation stage, not at the bribery payments stage. And if you strike a deal with a cement supplier who is perhaps the only one in the region, you can push the price up and it remains legal.
Stanislav Hvozdikov, Deputy Director for European Integration at SE “DerzhdorNDI,” whom we also asked questions, is nevertheless convinced that claims of inflated prices in the DerzhdorNDI databases are not true. According to him, this risk was mitigated by the price-formation methodology for road works that came into force on 17 last year.
“This methodology reflects globally recognized practices for procurement and price formation,” he explains.
— “Now material costs are separated from transport costs. The methodology enables the client to control costs at all project stages, from planning to completion of works. The services of the Reconstruction Agency in the regions and, in some cases, regional state administrations are required to provide planning and cost-estimation documentation, including the information source about material costs and transport distance.”
“Now the information source about material costs in the vast majority of cases is exclusively the DerzhdorNDI database,” says Hvozdikov, which is compiled from multiple information sources and not only from suppliers. This has brought material costs closer to the current market level, which in turn improves understanding and control over real project costs.
“Information on consigning and contract prices comes from raw material suppliers from quarries, specifically in the form of their commercial offers, which separately contain information about transport costs,” continues Stanislav Hvozdikov. “Moreover, our analysts at DerzhdorNDI use historical data. For example, information from ProZorro about already paid, executed contracts as well as tender offers from procurement participants. We also maintain a database of active quarries that we personally call. All information sources can be viewed in our price database. The supplier is only one of many sources.”
When we calculate the average price, we do so for objectivity from at least 4 to 5 sources,” explains Stanislav Hvozdikov, and he assures that the corruption factor in price inflations during the cost-estimation, contracting, and invoicing phases for work performed last year has been fully eliminated by the methodology.
Is that really the case? That is probably a reason for a separate investigation and a standalone article. It turns out, however, that the introduced methodology only came into force after the Department of Housing and Communal Services of the Dnipropetrovsk regional military administration 1,5 had transferred billions of UAH to Budinvest Engineering. And were the prices in the ProZorro contracts not already inflated according to exactly this scheme?
So, is there a prospect for the case?
The pace of the investigations does not meet society’s impatient expectations for suspects’ notices against the alleged main actors. Expectations are high because the story hits hard and blinds with the bluntness of its audacity. Of course, none of the owners of the names in the loud headlines is guilty until a court rules. But we have attempted to sketch the horizon on which the case might reach court.
Who will prove stronger in this story — the law or the government’s “shield” — will be another signal of what is really happening in our anti-corruption sector. And whom we should thank for it.
Document: PDF proof of the original version of the news item "Landromat der „Großbaustelle“: Wie Milliarden für Straßen in Schemata versickerten und warum Yuriy Holyk seit Jahren der Verantwortung entkommt". It records the publication content at the moment of the first scan, the preservation date and the source: HAB Media.
