And Is She from Yermak? Why Olena Duma Was Approved as Head of ARMA

And is she from Yermak? Why Olena Duma was approved as head of ARMA

Yuliya Sokolovska is a fellow townswoman and friend of Olena Duma. While serving as minister of social policy, she appointed Duma director of the Social Insurance Fund.

Sokolovska now works as deputy to the head of the Office of the President, Andriy Yermak.

30 June the Cabinet of Ministers appointed Olena Duma head of the National Agency for Finding and Managing Assets (ARMA). Until recently she held the position of deputy head of the Chernihiv regional state administration.

Two days before the appointment, Duma won the competition for the position of ARMA director. During the competition, representatives of anti-corruption organizations warned against choosing her candidacy.

A bad prognosis and a "cross on ARMA"

Transparency International Ukraine opposed Duma’s appointment as head of ARMA.

On its website TIU published a piece titled "The appointment of Olena Duma could put a cross on ARMA," accusing Duma of lacking the necessary professional experience, in particular experience related to criminal justice.

And of having close political ties. In 2019 Duma took direct part in campaigning for then-presidential candidate Volodymyr Zelensky.

According to TIU, activists found her ties to former SBU head Valentyn Nalyvaichenko.

Former head of the Chernihiv regional state administration Anna Kovalenko is a co-founder of the NGO "Anti-Corruption Movement of V. Nalyvaichenko," and Olena Duma worked as her deputy.

In addition, Duma allegedly had business contacts with the former head of the Crimean SBU department, Oleg Kulinych, who is suspected of treason. Olena Duma supposedly promoted "his interests" in the Chernihiv region, although the organization provides no details.

But the biggest marker, TIU notes, indicating the bias of the ARMA head, is her participation in 2019 in a joint press conference with Ukrainian-American businessman Sam Kislin, financial donor Rudolph Giuliani, who is the lawyer of former U.S. President Donald Trump.

"That is, 4 years ago the future head of ARMA directly took part in attempts to discredit her country and the current U.S. president, who on his part does everything to support our country both in resisting Russian aggression and in anti-corruption progress," TIU emphasizes.

Who is Olena Duma?

Olena Duma was born in 1980 in the city of Khmilnyk in Vinnytsia region; she graduated from the Law Faculty of Taras Shevchenko National University of Kyiv. According to the information in the autobiographical statement she submitted to the ARMA competition, she is a professional civil servant who, since 2006, has continuously held various positions in ministries and other state institutions, changing posts every year or two, sometimes resigning after several months.

For example, from late 2008 to mid-2010 she was deputy director of the Legal Department of the Ministry of Environmental Protection. And from September 2010 to February 2011 she worked in the Ministry of Agrarian Policy as head of the liaison department with the Verkhovna Rada.

Then for less than half a year she worked at the Executive Directorate of the Kyiv city branch of the Social Insurance Fund for temporary incapacity.

The longest stint was from late 2011 to 2015, when she worked at the State Registration Service.

Olena Duma changed her surname three times. She was Lytvyniuk, Faydevych, and Kholevytska.

Lytvyniuk is the ARMA head’s maiden name.

Earlier, Duma’s declarations listed Lytvyniuk Lidiia Mykhailivna, a resident of Khmilnyk, with whom Duma has joint property. Lidiia Lytvyniuk is also co-owner of LLC "Khmilnytska Central Pharmacy."

Approximately from 2001 to 2012 the current ARMA head used the surname Faydevych. For six years (from 2007 to 2012) Olena Faydevych was a paid assistant to MP from the bloc "Our Ukraine — People’s Self-Defense," Volodymyr Moisyk, who since 2016 has been a judge of the Constitutional Court of Ukraine.

From 2001 to 2006 Faydevych was officially listed as director of LLC "Avers," which specialized in selling building materials. In 2009, as director of "Avers," Olena Faydevych gave a comment to a real estate site, advising how best to choose bathroom fixtures.

In 2007–2008 Faydevych was listed as co-owner of the Kyiv developer LLC "Elitzhytlobud-Invest," which now, according to Youcontrol, is linked to the industrial-construction group of the Reinforced Concrete Structures Plant No. 1 of Vasyl Ivanchenko and Serhii Alekseiev. At that time it was linked to the circle around Arseniy Yatsenyuk; for some time the owner list included KUA "Kovin Capital" of Chernivtsi entrepreneur Volodymyr Hnatyshyn, who was a business partner of former justice minister Pavlo Petrenko, one of the closest associates of "People’s Front" leader Arseniy Yatsenyuk.

According to the media, Hnatyshyn is also a classmate of Oleksii Burbak — brother of the leader of the "People’s Front" faction, former infrastructure minister in Yatsenyuk’s government, Maksym Burbak.

In 2012 the current ARMA head took the surname Kholevytska, marrying Mykola Kholevytskyi, who previously served as first deputy head of the State Environmental Inspectorate of Kyiv.

Olena Duma was also involved in the environmental sphere, several times holding various positions in the Ministry of Ecology and Natural Resources.

In 2016 Olena divorced Mykola Kholevytskyi and then, apparently, changed her surname.

Before her appointment to ARMA, the pinnacle of Duma’s career in public administration could be considered the position of director of the Executive Directorate of the Social Insurance Fund, which she held from January to May 2020.

Her fellow townswoman, also born in Khmilnyk, minister of social policy Yuliya Sokolovska appointed Duma to that position. In March 2020 Sokolovska resigned from the ministry; a few months later Duma lost her director position at the Social Insurance Fund.

"A temporary commission established numerous facts of gross violations by Duma O.O. of labor legislation, compulsory state social insurance, other laws and regulatory acts of the Fund. The Fund’s board decided to dismiss Olena Duma from the position held (…), and gave a protocol instruction to the Executive Directorate of the SIF to send information about the results of the temporary commission’s work to the relevant law enforcement agencies," quotes the State Information Agency Ukrinform information from the Social Insurance Fund website.

There are no further mentions of the story about Olena Duma’s dismissal from the Social Insurance Fund.

After leaving the SIF, Duma joined the Chernihiv regional state administration as deputy to head Viacheslav Chaus.

During this entire period she was litigating against the Social Insurance Fund to be reinstated as head of the SIF. Even after the government’s decision to liquidate the SIF in December 2022 by merging it into the Pension Fund, Duma’s legal battle continued, reaching the Supreme Court; the next hearing is scheduled for September.

Meanwhile Yuliya Sokolovska, who appointed Duma to run the SIF, has worked since March 2020 in the Office of the President as deputy to OP head Andriy Yermak.

It can be assumed that these ties were decisive during the competition for head of ARMA and determinative for Olena Duma.

Why is ARMA so important now?

At the request of law enforcement, ARMA can take possession of anyone’s property that has been seized during a criminal proceeding.

By court decision ARMA may sell it or find a temporary manager for it; proceeds from sale or rent are to be sent to the state budget.

Since the start of the full-scale invasion, property of Russian owners and their collaborators worth more than $1,5 billion has been transferred to ARMA’s management at the request of law enforcement. However, the state’s revenue from their realization remains negligible.

In practice some seized property "disappears" even before ARMA holds a competition for a manager, while other properties are sold through ARMA-organized competitions at prices many times below market.

What is wrong with ARMA?

- Theft of seized property

As revealed during a meeting of the temporary investigative commission in the Verkhovna Rada studying ARMA’s activities, from the moment property is seized by court order until it is transferred under ARMA’s management, nobody is responsible for its safekeeping, creating favorable conditions for theft.

In practice, when ARMA publishes an announcement to sell an asset or find a manager for it, it lists the property specified in the text of the court seizure ruling.

At the same time, whether it actually exists in full or only on paper, ARMA representatives and the manager usually verify only after signing the sale or management agreement, when they travel to the site.

And usually less property is found than indicated in the court ruling.

- Nontransparent ARMA competitions

The most questions concern nontransparent competitions for the sale or management of seized property.

The Agency’s website lacks complete information about the property ARMA puts up for competition. To get it, one must write a request addressed to the acting head. After that you must arrange a personal meeting, if you can reach them by the listed contacts, and come to ARMA in person.

The decision to select a manager is made by an ARMA commission composed of agency employees, based on the "best proposals" of participants.

This procedure obviously creates ideal conditions for corruption.

- Imperfect legislation

The creation of ARMA in 2015 was one of the points in Ukraine’s action plan for visa liberalization (AVL) with the European Union.

Since 2007 the EU Council has operated a decision "On cooperation between national asset recovery offices of member states in tracing and identifying proceeds of crime or other property derived from criminal activity," which requires all EU countries to create a national Asset Recovery Office and organize cooperation between offices of different countries.

Ukraine was supposed to create such an office to detect and confiscate the property of former fugitive president Viktor Yanukovych and his circle.

Europeans provided consultations on legislation for the agency’s functioning, but the Verkhovna Rada adopted a law with significant changes. For example, current legislation obliges a manager of a seized asset to coordinate all actions with the property owners, even those under sanctions.

In practice, this norm leads to the sanctioned owner effectively remaining in control of running the enterprise.

Additionally, the transfer of seized property to ARMA’s management happens at the initiative of law enforcement agencies, which may file a corresponding motion to the court. This remains their right, not an obligation.

The court, in turn, can transfer only part of the property to ARMA’s management. For example, only corporate rights, without the production complex.

Often partial seizures are imposed, when one or several prohibitions regarding the owner’s ability to alienate, use, or dispose of property are missing.

Sometimes the court does not specify what to do with the property — sell it or transfer it to a manager. In such cases ARMA cannot do anything with the property.

Moreover, there is a risk that the court may at any time lift the seizure and return the property to the sanctioned owner.

Liquidation of ARMA is off the table

For a long time there have been discussions about the need to liquidate ARMA and transfer its functions to the State Property Fund.

In February the head of the "Servant of the People" faction in the Verkhovna Rada, David Arakhamia, proposed abolishing ARMA and transferring all seized assets to the State Property Fund. The main difference of the SPF from ARMA is that it works with all assets exclusively through the public electronic system Prozorro.Sales.

In June 2023 amendments to the law on the State Property Fund were adopted: the Fund was granted authority to manage and sell sanctioned assets. However, the legislative changes did not affect ARMA, which continues to work in parallel with seized assets despite numerous corruption scandals.

As MP from the "Holos" party Yaroslav Zhelezniak explained, ARMA will continue to manage property that was seized in criminal proceedings (by the National Police/SBU/SSU/etc.) and by court order transferred to the agency’s management (usually at the request of a law enforcement agency).

Meanwhile the State Property Fund will operate assets of sanctioned persons, citizens of the aggressor country and its collaborators that were confiscated to state revenue in accordance with the law on forced seizure in Ukraine of objects of property rights of the Russian Federation and its residents, and transferred to the Fund by decision of the High Anti-Corruption Court.

Olha Prokopyshyna