Chronicles of the National Reform Council. 18 September. Anticorruption

Chronicles of the National Reform Council. 18 September. Anticorruption

11 the meeting of the National Reform Council, which took place 18 September, was focused on anticorruption reform. As always, this text contains only an account of the discussion, without my personal comments, although sometimes they are provided [in square brackets]. Opening the meeting, in a rather long introductory monologue the President expressed satisfaction with the past week when parliament demonstrated consolidation around issues of debt restructuring and increasing social payments, and while the latter is understandable, the former is a sign of responsibility. We managed to avoid default and achieve macrofinancial stabilization, the President noted, and in this situation we not only found money for social payments but also convinced international financial institutions that these funds have a stable source. But the main parliamentary decision last week related to the meeting’s theme was the unblocking of the anticorruption prosecutor’s office. The legislative framework for fighting corruption has been formed, Poroshenko emphasized, mentioning transparent procurement, open access to property registers, and so on. The next step is building the institutions.The President raised the issue of a legislative ban on releasing state officials accused of corruption on bail [this greatly annoys citizens, although it is a standard European norm]. He mentioned recent arrests of high-ranking officials in the SBU, the Interior Ministry, etc., who could be released on bail just like earlier ones. Another important anticorruption step is the law on political party financing — Poroshenko promised to sign it immediately after adoption. It is cheaper for us to fund parties from the budget than to suffer the losses from parties’ oligarchic dependence (I note that this is one of the requirements of European integration). Next the President again mentioned transparent procurement, which yields savings of more than 20% (expected to amount to 50 billion hryvnias next year), deregulation, transparent privatization, which removes the base of political corruption at state enterprises. "I belong to an economic school," he said, "that believes the state cannot and should not be an effective owner." Also considered anticorruption steps were the issue of civil servant pay, abolition of parliamentary immunity (this bill disappeared in the Verkhovna Rada after a positive opinion from the Constitutional Court, the President said) and judges’ immunity, which exists nowhere in Europe. The next tranche of 1,7 billion, Poroshenko noted, has a large anticorruption component. Finally he devoted attention to the visa-free regime issue and emphasized that the EU’s political decision has been made; what remains is fulfilling technical requirements. The President also demanded changing either the legislation or the budget regarding court fees, because the lack of funds to pay them blocks the activity of the Antimonopoly Committee and the General Prosecutor’s Office in many cases.The Speaker of the Verkhovna Rada Volodymyr Hroysman confirmed the parliament’s readiness to abolish bail for corrupt officials and parliamentary immunity.Prime Minister Arseniy Yatsenyuk spoke in favor of several important measures, including a radical replacement of judges, creating a State Fiscal Service from scratch similar to the police, reforming the State Financial Inspection to primarily audit state enterprises (he recalled the conflict around "Elektrotyazhmash"), and also leaving the civil servants’ pay fund unchanged while reducing their headcount.After these lengthy introductions, as is traditional the Deputy Head of the Presidential Administration Dmytro Shymkiv took the floor to report on the status of previous decisions’ implementation. He named the critically unfulfilled decisions as including:- the Strategy for reforming public administration has not been approved, which means: financial assistance from the EU will not be provided from 1 January, although if the strategy is approved assistance could be provided from 1 April;- the draft law "On Civil Service" has not been adopted, which is a condition for receiving 600 million euros of assistance from the EU (see below);- no consensus has been reached regarding the draft law on hospital autonomization: bills supported by international organizations, the public and parliamentary experts are blocked by the relevant committee of the Verkhovna Rada, which means: the start of health care reform, including a targeted World Bank loan, is at risk;- the single state standards necessary for decentralization for provision of social services, education and health care have not been developed (the deadline was 10 July).Regarding the meeting’s theme, Dmytro proposed implementing a Code of Ethical Conduct for civil servants modeled on the American example, which would include a video course and voluntary signing of the code on the website.Opening the subject of the meeting, Justice Minister Pavlo Petrenko began with implementation of the law "On Purification of Power" (lustration). 760 officials have been lustrated, another 80 thousand officials and 45 thousand candidates for positions are undergoing checks. Special attention will be paid to the SFS.The First Deputy Minister of Justice Natalia Sevostyanova described in detail the progress of anticorruption reform, outlining the structure of the reform and its goals (the "reform passport"), which include:- effective prevention mechanisms,- inevitability of punishment,- zero tolerance in society.In addition to internal assessment of progress by the public and through a balanced system of indicators, Natalia noted there is continuous external evaluation by the EU and other international structures, since anticorruption is a key part of the tasks of European integration, including securing a visa-free regime. A recent visit by an EU anticorruption mission left a positive conclusion.So, briefly the state of affairs is as follows (those who wish can view the presentation on the website):1. National Anticorruption Bureau (NAB): the first 70 detectives began training.2. National Agency on Corruption Prevention: the selection commission has begun selecting candidates (must finish by year-end).3. Anticorruption prosecutor’s office: creation unblocked. Deadline for selection is 15 October.4. Opening access to socially important information: the draft law was adopted, but the state supervisory authority has not been defined.5. Financing of political parties and election campaigns: adopted in first reading.6. Opening property registers: the draft law was adopted.7. Search and disposal of assets obtained by criminal means: a package of draft laws has been prepared.8. Online publication and verification of public officials’ asset declarations: the technical specification has been developed, a tender to select the contractor is ongoing, launch date – January.9. Creation of a national asset recovery agency: draft laws have been developed, but they need to be given priority status because they are needed by year-end.10. To complete preparations for introducing the visa-free regime it is necessary to create a coordinating body (an anticorruption council).Each reform includes initiatives that reduce corruption, Natalia noted:- civil service reform: salary increases and strengthening ethical standards,- decentralization: reform of the State Architectural and Construction Control, land relations,- public procurement: obviously,- health care: transferring drug procurement to international organizations, hospital autonomization,- education: a new university admissions system, implementing university accountability,- financial sector: disclosure of banks’ ownership structure, etc.Finally Natalia announced a large anticorruption conference on 16 November for communication with the international community.In the discussion Volodymyr Hroysman noted: the Verkhovna Rada is capable of adopting 40-45 laws in a week, so priorities must be set. In his view these are special confiscations, releasing corrupt officials on bail and court fees (see above).Then NAB Director Artem Sytnyk and Deputy Prosecutor General Yuriy Sevruk stopped in detail on the state of affairs in the newly created bureau and the anticorruption prosecutor’s office. Conclusion: in October this year investigations can begin if an anticorruption prosecutor’s office is created. However, there is a risk, Artem said, that the mountain of old open cases from the Interior Ministry, SBU and the prosecutor’s office will be dumped on the NAB, which will make new investigations impossible. Therefore a procedure for setting priorities should be provided. He also expressed NAB’s readiness to monitor suspicious operations in public procurement in real time.Odesa Regional State Administration Head Mikheil Saakashvili reported on a pilot project for a center of administrative services modeled on the Georgian example, and also demanded opening the procurement register for medical-pharmaceutical goods. In Odesa region 550 thousand dental prostheses have been purchased and are lying in warehouses — why? He also addressed issues of allocating land on the coast, using video filming as evidence, etc., noting that all these proposals will be in the package of laws his team will propose.Dmytro Shymkiv emphasized that American companies are held accountable for corruption abroad, and a number of companies have already been found guilty by U.S. courts of corruption in Ukraine. There is also the World Bank’s "blacklist." This can be used because sanctioned companies can act as witnesses in subsequent investigations.Yehor Soboliev noted that the Ministry of Justice is opening access to property registers, but the State Committee on Land Resources is not ready, and data on vehicles is similarly fragmented.I raised the issue of reforming central executive bodies (CEBs). One source of corruption is an extremely broad list of CEB powers, partly inherited from the Soviet planned-administrative economy, partly introduced to expand the base of corruption. Cutting staff without cutting functions will have no effect. The Cabinet of Ministers is unable to reform itself, because it is not Baron Munchausen. Such work could be carried out by a civic team, but only with political support, I emphasized. You have my political support, the President said. [Well, we’ll see when the project is clearly outlined; I will write about this separately.]Den Pasko brought attention back to the problem of civil service reform. The draft law is stuck in parliament, as has been written repeatedly. And then something unexpected happened. Volodymyr Hroysman stated that the draft law was ruined in the Cabinet of Ministers; it was supported by the president’s representative in government Oleksandr Danyliuk, who criticized the proposed system as outdated and unsuitable for our conditions. The President summed up the short discussion: there is consensus to withdraw the draft law and develop a new one, for which a commission headed by Hroysman should be created. I only managed to insert two words demanding that the new draft law not be run through the government so as not to waste another six months. [This terrible story of the reform’s failure, which is unquestionably the first priority, deserves a separate post. To a large extent because of this 2015 year will be called the year of squandered hopes.]In a short but lively discussion it was noted that it is necessary to simplify the procedure for dismissing officials and liquidating bodies, because relics still exist such as the Ministry of Death and the Ministry of Industrial Policy, since the liquidation procedure is too complicated.The next meeting will be devoted to the issue of education reform.

Valeriy Pekar

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