Lobbying under the dome. What deputies demanded from Natalia Yaresko

Lobbying under the dome. What deputies demanded from Natalia Yaresko

VoxUkraine, researching the topic of parliamentary lobbying, sent letters to ministries, the Prosecutor General’s Office, the State Fiscal Service, and the National Bank requesting deputies’ inquiries since December 2014 of that year.

Earlier VoxUkraine wrote about what deputies want from the Ministry of Economic Development and Trade.

The next ministry that provided all deputies’ inquiries was the Ministry of Finance.

Thus, from December 2014 of that year to April 2016 of that year, while Natalia Yaresko headed the ministry, deputies sent her inquiries 95 times.

Of these, almost two-thirds contained requests to allocate additional funds, – writes EP.

The total amount of deputies’ requests – 3,5* billion UAH.

Of that, 2 billion UAH falls on requests from “People’s Will” deputy Serhiy Labaziuk, who asks to restore funding in 2016 for state housing programs for youth.

For convenience, the requests can be divided into the following groups.

1. Requests to allocate funds – 62 inquiries from 43 deputies.

2. Requests regarding the Ministry of Finance’s tax policy, the activity of the State Fiscal Service, or problematic taxpayers – 11 inquiries from 18 deputies.

3. Requests for information and explanations of the ministry’s actions – 16 inquiries from 20 deputies.

4. Requests on other topics – six inquiries from five deputies.

It is logical that the most popular type of inquiry to the Ministry of Finance falls under the “give money” category. The Ministry of Finance is special. Unlike other agencies, it controls the circulation of all state funds. Without the Ministry of Finance’s “visa,” no agency will receive funding from the state budget.

state budget.

There are different ways to ask

Funding volumes for the next year are agreed during the budget process – the period of preparing the country’s financial plan. By law it should begin in March and end with the adoption of the budget no later than 1 December.

In reality, however, the budget is adopted a few days before the New Year, and deputies together with other agencies chaotically submit their proposals to the ministry. Usually they exceed the budget’s capabilities by several times and therefore are not taken into account.

After the law on the state budget is adopted, deputies do not give up attempts to obtain the desired funding. They have two ways to do this.

The first, most popular, is to introduce amendments to the state budget. As a rule, the slightest legislative initiative to adjust the state budget instantly accumulates a large number of official “wishes” from members of parliament.

The number of amendments depends on how passable the bill is. If it is submitted by the government and foresees solving an urgent problem or planned allocation of funds, the likelihood of the bill’s adoption is high.

The problem for deputies is that everything hinges on the Ministry of Finance. According to the Budget Code, changes to the law on the state budget can be considered in the Verkhovna Rada only if there is an expert opinion from the Ministry of Finance.

The second way is to draw the ministry’s attention to a specific problem and request funds to solve it. The most effective tool for this is submitting a deputy’s inquiry. Theoretically it cannot be ignored.

A deputy may address an inquiry to the president, the government, local self-government bodies, or heads of enterprises regardless of their subordination and forms of ownership. The elected official should receive a response within 15 days.

However, an inquiry does not guarantee a solution. The Ministry of Finance usually limits itself to considering it without allocating funds or sends a boilerplate reply.

The reason is a shortage of funds. Moreover, the Ministry of Finance can act only within defined programs. Fulfilling a request is possible if the funding “fits” into the Ministry of Finance’s plans to allocate funds, or if there is a backroom agreement about it.

In the latter case, a deputy’s wish is included in amendments to the budget developed by the Ministry of Finance or is formalized into a separate parliamentary initiative and is not blocked by the Ministry of Finance during consideration in the plenary hall.

Relentless requesters

The most active in asking for money are deputies elected in single-member districts. The Ministry of Finance inquiries feature 38 surnames of majoritarians, 33 of them – in financial requests.

They address the ministry with a single goal: to increase funding for their districts. The most popular directions are road repairs, increased allocations to the region through targeted subsidies, and construction or repair of social facilities.

In their inquiries, deputies do not always specify exact amounts. In most cases, elected officials limit themselves to formulations like “increase the volume of subsidies,” “provide for expenditures,” “allocate funds.”

The most active requester is Ivan Rybak (BPP, electoral district No. 202, Chernivtsi region). In 2015 he sent 12 inquiries to the Ministry of Finance. All of them concerned increasing state budget funding for Chernivtsi region.

Some of his appeals specified concrete amounts. For example, the deputy asked for 250 million UAH to form a cultural and artistic center in Chernivtsi, 240 million UAH to continue construction of reinforced concrete bridges in Chernivtsi region and 0,29 million UAH to restore a fire post in the town of Nepokilivka.

In second place is unaffiliated Mykhailo Holovko (electoral district No. 164, Ternopil region, seven inquiries). The deputy requested additional funding to eliminate the emergency condition of cultural heritage monuments and to build a hospital.

In May 2015 he became interested in the issue of public debt and sent two inquiries to the Ministry of Finance. The first concerned information on external borrowings over the past year, the second – the status of negotiations with creditors regarding the restructuring of the public debt.

Unaffiliated Yakiv Bezbah entered the top three most active deputies.

He sent six inquiries to the Ministry of Finance asking to help specific residents of Dnipropetrovsk. For example, there was a request to look into recalculating the subsidy for utilities for the housing cooperative “Proektuvach-2” and the condo association “Shakhtar-95” of N. V. Astafieva for 29 447 UAH.

The deputy also drew the Ministry of Finance’s attention to the need to allocate funds for the construction of water supply networks on Yalynova Street in Dnipropetrovsk.

Arbitrators between business and the tax authority

Inquiries for deputies are not only a way to ask the state for money. Members of parliament use appeals to influence relations between business and the State Fiscal Service. The chain is simple: a businessman turns to a deputy, the deputy – to the Ministry of Finance.

Then the Ministry of Finance may report that it forwarded the complaint or information about violations to authorized persons in the State Fiscal Service or the ministry. From there – whatever happens: the problem may attract law enforcement’s attention or drown in bureaucratic procedures and formal replies.

There are few such appeals. In fact, only two.

Thus, Petro Vanat from the People’s Front in December 2015 demanded that the ministry stop pressure and arbitrariness by the tax police against the enterprise “Ukrhrafit.”

In 2014 the director of the First Private Brewery, Heorhiy Ambartsumyan, informed BPP deputy Mykhailo Kobtsev about corrupt actions by the head of the Specialized State Tax Inspectorate for servicing large taxpayers in Lviv, Oleksandr Yuristovskyi.

Kobtsev sent an inquiry to the Ministry of Finance requesting a “conduct of an official investigation.”

Yuristovskyi has worked in various positions in the tax service since 1997. In 2004 he was suspended from civil service, but later returned. The press has repeatedly written that he and his family own expensive real estate. In October 2015 he was transferred from service in Lviv to Lutsk.

Some tax-related inquiries are connected to deputies’ committee work in parliament. For example, Samopomich deputy Viktoriya Voitsitska is known for her fight against companies of Ihor Kolomoyskyi. The deputy deals with the issue of Ukrnafta’s tax debt and criticizes the head of the State Fiscal Service, Roman Nasirov, for his work in this area.

In October 2015 Voitsitska demanded that the Ministry of Finance investigate concealment by State Fiscal Service officials of documents that justify granting an installment plan for Ukrnafta’s tax debt.

Tatiana Ostrikova, Samopomich, a member of the parliamentary committee on tax and customs policy, deals with customs topics in the committee.

The deputy asked the Ministry of Finance to check the firms Vestum-Torg, Omikron-Plus, Import-Land, Kite-Group, Trading House Interagrotek, Advance Trade, Euro Effect, Shivada, Mriya Plus, Konteka for evasion of customs payments.

In 2015 the legislative relations between the Ministry of Finance and deputies on tax matters were far from ideal. During committee meetings on tax and customs policy, deputies complained about the low quality of legislative initiatives submitted by the ministry and the lack of calculations on their impact on industries.

Some inquiries reflect these concerns of the deputies.

Thus, in February 2015 deputy Serhiy Fayermak from the People’s Front asked the Ministry of Finance to clarify nuances of paying the single social contribution (SSC).

Andriy Shypko from Revival, in the midst of the budget process and preparation of a new Tax Code, tried to find out from Natalia Yaresko about the impact of the new tax legislation on the healthcare sector and the volume of its financing.

Suspected self-promotion

The main question regarding information requests is why deputies need that information. It is possible that some of the inquiries were written for self-promotion or to spread certain topics in the information space in their own interests.

For example, Holovko’s requests regarding the state debt coincided with two events.

First, at that time the process of negotiations with foreign holders of debt was underway, was complicated, and details were not disclosed.

Second, Holovko in the spring criticized the government’s debt policy. It is possible that this information was useful to him for his own media strategy.

A group of deputies’ inquiry led by Oleh Lyashko about checking tax payments by ATB group companies almost coincided with the appearance in parliament of a bill on nationalization of this retail chain. It was registered on 21 April, and the inquiry to the ministry was received on 24 April.

In the information space the idea of nationalization caused a huge resonance. Later, in its conclusions the Ministry of Finance did not support Lyashko’s bill.

According to the official version, the reason for the controversial bill’s appearance was that the ATB supermarket chain operates in occupied territories.

According to another version, the document appeared because of a domestic conflict between ATB co-owner Hennadiy Butkevych and owner of S. I. Group (TM Semki and “Morski”) Serhiy Rybalka, a member of parliament from the Radical Party.

* – the amount is calculated based on inquiries that specify figures. In reality deputies requested more. Exactly how much is difficult to say due to the lack of concrete calculations in the inquiries.

Infographic: Dmytro Ostapchuk, editor of VoxData, VoxUkraine