Auditor for Yatseniuk

Auditor for Yatseniuk

18 March, head of the State Financial Inspection Mykola Hordiienko accused Prime Minister Arseniy Yatseniuk of abuses totaling about 7,6 billion hryvnias.

Accusations by audit bodies against the prime minister or ministers are not new for Ukraine.

In particular, at various times the Accounting Chamber accused Viktor Yanukovych, Yulia Tymoshenko and other well-known officials, and Yuriy Yekhanurov was even dismissed from the post of defense minister because of Accounting Chamber statements (later, however, a court found the charges unfounded).

However, the Accounting Chamber usually targeted the previous authorities or was used to remove an unwanted minister. Now these accusations have been directed at the sitting prime minister.

Moreover, within a month these accusations were picked up by a number of parliamentary forces. After that, the prime minister’s team said an information campaign had been launched against them to remove Yatseniuk from the premiership by autumn.

Yesterday the accusations became the subject of review by two parliamentary committees, which held a joint session.

INSIDER attended that session and tried to sort out the high-profile accusations against the head of government.

Hordiienko’s accusations

"Despite obstacles to the work of the SFI, in 2014 the inspection conducted about 4 thousand audit checks, which established facts of losses totaling 7,6 billion hryvnias," Hordiienko said a month ago at a scandalous briefing in the Rada.

According to the head of the SFI, such facts prove that the corruption of Yanukovych’s era has not been eradicated, and now these schemes are "controlled by the Yatseniuk government."

In his accusations, Hordiienko specifically mentioned an audit of the fulfillment of contractual terms of Ukrtelecom’s privatization, which allegedly found non-fulfillment in the amount of 220 million hryvnias of obligations under the sale-purchase agreement, which is grounds for canceling the contract and returning the company to the state.

He said the Yatseniuk government delayed the inspection, and the prime minister’s adviser, former finance minister Oleksandr Shlapak, filed a lawsuit to cancel the inspection report, on the basis of which the General Prosecutor’s Office opened proceedings against Viktor Yanukovych and former finance minister Kolobov, recently detained in Spain.

The same Hordiienko

Hordiienko said that Yatseniuk, to hide corruption facts, removed him from his duties and blocked the inspection’s work on further audits of state enterprises. The auditor called on law enforcement agencies to investigate the published facts and to suspend Yatseniuk from his duties during the investigation.

After Hordiienko’s accusations were made public, deputies from Svoboda and Batkivshchyna first tried to block the rostrum demanding that Prosecutor General Viktor Shokin be heard, and later, with support from some deputies from the Petro Poroshenko Bloc, attempted to initiate an extraordinary session of the Verkhovna Rada to discuss the accusations.

Government reaction

The government immediately denied Hordiienko’s accusations. According to Cabinet Minister Hanna Onyshchenko, the amounts cited by Hordiienko relate to abuses from Yanukovych’s time. "This amount concerns the activities of a number of enterprises for the period 2010–early 2014, with most of it falling on 2012–2013 years," Onyshchenko said.

She also reported that an inspection into Hordiienko’s own activities is ongoing.

23 March, Yatseniuk himself publicly appealed to the General Prosecutor’s Office asking it to investigate all of Hordiienko’s accusations and said that he personally and members of the government are ready to give all necessary testimony.

4 April the government at its meeting decided to dismiss Hordiienko from his post. According to a special government commission that conducted a month-long review of the official’s work, signs of crimes under three articles were found in his activities. In particular, the Cabinet stated that Hordiienko failed to carry out one-third of government directives, which could have caused serious consequences for the state. The government also believes the official may have submitted false data in his declaration and deems it necessary to verify the act of the service check regarding Hordiienko’s son, Oleksandr, when he was appointed to a post at the Solomianskyi district prosecutor’s office in the capital.

In an interview on the 1+1 TV channel, Arseniy Yatseniuk said the corruption scandal in the Cabinet was manufactured to remove him from office and to break up the coalition. He said people behind the scandal are "interested in repeating the scenario of 2005 and those who are interested in removing the government." He promised to name these people in parliament.

In turn, the prime minister’s People's Front now directly accuses one of the leaders of the Opposition Bloc, Serhiy Lyovochkin, and Yulia Tymoshenko.

"They want to topple Yatseniuk by autumn to go into new early parliamentary elections and reformat the coalition," deputies say unofficially.

"For Tymoshenko, Yatseniuk, like Turchynov, is a personal enemy whom she blames for not becoming president or prime minister," the Front members add.

They also say Lyovochkin is using Svoboda, whose former ministers have cases opened against them, to fight Yatseniuk at rallies.

Svoboda at the rostrum

Parliamentary blockade

The story continued on 7 April. In the Verkhovna Rada, Svoboda deputies and some other MPs blocked the parliamentary rostrum, demanding the creation of a temporary investigative commission of the Verkhovna Rada to investigate Hordiienko’s accusations.

Supporters of Svoboda also gathered near the parliament walls at that time, and thematic tents with TSK inscriptions appeared.

"Look at this performance, they’ve already started preparing for elections. We are direct competitors on their (electoral) field where they lost in the parliamentary elections. And a TSK is a good tool for promotion," one Front deputy told INSIDER.

Svoboda responded to such statements in the opposite way, accusing the Front of, "through Avakov’s hands the People's Front is putting pressure on political opponents," referring to the interior minister’s statements about investigations against former Svoboda ministers.

After consultations with faction heads, Parliament Speaker Volodymyr Hroisman announced a decision to hold committee meetings on 8 April on anti-corruption and the legislative support of law enforcement, at which Hordiienko’s accusations would be considered.

Verbal battle in the committee with bottles thrown

At the committee meeting, Hordiienko was given the floor first. The former head of the SFI said his inspection conducted checks of government bodies and state enterprises from 2012 to 2014, and the amount 7,6 billion hryvnias previously mentioned is cumulative for the entire period.

At the same time he said 3,5 billion hryvnias of that total fall specifically on Yatseniuk’s government. "About 3,5 billion in corrupt losses falls on the second half of 2014, that is, the period of Yatseniuk’s government," Hordiienko specified.

He claimed this sum is only a small part of the financial activity of state economic entities and, in his assessment, if a full audit were carried out the amount of losses could reach tens of billions of hryvnias.

After that the former SFI head began recounting individual cases of abuses concerning Ukrzaliznytsia, Ukrzalizpostach, Ukrposhta and others. According to him, kickback schemes involving shell companies and some people close to Yatseniuk were used in the abuses. He did not name any surnames.

The auditor also mentioned Energoatom, saying a check of its activities during Yatseniuk’s government revealed violations totaling about 1,5 billion hryvnias. At that enterprise, according to Hordiienko, spare parts were being purchased at inflated prices.

He also accused Energoatom of selling goods at undervalued prices during military actions to Russia’s TVEL. "The overseer of Energoatom is Yatseniuk’s closest associate Mykola Martynenko, who did everything to obstruct the check at Energoatom," Hordiienko moved to personal attacks.

Among the auditor’s accusations was natural gas. He claimed that at the end of November the government approved the forecast balance of natural gas receipts for 2014, which envisaged allocating 15,1 billion cubic meters from Ukrgazvydobuvannia production and 1,7 billion cubic meters from Ukrnafta for household needs, but due to actual distribution only 13,4 billion cubic meters from Ukrgazvydobuvannia were provided and 0 from Ukrnafta.

"Instead of Ukrainian gas for household needs, a decision was made to allocate expensive imported gas," Hordiienko said, estimating losses to Naftogaz at 2,1 billion hryvnias as a result of these actions.

Interestingly, Yulia Tymoshenko made similar accusations against Yatseniuk on the show Shuster.Live.

"That day (Friday, 3 April, - INSIDER) the president gathered faction leaders, and she didn’t come, supposedly because she was ill. But an hour later we saw her on Shuster’s show," one Petro Poroshenko Bloc deputy said.

On behalf of the government, First Deputy Minister of Justice Nataliya Sevastianova reported at the joint committee session that Hordiienko was manipulating the figures, because of the stated 7,6 billion, 2,1 billion relate to January–February of 2014, and the rest, 5,5 billion hryvnias, are for 2012–2013 years.

Reaction of the People's Front to Svoboda’s speech

According to the government official, the former head of the SFI’s words are ordinary slander from an official who after being suspended did not even participate in the internal investigation against him.

Next to speak was First Deputy Prosecutor General Volodymyr Huzir, who said that regarding Hordiienko’s statements of 18 March, proceedings were opened in accordance with the law, but it is too early to speak of the results of the pre-trial investigation because it is ongoing.

He added that to date the GPO has not been provided with information on how much damage was caused during Yatseniuk’s government and how much was caused in the previous period.

He said that earlier, based on SFI reports, suspicions were announced against Viktor Yanukovych and members of his team, and 12 criminal proceedings were opened. Regarding the period from 1 March to 31 December 2014, according to SFI audit results of state enterprises, the investigation has already identified violations that led to losses totaling nearly 685 million hryvnias. However, later the GPO representative did not answer requests to name specific enterprises where the violations were confirmed.

The first deputy prosecutor general confirmed that Yatseniuk appealed to the GPO offering to give testimony. "For now, there is no need for investigators to question the prime minister," Huzir noted.

After the parties’ statements, deputies entered the discussion. But whether because of the TV cameras or the great excitement, the conversation very quickly got out of control.

Representatives of the People's Front, as they say, "on voice" tried to portray Hordiienko negatively, accusing him of carrying out a political order.

"I am not carrying out any political force’s order," the auditor denied.

Other committee members for some time were more specific in their questions, trying to get Hordiienko to name exact amounts and the surnames of people behind the criminal schemes and companies he mentioned.

Eventually one of the committee members asked whether the former SFI head could name facts of Yatseniuk’s personal involvement in implementing the schemes he announced.

"For all 4 thousand control measures that went through (and revealed violations), we have a single resolution that is directly about Yanukovych… There are no resolutions in the documents of these audits about Yatseniuk, however there are people and firms that appear in our audit acts connected either by regional ties or in other ways," Hordiienko replied.

Over time the questions began to repeat, and the session started to resemble a typical talk show, which deputies favor. At one point the rhetoric even became televisual. "Thank you, dear host," in the third hour of conversation Deputy Ihor Lutsenko of Batkivshchyna slipped.

In the end the committees were to decide on the format of the investigation, but they did not reach agreement on the wording. The committees agreed on the need to ask the GPO to provide protection for Hordiienko and on changes to temporary investigative commissions, since this parliamentary control mechanism does not work at the moment.

But regarding recommendations about a temporary special commission there was a heated debate. At one point deputies became so carried away that they seemed to lose interest in the discussion itself. At one such moment non-faction MP Boryslav Bereza accused radical MP Ihor Mosiychuk of working for Serhiy Lyovochkin, for which Mosiychuk threw a bottle of water in response.

In that atmosphere the Anti-Corruption Committee recommended parliament nevertheless create a TSK, voting 11 votes "for," while the committee on legislative provision of law enforcement opposed this, choosing instead to recommend creating a working group to oversee the investigation with TSK functions.

"Which TSK in this country ever produced anything other than PR, let’s be honest," Yuriy Lutsenko summed up.

"And what’s the problem creating it? You’ll be doing PR anyway," came a reply from the hall. Unfortunately, the author could not be identified.

On Thursday the Cabinet faces another TSK — this time on tariffs, initiated by Tymoshenko’s party.

Insider