Saturday, June 14, 2014

The Curse Of Corruption In Ukraine

KIEV, Ukraine -- The Mezhyhirya compound, the residence of Viktor Yanukovych, the deposed president, sits on a beautiful plot of land on the Dnieper river outside Kiev.

Corruption in Ukraine did not begin with Mr Yanukovych — nor will it end with him.

Mr Yanukovych fled Mezhyhirya on February 22nd under the cover of night.

Since then, it has become an open-air museum of the trappings of corruption: at weekends families stroll the manicured grounds and take pictures in front of Mr Yanukovych’s vintage-car collection and ostrich zoo.

Sitting in a guesthouse on the property, Anna Babinets, one of the founders of YanukovychLeaks, a website that archives the thousands of documents found at Mezhyhirya, talks of the “power of documents, of numbers, of knowing how politicians spend money”.

Ms Babinets says that first walking through the gates of Mezhyhirya and discovering the detailed schemes that underlined Mr Yanukovych’s rule was a “fairy tale”.

The details that have emerged since have led to new demands for transparency. 

Corruption in Ukraine did not begin with Mr Yanukovych—nor will it end with him.

Weak institutions, low morale, and an underdeveloped sense of public service have made everyone from judges to traffic police liable to corruption over Ukraine’s entire post-Soviet history.

Murky privatisation overseen by the former president, Leonid Kuchma, in the mid-1990s created a class of oligarchs who came to exercise outsized influence on politics and business.

That the two main candidates for the presidency in the recent election—Petro Poroshenko and Yulia Tymoshenko—both made large fortunes through opaque dealmaking in the 1990s shows the unshakable dominance of the power structure formed in that era.

Mr Yanukovych managed to create a centralised hierarchy of corruption.

He placed himself and a group known as “the Family”, led by his 40-year-old son, Oleksandr, at the top of a funnel that sucked up corrupt rents from all of the country’s economic sectors and institutions.

Mr Yanukovych’s attitude, says Andrei Marusov of Transparency International in Ukraine, was that “there should be only one empire in this country, and all other empires should become vassals”.

This scheme led to an ever more rapacious spiral of graft: as Mr Yanukovych’s increasingly brazen corruption made him less popular, he needed more resources to buy police, judges and electoral officials to keep himself in power at elections planned for March 2015.

The runaway corruption of Mr Yanukovych’s rule—and the cynicism that it symbolised—was one of the motors of the Maidan protests that toppled him from power.

Along with the bloody conflict in the east, it remains a primary concern of those who supported Maidan and voted Mr Poroshenko into office.

After the Orange revolution Ukrainians were overly trusting of their new leaders; by contrast, after the more recent one they remain sceptical and critical.

That will put healthy pressure on Mr Poroshenko and his ministers, but also leave them little room for error.

The trouble is that the underlying architecture of the governing apparatus is unchanged.

According to Sergii Leshchenko, an investigative journalist at Ukrainska Pravda, the “basic precondition” for corruption is the unchecked influence of businessmen in politics and it still exists.

Some are already using the reshuffling of political power to their benefit. Ihor Kolomoisky, an oligarch appointed to run the region of Dnipropetrovsk, is funding pro-Kiev battalions fighting in the east—a means to improve his image and earn himself favours he can cash in later.

Beyond that, says Mr Leshchenko, nearly all the other factors that made corruption inevitable still remain: burdensome tax rules, low salaries for state employees, complicated and expensive customs regulations, a non-transparent system of rent payments for extracting natural resources on state land and a similarly corruptible structure of fees for using state railways to move goods from factory to port.

Still, the country’s new senior officials are signalling that they are taking the fight against corruption seriously.

“The culture has changed,” says a European diplomat in Kiev.

Parliament has closed a loophole that allowed parliamentarians to avoid filing income declarations and voted for a new system governing public procurement.

It is consulting with outside experts to draft rules on conflict-of-interest so state agencies cannot buy goods and services from companies owned by state officials.

The next battle will be over the creation of an anti-corruption investigative bureau. 

Many of those at the forefront of the Maidan movement think the new government is not going far enough.

“The state has become so rotted by corruption that it would be better to start all over,” says Yegor Sobolev, an activist who heads an unofficial body on “lustration”, an initiative to remove bureaucrats tainted by corruption or ties to the violence on Maidan.

He and his group would like to see a total liquidation of police, for example—as Georgia did after the Rose revolution, when it rebuilt its national police force from scratch.

Mr Sobolev helped lobby for Ukraine’s highest-ranking administrative judges to be dismissed and face re-election by their subordinates.

To his disappointment, around half were voted into office again by the junior judges—a sign that the system is profitable for those on all levels.

Tetiana Chornovol, another investigative journalist, was among the first to report on Mezhyhirya.

One night in December, at the height of Maidan, she was beaten nearly to death by unknown men.

After Mr Yanukovych fled, the interim government appointed her to lead the state’s anti-corruption committee.

But now, three months later, she is frustrated by her limited powers.

Even so, she says, Maidan “changed a lot in national consciousness, in public perception”, destroying the widespread tolerance of corruption that existed before.

“There really are a lot of people who want to change the country,” she says.

“But unfortunately the higher up you go, the fewer there are.”

Source: The Economist Europe

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