Sergey Berezenko
The State Administration of Affairs, or as it's affectionately known, the DUSya, is, in reality, a vast monster, or rather a Hydra with many heads. Each of these heads (or rather, each state enterprise within the DUSya) faithfully serves its master (i.e., the head of the DUSya), bringing him a grain of salt, a kopeck of gold. And if any of these heads proves incapable of making its master happy, it is mercilessly chopped off...
The post-Maidan government, fully aware of the true gold mine this DUSya represents, first took stock of its member enterprises. To, so to speak, assess their potential—who could contribute what to the "most important" fund.
For example, the State Enterprise for Servicing Official Events, "Garant-Service" (part of the State Enterprise for Services to the President of Ukraine, serving the Secretariat of the President of Ukraine, the Cabinet of Ministers, the Verkhovna Rada, the National Security and Defense Council, and other government agencies), is very good at this function—bringing in cash. I recall, after the revolution, a scandal erupted when the media leaked information about the sums this enterprise spent on food for those in power. For example, in April, Canteen No. 1 (Bankova Street) and Canteen No. 2 (Shovkovychnaya Street) purchased lamb for 542 hryvnias, Italian cheeses such as Parmigiano Reggiani for 351 hryvnias, Grano Padano for 264 hryvnias, and a cheap French cheese called Mini Baby Belle for 218 hryvnias.
In total, the company purchased products worth seven million hryvnias. True, Prime Minister Yatsenyuk then asked the Prosecutor General's Office to "taste" lamb meat worth 500 hryvnias, but no one knows whether the "tasting" took place. War is a wonderful way to cover up loose ends, declaring that there's no time for that now...
Or take the scandal that erupted with the State Duma of Ukraine (DUS) during Yanukovych's presidency. Then, information surfaced in the media that airlines serving Verkhovna Rada deputies had stolen approximately $1 million from the budget. The scandal was sparked by opposition BYuT member Senchenko, who claimed that, according to calculations between the Verkhovna Rada's staff and the airlines, he had flown 295,000 hryvnias worth of flights on 200 flights. When he sought clarification from the State Enterprise "Hall of Official Delegations" (also owned by the DUS), a recalculation revealed that the deputy had actually flown 79 fewer flights.
One can only guess where the money spent on the non-existent parliamentary flights went...
True, Hydra also has less profitable "heads," some even unprofitable. DUSya is trying to get rid of these. For example, one of DUSya's post-Maytat directors (and there have already been five of them under the new government!), "UDAR" member Sergei Averchenko, stated back in early April that an inventory of assets was being conducted across the entire enterprise with the goal of transferring them from state ownership. For example, DUSya owns 68 buildings and four boarding houses with 143 apartments in Koncha-Zaspa alone, and 27 buildings and a boarding house with 36 apartments in Pushcha-Vodytsia. And in these buildings and apartments, complete communism reigns, because the "former" residents who live there not only don't pay for the use of state property, but also pay a penny for utilities, gas, water, electricity, and so on.
In addition to state dachas and state apartments, from which former officials of various ranks are being evicted with varying success, the State Department of Home Affairs (DUS) has a number of sanatoriums at its disposal, where those close to the state purse have become accustomed to vacationing practically for free. According to DUS leadership, it has also decided to abandon these properties. These include, in particular, the Semashko Sanatorium (located in Yessentuki, Russia), the Zbruch Sanatorium, the Psou Rest Home (located in Abkhazia), the Ukraine Sanatorium (located in Kislovodsk, Russia), the Pushcha-Voditsa state residences, the Koncha-Zaspa state dacha, and the Pushcha-Voditsa recreation complex building. Furthermore, in Crimea, annexed by Russia, the state owns 13 enterprises and over 20 properties that DUS cannot currently use. What to do with them is also unclear...
I recall that even before the presidential elections, Oleksandr Turchynov also loudly declared the need for the swift sale of property belonging to the State Agency of Ukraine (DUS). Oleksandr Valentynovych then hurled thunder and lightning at President Kuchma, at whose instigation, in fact, this multi-headed monster—the DUS—had been created. "And now all this has become a burden on the state budget, since residences and dachas need to be maintained, repaired, upheld, and so on. Ukraine should have one, maximum two, state residences for hosting international receptions. More is unacceptable. It doesn't correspond to either the country's economic conditions or common sense... Ukraine, which is at war, lacks resources...," Turchynov declared in a well-modulated voice.
But here's what's interesting: the draft state budget for 2015 once again allocates almost a billion hryvnias to funding the DUSi—as in previous years. 370 million hryvnias have been allocated for medical services at DUSi's medical facilities alone (including the infamous Feofaniya and the "privileged" Polyclinic No. 2), and about 50 million for sanatorium maintenance. For some reason, the newly appointed head of the National Security and Defense Council, Turchynov, is silent today about the state's unaffordability and the fact that a country bled dry by war cannot afford to support an army of current and former officials at its own expense.
So what happened? Why were all of the above-mentioned enterprises never removed from the state balance sheet? Experts believe the main reason was the discrepancy between the expected value of the properties and their actual value. In other words, all these sanatoriums, recreation centers, and state-owned dachas, as experts claim, are so dilapidated and unattractive as investments that privatizing them makes no sense. So why "take inventory" of something that won't generate a penny of income in the future?
But beyond the dilapidated sanatoriums (which the state continues to spend millions on maintaining), the State Property Management Department (DUS) still has some very attractive properties. It's no wonder that, under the guise of "restoring order," while still Speaker of the Verkhovna Rada, Turchynov signed a decree expediting the sale of DUS property—either through auctions or through transfer to designated ministries and agencies.
He and the appointed acting head of the Presidential Administration, Sergei Pashinsky, were in a great hurry to “privatize” a number of DUS facilities even before the presidential elections.
"Initially, the discussion was about five 'tasty' assets," a senior official at the State Property Management Department shared information with the media at the time. "These include dozens of hectares of land within the capital's borders—the VDNKh (Exhibition of Achievements of the National Economy), two hotels right on Khreshchatyk—the Dnipro and the Ukraine—the Crimean Artek, and the state-owned Zhytomyr Distillery, which includes the only distillery in Ukraine not included in the state monopoly Ukrspirt."
But, to the chagrin of Mr. Pashinsky, a pastor and helicopter fishing enthusiast, the Presidential Administration's leadership was forced to abandon the idea of "urgently" privatizing all the facilities (except the distillery, which we'll cover in the next publication). It proved physically impossible to quickly transfer VDNKh and the hotels to private hands through all the legal procedures, and Artek "sailed" away, along with Crimea, to Russia.
Then came the presidential elections, and then the new Ukrainian President Poroshenko appointed Serhiy Berezenko (whom we already wrote about in the previous publication in this series) as head of the State Security Service.
The young and unassuming head of DUSi, like all his predecessors, loudly announced a comprehensive inventory of the entire vast facility, promising to announce the results by New Year's. However, New Year's Eve is approaching midnight, and the inventory results are still not available...
In the "Official Delegations' Hall" in Boryspil, the method of working with cash has been resumed, which provides an opportunity to engage in illegal confiscation of money.
Instead, media reports began to circulate that the talented member of the Vinnytsia family had honorably continued the work of his predecessors—spoiling everything that lay unattended in the State Property Management Department. For example, information surfaced about active attempts to bankrupt the aforementioned state-owned enterprise "Hall of Official Delegations." However, in recent years, the enterprise had been operating steadily, generating profits and paying substantial taxes (1,1 million hryvnias in the first half of 2014 alone). Furthermore, the enterprise is completely self-sufficient and does not take funds from the state budget. Information also surfaced that everything happening at the enterprise is simply preparation for a hostile takeover.
For example, the new "overseers" who recently arrived at the enterprise reduced the workforce from 173 to 55 and reinstated a long-forgotten method of handling cash, enabling the illegal embezzlement of funds. It's clear to everyone that no "overseers" can launch a trial operation at an enterprise generating billions in profits without the knowledge of DUSi's top management. Therefore, the specific "inventory" planned for Berezenko's DUS is becoming clearer...
If this "inventorying" continues at this pace, all the remaining attractive properties—the hotels in central Kyiv (the Ukraina, President Hotel, and Dnipro Hotel); the Expocentre (formerly VDNKh), with hundreds of hectares of priceless land on which numerous residential complexes could be built; the Press of Ukraine publishing house, where, in its heyday, dozens of newspapers and magazines printed their millions of copies; and the Ukrinvest-Stroy enterprise, which handles construction and renovations for all DUSyu properties—will quickly find new owners. And the state will retain only those DUSyu properties from which it's no longer possible to squeeze a penny.
Incidentally, at the behest of Prime Minister Yatsenyuk, the National Exhibition Center "Expocenter of Ukraine" is already being proposed for exclusion from the list of state-owned properties not subject to privatization.
And, some media outlets claim, next in line for "Sergey Berezenko's inventory" are the long-suffering Zhitomir distillery, which Pashinsky once had his eye on, and the Natsionalnaya Hotel, located on Lipskaya Street. We will continue to monitor the situation surrounding the "inventory" of DUSi facilities, as the staff of virtually all the aforementioned facilities has risen up against such "inventory." People are fighting for the opportunity to continue working and provide for their families. And how the new government will deal with these people is of great concern to us.
Our editorial team will continue to monitor all developments in the State Property Management Department related to attempts to remove profitable enterprises from state ownership and transfer them into the hands of oligarchs. If you have information that will help us in our investigations, we will make it public. Contact us at [email protected].
Igor Naumenko, MIR
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