Dmitry Isaenko
Today, the "new" government is in no mood to see former military camps, training grounds, and airfields annexed by domestic officials and businessmen. Experienced swindlers—corrupt officials involved in the alienation of defense lands to businesses—continue to occupy the most important positions in ministries and departments. One of them is the Deputy Minister of Regional Development, Construction, and Housing. Isaenko Dmitry ValerievichDmitry Isaenko began his career in the Ukrainian Armed Forces, first as the head of the Central Specialized Construction Directorate of the Ministry of Defense of Ukraine in Kyiv, and then (attention!) as the director of the Department of Construction and Alienation of Assets of the Ministry of Defense of Ukraine in Kyiv.
That is, this is the very person who, thanks to whom, the lands and warehouses of the Ministry of Defense fell into disrepair and were effectively expropriated from the state and Kyiv for free in order to obtain excess profits and provide the construction mafia with the opportunity to build residential and commercial complexes on the lands of the Ministry of Defense.
After four years as the department director, Dmytro Isaenko became friends with such famous personalities as Oleksandr Pabat (a member of the Kyiv City Council, head of the advertising and construction department at Finance and Credit JSC) and the future head of the Kyiv City Council, Galina Gerega. After which Isaenko was elected as a member of the Kyiv City Council on the party list of the Kyiv Civil Activists in 2006.
You don't need to be an academic to understand why Oleksandr Pabat included Isayenko in his political party. Pabat was the head of the advertising and construction department at Finance and Credit Bank, which is de facto owned by Verkhovna Rada deputy Kostyantyn Zhevago. During Kyiv's construction boom, this bank was one of the top three banks actively providing loans for housing construction.
So, the scheme of the kennel's operation was as follows: Isayenko transferred the Ministry of Defense of Ukraine's lands to the Kyiv City Council, and Oleksandr Pabat, through a Kyiv City Council decision, provided land plots for further development to crony construction corporations. This is how the idea of the Confederation of Builders of Ukraine (KSU), or rather, a syndicate of military construction corruption on the lands of the Ministry of Defense, arose.
The Kyiv City Council's decision to allocate land for the military-industrial complex in Kyiv, followed by a lease agreement, was issued for 3-5 years (during construction), and then no one paid for the land. Sometimes the lease was set for 15-49 years (in cases where tenders for sale were necessary). Most often, corrupt judges, in concert with local and regional authorities and the prosecutor's office, decided to transfer defense land to construction companies.
But in any case, there was no talk of compensation for the army.
The article provides just one example of the transfer of military-related properties and lands, which were developed under this scheme in Kyiv's Pechersk district on the so-called Black Mountain, where a military unit had been located since 1958 (Fig. 1), covering a total area of over 20 hectares. Over time, the Defense Ministry lands were converted into luxury residential development. Construction has been ongoing for ten years and has enriched numerous government officials.
Thus, by the decision of the Kyiv City Council dated 29.12.2004, No. 924/2354, in accordance with the land management project with the corresponding approvals of all city services (Fig. 2), 19,5 hectares of defense land “Military Town No. 2” at 6 Podvysotskogo Street (cadastral No. 82244103) were transferred to the commercial structure Budspetsservis LLC for a period of 15 years.
This decision was made in violation of the Law of Ukraine "On the Use of Defense Lands," changing the intended use of a land parcel designated for defense purposes without the relevant Cabinet of Ministers decisions and justifications for the liquidation of military property, compensation measures, and ensuring the country's defense capability. A fragment of the master plan shows the allocated land parcel containing military facilities and recreational green spaces (Fig. 3).
Maps from the 90s show the condition of the site and defense facilities on the land. The fencing and structure of the buildings indicate the site's closed nature and its defensive purpose (Fig. 4).
Documents regarding the closure of the military camp, the sale, or alienation of property rights to military buildings and structures are currently absent from the land allocation project materials. However, orthophotomaps from 2005-2013 clearly show the pace of construction in areas not yet liberated from military installations and the growth of luxury residential high-rises on former defense lands (Fig. 5).
Disregarding the absence of duly approved urban planning documentation on changing the designated purpose of defense lands, the absence of construction permits and an approved project, Budspetsservis LLC takes over the territory, destroying green spaces and military property solely on the basis of the decision of the Kyiv Commercial Court dated 10.04.2007, No. 3/212, which obliged the Kyiv City Council to meet construction deadlines (Fig. 6).
In other words, neither the Kyiv community nor the troops received adequate compensation for the loss of property and land worth approximately $20 million. Special-purpose territories were converted into residential land with the help of Kyiv City State Administration officials, the Ministry of Defense, and judges.
According to the current Deputy Minister of the Ministry of Regional Development, Isaenko, the Kyiv urban development cadastre (MIAS ZMD) in 2013 listed the aforementioned territories as multi-story buildings on the site of the military base (Fig. 7). No urban development documents have yet been registered that would allow for the demise of the military base and its conversion to luxury development.
Isaenko alienated military property to his future friends, who later made him a member of parliament and then a deputy minister. Today, the so-called urban planners, who are completely dependent on the current deputy minister, Isaenko, are confidently envisioning commercial development in the new city master plan on the sites of barracks and military sites throughout the capital.
It was the significance and scale of Isaenko's corrupt dealings in construction that prevented Regional Development Minister Gennady Temnik from firing his deputy back in 2012, as it was easier to sit on already established corruption networks.
The new Deputy Prime Minister and Minister of Regional Development, Volodymyr Groysman, is also delighted with the clever and professional plans of his former deputy. As mayor of Vinnytsia, the new minister couldn't even imagine the scale and scope of the system... After all, his current deputy, Isayenko, is known to be the one who protects all the important state design institutes. One of these institutes, incidentally, is headed by Oleksandr Chizhevskyi, Vice President of the National Union of Architects of Ukraine (NUAU) (who, for some reason, often wins tenders for the most lucrative pieces of the budget pie).
Conclusions:
In order to find funds to replenish the state (capital) budget, to meet the needs of the army in wartime conditions and to ensure legality in matters of land management and construction, it is necessary:
1. Urgently establish a commission under the National Security and Defense Council and conduct an inspection of ALL military-industrial and defense facilities in cities with over a million inhabitants (Kyiv, Donetsk, Kharkiv, Dnepropetrovsk, Odessa, Lviv) for the alienation of property and the withdrawal of territories of military towns and garrisons (training grounds, airfields, warehouses, dormitories, etc.).
2. The National Security and Defense Council commissions shall develop and approve a program for strengthening the army's defense capability in wartime conditions and ensure the implementation of this program using illegally alienated and allocated property and lands for defense purposes.
3. In areas discovered where military use has been changed to commercial development without the relevant decisions of the Ministry of Defense and the Cabinet of Ministers, conduct an inventory of property and land plots at the expense of officials involved in the preparation of documents and business structures that received preferential treatment from the government for the re-registration of these land plots and military property (seizure, redemption, lease).
3. To exercise the state's right to restore law and order in relation to excluded (built-up, alienated) land plots and property of military units and enterprises of the country's defense complex that do not have documents for compensation of expenses to the country's budget from the loss of buildings, structures and land plots by decision of the Cabinet of Ministers (in some cases, the Supreme Council) and to return such property to state ownership.
In the event of failure to return property and land, compel owners and users of territories and property of the country's military-industrial and defense complex to compensate the state for expenses under programs to strengthen the army's defense capability in wartime conditions.
In our previous article, we described one of the schemes used by Deputy Minister of Regional Development, Construction, and Housing and Communal Services, Dmytro Isayenko, in collaboration with Kyiv deputies and officials, to steal 22 hectares of Kyiv land from the Ministry of Defense. This article will discuss how Isayenko dishonestly profits from architectural planning and oversight—billions on a national scale. Isayenko and the Confederation of Builders of Ukraine. As a reminder, in 2007, Dmytro Isayenko, with the help of the National Union of Architects (NUA), transferred to the Ministry of Regional Development, Construction, and Housing and Communal Services, where he became Deputy Minister in 2010. Today, this military genius also represents the interests of third parties in business, as he holds the position of Vice President of the Confederation of Builders of Ukraine (KSU).
A logical question arises: who is Isaenko primarily working for, then? It's not hard to guess. The Chairman of the Constitutional Court is Lev Revazovich Partskhaladze (known for his land schemes during Oleksandr Omelchenko's Kyiv mayoralty); the First Vice President of the Constitutional Court is Igor Lysov, President of Liko-Holding (who ran for the Verkhovna Rada in District No. 211 as a member of the Party of Regions); the other vice presidents are representatives of various construction corporations and holding companies.
Incidentally, such a combination of a leadership position in the Constitutional Court and a leadership position in the Ministry of Regional Development is prohibited by the Law on Civil Service. But no one is planning to dismiss the secret builder of Yanukovych's "Family" from his position as Deputy Minister of the Ministry of Regional Development, Construction, Housing and Utilities.
Isaenko oversees the following departments within the Ministry of Regional Development: regional development and project management; urban development, architecture, and territorial planning; construction development, pricing, and construction economics; technical regulation and scientific and technological development; regulatory and methodological support for industrial and civil construction, the construction industry, and the production of building materials; and state programs and housing development.
That is, Isaenko directly oversees all construction within Ukraine, architectural planning and territorial development (general plans for settlements, regional and district planning schemes, detailed plans and territorial zoning), the certification of specialists, and all regulatory, technical, and legal documents.
20 billion per year
Let's start with construction. The cost of corruption is 10 billion hryvnias over four years.
In 2010, in collaboration with the Constitutional Court and under the auspices of Andriy Portnov, the Family's chief lawyer, a feasibility study was developed for the state "Affordable Housing" program. Under the watchful eye of Boris Kolesnikov, Isaenko wrote off over 2,6 million hryvnias for this program. In other words, a simple piece of paper amounted to $300 at the then-current NBU exchange rate.
Afterwards, construction companies close to the President's eldest son, Oleksandr Yanukovych, received land plots and state budget compensation for the construction of so-called social housing under this program, effectively free of charge. Of course, this is just a smokescreen. In reality, everyone understands that the state budget was simply funding the Yanukovych family's commercial projects, which generated enormous profits for their implementers.
The estimated value of transactions for various housing programs is approximately 2 billion hryvnias. Dmytro Isaenko played a key role in these schemes, submitting reports to the Ministry of Finance and the Ministry of Economy to pay bills for state programs.
According to the Anti-Corruption Committee of the Constitutional Court of Ukraine, the total amount of corrupt funds involved in the construction process by real estate developers reaches UAH 20 billion per year.
Adding to this the costs of government housing programs and losses from the inefficient use of regional and local budgets, we get a picture of a multi-billion-dollar budget being squandered, a budget that is so hard-won by the real sector of the economy—small and medium-sized businesses, industrialists, and entrepreneurs.
The fate of construction projects was decided by 400 million
Next comes the urban development system. The corruption component here amounts to 300 million hryvnias per year. The regulators of this budget-spending system are urban development and architecture bodies—regional and capital departments, district and city administrations.
Upon appointment to the position, after consultation with Dmitry Isaenko, a representative of the Ministry of Regional Development, future architectural administrators swore allegiance to corrupt schemes that involve using the graphic portion of urban planning documentation (planning schemes, general plans, zoning plans, and detailed plans) to regulate urban development activities in the country.
To obtain a land allotment conclusion for land use (according to land management projects) and "urban planning conditions" for land development, clients must contact the chief architects of districts, cities, and regions. Obtaining these conclusions and urban planning conditions requires graphic information—extracts from urban planning documentation. It is precisely this graphic service that underlies financial activity and corruption schemes in the construction and land management sectors.
In Ukraine, urban planning and architecture authorities register an average of 1000 applications daily for urban planning regulation services in 25 oblasts, 490 rayons, and 350 cities. The cost of extracting urban planning documents (or bribes to avoid extracting them) ranges from 500 to 3000 hryvnias per document. This means that an average of 1 million hryvnias are in circulation per day!
Having calculated the possible errors using interpolation, we can conclude that 300 million hryvnias annually circulate here outside of state budgeting. And the relevant deputy minister, of course, is not standing idle in addressing these issues.
This doesn't even take into account the multi-million-dollar budget expenditures (state and local) on the creation of this urban planning documentation. For example, in 2012, three state design institutes collected over 70 million hryvnias from the state, regional, and local budgets, and in 2013, over 80 million hryvnias.
Regional representatives of Isaenko
It's a well-known fact that not a single major project in Kyiv was completed without Isayenko's personal approval. This cunning scheme is still in effect in the capital today, through Kyiv's Deputy Chief Architect, Andriy Vavrysh, who, when appointed to the Kyiv City State Administration, was a transportation electrician by training, but had no higher education.
However, this didn't stop Vavrish, through the patronage of Levochkin, Kravets, and Portnov, from becoming a construction fixer in Kyiv. Only those who haven't applied for documents from the Kyiv City State Administration's Department of Urban Development and Architecture don't know the capital's tariffs for "problem resolution."
Anyone who has approached him knows that in 2013, approaching Vavrish with initial design requirements without $50 was pointless. The total amount of corruption that passed through this architect amounts to approximately $5 million.
The situation is similar in the Kyiv region. The chief regional architect, Natalia Moshinskaya, also without a higher architectural education, was appointed to this position (which is prohibited by the law "On Architectural Activity") under the direct supervision of Dmytro Isaenko, in order to serve the interests of Boyko, Firtash, and Levochkin.
It wasn't until 2013 that Moshinskaya secured a qualification certificate as an architect through the Ministry of Regional Development and Construction and, through the National Council of Ukrainian Architects, received the title of Honored Architect of Ukraine. This isn't surprising, as the Kyiv region includes Mezhyhirya, Sukholuchye, Irpin, Stoyanka, Zazimye, and other lands lost to the community thanks to Moshinskaya. She was the one who signed regional state administration orders without any justification regarding land allocation for urban development purposes and approved master plans for settlements where "Family" protégés lived.
Incidentally, no one is planning to fire either Vavrish or Moshinskaya. That's a question for Prime Minister Arseniy Yatsenyuk and Deputy Prime Minister Volodymyr Groysman.
A $2 million talent forge
A little more about personnel. It's no surprise that Dmitry Isaenko's vigorous activity has extended to the certification process for specialists in construction and architecture.
Isaenko developed this system long and meticulously with the help of his friend, Honored Lawyer of Ukraine Andriy Portnov. And – oops! – Isaenko gained a monopoly on issuing qualification certificates, without any universities or the Ministry of Education.
Let's clarify that today, after completing five years of university studies, a young architect must pay 5300 hryvnias for a week-long course to gain entry into the architectural market. They must then pass an exam, paying a separate fee of 1147 hryvnias, as well as 688 hryvnias for a qualification certificate.
This scheme operates through the National Architectural and Construction Union (NACU) for the National Expert Center of the NACU, LLC, which is managed by the family of Isaenko's partner, Oleksandr Chizhevskyi, director of the state-owned enterprise Ukrniigrazhdanselbud and vice president of the NACU, who also serves as head of the architectural and construction certification commission of the Ministry of Regional Development and Construction. It's just a coincidence, you see...
Conclusions and recommendations
To reboot the government and change the system, which is based on the division of budget funds, it is necessary:
1. Urgently conduct a lustration of all deputy ministers and department directors in the Ministry of Regional Development (and other ministries and agencies), who have been operating for many years within a system of persistent corrupt ties and spending enormous budget funds, while the country is losing budget and resources, and Ukrainians are losing trust in the government.
2. Force the "new government" to root out corruption schemes in construction. Conduct audits not only of officials but also of businesses that received preferential treatment from the government. It's important to remember that the close ties between officials holding positions in various holding companies can be likened to a family relationship between "mother-government and father-business," giving rise to monstrous corruption.
3. In order to deprive Levochkin, Portnovav, Prisyazhnyuk, and other former "bloodsuckers" of a huge resource, it is necessary not only to fire officials, but also to fundamentally reform the regional development and construction sector.
4. Only people who have been barred from government offices, are not allowed to, and, perhaps, will not be allowed to unless other leaders emerge in the country, are capable of rebooting this system. These are, first and foremost, experienced specialists in innovative and creative thinking who have repeatedly proposed modern mechanisms and principles of public administration to the authorities (including the ministers of the Ministry of Regional Development) based on European standards and practices.
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