Recruiting key government positions through open competitions is currently trending. This approach is intended to demonstrate to both Ukrainian society and Western partners that there will be no return to the days of behind-the-scenes personnel appointments. However, there's no such thing as a good idea that Ukrainian officials can't nip in the bud. The selection of candidates for the position of head of the State Enterprise "Ukrspirt," conducted by the Ministry of Agrarian Policy, has become a farce even before the final results were announced. The "honest" competition not only proved infinitely far from the declared transparency but also threatens to return proven corrupt officials from the past to their posts.
On March 30, 2015, the agricultural ministry announced the results of the preliminary selection of candidates for the position of director of the state-owned enterprise Ukrspirt, which immediately sparked a negative reaction in the media and social media. The smell of scandal was clearly in the air.
The competition itself was announced back in January. Prime Minister Arseniy Yatsenyuk called on the Ministry of Agrarian Policy to root out corruption in one of the Yanukovych regime's favorite feeding troughs. As is well known, Ukrspirt was long controlled by Yuriy Ivanyushchenko, including through his protégés in the state-owned enterprise's management after the change of power. It's enough to recall the serious passions that erupted around the state-owned enterprise when, on January 16 of this year, Mikhail Labutin (Deputy General Director of Ukrspirt from 2010 to 2014, General Director since March 2014) was placed on the wanted list. Labutin is considered to be Yuriy Yenakievsky's hand in the country's "alcohol coffers." Labutin is suspected of embezzling 172,5 million hryvnias of company funds and evading 28,2 million hryvnias of value-added tax.
The public was assured that the competition would be completely transparent. The Ministry of Agrarian Policy even stated that it would engage renowned international recruiting firms, such as Deloitte, HRM, and others, in the search for candidates for the position of head of Ukrspirt.
What was the final result? On March 30, the Competition Committee under the Ministry of Agrarian Policy and Food announced that two candidates had advanced to the finals out of twenty—Nina Garkavaya and Anatoliy Dalibozhik. Dalibozhik currently serves as Deputy Director of Ukrspirt. Garkavaya, on the other hand, is an unemployed pensioner, but has experience as the head of this state-owned enterprise from 2007 to 2009. The Cabinet of Ministers was scheduled to make a final decision on the candidates within 10 days.
Regarding the results of this competition, one thing can be said: such a "thorough" selection of candidates could have been done without the involvement of the world's leading recruiting firms. Law enforcement agencies could easily have handled this task, as they have accumulated considerable material on the activities of both candidates. The quality of the selected candidates is truly perplexing. Perhaps the Ministry of Agrarian Policy's main selection criterion was mandatory involvement in criminal cases related to corruption?
The same Anatoly Dalibozhik is "absolutely transparently" a protégé of Agrarian Minister Alexei Pavlenko, and during his time in the industry, he has managed to accumulate a number of sins of varying severity.
As Delova Stolitsa reported, Dalibozhik, who once headed the Zaluchansky distillery in Ivano-Frankivsk region, was mentioned in connection with embezzlement of state funds for his own needs, concealment of the state-owned distillery's profits in the amount of 8 million hryvnias (at the pre-revolutionary exchange rate), and also in connection with the creation of a private company, Agro, at the enterprise he headed, which supplied raw materials at twice the inflated prices.
Dalibozhik was also implicated in fraudulent schemes involving the illegal production of alcohol, which was then supplied to several regions of Ukraine, non-payment of excise duties, illegal leasing of enterprise land, violations of tender legislation amounting to 57 million hryvnias, and more. All of these actions ultimately resulted in criminal charges being filed against him and his dismissal from his position in 2010. He evaded the investigation for some time, but was later arrested in Odessa and taken into custody.
However, the current semi-finalist of the "transparent competition" managed to avoid a lengthy prison sentence. In 2011, Dalibozhik was convicted under Part 2 of Article 367 of the Criminal Code of Ukraine, but was released under an amnesty.
The second candidate for the position, Nina Garkavaya, headed the Sumy Regional State Administration from 2005 to 2006, but was dismissed due to reaching the age limit for women in government positions. The 64-year-old Garkavaya spent the following years working in the alcohol industry, which, according to some reports, she developed a serious interest in while governor of Sumy Oblast. Garkavaya's last position (until 2014) was as head of the Ivano-Frankivsk Regional State Administration. Incidentally, it's possible that both candidates crossed paths during their work in the Ivano-Frankivsk Oblast alcohol industry and are well aware of each other's capabilities.
What is the reason for Garkava's return and her attempt to head one of the country's key state-owned enterprises?
As First Deputy Minister of Agrarian Policy Yaroslav Krasnopolsky told reporters, "Nina Garkavaya has experience working at Ukrspirt, where she headed the Ivano-Frankivsk branch, whose performance indicators were among the best in the industry."
Yury Enakievsky's experience as a manager at Ukrspirt during the period of complete industry control should have in itself raised concerns among the competition organizers. It's hard to imagine that Nina Garkavaya, the head of a major alcohol producer, could have been uninvolved in the large-scale schemes to siphon funds from the industry, which the "Family" and its closest associates were actively exploiting. As for the "best industry performance," these have long been the subject of intense scrutiny by the relevant authorities.
Confirmation that Garkava could very soon face serious legal problems is the criminal cases and complaints filed with the prosecutor's office by the State Enterprise "Ukrspirt," which emerged following an inspection by the Ivano-Frankivsk State Organized Crime Control Department last year.
The figures for losses, theft and embezzlement are impressive.
For example, officials from the Ivano-Frankivsk Regional State Organized Crime Control Department are accused of causing the company 30,6 million hryvnias in losses due to "undocumented soybean grain purchases in November-December." The list of violations uncovered by the audit also includes the illegal dismissal of employees, resulting in 61,000 hryvnias in losses, the "mysterious" debiting of 582,400 hryvnias from a private company, Stan LLC, and other charges.
Moreover, over the past two years, the leadership of the Ivano-Frankivsk Regional State Unitary Enterprise (OGOSP) has been implicated in several criminal cases. Perhaps it's worth listing them so that globally renowned recruiting firms don't get caught in the same trap and ruin their reputations in the future when searching for candidates for positions under contract with the Ministry of Agrarian Policy. Moreover, in this case, factors other than an impartial selection of the best of the best clearly played a role.
Thus, on October 31, 2012, a criminal case was opened against the leadership of the Ivano-Frankivsk State Unitary Enterprise for the fact of the release of products from Galichinatabak LLC in the amount of 7.8 million UAH under Article 191, Part 5 of the Criminal Code of Ukraine.
On April 27, 2013, a case was opened against Nina Garkavaya for gross violation of labor laws during the mass dismissal of workers of the association under Article 172, Part 1 of the Criminal Code of Ukraine.
On July 8, 2014, a criminal case was opened based on the results of an audit conducted by specialists of the State Enterprise “Ukrspirt” in accordance with Article 172, Part 1 (gross violation of labor legislation) and Article 191, Part 5 of the Criminal Code of Ukraine (embezzlement, misappropriation of property or taking possession of it through abuse of official position).
On August 12, 2014, a criminal case was opened on the fact of illegal release of excisable products (Article 364, Part 2 of the Criminal Code of Ukraine).
Currently, all criminal proceedings have been consolidated into one proceeding, and investigative and operational activities are underway, including interrogations of witnesses, suspects, and victims.
I wonder how Minister Pavlenko, who landed his position through the Samopoch quota, will justify himself to the public and the media when one "crystal-clean" finalist in the competition begins regularly undergoing questioning, while her lesser-known, but equally "crystal-clean" competitor, due to a scandal, deservedly attracts the attention of investigative journalists for his past corrupt activities?
However, the transparency of the Ministry of Agrarian Policy's competitions wasn't limited to Ukrspirt. On March 30, the results of the selection process for vacant positions at 10 state-owned enterprises subordinate to the Ministry of Agriculture were also announced. However, for some reason, only half of the winners were announced. In five other cases, according to the Ministry of Agriculture's press service, the competition results were deemed non-compliant with the procedures for selecting enterprise managers. Consequently, the Ministry decided to re-run the competition for these enterprises. Such is the simple system of transparent competitions: they selected the candidates themselves, then cancelled them themselves.
Ukraine is currently under the closest scrutiny of the West, which, under its declared reform and anti-corruption policies, is allocating unprecedented funds. And this practice of dubious tenders could become an indelible stain not only on the ministry's leadership but also on the reputation of the entire country.
Moreover, the good idea of a transparent selection process for the best managers could be completely undermined by such actions in the eyes of Ukrainian society. This would also have a ricocheting effect on the political prospects of those involved in the scandal. Therefore, to save face, the Ministry of Agrarian Policy appears to have only one right step left: admit the error of its choice, cancel the competition results, and conduct it again – this time in a truly fair and transparent manner.
Andrey Osipenko, for National Bureau of Investigation of Ukraine
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