The Prosecutor General's Office is stalling its investigations into cases against the former president's inner circle. Not a single case has been brought to trial in eight months, writes Dmitry Orlov for LIGABusinessInform.
CAN'T OR WON'T? HOW CHARGES AGAINST FORMER OFFICIALS FALL APART
Since the change of power, the prosecutor's office truly has nothing to boast about: not a single high-profile case has reached trial, and its high-profile claims of "successes" are often based on weak evidence and easily defeated in court. The agency's employees are criticized for their low level of qualifications, and it is claimed that investigative bodies have become commercial institutions that know how to count money but are incapable of investigating cases. For money, prosecutors are even willing to rehabilitate those they labeled yesterday—former Energy Minister Stavytskyi was offered an "indulgence" for 100 million hryvnias.
Six months ago, a forum on the recovery of assets stolen in Ukraine was held in London with the support of the United States and the United Kingdom. This unique event, attended by EU experts and representatives from 30 countries, was held specifically to support the efforts of the Arseniy Yatsenyuk government. Oleg Makhnitsky, delegated to power by the Svoboda party and serving as acting Prosecutor General, stated that President Viktor Yanukovych and his entourage had embezzled approximately $100 billion, a third of which was taken to Russia. Following the meeting, an agreement was reached to amend legislation to facilitate the return of funds stolen by high-ranking officials. The United States pledged to allocate $2,5 million for expert support, and the United Kingdom sent prosecutors to assist in the recovery of the money.
Earlier, the European Union released a list of 18 former Ukrainian officials suspected of repression and/or embezzlement. The list includes former President Viktor Yanukovych and his eldest son, former Prime Minister Mykola Azarov and his first deputy Serhiy Arbuzov, members of the government, former Prosecutor General Viktor Pshonka, former head of the National Security and Defense Council Andriy Klyuyev, businessman Serhiy Kurchenko, and others. The adopted document states that the "blacklist" is subject to change, which is what the fugitives have taken advantage of—many of them are pursuing legal action to have the sanctions lifted.
The West has frozen the assets of Yanukovych and his associates as part of the sanctions imposed. Countries that have announced the seizure of their accounts include Switzerland, Austria, the United Kingdom, the Netherlands, Cyprus, Liechtenstein, and Latvia—a total of several hundred million dollars have been frozen. While media reports have claimed a billion dollars are linked to the Yanukovych clan, this information has yet to be officially confirmed.
That's all for now. Since the presidential elections in Ukraine and the change of Prosecutor General, nothing has been heard about the Family's money.
"By August, it had already become clear that Ukraine's response to the West's enthusiasm was muted. There were plenty of pre-trial results, but not many preliminary charges," says Irina Timchyshyn, a partner at the London office of the law firm Bryan Cave. "Although there's no reason to complain about a lack of evidence against the most senior officials."
EU sanctions alone are not enough to return stolen money to the homeland. The Prosecutor General's Office must gather evidence and bring charges against the embezzlers—and most Ukrainian officials opened bank accounts and registered foreign assets in the names of third parties. According to Iryna Tymchyshyn, Ukraine is in no hurry to do this. "It seems that for some reason the current government is reluctant to have these investigations proceed quickly, or even not at all," she says, surprised.
The Prosecutor General's Office has been remarkably slow to act on this matter. Agency representatives have not actively participated in lobbying for the law on in absentia convictions. Moreover, most of the articles of the criminal code under which the cases were initiated do not provide for the confiscation of property. According to yanukovich.info, legal requisition is absent from the articles of the criminal code under which Prime Minister Mykola Azarov, Security Service of Ukraine (SBU) Chief Oleksandr Yakymenko, former Justice Minister Olena Lukash, and former National Security and Defense Council (NSDC) Head Andriy Klyuyev are charged.
One gets the impression that the current government, for some reason, is not very keen on these investigations taking place quickly, or even not taking place at all.
Assessing the prosecutor's office's passivity, Vitaly Shabunin, chairman of the Anti-Corruption Action Center, notes the oversight agency's unwillingness to combat corruption. "Did we think this was due to carelessness or political reluctance? Putting all the factors together, we lean toward the latter," he concludes.
Inconsistencies and delays of the GPU
The prosecutor's office truly has nothing to brag about. Not a single high-profile case has reached trial, and businesses belonging to members of the so-called Family continue to operate in Ukraine. Furthermore, the prosecutor's office's claims of "successes" are often based on weak evidence. This, for example, allowed former Deputy Head of the Presidential Administration Andriy Portnov to win several cases against the Prosecutor General's Office, whose leaders accused a Yanukovych administration official who fled to Russia of involvement in the Maidan massacre.
Contrary to Makhnitsky's loud claim that Ukraine's losses from Yanukovych's activities amounted to $100 billion, the Prosecutor General's Office's response somehow put the total amount of damages at a hundred times lower—11 billion hryvnias. Moreover, the document indicates that, to compensate the state for losses, investigators seized assets worth 6,2 billion hryvnias and $1,8 billion, or nearly 30 billion hryvnias—the value of the seized assets is almost three times greater than the damages.
There are many such inconsistencies in the prosecutor's office. At the end of May, Prosecutor General Oleh Makhnitsky announced on the Ukraine television channel that 42 criminal cases had been opened against members of the previous government. Today, according to the same response from the Prosecutor General's Office, 30 cases against senior officials are under investigation. It's possible that some materials were transferred from the investigative department to other units, while other cases were consolidated into a single proceeding. However, no official explanation has been provided regarding the change in damage amounts or the number of criminal cases.
The Prosecutor General's Office is reluctant to comment on the difference, but privately acknowledges the sluggish nature of high-profile investigations. They blame the unfilled vacancies in the Prosecutor General's Office's Investigative Department, which handles high-profile cases.
"There's no one in the prosecutor's office to investigate. Investigative bodies are commercial institutions; they know how to count money, but they don't know how to investigate," says Volodymyr Boyko, head of the Prosecutor General's Office's Advisory Public Council.
For example, the former prime minister's son, Oleksiy Azarov, has yet to be charged with any criminal offences by the Prosecutor General's Office in Ukraine. However, his name is on the EU blacklist. According to media reports, the Austrian prosecutor's office is investigating Azarov Jr., and his property is being seized in Italy.
Back in August, a pre-trial investigation was launched into the seizure of land belonging to the Kornatskikh Agrofirm (Mykolaiv Oblast) worth $200 million by the son of the former Prosecutor General, MP Artem Pshonka. Almost three months have passed, and charges have still not been filed. Even though six months ago, Igor Shcherbina, head of the Prosecutor General's Office's Investigative Directorate, spoke of billions in income earned by the family of the former chief prosecutor through corruption and extortion.
However, Shcherbina is no longer in charge—Oleg Zalisko has been appointed in his place. Prosecutor General Vitaly Yarema also removed Deputy Prosecutor General Oleksiy Bagants, who oversaw this area, from the investigation. The Prosecutor General's Office is increasingly less likely to publicly mention its successes in investigating particularly important cases. Volodymyr Boyko believes that any serious delving into the matter will immediately lead the investigation to current officials. Therefore, the authorities are not particularly enthusiastic.
Justify for money
After repeated failed attempts, the Verkhovna Rada voted, and the president signed a law five days before the election (October 21) allowing for the trial in absentia of criminals and the confiscation of their property for serious crimes—encroachment on the territorial integrity of Ukraine, the life of a public official, treason, espionage, terrorism, and others. Its main purpose, as stated in the explanatory note, is to ensure the inevitability of punishment in cases where a suspect is hiding from investigation abroad. This law was published in the official press today and comes into force tomorrow, November 7.
This law is intended to facilitate the investigation of specific individuals from the entourage of former President Viktor Yanukovych. Firstly, it follows on from Acting President Oleksandr Turchynov's decree on developing mechanisms to seize the assets of high-ranking corrupt officials for the benefit of the state. Secondly, Prime Minister Arseniy Yatsenyuk made no secret of the fact that the adoption of the document "will allow for the seizure of the assets of former President Viktor Yanukovych, former Minister of Internal Affairs Vitaliy Zakharchenko, and other former senior officials who committed crimes against Ukraine."
Ironically, the introduction of in absentia sentencing was planned under the previous president, Viktor Yanukovych. This provision was also specifically aimed at former Prime Minister Yulia Tymoshenko. In the fall of 2013, consideration was given to sending her to Germany for treatment, and the in absentia sentencing was intended to serve as a safeguard for the authorities in the event she refused to return to the country.
The law on conviction in absentia is just one tool for recovering assets belonging to former senior officials from the former president's entourage. Initially, the option of compensating suspects for damages in exchange for a legal amnesty was considered—for those officials from the previous administration who are not guilty of any crime. Such a mechanism is provided for in Article 469 of the Criminal Procedure Code, whereby a so-called plea bargain is concluded between the prosecutor and the suspect. "The document specifies the amount of damages and the punishment—usually a fine, a suspended sentence, or restricted freedom," says Denis Ovcharov, a lawyer with the Yuskutum law firm. A plea bargain is not signed if the person is suspected of committing particularly serious crimes (those punishable by more than 10 years in prison). Incidentally, Viktor Yanukovych, former Prosecutor General Viktor Pshonka, former Deputy Prime Minister Serhiy Arbuzov, former Secretary of the National Security and Defense Council Andriy Klyuyev, and former heads of the Ministry of Internal Affairs and the Security Service of Ukraine (SBU) Vitaly Zakharchenko and Oleksandr Yakimenko are facing similarly serious charges. However, the charges against the economic ministers of the Azarov government, as well as against the former prime minister himself, are more lenient.
Belgium has a similar experience, passing a law 10 years ago allowing funds previously transferred abroad to be re-introduced without sanctions, subject to a 6-9% state fee on the reimbursement amount. Thanks to this regulation, approximately €1 billion has returned to the economy.
Representatives of the Prosecutor General's Office held negotiations with the lawyer for the fugitive former head of the Ministry of Energy and Coal Industry, Eduard Stavytsky. The former official is a defendant in a criminal case opened under the article on embezzlement and misappropriation of property through abuse of office on an especially large scale. A search of his person revealed $4,8 million, nearly 42 kg of gold, numerous pieces of jewelry, and expensive watches. The agreement could have resulted in Stavytsky's rehabilitation, subject to compensation to the state of 100 million hryvnias. "In the context of a de facto war with Russia, this is the most effective way to return stolen funds to the state, which are essential for the Ukrainian army," believes a high-ranking official of the Prosecutor General's Office. However, there is no unanimity on this issue. Viktor Chumak, head of the parliamentary committee on combating organized crime, doubts that absolution for the corruption sins of odious politicians in exchange for money will find public support. "Such an agreement can only be concluded with second-tier officials suspected of corruption. “It’s impossible to negotiate with odious figures,” he believes.
Stavytsky was slated to be the subject of a legal amnesty in exchange for damages. The price of the pardon depended on the fugitive's stature and the degree of culpability for the crime of which the official was suspected. For example, a pardon for another fugitive, former Minister of Revenue and Duties Oleksandr Klymenko, could have cost at least a billion hryvnias, according to sources in the Prosecutor General's Office. However, the deal with Stavytsky fell through—he received Israeli citizenship and, according to sources, abandoned the original plans. The issue of an official monetary amnesty then faded into the background at the Prosecutor General's Office.
Now the Prosecutor General's Office has everything: a law on in absentia convictions, the cooperation of the new government's Western partners, and public support. The only thing missing in the eight months since then is a lack of cases brought to trial.
Prosecutor's Truth
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