A long-running corruption scandal is simmering at 36 Khreshchatyk Street: the management of the municipal enterprise "Khozkomobsluzhivanie" (Housing and Utilities Services) persistently outsources cleaning and maintenance of the administrative and auxiliary premises of the Kyiv City Council and the Kyiv City State Administration to its proxy company, Invite LLC. The City Council's contract with this LLC had already been terminated at the request of the Antimonopoly Committee of Ukraine (AMCU) due to violations uncovered during the public procurement process. However, the management of the municipal enterprise, which had been ordered to handle the municipal administration's maintenance independently, has once again outsourced Invite LLC.
According to Kyiv City Council Secretary Oleksiy Reznikov, this situation is largely the result of third parties exploiting the Antimonopoly Committee in their fraudulent schemes.
"Unfortunately, this case is not isolated. If you recall, not long ago, due to a similar situation involving the cancellation of tender results, Kyiv residents were deprived of the opportunity to use Lviv's excellent trams. I suspect that extra-legal relations are at play," KV Reznikov stated.
As KyivVlast has discovered, the Administrative Board of the Antimonopoly Committee of Ukraine (AMCU) demanded that the Kyiv City Council Secretariat cancel the procurement of services (cleaning and maintenance of the premises and grounds of the mayor's office, etc.) from Invite LLC back in March 2015.
It's worth noting that previously, the city's leadership claimed that the new partnership with Invite LLC was nothing less than a victory over corruption. They claimed that under its predecessors, Khozkomobsluzhivanie, as the mayor's office's chief "supply manager," had engaged in corrupt schemes, mercilessly fleecing the city budget, but now this would no longer be the case. The Kyiv City State Administration then officially stated that the 6,4 million hryvnias that Invite LLC would receive from the City Council by the end of the year was significantly less than the municipal utility had previously received from the city treasury.
Ultimately, following the intervention of the Antimonopoly Committee of Ukraine, the Kyiv City Council, on May 5, by decision of its competitive bidding committee, cancelled the results of the open bidding and on June 5 signed contract No. KG-2015 for the provision of the specified services with the KP “Khozkomuslugivanie” for a period until the end of 2015 and a price of 4,2 million UAH.
It should be noted that the signing of this agreement was preceded by negotiations with the management of the municipal enterprise regarding the procurement from a single participant and the receipt of a corresponding positive expert opinion from the Ministry of Regional Development.
The official reason for purchasing from a single participant is “lack of competition in the market, including for technical reasons.”
At the same time, according to KV, up until mid-July, the Kyiv City Council periodically received requests from Invite LLC for access by their employees to the building at 36 Khreshchatyk. And on July 20, 2015, the management of the Khozkomobsluzhivanie municipal enterprise officially requested the City Council to engage Invite to fulfill the contract from June 5, 2015.
Thus, the leadership of the Kyiv City Council learned that the municipal enterprise "Khozkomobsluzhivanie" signed contract No. 05/06-2015-G with LLC "Invite" on the same day as the Kyiv City Council. The content, specifications, and execution of this contract are virtually identical to the contract between the municipal enterprise and the City Council.
This contract covers almost all the services that the municipal enterprise "Khozkomuslugivanie" is required to provide to the mayor's office under its contract with the city council. The only exceptions are the services of pass office inspectors and electricians for the maintenance and repair of communication equipment and devices. The term of both contracts is the same. However, while the Kyiv City Council is required to pay "Invite" 4,2 million UAH by the end of the year, the municipal enterprise intends to pay "Invite" LLC 3,8 million UAH for the same period.
According to KV sources in the Kyiv City Council, the "Invite" form was hastily created by the leadership of the municipal enterprise and the Kyiv City Council Secretariat in early 2015, specifically for the tender process, which was later challenged by the Antimonopoly Committee of Ukraine. Cleaners and other city hall service workers who had previously been dismissed from the municipal enterprise "Khozkomuslugivanie" were hired, specifically those who agreed to sign a memorandum agreeing to work overtime without requiring additional pay.
"The management of the municipal enterprise 'Khozkomobsluzhivanie' is thus using these personnel both to misappropriate budget funds and to earn extra income from repairs and cleaning services. And now they're also planning to quietly start leasing out some of the city hall's premises. This scheme is being implemented and protected by a former employee and current director of the municipal enterprise, Svetlana Rymar, the city council's manager, Andrei Gota, and his friend, Reznikov's advisor and assistant, Andrei Miroshnichenko," a source in the city council, who wished to remain anonymous, told KV.
If we add to this the fact that Svitlana Rymar is also constantly accused of freely using the production facilities of the Kyiv City Council canteen and electricity to produce illegal products (pies, etc.), then the picture of how the “new honest government” conducts business becomes complete.
It appears that all of this requires an internal investigation, the cancellation of the single-party procurement negotiation procedure, and the punishment of those guilty of fraud.
In turn, Reznikov assured KV that no one had provided him with any information about violations.
"I don't know the source of this information, but I want to appeal to them through you—not even appeal, but demand: come and show at least something about the facts mentioned, and then we can conduct an investigation. If you don't want to come to me, then all available information can be submitted to the Mayor's Anti-Corruption Council, or directly to law enforcement agencies. At the very least, post it on the KyivVlast website and simultaneously forward it to all the aforementioned authorities, just to be sure. If such facts are confirmed, all those involved will be punished according to the law. Otherwise, these statements from an unknown source are nothing but unsubstantiated slander and pre-election populism," the Kyiv City Council speaker told KV.
KV can only hope that an official investigation will be conducted, its results will be made public in the near future, and those responsible will be punished.
Alexander Krasnogorodsky, KyivVlast
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