How the country's cybersecurity official profits from taxpayers and secret schemes
Viktor Zhora, Deputy Chairman of the State Service for Special Communications and Information Protection of Ukraine for Digital Development, Digital Transformation, and Digitization (SSSIP), earns his living through government contracts awarded to his agency and several other state agencies. According to his asset declaration, he still owns a 30% stake in Infosafe IT LLC, a key government contractor for cybersecurity. Zhora directly coordinates his activities with Deputy Prime Minister Mykhailo Fedorov, according to Anticorrosive
A contractor with a complicated history
Despite several revolutions, multi-billion dollar investments in the anti-corruption agenda, and numerous anti-corruption agencies, nepotism or family ties between officials in Ukraine still raise few eyebrows. However, schemes for "blatantly" profiting from government contracts through companies directly controlled by top officials should have long been a thing of the past. Nevertheless, Deputy Head of the State Special Communications Service Viktor Zhora is giving his government colleagues a masterclass in impunity by continuing to hold a position in a semi-secret agency and receive dividends from a company that provides services to it.
We're talking about the notorious InfoSafe Innovative Technologies LLC (EDRPOU code 39996917). Before his appointment as Deputy Head of the State Special Communications Service, Viktor Zhora worked at this company from 2012 to early 2021. The company has repeatedly found itself in various unpleasant situations related to providing government agencies with cybersecurity systems. The fact is that over the past 10 years, InfoSafe IT has participated in arguably every major tender for the installation of such equipment for key government agencies—from the Central Election Commission to the State Property Fund, from the Pension Fund to the State Special Communications Service itself.
According to the Zakupivli project of the publication "Texty," during this period the company spent at least 400 million hryvnias, winning more than 360 lots. The largest one-time win was the installation of network equipment for the Accounting Chamber for 46 million hryvnias. According to data from the Prozorro system, in 2020-2021 alone, Infosafe IT won tenders worth 124 million hryvnias, of which 88 million hryvnias were contracts with the Pension Fund, 7,7 million hryvnias with the State Treasury Service, and 5,7 million hryvnias with the Main Directorate of Government Communications of the State Special Communications Service.
Viktor Zhora was formally the founder and, for a time, director of InfoSafe throughout his tenure at the company. However, as early as 2013, media outlets reported that the real owner of this highly profitable business was the father-in-law of former Deputy Minister of Regional Development Lev Partskhaladze, Sergey Matveyev, a former business partner of the current former head of the National Bank of Ukraine (NBU) and then-head of a bank, Yakiv Smoliy. Furthermore, connections from InfoSafe and a number of other related companies led, among others, to the sister of former SBU head Ihor Smeshko, to the circle of former head of the State Communications Committee Stanislav Dovhyi, and to many other prominent names.
Connection with Fedorov
However, it's possible that Zhora gradually emerged from under the wing of his influential patrons and began building his business independently. Already in 2018, the company was "safely" caught up in a scandal involving the development of software for one of the most high-profile corruption schemes in the appraisal industry—the "platforms" of the State Property Fund. InfoSafe was also a contractor in the controversial software procurement for the Central Election Commission on the eve of the 2019 parliamentary elections.
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Over the past few years, Zhora has been actively involved in public affairs, including serving on the public council of the State Committee for Special Communications (and continuing to supply the agency with his products and services). He also serves on the board of the Ukrainian Information Security Group, a public organization whose members include, among others, representatives of the Ukrainian Cyber Alliance. It is possible that it was through these activities that Zhora was able to gain the trust and establish a working relationship with Deputy Prime Minister for Digital Transformation Mykhailo Fedorov.
According to market participants, it was Fedorov who directly lobbied for Zhora's appointment as deputy head of the State Special Communications Service. Meanwhile, the head of the agency, Yuri Shchigol, did not even have a formal vote on this personnel decision. Immediately after joining the agency, Zhora made it clear that his company would now become the main contractor for the State Special Communications Service. This applies not only to public contracts, but primarily to "secret" contracts, which are not disclosed through the Prozorro system for national security reasons and are classified as state secrets. In such procurements, it is virtually impossible to organize genuine competition and determine a "market" price. As a result, the cost of work and services is greatly inflated. This makes this sector highly corruptible. Companies outside the "closest circle" are unaware of the existence of such procurements, let alone their subject matter.
Nevertheless, since Gosspetssvyaz has been in existence for several years, a certain pool of companies working on "secret" contracts has nevertheless formed. It was this pool that Zhora first gathered to announce the "new rules of the game": now all contracts, either directly or indirectly, would go through InfoSafe, all prices would be negotiated personally by him, and those who disagreed could leave the pool of "lucrative" government contracts, permanently being blacklisted. According to meeting participants, a number of those who disagreed were immediately cut off from the "feeding trough," some of whom were forced to ask to return, significantly curtailing their appetites. Others were forced to "share" their contracts with InfoSafe.
Three million in dividends
Despite his appointment to the State Special Communications Service in 2021, Zhora continues to receive income from a company that provides both public and secret services to government agencies. Specifically, according to the official's 2020 income declaration, he received UAH 1,74 million in dividends from InfoSafe. In February 2021, he filed a declaration of a significant change in his financial situation, according to which InfoSafe paid him an additional UAH 1,41 million.
It is quite clear that by continuing to participate in and win public and non-public tenders, and by receiving income from such tenders, Deputy Head of the State Special Communications Service Viktor Zhora is clearly violating anti-corruption legislation regarding conflicts of interest. Moreover, since this is a sensitive area such as state cybersecurity, violations at this level clearly deserve special attention from the intelligence agencies.
While inflated prices and the installation of "excess" equipment at the Pension Fund or the State Property Fund's "evaluation" sites—with all due respect to these agencies—are unlikely to have any significant impact on the state's cybersecurity system, dubious operations involving government communication lines and secret communication frequencies could lead to the leaking of sensitive data and threaten the very state. Therefore, the Security Service of Ukraine and the State Bureau of Investigation must, first and foremost, address the situation and stop this lawlessness, as crimes committed by high-ranking government officials are their exclusive responsibility. Moreover, state security is their exclusive jurisdiction.
Author: Igor Vetrov
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