The Guardian, Oct 31, 2016
By Shaun Walker, The Guardian, Oct 31, 2016
MOSCOW – Two years after angry Ukrainians deposed Viktor Yanukovych and broke into his vast, opulent residential compound outside Kiev, revelations thrown up by a new system that requires government officials to declare their wealth and property online have led many to suspect the new elite are no better.
The declarations, which all officials were required to file by Sunday evening, have made public many curiosities, including politicians who own multiple luxury watches, Fabergé eggs and large collections of weapons. One politician declared that he owned a personal church.
By far the biggest shock, however, has been just how much money Ukraine’s politicians seem to stash away in hard cash. The prime minister, Volodymyr Groysman, declared $1.2m (£980,000) and €460,000 (£410,000) in cash, as well as a collection of luxury watches. Many other officials declared hundreds of thousands of dollars worth of cash.
"Everyone is amazed that there is so much cash in our country,” said Kristina Berdynskykh, an investigative journalist who has written extensively on corruption among the elite.
Mikhail Dobkin, an opposition MP, declared 1,780 bottles of wine, while Roman Nasirov, the head of the state fiscal service, declared that together, he and his wife owned Swiss watches, diamonds, fur coats and held more than $2m in cash.
Observers have pointed out that when the head of the national bank keeps his savings in dollars, it can hardly fill the population with confidence about the prospects for the hryvnia, Ukraine’s national currency.
Other curiosities found among the declarations included a Nazi SS dagger and medieval religious icons. Anatoly Matviyenko, the deputy leader of the presidential faction in parliament, declared ownership of a church.
"The other thing that is amazing is the excess. Even if someone is well-off, it’s not clear why a state official requires 10 luxury watches, 30 plots of land or his own personal chapel,” Berdynskykh said.
One of the key demands of the Maidan revolution of 2014 was an end to the rampant corruption that plagued the country. When protesters stormed Yanukovych’s compound they found gold-plated golf clubs, a petting zoo and a replica of a Spanish galleon moored in a manmade lake.
The current president, Petro Poroshenko, is a billionaire tycoon, but promised a new, more transparent kind of politics. Critics say reform efforts have stalled and that despite impressive rhetoric, the government has done little to transform the fundamental nature of Ukrainian business and politics.
Setting up the electronic declaration system was one of a number of conditions laid down by the EU as requirements to ensure a visa liberalisation deal for Ukrainians. Anders Fogh Rasmussen, the former secretary general of Nato, who is an adviser to Poroshenko, said: "Ukraine has taken a crucial step to break with corruption and ensure a clean and efficient public administration. The e-declaration is of paramount importance and all of Europe should take notice and applaud this important step.”
Poroshenko called the declarations "a truly historic event of openness and transparency”.
However, inside the country, the response was far from enthusiastic. One columnist referred to Ukrainian officials as "moral degenerates”. In a society where the average wage is under £200 per month, the lavish wealth on the declarations only underscored the vast gulf between the political elite and average Ukrainians who are largely impoverished.
There was also anger at such vast displays of wealth while thousands of Ukrainians in the army receive low salaries to risk their lives on the frontline of a war with Russia-backed separatists in the east of the country.
The key indicator of whether the declarations serve their purpose in the fight against corruption will be what action is taken by the country’s authorities to investigate them.
Berdynskykh said: "It’s amazing how much information we have now, as a journalist I couldn’t have dreamed of this before. Some MPs have released the names of offshore companies they are linked to, and it will be interesting if the anti-corruption bureau will actually follow up with real questions now.
"Also, some MPs have said nothing, claiming they have no bank accounts, no cash, and live only on their official salary. And we all know this isn’t true. Will they be checked as well?”
Ukrainians shocked as politicians declare vast wealth
By Alessandra Prentice, Reuters, Nov 1, 2016
KYIV – An anti-corruption reform requiring senior Ukrainian officials to declare their wealth online has exposed a vast difference between the fortunes of politicians and those they represent.
Some declared millions of dollars in cash. Others said they owned fleets of luxury cars, expensive Swiss watches, diamond jewelry and large tracts of land – revelations that could further hit public confidence in the authorities in Ukraine, where the average salary is just over $200 per month.
Officials had until October 30 to upload details of their assets and income in 2015 to a publicly searchable database, part of an International Monetary Fund-backed drive to boost transparency and modernize Ukraine’s recession-hit economy.
Prime Minister Volodymyr Groysman, who last week likened the declarations process to jumping out of an airplane, revealed that he and his wife had a total of $1.2 million and 460,000 euros in cash and a collection of luxury watches.
The database also shows that Groysman, a former businessman and provincial mayor, is not alone in preferring to keep much of his money out of Ukraine’s banking system. Reuters calculations based on the declarations show that the 24 members of the Ukrainian cabinet together have nearly $7 million, just in cash.
The declarations of two brothers in President Petro Poroshenko’s faction, Bohdan and Yaroslav Dubnevych, show holdings of over $26 million, also in cash only.
"When the Economy Ministry says that in some areas around 60 per cent of the economy is in the shadows, then this is accounted for by the volume of cash registered by civil servants, officials and lawmakers,” said Taras Kachka, deputy executive director at George Soros’s International Renaissance Foundation. "This is a reflection on the state of our society.”
Justice Minister Pavlo Petrenko, who declared $1 million in a bank account and a further $500,000 in cash, said officials’ decision to hold cash pointed to a mistrust in the banks that many Ukrainians could relate to. "Of course to EU countries it seems uncivilized that people hold cash,” he said. "But it is linked to the fact that the banking system could, let’s say, be doing better. This is a problem for many Ukrainians who lost their savings in the bank.”
A $10,000 bottle of wine
The online declaration system is intended to represent a show of good faith that officials are willing to open their finances up to public scrutiny, to be held accountable, and to move away from a culture that tacitly allowed bureaucrats to amass wealth through cronyism and graft. However, the public reaction has been one of shocked dismay at the extravagant lifestyles conjured up by many of the disclosures.
"We did not expect that this would be such a widespread phenomenon among state officials. I can’t imagine there is a European politician who invests money in a wine collection where one bottle costs over $10,000,” said Vitaliy Shabunin, the head of the non-governmental Anti-Corruption Action Center.
Opposition Bloc lawmaker Mikhail Dobkin’s declaration included 1,780 bottles of wine and an antique copy of Russian novel Anna Karenina worth at least $5,500.
Roman Nasirov, the head of the State Fiscal Service, disclosed that he and his wife owned Swiss watches, diamond jewelry, fur coats, fine porcelain and crystal glassware, an assault rifle and cash in euros and dollars worth $2.2 million.
The declaration of Oleh Lyashko, the head of the populist Radical party who has styled himself as a representative of the common man, showed he rented a house and land in Kiev’s most exclusive district and his household had cash worth the equivalent of over $1 million.
Other forms give an insight into particular hobbies and interests of Ukraine’s elite.
Ihor Hryniv, the head of Poroshenko’s faction, has a collection of icons dating from the 14th century and several works by Ukrainian impressionist masters. Lawmaker Ihor Mosiychuk declared an array of antique weapons, including a 16th century Turkish scimitar, an English broadsword and a Nazi SS dagger.
Many senior politicians filed their forms in the last two days before the deadline, resulting in a crescendo of surprise and anger on social media over the weekend.
"I personally feel unwell. Or rather, like someone who has been beaten and is therefore unwell. I had no illusions about our political and official elite. But all the same, what’s come out is beyond the pale,” Roman Donik, a volunteer to Ukraine’s frontline troops, said on Facebook.
The average Ukrainian citizen has been hit hard by the economic crisis that unfolded in the wake of the 2014 pro-European ‘Maidan’ uprising and subsequent pro-Russian separatist [sic] conflict. The national hryvnia currency has plummeted to 25 to the dollar from 8 in 2013 and energy tariffs have soared under the IMF-backed economic reform program.
The latest revelations will likely add to public dissatisfaction with the current leadership’s progress on reforms. A September poll showed that only 12.6 per cent would now vote for Poroshenko’s faction, down from 21.8 per cent in the last election. Meanwhile support for populist and opposition parties has risen.
The anti-corruption agency says it will now start verifying the declarations, but with over 100,000 forms submitted, it is unclear how thorough the process can be.