Portraits of corruption: new faces

УДАР бизнес

For the past three weeks, the Prosecutor General’s Office, Security Services, and Ministry of the Interior have been probing the activities of Heorhiy Yaroshenko, who is believed to have created a new corruption scheme in the Ukrainian customs service. However, the incriminating facts are so numerous that the political damage that further investigation may inflict is likely to be far greater than the triumph of justice itself.

Let’s live a new life

In accordance with Poroshenko’s central campaign slogan, the PGO started to “live a new life.”

However, the “new” actually turns out to be well-forgotten “old.” Remember the famous slogan of the crumbling Soviet Union?: “Acceleration. Glasnost. Perestroika.”

In the PGO, “perestroika” began with major management reshuffles, in particular the appointment of the First Deputy Chief Mykola Holomsha. His job description was as follows: protection of the rights and freedoms of citizens; overseeing the interests of the state; and ensuring that Special Forces and other law enforcement agencies involved in fighting organized crime and corruption work in strict compliance with the law.

The very next day after the scandal in Dnipropetrovsk, the PGO launched “accelerated” criminal proceedings – not only because they were required by law, but also because the president gave a clear mandate to “conduct [an investigation] and report the results within 24 hours.”

And finally, “glasnost”. On June 20, Mr. Holomsha quite competently stated to journalist Yuri Butusov:

“On Monday (June 23), PGO will publicize its assessment of the Yaroshenko case and other related cases. The investigation is under my personal control. Prosecutors will leave no stone unturned to make sure that an entirely transparent and legal assessment is given to the people in question. If their fault is duly proven, the most severe legal sanctions will follow!”

However, no “transparent legal assessment” has followed, neither “within a day” nor after more than two weeks.

Why?

Probably because Holomsha, who personally supervised the investigation, was quietly dismissed a few days after the announcement, and the PGO modestly stated on June 23 that a “comprehensive, all-encompassing, and objective investigation into the circumstances of the criminal offense is underway.”

The rest is silence.

The only news into the “Yaroshenko case,” again, came from the same journalist, Butusov.

According to Butusov, Heorhiy Yaroshenko held repeated phone conversations in recent months with Ivan Avramenko, the beneficiary of the famous Odessa marketplace 7-th km and a business partner of Yuri Ivanyushchenko.

Secondly, immediately after the Yaroshenko row in Dnipropetrovsk, his employer and an MP, Valery Ishchenko (UDAR), met with another UDAR deputy, Artur Palatny.

Who is Mr. Palatny?

He is a childhood friend of Vitali Klitschko and a son of the the Klitschko brothers’ godfather, Leonid Palatny, a member of political council and deputy chairman of UDAR.

It looks like the candidate overseer Yaroshenko had every reason to warn, “I have a direct link to the very top!”

Connected “to the top”

A variety of Valery Ishchenko’s biographies, ranging from apologetic to biased, can be easily found on the internet. I only want to draw the reader’s attention to some moments in the life course of the UDAR People’s Deputy (Number 32 in the 2012 electoral ticket).

Speaking of the ticket: During the 2012 elections, Vitali Klitschko’s team included a writer, an army general, former members of the Verkhovna Rada, politicians, representatives of small and medium-sized businesses, and temporarily unemployed low-ranking officials.

Each of the candidates contributed his or her knowledge, experience, skills, reputation, and personal connections to the party cause.

Valery Ishchenko earned his knowledge at Kyiv High School No. 30, which he left after completing the eighth grade in 1989.

In 1989-1993, he continued his education at the Kyiv College of Electronics, mastering the vocation of “equipment maintenance for the production of electronic equipment.”

He received a diploma of higher education only in 2002, at Kharkiv National University of Radio Electronics, where he majored in “information systems management.” Most likely, he completed a distance learning program, as he managed to combine university studies with with his work as CFO at the Pivdenniy Company in Kyiv.

Do we have any other particulars about the life of the future people’s deputy from the age 20 to 35, i.e. in 1993-2008?

In 1995, he established a private company called ATV.

In 2001, he got a job as CFO at Pivdenniy Company.

In 2002-2005, he studied at the National Academy of Management at Kharkiv Regional Institute of Public Administration, again in absentia.

And that’s all we know about him – officially.

How about less public information?

Ishchenko launched his first business a year after having graduated from college. His private company ATV was registered in 1995 and not in 1994. In 1995 he and his mother registered a company with the same name ATV but with an LLC form of ownership. Both companies had a miserable statutory capital and were engaged in small retail.

Ishchenko’s involvement with PE Pivdenniy started in 2000 rather than in 2001, and he was the only founder of the firm. Its capital at the time was UAH 50..

In 2003, according to Minstat, the authorized capital of Pivdenniy was still at UAH 50.

In just four years, however, it soared 208,000 times to solid UAH 10.4 million.

How do you explain such a miracle? By the talent, knowledge and experience of the newfangled capitalist Valery Ishchenko?

Or something else?

The real reason

LLC Telbin-IVA (USREOU 32,157,479) was registered on October 28, 2002 in Kyiv, with a statutory fund of UAH 16,500.

The acronym IVA, as you understand, was needed to stress the leading role of Valery Ishchenko in this company as it was he who contributed UAH 13,200 to the company’s capital.

Andriy Strannikov invested UAH 3,300, and also provided protective and administrative resources for the company, because at that time he was a member of the Land Commission in the Kyiv council.

Which was very important!

Странников

Telbin-IVA was created right on time for the City Council’s forthcoming resolution (No. 171/331) on December 19, 2002 , according to which the company was leased ​​0.93 hectares of Kyiv land (cadastral № 90:105:028) at 6a Serafymovych Street.

Why did Ishchenko and Strannikov need that land?

The newbie developers with UAH 16,500 in equity stated their plans to build a shopping mall with 7,000 square meters of space, three 36-storey residential buildings, and an 18-storey office center.

Clearly, neither Ishchenko nor Strannikov owned enough assets to invest into such a massive project, but they successfully converted the administrative resources and preparedness into a straw man that they could use to finagle more money and connections..

What happened next?

Well, basically the same. Ishchenko and Strannikov kept preempting Kyiv land plots, and then sought for a buyer.

One Telbin IVA client was a Lithuanian company called BT Invest. In the late 2000s, it came to the Ukrainian market with nearly $1 billion in capital and eyed the land for the construction of the namesake retail chain. In 2012, they grabbed the bait at 6a Serafymovych Street that Telbin-IVA proposed.

The start of construction in 2013, however, was marked by a scandal.

The residents of the surrounding Bereznyaky district  rallied en masse to obstruct construction and defend the only park in the area. There was such a loud public outcry that the City Council gave the territory the recreational land status in September 2002.

Land for corrupt purposes

In 2006-2007, Pivdenniy, LLC Niseko, LLC Vtormeks and LLC AgroMarket all had affiliations with Valery Ishchenko and his family members, including his mother, his sister, his father-in law, etc. They obtained 14 plots of land on Serafymovych Street, Revutskiy Street, Decembrists’ Street, and Verbitsky Street. This “straw chairman’s” list of properties in question is certainly incomplete …

In the meantime, who is the real “chairman” of all the above, by the way?

This is the question that the PGO could have answered if the investigators had followed the Yaroshenko-Ishchenko/Strannikov-Palatny chain all the way up…

In that case, prosecutors might have unearthed the truth and facts about numerous machinations with Kyiv land, the resonant scams and scandals (i.e., the Elita-Center), and other cases of corruption involving UDAR’s people in the City Council and the Verkhovna Rada.

On the other hand, who really needs that truth? Especially considering the current political situation?

***

Instead of an epilogue

On June 19, President Poroshenko ushered Vitaly Yarema to the post of Prosecutor General of Ukraine and wished him success in the fight against corruption. Among other things, he recommended:

“Consider starting with putting three of your friends behind bars. You know exactly what for. They know exactly what for. And people will believe you.”

I believe it is about time to get started.

Oleksandr Matiushenko