“Corruption-related cases that involve senior officials of the Prosecutor General’s Office are in our investigative jurisdiction, and we will keep investigating these cases. Whatever incidents may arise, they can’t affect our position,” Artem Sytnyk, head of the National Anti-Corruption Bureau of Ukraine (NABU), tells bne IntelliNews in an exclusive interview in his Kyiv office.

By “incidents” Sytnyk is clearly referring to a bitter conflict that his newly-created independent institution is involved in with the Prosecutor General’s Office. In August, Sytnyk accused prosecutors of illegally detaining two NABU technical employees for 11 hours. The two individuals were conducting undercover investigations, and Sytnyk claimed the PGO had used physical and psychological pressure on them. NABU was forced to use its special operations unit in an attempt to free employees, which led to a physical clash between representatives of the two institutions.

This was preceded by a controversial raid of NABU’s Kyiv headquarters by PGO representatives under a court-approved search warrant, in a case related to the allegedly unauthorised wiretapping of phone conversations between suspects in a criminal investigation being conducted by NABU.

According to the Washington DC-based human rights watchdog Freedom House, NABU is more independent and reform-minded than many other parts of the judicial system like the prosecution service, which is a largely discredited, presidentially-controlled agency that has proved ineffective in combating corruption. Thus the skirmishes can be seen in the context of a wider conflict in the country between the old, discredited forces that are still busy enriching themselves and protecting their past ill-gotten gains against the new, reformist forces that are trying to clean up the system and bring high-level criminals to justice.

Daniel Calingaert, executive vice president of Freedom House, says that evidence including video testimony released by NABU, which contained detailed allegations of serious abuse by prosecutors, “raises grave concerns about the progress of anti-corruption and prosecutorial reforms in Ukraine”.

Sytnyk attributes the conflict between the two law enforcement agencies to NABU’s criminal investigations concerning possible wrongdoings by a number senior prosecutors. “Until recently, the Prosecutor General’s Office decided whom among its officials would be prosecuted, and whom would avoid such treatment. Since the start of our operations, NABU has  initiated a large number of investigations against  high-level prosecutors, both from the PGO and from regional offices,” Sytnyk says. “I assume this fact has led to such provocative actions.”

Unafraid

The anti-corruption chief adds that he has discussed the conflict with the country’s president, Petro Poroshenko. “I had a short meeting with him,” Sytnyk says, noting that he offered to pass the investigation concerning the detention of NABU employees to the SBU security service, in order to avoid any conflict of interest.

He refused to comment on whether Poroshenko should publicly take a stand over the conflict between the two law enforcement agencies, pointing out that “impartial investigation is more important than somebody’s public position”. ”I’m sure that we are right and that the actions of our employees were legitimate,” he says.

Sytnyk’s office windows look out on to the courtyard at NABU headquarters, where two armed personnel carriers are parked. The vehicles were granted to the bureau by the country’s Ministry of Defence. “They symbolise that nobody will stop NABU’s detectives and special operations troops,” Poroshenko said during a visit to NABU in February.

NABU was created under pressure from Ukraine’s Western backers, who wanted to see an independent body set up that could fight against endemic high-level corruption in Ukraine. In particular, the International Monetary Fund (IMF) made financial support conditional on the implementation of anti-corruption measures from the very outset of its cooperation with Kyiv’s pro-Western government in 2014.

Sytnyk admits that since the onset of NABU’s conflict with the PGO, he has received messages from “some diplomats” with assurances of their “further support”. However, more hurdles seem to lie ahead in relations between the two law enforcement agencies, as NABU recently started verifying media reports about the possible illegal enrichment of former Prosecutor General Viktor Shokin, who was a close ally of Poroshenko. “We have no right to be afraid of anybody, especially the Prosecutor General’s Office,” Sytnyk says.

Yanukovych’s secret ledger

Meanwhile, over the past month NABU has been caught in the centre of another scandal, this time a trans-Atlantic one. In August, the agency unveiled that Paul Manafort, who was until recently the campaign chief of US Republican presidential candidate Donald Trump, was mentioned in the secret ledger of Ukraine’s Party of Regions, which was at the time headed by ousted president Viktor Yanukovych.

NABU has published copies of 19 pages in which Manafort, who previously headed the political campaigns of Yanukovych’s party, was mentioned, with the aim of “avoiding any speculation” after this information had appeared in the global media, Sytnyk tells bne IntelliNews. 

A total sum of over $12.7mn was allocated to costs associated with Manafort between November 2007 and October 2012. However, the bureau emphasises that the fact of Manafort’s name appearing on these lists does not necessarily mean that he actually obtained the money, because the signatures that appear in the column of recipients could belong to other people.

The secret ledger appeared in Kyiv in May, when the ex-deputy head of the SBU security service, Viktor Trepak, announced that he had obtained documents of the Party of Regions from an undisclosed source, and that the contents showed that $2bn in cash was used to bribe both former and incumbent top officials. Trepak refused to specify names and later submitted these documents to NABU for investigation.

Sytnyk says that NABU’s detectives have faced “some difficulties” during their investigation because the information about the existence of these “bribe books” appeared in the media simultaneously with their submission to the law enforcement agency. “Currently, our detectives are working with these documents meticulously, conducting a number of examinations with the aim of identifying the signatures and notes. We have also prepared a number of international requests to verify some of the data described in the documents, as some funds were allocated for operations outside Ukraine,” Sytnyk explains.

According to the anti-corruption chef, NABU intends to make “the first procedural decisions” in October, which means the first cases will be filed in the courts. “How many copies [of the secret ledger] exist? We don’t know. However, it was possible to make a lot of copies over two years [that have passed since the documents were submitted to NABU for investigation]. Again, we don’t know who might have them,” Sytnyk says.

Shadow side of state-owned businesses

Sytnyk admits that the pace of anti-corruption efforts and other reforms in Ukraine is currently insufficient. At the same time, “real steps” have been made over the past two and a half years in changing the structure of the country’s anti-corruption agencies in Ukraine, he believes.

“And this is already bringing some results,” he argues, noting that the prosecution of Ukrainian lawmaker Oleksandr Onyshchenko, who is suspected by NABU of involvement in the embezzlement of state-owned natural gas, has proved that “there are no untouchable [officials] in Ukraine”.

In July, Ukraine’s parliament sanctioned the criminal prosecution, detention and arrest of Onyshchenko, a member of the Volia Narodu (People’s Will) parliamentary group as part of an investigation into the activities of a criminal group allegedly involved in illegal schemes when selling gas produced with the participation of state-owned company Ukrgazvydobuvannia.

Onyshchenko, who denies any wrongdoing, has fled Ukraine and announced his intention to seek political asylum in the UK. “When we detained members of Onyshchenko’s criminal group,  we wanted not only to liquidate the group itself, but also to break its [corruption] scheme,” Sytnyk explains. “Companies that were used to siphon off state funds have already been eliminated.”

According to the anti-corruption chief, NABU’s investigations of corrupt schemes at state-owned companies have led to major enterprises starting to declare profits instead of losses, as they had done in previous years. Ukrainian state-run companies declared total losses of UAH110bn in 2014. “Pressure from anti-corruption agencies and public activists is breaking up corruption schemes, and as a result the operations of state-owned enterprises have become more transparent,” Sytnyk underlines.

He adds that one of NABU’s current priorities is a campaign against corruption at state-owned enterprises that are intended to be privatised in the near future, including Odessa Port Plant (OPP), which is the frontrunner in a renewed privatisation drive, and a number of major power generation companies. “We are carrying out investigations into almost all companies which are subject to privatisation, including  OPP,” Sytnyk explains. ”We intend to eliminate corruption schemes, which will allow to sell these companies at a higher price.”

Earlier, the head of the OPP supervisory board, Serhiy Pereloma, and the plant’s first deputy director, Mykola Schurikov, were both detained by Ukrainian authorities on suspicion of embezzling funds. According to Ukrainian law enforcement agencies, Pereloma allegedly acted on behalf of Ukraine’s biggest state-controlled oil producer Ukrnafta, partly controlled by oligarch Ihor Kolomoisky.

Court dilemma

Despite some progress in its investigations into corruption, NABU faces a problem with the judiciary, which has a reputation as one of the most rotten institutions in Ukraine. “We have significant problems – hearings concerning even simple cases can take a very long time,” Sytnyk complains. He describes an instance of how an official at the Prosecutor General’s Office offered a bribe to a member of a commission that was responsible for hiring NABU and was detained. “This is an elementary case that was instantly investigated and filed to a court, however, there is still no court decision.” 

Sytnyk describes the problem as “very worrying”. “Firstly, we do not want to lose the results of our work. Secondly, Ukrainian society expects more than just detentions and initiations of criminal cases; it wants to see court verdicts.”

The slow judicial process also means that property seized by NABU does not bring money to the state budget, Sytnyk adds. “Because of this trend, I advocate the creation of a specialised anti-corruption court, whose judges would have the guarantees of independence and security,” he says.