Ukraine’s National Anti-Corruption Bureau is on the frontline of the country’s fight against corruption, but its offices are in a quiet suburb of Kyiv well away from the rest of the imposing government buildings in the centre.
That’s probably a good thing, as NABU is not well liked by the other branches of government. Seen by some as the modern day equivalent of the US federal “Untouchables,” NABU in reality seems to spend more time fighting off attacks by Ukraine’s government than it does catching bent officials who are lining their pockets.
The agency was more or less explicitly forced on President Petro Poroshenko's administration by Ukraine’s international donors, by being made a rider in the deal on the country’s $17.5bn standby programme with the International Monetary Fund (IMF) and hundreds of millions more from the likes of the European Union (EU) and others.
NABU has been frustrated by the government’s increasingly transparent efforts to block its work. Corruption is the bane of transitional countries, but without strong and independent institutions most of the leaders of these countries use corruption as the easiest and most effective way to wield political power. In most countries, including Ukraine, corruption is the system. The point was highlighted yet again by the latest Transparency International Corruption Perspectives index, released at the end of February, which showed that Russia and Ukraine are the two most corrupt countries in Europe and Kyiv despite Ukraine's attempt to “turn to the West”. On the ground, NABU has hundreds of open cases on official corruption, but has yet to see a single senior government official jailed.
The agency occupies a large, quiet building formerly owned by the Industry Ministry on the outskirts of Kyiv. There’s a lot of unused space, and it’s apparent that NABU’s budget doesn't stretch to redecorating. The only really discernable touch made by NABU’s management after taking the building over was the addition of the wooden letterbox that stands by the entrance with a sign inviting Ukrainian citizens to drop off documents proving acts of corruption by high-level officials.
Yet the agency is committed to making a change. NABU has been targeting increasingly senior officials in the last year which has caused the blow back to escalate dramatically. In late 2017, the agency faced an unprecedented number of open attacks by the other law enforcement branches that culminated in an attempt to place the bureau under the direct scrutiny of parliament – something antithetical to the whole idea of an independent agency as conceived by the donors. The move, Western backers complained, would have effectively killed the hard-earned independence of the bureau. The outcry was unprecedented, with a storm of tweets and EU officials making midnight calls to the president’s office ahead of the vote the next day. Ukrainian authorities backed down and killed the offending bill.
The dust has now settled. But NABU director Artem Sytnyk has grown weary. “Right now is a decisive moment, not just for the bureau but for the entire anti-corruption cause in Ukraine,” he told bne IntelliNews in an exclusive interview at the agency’s headquarters.
His massive, but largely bare, office reflects the agency’s limbo-like status. On the walls are a few awards, as well as an agreement on cooperation with the FBI, which trains NABU's agents and has been cooperating with the agency on international matters.
Lack of sentences
Sytnyk’s number one concern is the upcoming bill on the creation of a dedicated anticorruption court (ACC).
NABU is the investigative part of a triumvirate that also includes the Special Anti-Corruption Prosecutor’s Office (SAPO), which carries out prosecutions in parallel to the General Prosecutor’s Office, but is also entirely independent from the government’s control. What is missing is a court to hear the cases investigated by NABU and prosecuted by SAPO that is also independent from the notoriously corrupt Ukrainian judicial system.
The courts were supposed to be reformed in 2017, but when the new system was announced Ukraine’s civil society was shocked to discover that at least 25 of the 111 judges appointed were known to be corrupt. “The judicial reform has failed,” said Anders Aslund, a senior fellow at the Atlantic Council and usually one of Ukraine’s most outspoken supporters.
International donors are becoming increasingly frustrated and cancelled the transfer of cash at the end of last year until the anti-corruption court was set up.
Sytnyk says the ACC would solve the bureau’s main problem: the fact that the various officials it has investigated and arrested in the last few years have almost all been freed or received light sentences once they enter the notoriously corrupt Ukrainian justice system. In the latest case, the arrest of Odessa mayor Hennady Trukhanov, suspected of embezzlement, was short lived as he was immediately released without bail pending his trial.
“The anticorruption court is the most important reform right now,” Sytnyk says, “but its creation has been controversial.”
President Poroshenko became only a reluctant supporter of the reform in late 2017, after the IMF made it clear it was a key condition for unlocking the next bailout loan. Ukraine has so far received only four out of 12 scheduled IMF payments and it looks increasingly likely it will not receive any more money at all until the ACC is established.
For Sytnyk, the inability to capitalise on the bureau’s investigations has direct consequences: “It’s a big hit to the morale of our detectives,” he says. “They work, they work, they work, bring a case to the court, and nothing happens.” In a tired voice, Sytnyk alternates between praise for his “small but motivated team” and pessimism over the political situation.
Sytnyk, who comes over as a somewhat reluctant director, combines experience as a former head of investigations in the Kyiv regional prosecutor's office and apparent honesty: he resigned from his old job in 2011 after denouncing the “criminalisation of law enforcement agencies” under former president Viktor Yanukovych (according to his official biography). He was appointed director of NABU in April 2015.
Since then, as Ukrainian authorities have appeared less and less enthusiastic about the monumental task of tackling corruption, NABU has become a poster child of what reforms should look like for Ukraine’s Western backers as well as for the country’s civil society – if not the only, then the most visible, success in Ukraine’s half-hearted fight against corruption.
“At the same time NABU was created, a big reform of the prosecutor general and of the police were also launched,” says Daria Kaleniuk, executive director of the NGO Anti-Corruption Action Centre. “Both failed. But NABU succeeded, partly because it’s a parallel structure built from scratch.”
NABU earned that backing in part thanks to a series of high-profile investigations which, Sytnyk says, “showed NABU is an independent organ not afraid to investigate cases of corruption. It's a first in the history of Ukraine.”
The agency sprang to international prominence after it indicted its first big fish, Roman Nasirov, the head of the State Fiscal Service and a close friend of Poroshenko, in March 2017. The indictment was the first time a senior active politician from the government’s inner circles had been pulled up on corruption charges. Nasirov is accused of diverting some $75mn while restructuring tax debts. He denies the charges.
“Ukraine’s justice system is on trial,” wrote bne IntelliNews columnist Katya Kruk at the time, but unfortunately it has failed the test. Nasirov’s wife posted bail of over $3mn and while the case was supposed to go to trial last August, as of the time of writing nothing has happened.
The workload to close a single case involving a senior government official is considerable, and the sheer number of lower level officials that are also on the take multiplies it. But with only 700 employees (the maximum number set by law), NABU is a minuscule agency compared to the rest of Ukraine’s massive law enforcement institutions.
It’s easy to see this at the agency’s Kyiv office: while there’s a regular flow of NABU agents in civilian clothes near the entrance, passing men in military uniform who carry troves of documents, most of the building seems almost eerily empty.
Still, NABU’s impact has been real and its investigations have sent shockwaves through the system. In the last year, amongst the other big fish that have come under NABU’s scrutiny are Lieutenant General Igor Pavlovsky, a deputy defence minister, who has been accused of embezzlement, and the son of Arsen Avakov, the powerful interior minister, who was briefly arrested for his involvement in the “backpack case” – a scheme in which a businessman close to Oleksandr Avakov allegedly sold UAH14m ($520,000) worth of backpacks to the Ukrainian military at an inflated price.
The elite strikes back
The cases against Avakov’s son and Igor Pavlovsky “united the Ukrainian political elite against NABU”, says Kaleniuk. When Nasirov was held in jail over the weekend before his arraignment last year, on Monday the courtroom was host to an extraordinary scene when dozens of Rada deputies turned up to offer personal guarantees to ensure Nasirov’s release.
“NABU and its investigations represent an existential threat to most of those in government,” says Tim Ash, head of strategy at Bluebay Asset Management.
As last year drew to an end a flurry of attacks rained down on NABU and its leadership in just a few weeks, two of which prompted a public outcry: the arrest by Ukraine’s Prosecutor General of several of NABU’s undercover agents, whose identity were revealed by the prosecutor (thus blowing their covers), and an attempt by the Ukrainian parliament in early December to vote a new law that would allow the parliament to dismiss the director of the NABU.
The biggest success the pro-corruption lobby in parliament won was the dismissal of the highly respected head of the legislative's anti-corruption committee, Egor Sobolev, on December 7, which was widely seen as parliamentarians striking a blow against NABU and its work.
“I expected resistance,” Sytnyk said with a sigh, “but I did not think it would be that intense. I also expected some political will, even if it was just pragmatic. But the authorities do not take any independent steps. Every new progress is made 'under the knife' of the civil society and international partners.”
The December crisis was averted thanks to pressure from Ukraine’s civil society and frantic calls by Western embassies warning of potential consequences if NABU was placed under parliamentary control. But paradoxically, it also helped to put the issue of the anti-corruption court in the spotlight. “I think the law will be voted, as it’s become such a major issue for the West,” Vladimir Fesenko, a Ukrainian political scientist, told bne IntelliNews.
The other step Sytnyk claims is needed to enhance the NABU’s efficiency would be to allow the bureau to do its own wiretapping – something it can currently only do through the SBU, Ukraine’s security service. But the director isn’t holding his breath.
“This can only happen if a new law is voted,” Sytnyk says. “But that’s the problem: when there’s a bill to pressure NABU, then the parliament works very quickly, but when it's about making the NABU more effective, it has a lot more trouble getting the law voted.”