KRUK REPORT: Ukraine’s anti-corruption agency shows its teeth with new detentions

KRUK REPORT: Ukraine’s anti-corruption agency shows its teeth with new detentions
Endemic corruption has stunted Ukraine’s growth for years.
By Kateryna Kruk in Kyiv April 21, 2017

Ukrainian activists have long fought for anti-corruption institutions to be created. This wasn’t an easy fight, but it was totally worth it. In the latest glimmer of hope for an end to the endemic corruption that has stunted the country’s growth for years, the National Anti-corruption Bureau of Ukraine detained former MP Mykola Martynenko on April 20.

A few hours later, NABU also detained Serhiy Pereloma, first deputy chairman of state oil and gas company Naftogaz, on separate charges of creating a criminal organisation and using a government position for personal enrichment. Innocent until proven guilty in both cases, of course, but it’s encouraging to see law enforcers doing their job.

So who is Mykola Martynenko, apart from a former MP and a chum of ex-prime minister Arseniy Yatsenyuk?  The last time he was in the centre of public attention was in 2015 when his shadowy dealings became known, and not just known – Swiss prosecutors opened a criminal case against him. Martynenko was suspected of accepting $29mn in bribes from the Czech-based engineering firm Skoda in exchange for a contract to supply equipment to Energoatom, Ukraine’s nuclear power plant operator.

Czech prosecutors later also announced that they would start an investigation into the aforementioned deal. According to the Swiss, the bribes were paid in the form of commission fees to an offshore company in exchange for helping to get the company a contract with Ukraine’s Khmelnytska nuclear plant. 

Eyes now on the watcher

Martynenko was a long-time associate and ally of Yatsenyuk, and is often described with a jargon word smotriashchiy. Literally meaning “watcher”, this political euphemism is used to refer to a crooked politician, a kind of cashier and minder who is supposed to ensure that businesses and people under his watch bring in the expected profit. Martynenko was one of the biggest sponsors in the Verkhovna Rada parliament of the People’s Front co-founded by Yatsenyuk in 2014, and also chaired the energy committee in the Verkhovna Rada parliament.

At the time, news of the investigation dealt a huge blow not only to Martynenko, but also Yatsenyuk, who was still prime minister and tried to distance himself from the scandal, which nevertheless cast a shadow on him and his People’s Front party. It was probably the wave of public outrage directed also against Yatsenyuk that made Martynenko give up his MP’s mandate. As he tells it, he resigned from the parliament in order to legally assert his innocence regarding accusations from MPs and other officials. It took three attempts to finally pass a resolution on stripping him of his parliamentary mandate.

Two years later, NABU officers escorted Martynenko to their headquarters to hand over notice of the charges against him. A few weeks before, NABU detectives conducted searches of his home. As anti-corruption prosecutor Nazar Kholodnytskiy explained, Martynenko was detained in the case relating to the state-owned Eastern Ore Mining and Processing Enterprise, which is believed in 2014-2015 to have overpaid some $17mn to one of its intermediaries.

Party shockwaves

His detention will have some further political implications. One of the first reactions of Ukrainian social media to the news was a sarcastic “and how is Yatsenyuk doing right now?”. This event will undoubtedly shake the former premier’s position on the political scene and in his own party.

People’s Front, just like every other party, consists of different interest groups. This investigation, which can implicate other people from his network, can shake the integrity of People’s Front, and this is especially important when it comes to its parliamentary faction. In fact, Martynenko’s links to Yatsenyuk can cause two problems for the latter: weaken his recently strengthened position that made him think of returning to big politics again and even make a play for his old job of premier, and disintegrate the People’s Front faction in the Rada.

The faction is one of the strongest leverages Yatsenyuk has over Ukrainian President Petro Poroshenko. Yatsenyuk is an uncomfortable partner for the president, who must still maintain an alliance with him in parliament. People’s Front is better organised than Poroshenko’s own Petro Poroshenko Bloc, which makes it predictable and loyal when it comes to voting. Basically, all that is left from the coalition is these two factions, giving Yatsenyuk a strong position in dealing with Poroshenko.

An ideal scenario for the president, who wants to avoid snap elections and retain control over parliament, is to still have a coalition but without having to deal with Yatsenyuk. Technically, it is impossible to get rid of the People’s Front faction. But it is possible to have Yatsenyuk’s influence over his party significantly weakened. Detention of his closest ally and repeated reminders of his corruption deals might cause some MPs to distance themselves from Yatsenyuk.

But the NABU news that should have brought a smile to Poroshenko’s face has a downside too. It also brings attention again to another recent loud corruption case, the detention of state fiscal service chief and Poroshenko ally Roman Nasirov. The investigation of Nasirov’s case is still ongoing and even though he hasn’t yet wriggled free (which is already a victory given the history of Ukraine’s fight with corruption) he seems to be doing pretty well. This week, Nasirov was even elected president of Ukrainian judo federation. All of which puts a big question mark over whether Martynenko will really face any serious rap for any crimes that may be established,  or will he, after some detention or trial drama, quietly avoid punishment as always.

Still no anti-corruption court

This all brings us to another important issue that Ukrainian activists have been raising for a long time: the creation of a specialised anti-corruption court. In a country where the judicial system is seen by many as one of the symbols of corruption, having a special independent and trusted body that deals with corruption is of paramount importance.

But the question of its creation has been caught in a political stalemate for quite some time. All key political players publically agree that an anti-corruption court should be created, but in fact no real steps were taken, and a bill to this end is still languishing in the Rada. Fighting corruption only with investigations and detentions is not enough.

As long as there will be no real punishments and no crooked politicians imprisoned, the fight with corruption will remain more of a spectacle than a new reality. NABU and the specialised anti-corruption prosecutors are showing good results; they should now be further weaponised with a court that will finalise their actions.

All in all, Martynenko’s detention brings a shake-up into Ukrainian politics at a crucial time, as the fate of Prime Minister Volodymyr Groysman’s government is being decided. A week ago, the immunity of Groysman’s government expired, meaning that the Rada is now trying to initiate the  dismissal of some cabinet ministers.

There is just under a month left for negotiations, with the next sitting of parliament scheduled for May 17. Regardless of whether the detention of Yatsenyuk’s close ally was synchronised with the manoeuvrings over the government’s composition or not, it will inevitably change the status quo between key political players in Ukraine.

Activist, journalist and co-founder of Global Ukrainians, an international network of Ukrainians worldwide, Kateryna Kruk was awarded the Atlantic Council Freedom Award for her work communicating the Euromaidan revolution to the world. She predicted a frozen conflict in July 2014, which has largely come to pass, and now comments on the progress of crucial reforms in Ukraine.