Now more than $30 billion in annual government spending will be cloaked from the public eye, according to the Nashi Groshi watchdog website. The bill addresses state-owned companies, like gas monopolist Naftogaz Ukraine and rail monopoly Ukrzalyznytsia, both in constant financial disarray. Agencies will no longer have to disclose with whom they do business or for how much. Worse still, they no longer have to accept competitive bids to award contracts.
Pro-presidential lawmaker Oleksandr Yefremov argued that the bill will allow state firms and other government entities to compete with the private sector. He said private firms don’t have to take bids, so why should government firms?
The problem with Yefremov’s analogy is that the government spends public money, while private businesses are accountable to their owners and shareholders, who impose their own discipline. Besides, many private companies do engage in competitive bidding for their purchases.
In a democracy, the citizens are the shareholders. They have the right to know how their money is spent. The government must spend taxpayer money wisely and transparently. Now citizens are shut out of the process by a president who talks loudly about fighting corruption while doing the opposite.
So a Naftogaz subsidiary can continue spending $2 million a year to fly, lease and service a helicopter for Yanukovych. The public won’t know how many oil rigs Naftogaz buys at $150 million above market value, as it did in December 2010. And, considering the billions of dollars spent in Ukraine’s opaque banking, energy and other sectors, that’s peanuts.
If the government is not willing to account for its spending, officials can expect people to continue evading taxes and hiding money.
No wonder Ukrainian banks reported sending $50 billion to offshore accounts in the last two years. Why give it to the procurement leaches who enrich themselves at everyone else’s expense?
