Eighteen months after former Ukrainian President Viktor Yanukovych fled the country, an estimated $30 billion that he and his cronies are believed to have stolen is still missing. The loot could come in very handy for a poor nation reeling from war, debt crisis and a recession that could shrink the national economy to a paltry $100 billion this year.
Yet law enforcement — from prosecutors to police and courts — have proven to be typically incompetent in building criminal cases to recover the pilfered treasure, fueling suspicions of high-level political interference to thwart justice.
But now several political and civic forces are pushing for the creation of a new national agency to recover as much of that money as it can and to manage illegally acquired assets. The agency will also track the property holdings of state officials, and prepare cases against those who have somehow amassed huge fortunes on modest state salaries.
Progress on recovering cash stolen by state officials has been astonishingly meager: only Hr 8,000 ($362) worth of illegally acquired assets has been returned to the state in the last six months. Meanwhile, the international accounts of corrupt former officials are being unfrozen because Ukrainian law enforcers have not provided sufficient evidence.
Hanna Hopko, a lawmaker from the Samopomich party and one of those who is backing legislation to create a new agency, said the current responsible bodies – the Justice Ministry and Prosecutor General’s Office – have failed in their task to recover embezzled funds.
“For instance, former Ecology Minister Mykola Zlochevsky’s $23 million were unfrozen,” Hopko said at a conference on Aug. 19. She said the agency is needed to make progress and engineer a turnaround from this dismal record.
Daria Kaleniuk, the executive director of the Anti-Corruption Action Center, a Ukrainian civil society organization that unites experts from the legal, media and civic-political sectors fighting corruption, welcomed the proposed legislation.
“These laws will deprive the law enforcement authorities of the last excuses and arguments for why they are not searching for or finding the criminally acquired assets. They will close all of the legislative loopholes,” Kaleniuk said.
The new agency, which will employ up to 100 well-paid professionals, will manage individual arrested assets that are worth at least Hr 200,000 ($9,000), such as cars and other high-price items, and will gain control of the asset even before a final court ruling on its seizure is taken. Such assets will be managed via a state fund deposited in a state bank at market-level interest rates.
The agency will also draw up a register of illegal assets, also including the names of the investigators personally responsible for each case, and maintain national databases to provide investigators with all of the information about any asset of any person, and their relatives, in the course of three days. Currently, investigators have to ask numerous bureaucratic bodies separately for such information in a process that can take months.
Although the register will not be public, the news media will be able to access information from it upon request.
In addition to the bill on the new agency, parliament is expected to consider two other draft bills making changes to the criminal and civil codes. According to Deputy Prosecutor General Vitaly Kasko, those changes will make it impossible for people suspected of corruption to hide assets under the names of other people, and allow the arrest of assets as soon as their illicit origin is proved. Currently this is not possible until a person is officially declared a suspect, or if the asset is officially owned by another person.
The agency will also be able to sell an arrested asset – such as a car or an electronic device -immediately upon its arrest if asset’s value is expected to decrease with time. If the owner is found not guilty, they will be refunded the money gained from such sales.
If Parliament adopts the laws by the end of September as expected, the agency could start working as early as 2016. No firm estimate of the initial funding needed for the agency has yet been announced, but Kaleniuk expects it to be below Hr 50 million ($2.3 million) for the coming year. The setting up of such an agency has been approved by international partners like the IMF and European Union, so there is a fair chance Ukraine will get technical assistance from them for this purpose, she said.
Later on, the agency will become self-sufficient, financing its activities from a special fund formed from 25 percent of the asset value it succeeds in returning to the state.
The benefits to the state from the new agency are still hard to estimate, but even if only the $1 billion of currently frozen Yannukovych family assets are recovered, that money could be earning 20 percent interest if deposited in a state fund.
The agency will also enhance Ukraine’s international cooperation in recovering stolen assets by becoming part of a network of similar asset management authorities that are active in other countries.
Kyiv Post staff writer Olena Gordiienko can be reached at [email protected]
