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Ukraine created the position of anti-corruption prosecutor three years ago because regular prosecutors throughout the nation’s history have been more skilled at protecting powerful people than prosecuting those suspected of wrongdoing.
This clean-up job went to Nazar Kholodnytsky, appointed in November 2015. Fast-forward to March 30, when strong evidence emerged that the anti-corruption prosecutor is himself corrupt.
In one month of secret recordings alone, from early February to early March, the National Anti-Corruption Bureau of Ukraine found that Kholodnytsky pressured prosecutors and judges to stop cases against high-profile suspects and tipped off others about planned searches — effectively destroying investigations under way.
He subverted cases involving Odesa Mayor Gennady Trukhanov, agricultural tycoon Oleh Bakhmatyuk and President Petro Poroshenko’s former business partner Kostyantyn Grigorishin.
But two weeks after the revelation, Kholodnytsky remains on the job. The absurdity of it all is not lost on people.
“What a mess,” tweeted former U. S. Deputy Assistant Defense Secretary Michael Carpenter, now with the Penn Biden Center in Washington, D.C. “In my view Kholodnytsky ought to step aside until the investigation is completed (if cleared, then he can go back to his job). In the meantime, however, this case undermines public confidence in his ability to execute his responsibilities.”
Prosecutor General Yuriy Lutsenko has asked the Qualification and Disciplinary Commission of Prosecutors to fire Kholodnytsky. The NABU has asked the Prosecutor General’s Office to approve a notice of suspicion for Kholodnytsky. But nobody seems to be moving fast to move Kholodnytsky aside.
Meanwhile, the scandal has delivered another crushing blow to the already thin credibility of Ukraine’s failing anti-corruption drive, which has delivered no convictions against top suspects implicated in multibillion-dollar corruption.
Kholodnytsky denies the accusations of obstruction and graft. But his critics say he should have never been appointed to the job, given he was implicated in alleged bribery before as a Crimean prosecutor, and has blocked corruption cases opened by the NABU, whose work depends on a team of 35 anti-corruption prosecutors working under Kholodnytsky.
When Kholodnytsky was the first deputy chief prosecutor of Crimea in 2014 to 2015, prosecutors of the Crimea prosecutor’s office were arrested and investigated over allegedly extorting a bribe for releasing a suspect. A source who was not authorized to speak to the press said that Kholodnytsky was implicated in the case.
Although the record is not uniformly bleak, progress is slow and high-profile convictions non-existent.
In March, the NABU said that, out of 121 cases sent to trial, verdicts have been reached in 29 cases, another 45 cases are being considered while 47 others have not yet been heard. Only three persons convicted have been sent to prison.
Here are the highlights, such as they are, showing a judicial system filled with judges and prosecutors stalling cases and ignoring high-level corruption:
Ihor Kononenko Status: Under investigation
The NABU is investigating Poroshenko’s top allies, lawmakers Ihor Kononenko and Oleksandr Hranovsky, and ex-People’s Front lawmaker Mykola Martynenko in a graft case linked to the state-owned Odesa Portside Plant, a fertilizer maker.
In 2016, Mykola Shchurikov, a deputy CEO of the plant, and Serhiy Pereloma, ex-chairman of the plant’s supervisory board, were charged by the NABU with stealing Hr 205 million from the plant and released by courts on bail. The case was sent to trial in February 2017.
However, the court is dragging its feet on the case and has ruled to make the hearings secret, NABU Chief Artem Sytnyk told the Kyiv Post.
As a result of such favorable conditions for the defendants and the weakness of anti-corruption prosecutors, suspects are not motivated to give testimony against higher-ranking people involved in the scheme, Sytnyk said.
In 2016 then-Economy Minister Aivaras Abromavicius also accused Kononenko of trying to install his proteges as a deputy economy minister, as well as at state firms, including ammonia shipping company Ukrkhimtransamiak and market research company Derzhzovnishinform.
Andriy Pasishnik, a deputy CEO of state-owned oil and gas company Naftogaz, is currently on trial in the case involving Kononenko’s alleged efforts to impose him as a deputy economy minister.
Moreover, the NABU has arrested several suspects in embezzlement cases at Ukrkhimtransamiak and Derzhzovnishinform. Oleksandr Lemenov, an anti-corruption expert at the Reanimation Package of Reforms, told the Kyiv Post Kholodnytsky had been trying to block the Ukrkhimtransamiak and Derzhzovnishinform cases.
The bureau is also investigating an embezzlement case involving Kyiv’s Rybalsky Kuznya shipyard, which is owned by Poroshenko and Kononenko.
Meanwhile, in 2016 Estonian businessman Hillar Teder’s Arricano Real Estate and lawmaker Yegor Firsov have asked Kholodnytsky to open a criminal case into what they believed to be the illegal seizure of the Sky Mall shopping complex by Hranovsky and his business partner Adamovsky, a tax evasion case against Hranovsky and Hranovsky’s alleged interference into the judiciary. Hranovsky denies the accusations of wrongdoing.
However, Kholodnytsky transferred one of the cases from the NABU to the police, which closed it, while another case was transferred by Prosecutor General Yuriy Lutsenko from the NABU to the Prosecutor General’s Office and also closed.
Adamovsky’s Trade Commodity is under investigation by the NABU in a Hr 149 million embezzlement case at the Defense Ministry.
Oleksandr Avakov Status: Charged, not on trial
Interior Minister Arsen Avakov’s son Oleksandr is accused of embezzling Hr 14 million in a case related to the supply of overpriced backpacks to the 200,000-member law enforcement agency that his father heads.
He was arrested in October and released by a court without bail. Oleksandr Lemenov, an anti-corruption expert at the Reanimation Package of Reforms, told the Kyiv Post that Kholodnytsky had initially refused to authorize a notice of suspicion for Oleksandr Avakov for half a year — a claim denied by Kholodnytsky.
The NABU is also investigating a video in which Avakov’s deputy Vadym Troyan and his former deputy Serhiy Chebotar discuss corrupt revenues from the traffic police and extorting money from businesspeople.
Rinat Akhmetov’s DTEK group, Dmytro Vovk Status: Under investigation
In August the NABU opened a criminal case into the Rotterdam+ formula, which was introduced in 2016 by the energy regulator headed by Dmytro Vovk, a presidential protégé.
The price formula is pegged to prices in Rotterdam, the Netherlands, and is unjustifiably high, according to some analysts. Tycoon Rinat Akhmetov’s DTEK energy group has benefited from the high coal and power prices introduced by the Rotterdam+ scheme.
Most of DTEK’s coal is supplied from Ukrainian mines, and some of it is delivered from Russia and used to be supplied from Russian-occupied territories in the Donbas. However, the coal’s prices, type and quality have nothing to do whatsoever with Rotterdam prices and do not include transportation costs from Rotterdam, Andriy Gerus, a former member of the energy regulator, told the Kyiv Post.
Only about 2 percent of Ukraine’s coal used to be supplied from South Africa under the Rotterdam+ formula, Gerus said.
Akhmetov’s SCM group denied the accusations of wrongdoing, saying that “you need to have prices set that cover the cost of acquisition and importation or you have insecure energy supplies and energy blackouts.”
Dmytro Firtash Status: Associates charged, but not him
Volodymyr Syvak, CEO of oligarch Dmytro Firtash’s Zaporizhzhia Titanium and Magnesium Factory, has been charged with embezzling Hr 500 million.
Vitaly Shabunin, head of the Anti- Corruption Action Center’s executive board, has accused Kholodnytsky of blocking the case, which the prosecutor denies.
Shabunin argued that Kholodnytsky had sent the case to Kyiv’s Pechersk Court in 2016 despite knowing well that it was outside its jurisdiction, and it got stuck at the court for seven months.
In June 2017 the court refused to accept the case, saying that it was not in its jurisdiction. When the case was finally sent to trial, the prosecutors withheld evidence of guilt, according to Shabunin.
The anti-corruption prosecutors also dragged their feet on filing a civil lawsuit to seize Firtash’s factory based on the alleged embezzlement, Shabunin argued.
Mykola Zlochevsky Status: Case closed
In August Kholodnytsky closed the case into the allegedly illegal acquisition of natural gas production licenses by ex-President Viktor Yanukovych’s Ecology Minister Mykola Zlochevsky, arguing there was no proof.
Shabunin accused Kholodnytsky of blocking the case for political reasons, saying that he had “hidden” the evidence in the case for nine months before sending the case to trial. The court refused to accept the case because the term for its submission had expired, according to Shabunin. Kholodnytsky denies the claim.
Gennady Trukhanov Status: Charged, not on trial
In February, the NABU charged Odesa Mayor Gennady Trukhanov with embezzling Hr 100 million. On Feb. 7, Kholodnytsky told his deputy Volodymyr Kryvenko not to prosecute Trukhanov, according to the NABU recordings. Sytnyk also said that Kholodnytsky had leaked information to suspects in the Odesa case, which is denied by the prosecutor.
Meanwhile, Oleh Babenko, a member of Odesa Oblast’s legislature, has been charged with offering a $500,000 bribe to the NABU. A source who spoke on condition of anonymity out of fear of reprisals told the Kyiv Post that Babenko and Oleksandr Dubovoi — two associates of Oleksandr Turchynov, secretary of the National Security and Defense Council — were implicated in the Trukhanov case.
They could not be reached for comment.
The Anti-Corruption Action Center on April 11 published Dubovoi’s WhastApp correspondence in which Dubovoi was negotiating the cancellation of a Hr 92 million freeze on assets at the request of Odesa businessman Vladimir Galanternik with Solomyansky Court judge Lyudmila Kizyun. The correspondence was read by an anti-corruption prosecutor during a court hearing.
Trukhanov and Odesa businessmen Alexander Angert and Galanternik have been accused of spearheading corruption in Odesa and, according to an Italian police dossier, were members of a mafia gang in the 1990s.
Roman Nasirov Status: Charged, on trial
Ex-State Fiscal Service Chief Roman Nasirov is accused of abusing his power by illegally allowing participants of an alleged corrupt scheme at gas producer Ukrgazvydobuvannya to delay tax payments, causing losses to the state of Hr 2 billion. He was arrested in 2017 and released by a court on Hr 100 million bail.
Lemenov said Kholodnytsky had initially refused to authorize the charges against Nasirov for months.
The case was sent to trial in December. But the trial could take years because hearings are scheduled once a month, and the court has also decided to first read the whole 700-page indictment instead of beginning to consider the case, Sytnyk said.
Mykola Martynenko Status: Charged, not on trial
Mykola Martynenko, an ex-lawmaker from the People’s Front party, has been charged with organized crime and embezzling $17 million during uranium ore sales to the state-owned Eastern Ore Dressing Plant. He was arrested by the NABU in April 2017 and released by a court without bail.
Kholodnytsky had been accused by anti-corruption activists of blocking the charges against Martynenko before he signed the notice of suspicion.
Mykhailo Okhendovsky Status: Case suspended
In 2016 Central Election Commission Chief Mykhailo Okhendovsky was charged with receiving bribes worth $161,000 from Yanukovych’s Party of Regions. In June the anti-corruption prosecutor suspended the case, claiming it was waiting for documents from abroad. Sytnyk said that he disagreed with Kholodnytsky’s decision, and that the Okhendovsky case should have been sent to trial.
On April 3, a court canceled Kholodnytsky’s decision to suspend the case amid the corruption scandal around him.
Natalia Korchak Status: Under investigation
Natalia Korchak, an incumbent top official of the National Agency for Preventing Corruption and the agency’s ex-chief, is under investigation for failing to declare a Skoda Octavia A7 car. Korchak and other members of the NAPC’s management board are also under investigation over allegedly receiving an Hr 1 million bribe from a lawmaker for falsifying an asset declaration.
According to the NABU recordings, Kholodnytsky refused to authorize a search warrant for Korchak. Kholodnytsky also told Yaroslav Yurchyshyn, head of Transparency International Ukraine, that he would not prosecute Korchak.
In November, NAPC top officials Hanna Solomatina and Oksana Divnich accused their agency of large-scale corruption and being controlled by Poroshenko. But the NAPC graft case was transferred, on the orders of Kholodnytsky and Lutsenko, from the NABU to the presidentially controlled Security Service of Ukraine, or SBU, in what critics, including Solomatina, believe to be an effort to destroy the case.
In March Oleksandr Pysarenko, the NAPC’s acting chief of staff, filed a report effectively confirming the whistleblowers’ position. He said top NAPC officials, including Oleksandr Skopych, could have committed crimes including abuse of power and failed to report officials’ failure to file declarations and violations in asset declarations.
Status: charged, on trial
In 2016 the NABU complained that Kholodnytsky was refusing to sign notices of suspicion against Yuriy Miroshnikov, CEO of tycoon Ihor Kolomoisky’s Ukraine International Airlines, and Denis Antonyuk, ex-head of the State Aviation Service.
However, subsequently the bureau charged them with embezzlement worth Hr 147 million and sent the case to trial.