AntAC Newsletter

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1. The most burning successes and challenges of the anti-corruption reform in Ukraine

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Yours, Anti-corruption Action Centre

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Караємо зашкварених мажоритарників

Holding those responsible for syphoning money from procurements.

Watchdogging for public procurement of drugs.

Map Ukrainian Politically Exposed Persons (PEPs)

Foreign partners condition Ukraine to fight corruption. We are monitoring how Ukraine implements these obligations.

Exploring corruption and learn to fight it.

Helping to return the money stolen by corrupt officials back to Ukraine.

Presidents Administration released Message Box for MPs re E-Declarations

The arguments in favor of amending the Law of Ukraine “On prevention of corruption” in terms of imposing requirement to submit Electronic declarations to representatives of NGOs working in the field of anti-corruption policy.

Current national legislation provides for broad public involvement in shaping, implementing and monitoring of anti-corruption policy, public control over the activities of anti-corruption authorities.

An active role in this process is played by individuals who are taking part in the realization of related programs (projects) of international technical assistance, in the work of civil groups and other non-business companies, which are aimed at preventing and counteracting corruption.

They are having the decisive influence on formation of the State policy and on the activities of key authorities on prevention and counteracting corruption (Council of Public Control under National Anti-corruption Bureau, Public Council Under National Agency of Corruption Prevention, Public Integrity Council).

Apart from that, these individuals influence on the ssemination of information on corruption in Ukraine, the formation of the ideology of intolerance to corruption in the society. However, recently cases on allegations of lack of integrity against certain   iconic representatives of NGOs became frequent. This discredits the idea of public control in the field of anti-corruption policy, affects the image of the individuals, institutions, civil society and the State.

The solution to this problem is ensuring greater transparency in the activities of the entities involved in the implementation of measures on prevention and counteraction of corruption by imposing certain preventive anti-corruption mechanisms on the above-mentioned individuals, specifically  such internationally recognized financial control mechanism as electronic declaration, which is provided  by national legislation. It would minimize speculation around wealth and conflict of interests of such individuals.

  1. Improving transparency, strengthening of public trust, strengthening of responsibility and exemplary behavior of non-governmental organizations is one of the key principles of the activity of civil society in accordance with international standards, like The Istanbul Principles for Civil Society Organizations Effectiveness. The introduction of effective modern forms of NGOs financial control by the State and by the Society is the right step towards achieving these standards.
  2. Ukraine uses the best practices of Member States of the European Union – Latvia, Portugal, Romania among others and also the US, were Managerial personnel of the American non-profit organizations should disclose their income (IRS 990 form).
  3. Introduction of electronic declaration – is the introduction of civilized forms of financial control and neutralization of conflicts of interest of Anti-corruption NGOs management.
  4. This is the instrument of rehabilitation of civil society and   its purification from fake corruption fighters, former public officials, who are abusing established NGOs as a scheme to avoid declaring ill-gotten funds.
  5. New mechanisms of financial control regarding the management of non-governmental organizations are useful also for donors of international technical assistance projects, as far as an effective system of  control over spending of projects funds and accountability to taxpayers is being created.
  6. Electronic declaration is not a punishment or a method of political pressure on non-governmental organizations for the anti-corruption activities. As far as new rules of financial control do not change the “game rules” for non-governmental organizations, do not harm their rights and responsibilities, do not weaken their organizational and financial independence from the State, do not restrict their right to receive international financial and technical assistance and do not interfere into internal processes of the organizations.
  7. New rules will apply only for managerial personnel of nongovernmental organizations and will not cover ordinary members.
  8. Amendments to the Law do not equate heads of non-governmental organizations to civil servants in terms of other limitations according to the status – gifts, prohibition of employment in other places.
  9. Heads of NGOs have to start filing electronic declarations only in 2018 (for the period starting from the day when law entered into force).
  10. It is impossible to impose a veto because of the timeframes, as far as the Law applies in regards to about 169,000 of military personnel and contracted servicemen who are protecting Ukraine from Russian aggressor and are exempt from electronic declaration.

Arguments “against”

  1. Revenge of the Presidential Administration, Petro Poroshenko Block, People’s Front Party and personally the President of Ukraine to the civil society. This revenge was planned long ago in the Presidential Administration.
  2. If the President signs the draft law he will declare war to the civil society. All NGOs which are related to the fight against corruption and their subcontractor will fall under the law.
  3. The amendments are allowing to avoid responsibility for many corrupt officials by getting the combatant status or by Entering to a higher military education institution.
  4. In domestic and international law term “corruption” is first of all related to the conflict of interest of the official, who in violation of the law abuses his powers for personal gain. A new edition of the law equals NGO staff to officials, which belie the common sense.
  5. Implementation of the law will lead to the paralysis of activities of the whole segment of civil society – because of the provision, which obliges all entities that provide paid services within the anti-corruption projects to declare (equally with state officials).  Business will be massively refusing from such a “faff”. It will be impossible to carry out trainings, education, conferences, publish literature, create websites etc. So, the aim of the law is blocking the  activity, while  “declaration for grant eaters” – is only a cover for misleading naive citizens.
  6. Members of civil society are playing a vital role in providing transparency; making them a target – is making one step backward.

Counterarguments

Following many public scandals regarding anti-corruption activists (lobbyism of Chumak, real estate of Leshchenko, Zalishchuk and Nayem, declaration and lobbyism of Shabunin) the anti-corruption sector needs rebuilding trust. E-declaration will help in this.

The legislation of the US envisages that all nonprofit organizations file a form 990s which includes all profits, expenses, assets of  main recipients of funds, salaries of key staff, etc. Here it is: Http://www.irs.gov/pub/irs-pdf/f990.pdf

This information is public and should be provided to anyone upon first request.

And the logic here is easy. If you are not paying taxes, meaning you are getting benefits from the country  – than be so kind to report to the citizens of this country why they are paying taxes when creating legal entities and you don’t. And for what good things  for the country did you spend these unpaid taxes.

  1. Chornovil: Recently I read a bestseller of New York Times and Wall Street Journal “Why nations fail”, specifically  part  on “Fail of International Assistance”.

It refers to the fate of the billions of international assistances for Afghanistan after falling of the Taliban regime. The fact that this aid did not reach ordinary Afghans not even because it was stolen by native corrupt officials but because it dispersed in the organizations which were passing grants to each other.

I quote a paragraph about a multimillion aid in the program of restoration of housing in one of the regions of Afghanistan: “What happened with millions of dollars which were promised to peasants? 20% were spent for the support of the UN headquarters in Geneva. The rest was given to the NGO under the Agreement and it took 20% for supporting of the headquarters in Brussels and the same thing happened with three organizations at the lower level and every participant took 20% of what has left. Those meager funds that remained in the program were spent to buy some… logs. They were unloaded in the middle of one of the Afghan villages and peasants sawed them for firewood.

Does this situation look familiar? No? It does. Recall  the international assistance of Denmark in the sphere of e-declaration launch, which happened last year. Millions of dollars melted there as well during the passing of funds from the grantgiving organization to the granteating organization, who received it and after that to the second and third organization. As a result, the developer of the software got only thousands and the e-declaration software turned out to be very bad.

I quote the book more: ” The thing which happened in the central valley of Afghanistan is not a special case. Numerous researches show that final recipient gets 10 to 20% of aid. There are dozens of studies of abuse which blame the UN local administrations officials in outflows of assistance provided. However, the biggest part of losses connected with international assistance are not abuses but rather INCOMPETENCE or, what is worth, JUST BUSINESS AS USUAL FOR THE ORGANIZATIONS WHO PROVIDE ASSISTANCE”

Head of the “Anti-corruption Action Centre” Vitaliy Shabunin concealed from his tax return for 2014 the land plot of his wife. Journalist Volodymyr Boiko reports on Facebook.

Let’s talk about anti-corruption activists. On the screen – monthly expenses for “Slidstvo.info” (source – Roman Skrypin).  Look at the lines 13 and 25. According to them (Dmytro) Gnap receives $5150 or almost 140 000 UAH. The fight with corruption is well paid, don’t you think so?

…Plus anti-corruption activists are in fact lobbyists and influence on the decision making by the government authorities in Ukraine. And they also needed to be controlled, but with the real civil control, not that funny one which they perform by white washing the NABU.

Serhiy Sydorenko de-facto confirms  the need for e-declaration for representatives of NGO.

Exaggerated fight against corruption from Tatiana Chornovol. A bit of history

This post was first published on my facebook page but as far as attention to it was quite significant, it is worth to deliver it to the general public in – a blog on UP.

It is not a journalist work – actually I have no interest in exploring the lifestyle of Tetiana Chornovol. But people in crowd perfectly know that her way of thinking is very far from the Image of implacable corruption fighter which she has chosen. Tetiana has devoted a lot of time to the fight against “Mezhyhirya” stolen from the State but when she had an opportunity to take a land for her “manor“, even if the scale was smaller, she  openly admitted to colleagues that such a chance could not be missed…

Ihor Schedrin: Why Anti-corruption activists do not want to show their income and property in e-declarations?

Ukrainian professional corruption fighters don’t know how to work without communist rhetoric. Exclamation: “He has stolen ten million dollars!” is not working without detailing “And has built a castle for them!”. It was the power of our “anti-corruption activists“: They almost never could build an evidence base for their exposures (lack of intelligence, tenderness and professionalism), but the plot’s heroes really had castles and they were an evidence for the society: where there’s smoke, there’s fire,”gnapuniny” (mix of surnames of Gnap and Shabunin) have a point. And the main motivation for a lot of “gnapuninyh” was: to grow on  this ”humus” of communist rhetoric, inscribe their face’s oval into the rectangle of the TV, earn the love of the electorate and become a politician. The real one. Not a social activist. To become a Member of Parliament, Minister, President in the end!

What will happen if millions of taxpayers will find out that exposers also have their own palaces? That they earn more than the Minister or the President? …And Ukrainian people, who took the bait of fables of “anti-corruption activists” – mainly leftists, mentally crippled by a planned economy.

Electronic declaration completely deprives the main resource of “anti-corruption crowd”, who accrued very fat wages to themselves contrary to the methodical instructions of grantors during many years. This main resource is trust. If the honest blue eyes of civil activist reflect digits of his bank account, who will believe him? There will be no political career, there will be no respect, there will be no support of really honest people who believe in unselfishness of the “fighters”. That is why anti-corruption activists – millionaires are shaking. And rightly so.

  1. It is strange that “corruption fighters” made a fuss. Guilty conscience needs no accuser?

After numerous scandals with anti-corruption activists (lobbyism of Chumak, real estate of Leschenko, Zalischuk and Nayem, declaration and lobbyism of Shabunin) anti-corruption community needs restoration of trust. E-declaration will facilitate this.

  1. Classical definition of corruption from Transparency International is as follows:

“The abuse of entrusted power for private gain”.

  1. This applies to civil servants for 90% but not only to them. Corruption activities could be committed by employees of medical industry, educational sector and also non-governmental organisations (anti-corruption, ecological, anti-raiding, parapolitical and others), which are lobbying the decisions of public authorities, by inclining them to certain decisions.   (Transparency International: Political corruption is a manipulation of policies, institutions and rules of procedure in the allocation of resources and financing by political decision makers, who abuse their position to sustain their power, status and wealth).
  2. Amendments to the law on E-declaration is the first step to expanding the list of those who files declarations. The next steps will certainly take place. Our aim: every citizen of Ukraine without exception will file e-declaration.
  3. Why did it start from the NGOs? Because:
  • In Ukraine, their influence is almost the same as governmental authorities. Now they are performing the whole set of governmental functions: confirm the officials, influence on the distribution and redistribution of budget funds (Commissions, Public Councils), inclining the “classical Government” to certain decisions using public campaigns, including international ones.    
  • Former leaders of an NGOs are now presented in public authorities – Members of Parliament, employees of the Ministries. If they filed their dubious e-declarations before their election or appointment they would not have been elected and appointed.
  • Current leaders of an NGOs are tomorrows public authorities, at least part of it. If they file e-declarations today it will be a powerful filter to avoid corrupt officials in future’s authorities.
  1. Corruption always has two components:
  • Illicit enrichment (bribe)
  • As a result: ensuring the adoption of decisions harmful to society.

Illicit enrichment is an indicator of corruption. If there is an enrichment – there is corruption.  

  1. The aim of the e-declaration is the reduction of corruption possibilities and ineffective decisions of the State authorities which are performed using lobbyist influence.  
  2. Technical mean is the separation of real NGO from the lobbyist ones.
  • Real. There is no illicit enrichment. The decision to the State authorities are proposed based on the meeting public interest
  • Lobbyist. There is illicit enrichment. The decision proposed to the State authorities are harmful with the aim of getting personal or hirer’s illicit enrichment.

The criterion of distinction: the presence or absence of illicit enrichment. Meaning e-declarations.  

The original document was released by Ukrainska Pravda on March 28. Allegedly it was produced at the Presidential Administration and disseminated among MPs from Poroshenko Bloc, who are public speakers. AntAC prepared translation of the document into English.