E-declaration aftermath: E-declaration: outcome of unprecedented ‘financial striptease' of Ukrainian politicians

09:57 Nov. 1, 2016

E-declaration: outcome of unprecedented ‘financial striptease' of Ukrainian politicians

Rally in support of e-declarations by the Ukrainian parliament building (Photo source: censor.net)

Experts, lawyers and activists discuss what's going to happen after officials and MP's revealed their extraordinary wealth

"Tens of thousands of Ukrainian officials and lawmakers have disclosed their incomes and assets in a publicly available database for the first time," The Associated Press informed world this morning.

Sunday midnight was the deadline by which all Ukrainian officials were due to declare expensive possessions and assets held in their own and their families' names in what is commonly known in Ukraine as an e-declaration. Some Ukrainian politicians complained about filling in the elaborate forms for hours, and several lawmakers didn't meet the deadline.

The data from the e-declaration has been posted on a searchable online database that has been available since early Monday. It has been lauded as a major step toward transparency in the corruption-ridden Ukraine.

The e-declarations, which have been filed by more than 50.000 officials, were developed under the guidelines of the UN. development agency UNDP.

"The international community, including the UN, will be behind Ukraine in these next steps because the e-declaration is only the first step. What comes after is maybe even more difficult," UNDP's Ukraine director, Janthomas Hiemstra, told AP.

Olexandra Ustynova, board member of Ukraine's grassroots Anti-Corruption Action Center, hailed the e-declarations as "a kind of new revolution for Ukraine," saying that the elaborate disclosure of luxury gifts and property should prompt investigations by the government's anti-corruption task force.

President of the European Parliament Martin Schulz and President of the European Council Donald Tusk already congratulated President Petro Poroshenko "on successful completion of the first phase of e-declaration in the framework of the newly established system of preventing corruption", press-service of Ukrainian leader informs.

Anders Fogh Rasmussen, the former NATO secretary-general, called the introduction of e-declarations in Ukraine an important step in the fight against corruption which the whole of Europe should applaud for, UNIAN reports. Rasmussen believes that it is a remarkable system, more advanced than those used in many Western countries, and a demonstration of a strong will to fight corruption.

Read also Pitch-forks and wads of cash: top weird declarations of Ukrainian civil servants

But after the first euphoria experts and media asked the next question: what declarants should expect after such public confession?

An anti-corruption reform requiring senior Ukrainian officials to declare their wealth online has exposed a vast difference between the fortunes of politicians and those they represent, Reuters points.

"Some declared millions of dollars in cash. Others said they owned fleets of luxury cars, expensive Swiss watches, diamond jewelry and large tracts of land - revelations that could further hit public confidence in the authorities in Ukraine, where the average salary is just over USD 200 per month," agency explains.

Prime Minister Voldymyr Groysman, who last week likened the declarations process to jumping out of an airplane, revealed that he and his wife had a total of USD 1.2 million and 460.000 euros in cash and a collection of luxury watches.

The database also shows that Groysman, a former businessman and provincial mayor, is not alone in preferring to keep much of his money out of Ukraine's banking system.

Reuters calculations based on the declarations show that the 24 members of the Ukrainian cabinet together have nearly USD 7 million, just in cash.

"When the Economy Ministry says that in some areas around 60 percent of the economy is in the shadows, then this is accounted for by the volume of cash registered by civil servants, officials and lawmakers," said Taras Kachka, deputy executive director at George Soros's International Renaissance Foundation.

Justice Minister Pavlo Petrenko, who declared USD 1 million in a bank account and a further 500.000 dollars in cash, said officials' decision to hold cash pointed to a mistrust in the banks that many Ukrainians could relate to.

"Of course to EU countries it seems uncivilized that people hold cash," he said. "But it is linked to the fact that the banking system could, let's say, be doing better. This is a problem for many Ukrainians who lost their savings in the bank," minister explained.

However, the public reaction has been one of shocked dismay at the extravagant lifestyles conjured up by many of the disclosures.

"We did not expect that this would be such a widespread phenomenon among state officials. I can't imagine there is a European politician who invests money in a wine collection where one bottle costs over 10.000 dollars," said Vitaliy Shabunin, the head of the non-governmental Anti-Corruption Action Center.

He means lawmaker Mikhail Dobkin from ‘Opposition Bloc' (remnants of Viktor Yanukovych's ‘Party of Regions'). His declaration included 1,780 bottles of wine and an antique copy of Russian novel Anna Karenina worth at least USD 5,500.

The declaration of Oleh Lyashko, the head of the populist ‘Radical Party' who has styled himself as a representative of the common man, showed he rented a house and land in Kiev's most exclusive district and his household had cash worth the equivalent of over USD million.

Read also Laughter through tears: Ukrainians react to declarations

Many senior politicians filed their forms in the last two days before the deadline, resulting in a crescendo of surprise and anger on social media over the weekend.

"I personally feel unwell. Or rather, like someone who has been beaten and is therefore unwell. I had no illusions about our political and official elite. But all the same, what's come out is beyond the pale," Roman Donik, a volunteer to Ukraine's frontline troops, said on Facebook.

The average Ukrainian citizen has been hit hard by the economic crisis that unfolded in the wake of the 2014 pro-European 'Maidan' uprising and subsequent Russia-sponsored ‘separatist' conflict. The national hryvnia currency has plummeted to 25 to the dollar from 8 in 2013 and energy tariffs have soared under the IMF-backed economic reform program, Reuters explains.

From now on declarations of officials are to be checked by the National Center of Preventing Corruption (NAZK). After finding some suspicious data they should appeal to the National Anti-Corruption Bureau (NABU) to open criminal cases if needed. So says it will now start verifying the declarations, but with over 100.000 forms submitted, it is unclear how thorough the process can be.

Vitaly Shabunin stresses that this is an important step to make people see who they choose during the elections and to make a conscious choice in the future, RFE/RL reports.

"If a person has 12 flats, 20 plots of land and USD 5 million in cash, then it is difficult for him to understand the problems faced by 95% of Ukraine," he explained.

As for cash, declared by officials, Vitaliy Shabunin suggests that it may be fictitious amounts and specifically submitted to avoid explaining corruption gains in future. However, the head of the organization said that the declarations must be checked, and illicit enrichment should provide criminal liability.

"We see declaration that potentially have the features of illegal enrichment. We did not expect for such accuracy," Shabunin said.

"Illicit enrichment" is a declarative paragraph that does not work, emphasizes Igor Popov, MP of the Radical Party and Deputy Chairman of the Committee on Preventing and Combating Corruption. Declarant only should explain the source of income, and that's enough, even if the evidence questionable, MP stresses.

Igor Popov believes that popular anger will be focused on the people who honestly revealed the wealth, but those cheated will avoid it. MP says no punishment will follow the submission of false data.

"We must make a total declaration, make records of all property, all land... Now no benefit for the citizens or the state will happen. Overall disappointing, a little curiosity to the juicy details, but then comes another wave of disappointment when no one will be punished and there will be no concrete results," he says.

Read also Poroshenko's e-declaration includes over 100 firms

But executive director of ‘Transparency International Ukraine' Jaroslav Yurchyshyn does not agree with this statement. He is convinced that even jokes in declarations would be punished. But real punishment for illegal enrichment will not happen soon.

"As the practice of leading countries shows, it is quite complex processes. For example, the Latvian National Anti-Corruption Bureau was established in 2002, but the first millionaires were caught out and brought to the court only this year," Yurchyshyn pointed.

He called activists and journalists to investigate and provide evidence from declarations to anti-corruption officials to push the process.

"I also do not believe it would be fast. But now we have a unique situation where everything is recorded in the public domain, and as they say "manuscripts do not burn" – databases too, they just need to be put to good use by journalists and activists," executive director of ‘Transparency International Ukraine' stressed.

Prominent Ukrainian lawyer Natalia Radchenko focused on the legal procedures following the e-declarations, Liga.NET informs.

"Verification mechanism of e-declaration is currently unknown. All the deal at the moment is about the collecting of the declarations. From what is written in the law, NAZK initially provides the technical inspection, looking for compliance – who filled in and is the declaration correct, identify logic errors. NAZK has the right to check the data on the level of public data. If the Agency openly questioned the official declaration, then the issue is to be transmitted to NABU. And NABU detectives are to work closely with NAZK," she explained.

Read also Ukraine politicians' huge cash piles exposed in reform drive - BBC

But the President of the Supreme Court of Ukraine Yaroslav Romaniuk noted one more danger of sharing the wealth declarations of judges – because this information can benefit thieves, UNIAN reports.

"Previously our declarations could be used only special bodies – fiscal service, anti-corruption bureau, but now they put them in the public domain. And the offender has the ability to see who is rich and who he should visit to get profit. There are such risks, we think. And time will pass and we see whether we were right or not," Romaniuk said.

But it seems thieves don't need e-declarations to find out who is rich among judges – they just need to check their cars, or just the occupation. Blogger Klym Bratkivsky reviewed 200 declarations of judges and prosecutors, and confirmed that most of these declarants' revenues do not meet the costs they spend.

"It seems that it's not prestigious to work in prosecutor's office in Kyiv without ‘Infiniti'. Or, for example, a judge of the Supreme Economic Court. Wherever you look – every judge has ‘Jaguar', ‘Infiniti', ‘Lexus' and so on. Typically, 99% of them have worked all their lives in public service. They are not businessmen. It is clear evidence that it can't be true – their salary is too small to cover these things," blogger says.

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