Ukraine prosecutors investigate corruption as top official found clean

The Security Service of Ukraine (SBU) didn’t find any criminal wrongdoing in the investigation of Anatoliy Danylenko, the deputy prosecutor general of Ukraine, reported the Ukrayinska Pravda news site on Dec. 8, citing its interview with Prosecutor General Vitaliy Yarema. The SBU was asked to investigate the origins of a 140-hectare residential compound, which Yarema said belongs to Danylenko’s 30-year-old son, who defended his claim to the property in court, thereby removing any corruption suspicions. Danylenko has declared questionable sources of income and finances, the news site reported. As one example, Danylenko reported no funds on his bank accounts while family members had millions.

A high-ranking official with the state power company Centrenergo (CEEN UK) has been declared under suspicion of embezzling state funds in large sums, Yarema announced at a Dec. 8 press conference. In particular, UAH 5 million were allegedly stolen monthly through fraudulent enterprises, he said. Prosecutors have also confirmed embezzlement of state funds by the employees of Energoatom, the nuclear electricity producer, and have opened a criminal case of possible fraud committed by the director of Ukrinterenergo, Volodymyr Zinevych, which bought useless coal from South Africa at inflated prices.

Zenon Zawada: Even if there was no evidence of financial machinations committed by Danylenko, it still wouldn’t be appropriate for someone with such relations to Yarema to serve as his deputy (they are related through godchildren). No results have turned up either in the investigation of threats against journalists who were investigating Danylenko’s alleged machinations. But rather than dismiss Danylenko, Yarema directed the public’s attention towards other alleged incidents of corruption.

These developments add to the mountain of evidence that it’s business as usual in the Ukrainian government, namely nepotism and corruption. Given that Yarema is a direct appointment of Ukrainian President Petro Poroshenko, we can conclude that the president is willing to protect his entourage and pursue investigations against those not in his exclusive circle (the trend has been investigations without any convictions of significant figures). In this sense, the current government’s approach to corruption is no different than that of its predecessors in the Yanukovych administration, in our view.

However, the first protests demanding Yarema’s resignation surfaced last week, and we expect accelerating public demonstrations against the corruption in the Poroshenko administration, even earlier than the spring. We have little confidence in the president to implement the changes Ukraine needs, a view that we expect will spread fast and pose a challenge to his presidency “to shape up or ship out.”