A New Generation of Corrupt Officials in Ukraine

Oleksii Horashchenkov Oleksii Horashchenkov

Personnel shortages raise strange candidates to the top positions of Ukrainian law enforcement agencies. Young, educated and corrupt to their very cores.

The recently completed competition for the positions of heads of the State Bureau of Investigation of Ukraine has shown that people with absolutely odious reputations have no shame in putting themselves forward for such high and sensitive posts.

A total of some 60 persons applied for the competition. Among them were outright strange figures, as well as quite passable candidates, and “dark horses” who are bound to appear in high positions in the future. They can even end up being pulled up through the competition procedures or appointed by bypassing them. They have many skeletons in their closets. This means that their reputations will allow puppeteers with sufficiently big and dirty dossiers on these characters to manipulate them.

Usually, they have a history deeply rooted in corruption schemes orchestrated during the rule of Viktor Yanukovych, have been involved in semi-criminal takeovers of state property, and have extensive ties with shadow structures.

Neither the young age of these people nor their participation in today’s state bodies is a guarantee against this. A very telling example is Oleksii Horashchenkov. He obtained a law degree at the elite educational institution, the Institute of International Relations in Kyiv. He also studied at the NATO Defense College (NDC) in Rome, Italy. He currently holds a very respectable position of deputy chief of the Head Department for Strategic Planning and Operational Support of the Presidential Administration of Ukraine.

But this is the clean part of his biography. And now let’s talk about the skeletons in the closet of Mr Horashchenkov. The most prominent of known corruption episodes involving Oleksii Horashchenkov is the statement of Hanna Solomatina, ex-employee of the National Agency for Corruption Prevention (NAZK), that he was the so-called “curator” behind the activities of the NAZK.

“We talked with Horashchenkov about the fact that draft decisions on full checks should be agreed with him: whom to check or not to check, what the results should be,” said Solomatina to Hromadske TV (https://hromadske.ua/posts/oleksii-horashchenkov-ie-kuratorom-nazk-vin-administratsii-prezydenta-solomatina).

The scandal surrounding the manipulation of the results of investigation against state officials based on their e-declarations of assets hit Ukraine in early November. It may lead to changes in the leadership of NAZK, the body responsible for collecting, publishing and analysing e-declarations of Ukraine’s state officials.

The most difficult of the known incidents involving Oleksii Horashchenkov is the takeover of property belonging to the Ministry of Defence of Ukraine. Of special interest in this case is the involvement in this hostile takeover of not only the law firm for which Mr Horashchenkov used to work but also of Russian money. On January 19, 2017, the Kyiv Economic Court http://www.reyestr.court.gov.ua/Review/64200713 delivered a decision in which it turned down the request of an enterprise of the Ministry of Defence of Ukraine to restore assets in the centre of the capital of Ukraine. The property is a complex of industrial and storage buildings located on 16 Hospitalnyi Lane.

Oleksii Horashchenkov

Oleksii Horashchenkov

The online publication Nashi Hroshi published an article uncovering the mechanism of this property’s takeover (http://nashigroshi.org/2017/01/31/minoborony-ne-zmohlo-vidsudyty-u-firmy-putinskoho-deputata-sklady-v-tsentri-kyjeva/). The article states that the takeover was carried out in the interests of Moonlight East Ltd., whose final beneficiary was named to be Aleksandr Babakov, the member of the State Duma of the Russian Federation. In addition, Nashi Hroshi refers to the criminal issue of appropriation of state funds by VS Energy, a company belonging to Babakov. In the judicial applications from June 2016, investigators point to a direct relation between Moonlight East Ltd and VS Energy. According to Nashi Hroshi, the Cypriot company Carallo Investments Limited subsequently became the formal owner of Moonlight East.

The tracks of Oleksii Horashchenkov in this dirty takeover scheme are clear, beginning with the days when he was one of the key employees of the Interkas law firm founded by his father Mykola Horashchenkov. In 2002, the military unit A2352 transferred its property to the law firm Interaks Kyiv Ltd as debt repayment. It was the very property the Ministry of Defence of Ukraine failed to return through legal proceedings in 2017. The property consists of a 2,000-square-metre complex of premises in the centre of Ukraine’s capital and the land plot on which they are situated. Of particular value is the land plot, as it is located between the Kyiv Fortress Museum, Olimpiyskyi Stadium and the Rus hotel.

In 2002, the dirty scheme was launched with the property takeover by Interkas. Later Interkas sold the real estate complex to the law firm Lotok and Partners.

Shortly after the transaction with Lotok and Partners, to render the return of the aforementioned property and a number of other assets impossible, Interkas was declared bankrupt in June 2004. This way a classical takeover scheme in Ukraine was created: takeover of property, sale of property to the first “bona fide purchaser”, bankruptcy of the hostile possessor-seller, sale to the next “bona fide purchaser”. The next buyer in line after Lotok and Partners was Moonlight East.

And now let’s take a look at Mr Horashchenkov Jr’s career. Between 1999 and 2001, he worked at Interkas and from 2002 at Lotok and Partners. He then moved to civil service. Until 2005, he held civil servant positions at the Ministry of Foreign Affairs of Ukraine, without working for a single day in the diplomatic corps. Then consecutively: the Ministry of Justice, the State Migration Service, and back to the Ministry of Justice. And it’s civil service everywhere: assistant to the head, head of structural divisions. His career continued without interruption during the presidencies of Viktor Yushchenko, Viktor Yanukovych and now Petro Poroshenko.

Nevertheless, Oleksii Horashchenkov received the high diplomatic rank of Envoy Extraordinary and Plenipotentiary of the First Class in August 2015 (http://zakon0.rada.gov.ua/laws/show/517/2015). He received this rank while being assistant to the President of Ukraine, i.e. not in the diplomatic service. Who is promoting the “diplomat”? More importantly, why? After all, when he takes public office, his entire biography would be scrutinized under the magnifying glass. And all the skeletons in his closets would become the property of the media.

For example, the story that almost all of the assets belonging to the family of Oleksii Horashchenkov are registered in the name of his wife Anna, including the allegedly incomplete 600-square-metre house in the capital (https://public.nazk.gov.ua/declaration/7d74b95c-8e68-48d0-b375-f79b9ac1c2cf). Until 2016, such schemes made sense, but with the launch of e-declarations to be filed by civil servants, all assets held by their close relatives are out in the open. In addition, there are questions surrounding some of Mr Horashchenkov Jr’s deals. For example, he drives an expensive car offered for use by his father. In 2015, he sold half a flat for an exorbitantly high price to a close relative. This transaction may be regarded as part of a scheme to legalise funds of illicit origin.