Ukrainian Corruption Beats Records: $11 Billion in 2008-2009

KYIV, Ukraine, January 28, 2011 /PRNewswire/ -- The results of the 2010 audit conducted by the State financial inspection (SFI) of Ukraine, revealed fiscal violations of 90 billion Ukrainian hryvnia (approx. $11 billion). The misuse of public funds takes up to one-third of all identified violations, according to Petro Andreyev, head of the State financial inspection of Ukraine.

Petro Andreyev said the embezzlement of 15 bln. Ukrainian hryvnia (UAH) (approx. $2 billion) took place in the area of state procurement of goods and services. The Ministry of Economy of Ukraine (MoE) played the key role in such embezzlements, according to Andreyev.

In 2008-2009, the Cabinet of Ministers of Ukraine issued 60 orders, enabling customers to avoid using mandatory procurement procedures. In most cases, the ordinances were initiated by the MoE.

MoE has given its consent to the Ministry of Defense to purchase overpriced fuel worth almost 52 mln. UAH (approx. $6 million), hurting the country's economy by more than 1 million UAH. The former Minister of Economy issued the letters to the Ministry of Emergency Situations approving the purchase of fire engines and ambulance vehicles totaling about $32 million, which let MES avoid issuing a tender on the premises of "absence of competition." Afterward, Ministry of Emergency Situations purchased 27 ambulance vehicles, causing losses to the state budget in the amount of approximately $2 million.

Andreyev noted that similar violations took place on multiple occasions including the one in the city of Shostka during the repairs of the public heat supply system, and in Kyiv during the construction of the security data processing center for EURO 2012, as well as during installation of auxiliary subsystems including video surveillance, traffic moving detectors, automatic traffic control system, etc.

The State financial inspection has transferred more than 6 thousand audit cases, which indicate the losses incurred by the state, to the law enforcement agencies. About 1.5 thousand of these cases have already served as evidence for multiple ongoing criminal investigations.

Bohdan Danylyshyn occupied the position of the Minister of Economy of Ukraine since December 18, 2007 till March 11, 2010.

The ex-prime-minister's political party BYuT dismissed the accusations, claiming that the inspection is "aimed at defamation of the opposition and using a so-called case-based reasoning to conduct repressions."