All on a government salary.

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Thankless Job? Try Fighting Graft in Ukraine

Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
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Throughout its 23 years as an independent state, Ukraine has been one of the most corrupt countries in the world. As it tries to clean itself up, the people driving change are predictably frustrated by the formidable resistance they face, and yet remarkably undeterred.

Previously: 30-Somethings Remake Ukraine

Tatyana Kozachenko, 39, was the founding partner in a Kiev corporate law firm when Ukraine's "revolution of dignity" began in 2013. Suddenly, all she was doing was pro bono work for protesters, serving as a self-described "legal ambulance". She had become so frustrated with the stifling, corrupt system built under President Viktor Yanukovych that she felt her day job no longer made sense. 

"It was all decided before one could do anything about it -- the kickbacks, the schemes, the raids on businesses that someone in the Yanukovych family liked," Kozachenko says. "I had a client who was told to give up a factory for 30 percent of its value, and when he was slow to do it, suddenly there were six criminal cases against him."

While defending activists in the Yanukovych-controlled courts, Kozachenko and a group of like-minded people became convinced that what Ukraine needed was lustration -- a ban on civil service employment for people who held the top jobs under the Yanukovych regime. After the president fled to Russia early last year, Kozachenko helped the newly-appointed Justice Minister, Pavlo Petrenko, draft a lustration bill. She was soon brought into the ministry to oversee the process, without a budget and with a staff of 15 poorly paid civil servants. "It was do it or be sorry later," she says.

Kozachenko has occupied a cramped office in the justice ministry for four months and is happy with what she's achieved so far. She's been developing Excel spreadsheets that track the job moves of Yanukovych-era officials, to see if government agencies have fired them as required by the law. Most quit voluntarily when the law came into effect last summer, but some managed to hold on to their positions because the heads of government bodies closed their eyes -- or actually wanted people with their experience.

"These are useful people if you want to get in on the schemes they were running," Kozachenko says.

Yesterday, she took one of her spreadsheets to David Sakvarelidze, who was put in charge of reforming the Prosecutor General's office a month ago. A Georgian national, Sakvarelidze has trouble typing on the computer in his office, having never used a Cyrillic keyboard before.  Yet he is working hard to slash the number of prosecutors and investigators from the current 18,000, so he can double the salaries of the staff that remain. He was acutely interested in Kozachenko's data, which shows him where to find Yanukovych holdouts he can fire.

Kozachenko and Sakvarelidze are open about their frustration at the slow pace of change.

"When reforms began in Georgia in 2003, the entire government budget was $700 million," recalls Sakvarelidze, who helped implement former President Mikheil Saakashvili's law enforcement reforms in the Caucasus nation. "The very first year, we retrieved $1.4 billion stolen by officials under the previous regime. Ukraine needs these resources, but it's not getting them back."

Georgia got the money by summarily cutting plea bargain deals with the former officials. Ukrainian law doesn't allow this, but then strictly speaking nor did Georgia's. Sakvarelidze figures Ukraine could get $5 billion just by bringing back 10 to 15 percent of the funds that used to be stolen from Ukraine in one year. "The Yanukovych people who fled to Russia don't like it there," Sakvarelidze says. "They want to be able to return, travel to Europe. But what are we offering them except the certainty of jail terms? What do we really want: a former bureaucrat in prison for 10 years or 80 percent of what he stole back in government coffers?"

Few former officials have been convicted of corruption-related crimes. There have been  suicides by former Yanukovych allies who remained in Ukraine, but no arrests of major old-regime figures. European sanctions against Yanukovych's allies have recently begun lapsing, because Ukraine does little to investigate them. 

"I'd like to see faster changes," Sakvarelidze says. "The political spectrum here is much more fragmented than it used to be in Georgia, and the oligarch groups wield a lot of influence through legislators."

In this environment of indecision and fragmentation, corruption has endured. "OK, the standard kickback has dropped to 15 percent from 30 percent, but that's largely because people have no money to pay it," Kozachenko says.   The heads of the tax and customs services as well as the government financial inspectorate, an anti-corruption watchdog, have been suspended on corruption charges, and the head of the state agency for emergencies was recently handcuffed and led away from a cabinet meeting. "Everybody in the room must have wondered if the cops had come for them," says Kozachenko, grinning.

Prime Minister Arseniy Yatsenyuk has been trying to build up his credentials with these high-profile arrests, but his own government is now being accused of graft and some suspect the motive for the prosecutions is mainly political. Mykola Gordienko, the suspended chief financial inspector, wrote in a letter to the Prosecutor General: "Now I know for sure that the shortage of funds has to do with the corrupt activities of the government and the necessary funds can be found without cutting pensions and with significantly less dependence on foreign borrowing, just by stopping the systematic corruption of the Yatsenyuk government."

No matter what's behind the arrests and suspensions, both Kozachenko and Sakvarelidze like the publicity they generate. "We need to get rid of the cult of the civil servant as someone untouchable," Sakvarelidze says.

They both realize positive change is only just beginning: Not much has happened in the year since the revolution, and the government is losing political support as Ukrainians face increasing economic hardship. However, each of Ukraine's unlikely new officials working to reinvent the country has a powerful motive to succeed. 

For Sakvarelidze, who is not welcome in Georgia under the current regime, the job in Kiev is a chance to prove Saakashvili's team can still work miracles and should be brought back. "My allies in Georgia are looking to Kiev as if it were Jerusalem now," he says. He has become a Ukrainian citizen to take the job, but still has a year to give up his Georgian passport and is in no hurry to do so.

As for Kozachenko, her partner in the law firm is begging her to come back, she says, but it's pointless until her job at the justice ministry is done: Otherwise, she'll come up against the same stone wall in the courts she faced under Yanukovych.

So both work long hours, hoping to change as much as they can before it becomes impossible, or a breakthrough occurs. For their sake and Ukraine's, I hope -- against hope -- that it's the latter. 

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Leonid Bershidsky at lbershidsky@bloomberg.net

To contact the editor on this story:
Marc Champion at mchampion7@bloomberg.net