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7 March, 2019
NAKO Statement on Bihus Defense Corruption Investigation
Corrupt officials should be brought to justice, Ukroboronprom - audited and reformed

On February 25 and on March 4, journalists from Bihus-Info presented a detailed investigation on corruption schemes in procurement for Ukroboronprom companies. Their investigation concluded that Ukroboronprom (UOP) knowingly purchased smuggled Russian equipment from an intermediary company, in a scheme apparently designed to benefit Oleh Gladkovsky, deputy secretary of the National Security and Defense Council and his son Ihor.  NAKO calls on Ukrainian authorities to launch an objective investigation of the facts presented by the journalists and bring the responsible officials to justice, as well as ensure that an independent financial audit of UOP companies is launched in March.

NAKO has been engaged in the effort to reform UOP since 2016, advocating for a functioning independent Supervisory Board and a full financial audit according to international standards of UOP and its companies. The Supervisory Board of Ukroboronprom is in place to prevent corruption within the concern. It is within the Board’s legal and moral responsibility to and oversee audits and eventually also help bring suspected officials of UOP to justice. This is why it is vital for the Supervisory Board to operate in line with the OECD Guidelines on Corporate Governance of State-Owned Enterprises, to ensure that the public can trust that it is doing its job effectively.

Considering the scale of corruption shown in “Nashi Hroshi” (Bihus-Info) investigation, NAKO calls for all measures to be taken in order to ensure a full audit of Ukroboronprom, and that it be independent and transparent.   NAKO also calls for policymakers to implement necessary changes in legislation  in order to ensure that similar abuse of power and law would be impossible in the future. The influence of criminal elements on the defence sector is devastating. The resistance of an old, post-soviet and pro-Kremlin system poses a fundamental obstacles for the implementation of real changes in our country, and the defense of its borders. The investigations are a vivid example of the benefit of appropriate democratic oversight to the security of the country. We hope that the result of their work will not be limited only by wide public acknowledgment, but also gets the attention it deserves from the ones responsible for delivering the justice.

As the country is preparing for presidential elections, NAKO calls for all candidates to clearly state their views on corruption in the defence sector. To that end, NAKO issued the open Questionnaire on January 21st, 2019 and hopes that all candidates will seize the opportunity to inform the public of their views on the matter.