How Corruption and Anti-Corruption Policies Sustain Hybrid Regimes : Strategies of Political Domination under Ukraine’s Presidents in 1994-2014 9783838274300

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Michael Johnston, Professor Emeritus of Political Science, Colgate University, New York

“Ukraine is an exemplary case to demonstrate the complexities of the fight against corruption. In her book, Oksana Huss does not simply illustrate this over a longer time period and with more details than usual. Crucially, she provides a systematic analytical framework which coherently and convincingly brings together the numerous and diverse aspects of the political economy of corruption.” Heiko Pleines, Professor of Comparative Politics, University of Bremen

“At a time, when quantitative analyses of dubious quality have come to dominate research on corruption, Oksana Huss presents a masterfully crafted study that deserves the attention of every scholar who seriously tries to understand the political dynamics of corrupt practices and anti-corruption campaigns. It is also a must-read for students of modern Ukraine. Her fine analysis traces how patterns of corruption and anti-corruption shaped and were shaped by Ukraine’s three presidential regimes from 1994 until 2014. It leaves the reader with a central message: to understand today’s hybrid regimes, a solid understanding of institutionalized corruption is indispensable.”

218

How Corruption and Anti-Corruption Policies Sustain Hybrid Regimes

“Huss, in this provocative study of Ukraine, shows that the conventional wisdom is misleading. Both corruption and reforms can be means of control, solidifying rather than undermining the power of presidents—even those who govern badly. In a time of international awareness of corruption, that might seem surprising—but top figures can skew our perceptions by the ways they ‘frame’ corruption and reform. In struggling societies dealing with corruption is much more than just a matter of making and enforcing rules.”

SPPS

Huss

Leaders of hybrid regimes in pursuit of political domination and material gain instrumentalize both hidden forms of corruption and public anti-corruption policies. Corruption is pursued for different purposes including cooperation with strategic partners and exclusion of opponents. Presidents use anti-corruption policies to legitimize and institutionalize political domination. Corrupt practices and anti-corruption policies become two sides of the same coin and are exercised to maintain an uneven political playing field. This study combines empirical analysis and social constructivism for an investigation into the presidencies of Leonid Kuchma (1994–2005), Viktor Yushchenko (2005–2010), and Viktor Yanukovych (2010–2014). Explorative expert interviews, press surveys, content analysis of presidential speeches, as well as critical assessment of anti-corruption legislation are used for comparison and process tracing of the utilization of corruption under three Ukrainian presidents.

The author: Dr Oksana Huss is a Research Fellow at Bologna University. She earned her PhD at the University of Duisburg-Essen and held a postdoc position at Leiden University. Huss taught at the Kyiv-Mohyla Academy as well as Kyiv School of Economics, and consulted the Council of Europe, EU, UNESCO, and UNODC. She is a co-founder of ICRNetwork. org—the Interdisciplinary Corruption Research Network.

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Oksana Huss

Strategies of Political Domination under Ukraine’s Presidents in 1994-2014

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Soviet and Post-Soviet Politics and Society

How Corruption and Anti-Corruption Policies Sustain Hybrid Regimes

Christoph Stefes, Professor of Political Science, University of Colorado, Denver

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Oksana Huss

HOW CORRUPTION AND ANTI-CORRUPTION POLICIES SUSTAIN HYBRID REGIMES Strategies of Political Domination under Ukraine’s Presidents in 1994-2014 With a foreword by Tobias Debiel and Andrea Gawrich

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Abstract This book argues that leaders of hybrid regimes in pursuit of political domination and material gain instrumentalize both hidden forms of corruption and public anti-corruption policies. Corruption is pursued for different purposes including cooperation with strategic partners and exclusion of opponents. Presidents use anti-corruption policies to legitimize and institutionalize political domination. Corrupt practices and anti-corruption policies become two sides of the same coin and are exercised to maintain an uneven political playing field. This study combines empirical analysis and social constructivism for an investigation into the presidencies of Leonid Kuchma (1994–2005), Viktor Yushchenko (2005–2010) and Viktor Yanukovych (2010–2014). Explorative expert interviews, press surveys, content analysis of presidential speeches, as well as critical assessment of anti-corruption legislation, provide data for comparison and process tracing of the utilization of corruption under three Ukrainian presidents. Dr. Oksana Huss is a Research Fellow at Bologna University. She did her doctorate at the University of Duisburg-Essen and a postdoc at Leiden University. Huss taught at the Kyiv-Mohyla Academy as well as the Kyiv School of Economics, and consulted for the Council of Europe, the EU, UNESCO and UNODC. She is a cofounder of ICRNetwork.org—the Interdisciplinary Corruption Research Network. The authors of the foreword: Dr. Tobias Debiel is Professor of International Relations and Development Policy at the University of Duisburg-Essen Dr. Andrea Gawrich is Professor of International Integration at Justus Liebig University of Giessen

v

Table of Contents Abstract................................................................................................... v List of Figures .................................................................................... xiii List of Tables ....................................................................................... xv List of Abbreviations ...................................................................... xvii Acknowledgments............................................................................. xix Foreword by Tobias Debiel and Andrea Gawrich ............................ xxiii 1.

Introduction ................................................................................... 1 1.1. The research puzzle ............................................................... 3 1.2. The research question............................................................ 4 1.3. The central argument ............................................................ 5 1.4. Methods of data collection and analysis ............................. 6 1.5. The structure of this study.................................................. 11

2.

Conceptualizing corruption: Definitions, typologies and explanatory approaches ............................................................. 15 2.1. From worldview to the concept ......................................... 15 2.2. Core characteristics of corruption ..................................... 17 2.3. Varieties of corruption ........................................................ 19 2.3.1. Distinguishing context: Corruption as an exception vs. corruption as the norm ................... 20 2.3.2. Distinguishing relevant forms of corruption ....... 22 2.4. Corruption as an umbrella concept ................................... 24 2.4.1. Particularism and conflict of interest .................... 25 2.4.2. Clientelism................................................................ 28 2.4.3. Patronage .................................................................. 29 2.4.4. Control in clientelistic and patronage networks ... 31 2.4.5. Patrimonialism......................................................... 34 2.4.6. State capture ............................................................. 36 vii

2.5. System as an analytical concept for corruption clusters in hybrid regimes ................................................................. 37 2.5.1. Defining the system of corruption ........................ 38 2.5.2. Typology of the system of corruption .................. 40 3.

Combining constructivist and empirical-analytical perspectives on corruption........................................................ 45 3.1. Constructivist perspective .................................................. 46 3.1.1. Corruption as an empty signifier .......................... 46 3.1.2. From articulation to construction of social identities and institutions ....................................... 49 3.1.3. Framing corruption as a tool in political tactics .... 52 3.1.4. The role of corruption and anti-corruption in hegemonic struggle ................................................. 53 3.2. Theoretical explanatory approaches to corruption: Agency vs. institutions ........................................................ 54 3.2.1. Agency-centered micro-perspective ..................... 54 3.2.2. Institution-centered macro-perspective ............... 58 3.3. Synthesis: Variety of corruption meanings as framing options ................................................................................... 62

4.

Conceptualizing hybrid regimes and the role of corruption in them ...................................................................... 65 4.1. Hybrid regime concepts at a glance .................................. 65 4.2. Characteristics of hybrid regimes ...................................... 68 4.2.1. Distinguishing hybrid regimes from democracy and authoritarianism .............................................. 69 4.2.2. Uneven playing field............................................... 71 4.2.3. Power asymmetries in semi-presidentialism....... 72 4.2.4. The interplay of formal and informal institutions in hybrid regimes .................................................... 74 4.3. Dynamic of hybrid regimes and the role of corruption.... 79 4.3.1. Scenarios of elite interaction and corresponding type of corruption systems ..................................... 79 viii

4.3.2. Operationalizing regime dynamics....................... 82 4.4. Operationalizing actors’ action: political strategy and tactics in hybrid regimes ............................................. 84 4.4.1. The interplay of structural context and individual actors’ action ............................................................ 84 4.4.2. Defining strategy and tactics ................................. 86 4.4.3. Actors’ strategic calculations in hybrid regimes: Goals, resources, environment .............................. 88 5.

The system of corruption in Ukraine and its role in sustaining regime hybridity ..................................................... 93 5.1. The role of the oligarchs...................................................... 93 5.2. A system of corruption model ........................................... 94 5.2.1. Political parties ........................................................ 96 5.2.2. Elections .................................................................. 101 5.2.3. Political influence .................................................. 105 5.2.4. Political outcome side ........................................... 108 5.3. Synthesis: An uneven playing field as a result of corruption practices ........................................................... 110

6.

Case study of the political domination of Leonid Kuchma: Functions and implications of the centralized system of corruption ................................................................ 115 6.1. Outset: Regime trajectory, power resources and constellation of actors ........................................................ 116 6.1.1. Fragmentation of power: Institutional and political competition ............................................. 117 6.1.2. Points of reference for strategic interaction ....... 121 6.1.3. Synthesis ................................................................. 126 6.2. Corrupt practices as tactics for political domination .... 126 6.2.1. Neo-patrimonial decision-making between 1994 and 1998 ......................................................... 128 6.2.2. Change of the political domination strategy: From exclusion to co-optation ............................. 129 ix

6.2.3. Patronage ................................................................ 132 6.2.4. Clientelism.............................................................. 141 6.2.5. Non-coercive control: Corruption-based kompromat and blackmail ...................................... 146 6.2.6. Synthesis ................................................................. 151 6.3. Corruption framing as a tactic for political domination ... 153 6.3.1. Antagonism of strong principal and “invisible enemy” .................................................................... 153 6.3.2. Framing of corruption as a principal-agent problem ................................................................... 155 6.3.3. Suggested remedies............................................... 157 6.3.4. Crisis and change: Framing shift toward perpetual corruption in society ........................... 160 6.3.5. Popular attitudes ................................................... 162 6.3.6. Synthesis ................................................................. 164 6.4. Assessment of the anti-corruption policies .................... 165 6.4.1. Constellation of actors and control of corruption in early 1990s ...................................... 166 6.4.2. Political domination by means of anticorruption institutions .......................................... 169 6.4.3. Conceptualization of corruption in legislation ... 172 6.4.4. Synthesis ................................................................. 178 6.5. Conclusion .......................................................................... 180 7.

Case study of the political domination of Viktor Yushchenko: Functions and implications of the decentralized system of corruption ....................................... 185 7.1. Outset: Regime trajectory, power resources and constellation of actors ........................................................ 186 7.1.1. Renewal of the elite ............................................... 190 7.1.2. Fragmentation of power: Institutional and political competition ............................................. 194 7.1.3. Synthesis ................................................................. 199

x

7.2. Corrupt practices as tactics for political domination .... 199 7.2.1. Shifting towards a gray zone of governance ..... 200 7.2.2. Favoritism under Yushchenko: Bargaining in patron-client networks.......................................... 209 7.2.3. Synthesis ................................................................. 212 7.3. Corruption framing as a tactic for political domination ... 213 7.3.1. Antagonism of democracy and authoritarianism 214 7.3.2. Framing of corruption as a system...................... 216 7.3.3. Crisis and change: Framing shift toward the concept of “political corruption” ......................... 218 7.3.4. Suggested remedies............................................... 222 7.3.5. Popular attitudes ................................................... 223 7.3.6. Synthesis ................................................................. 226 7.4. Assessment of the anti-corruption policies .................... 227 7.4.1. Constellation of actors and control of corruption .. 227 7.4.2. Conceptualization of corruption in legislation.. 232 7.4.3. Synthesis ................................................................. 240 7.5. Conclusion .......................................................................... 241 8.

Case study of the political domination of Viktor Yanukovych: Functions and implications of the monopolized system of corruption ....................................... 247 8.1. Outset: Regime trajectory, power resources and constellation of actors ........................................................ 248 8.1.1. Subordination of state institutions ...................... 248 8.1.2. Synthesis ................................................................. 251 8.2. Corrupt practices as tactics for political domination .... 253 8.2.1. Particularism under Yanukovych ....................... 253 8.2.2. Monetary corruption: An instrument of exclusion and monopolization of power............ 256 8.2.3. Raising the “Family” ............................................. 262 8.2.4. Synthesis ................................................................. 271

xi

8.3. Corruption framing as a tactic for political domination ... 272 8.3.1. Antagonism of chaos and order .......................... 273 8.3.2. Functions of the empty meaning of “corruption” . 274 8.3.3. Framing corruption as a principal-agent problem ................................................................... 278 8.3.4. Suggested remedies............................................... 279 8.3.5. Popular attitudes ................................................... 282 8.3.6. Synthesis ................................................................. 283 8.4. Assessment of the anti-corruption policies .................... 284 8.4.1. Constellation of actors and control of corruption .. 285 8.4.2. Conceptualization of corruption in the legislation ............................................................... 292 8.4.3. Synthesis ................................................................. 298 8.5. Conclusion .......................................................................... 299 9.

Conclusion ................................................................................. 303 9.1. Synopsis .............................................................................. 303 9.2. Comparative analysis ........................................................ 305 9.2.1. Assessment of the strategies ................................ 305 9.2.2. Comparison of political tactics ............................ 307 9.3. Key findings and implications for counteracting corruption ........................................................................... 317 9.4. Prospects for further research .......................................... 320

References .......................................................................................... 325 Secondary sources ..................................................................... 325 Primary sources for the framing analysis............................... 351 International Organizations: Documents, reports, assessments................................................................................. 355 Annex 1: Overview of the expert interview partners ................. 357 Annex 2: List of online media for the search inquiry ................ 358 Annex 3: MaxQDA code book........................................................ 360 Annex 4: Anti-corruption legislation ............................................ 364 xii

List of Figures Figure 1:

Freedom House Nations in Transit democracy score 1999–2014 .............................................................. 2

Figure 2:

From worldview to the concept ................................. 15

Figure 3:

Dimensions of corruption ........................................... 23

Figure 4:

Corruption as the connecting core............................. 25

Figure 5:

The theory of crisis and change ................................. 49

Figure 6:

Pure types versus fuzzy types of regimes ................ 67

Figure 7:

Applying Coleman’s bathtub to the research of corruption ..................................................................... 85

Figure 8:

Strategy circle ............................................................... 86

Figure 9:

External points of reference for strategic interaction ..................................................................... 90

Figure 10:

Perpetual cycle of corruption in Ukraine’s political process ............................................................ 95

Figure 11:

Freedom House Nations in Transit democracy score 1999–2004 .......................................................... 127

Figure 12:

Number of appointments by presidential decree in Russia and Ukraine ............................................... 134

Figure 13:

Perception of state authorities: comparative assessment................................................................... 163

Figure 14:

Survey of support for Leonid Kuchma, 2000– 2004 .............................................................................. 164

Figure 15:

Freedom House Nations in Transit democracy score 2005–2010 .......................................................... 188

Figure 16:

The governmental system of Ukraine ..................... 202

Figure 17:

Survey on the perceptions of the obedience to the law of public servants 2006–2008 ...................... 224

Figure 18:

Survey of support for Viktor Yushchenko, 2005– 2009 .............................................................................. 225 xiii

Figure 19:

Freedom House Nations in Transit democracy score 2010–2014 .......................................................... 252

Figure 20:

Forbes ranking of tender champions 2011–2013 .... 262

Figure 21:

Oleksandr Yanukovych assets ................................. 264

Figure 22:

The chronology of the Ukrainian Bank of Development’s capital increase................................ 266

Figure 23:

Survey about support for Viktor Yanukovych, 2010–2013 .................................................................... 282

Figure 24:

Foreign funding-based development projects in Ukraine, 1994–2016 .................................................... 286

xiv

List of Tables Table 1:

Governance context of corruption practices ............ 21

Table 2:

Variety of corruption meanings as framing options ........................................................................... 64

Table 3:

Scenarios of elite interaction ....................................... 80

Table 4:

Regime trajectory and tactics under presidency of L. Kuchma .............................................................. 115

Table 5:

Power relationships between Kuchma and his prime ministers .......................................................... 131

Table 6:

State institutions created between July 1994 and June 1996 ..................................................................... 143

Table 7:

Regime trajectory and tactics under presidency of V. Yushchenko ....................................................... 186

Table 8:

Political affiliation of oligarchs in Parliament ........ 196

Table 9:

Regime trajectory and tactics under presidency of V. Yanukovych....................................................... 248

Table 10:

Scenarios at the end of the presidency .................... 307

Table 11:

Comparative summary of the empirical case studies.......................................................................... 313

xv

List of Abbreviations ACN OECD AntAC AP BYuT CSO DRFC LLC EBRD EEAS EU GRECO IAHR IMF MP NAC NGO NiT index NSDC NUNS OECD OIG PACE PGO PM PUMB RUE SBU SIDA

OECD Anti-Corruption Network for Eastern Europe and Central Asia Anti-Corruption Action Centre Administration of the President Bloc of Yulia Tymoshenko Civil Society Organization Donbass Rozrakhunkovo Finansovyi Centr European Bank for Reconstruction and Development European External Action Service European Union Council of Europe’s Group of States against Corruption Institute of Applied Humanitarian Research International Monetary Found Member of Parliament National Anti-Corruption Committee Non-Governmental Organization Freedom House Nations in Transit Index National Security and Defense Council of Ukraine Nasha Ukraina—Narodna Samooborona (“Our Ukraine”—People’s Self-Defense Bloc) Organisation for Economic Co-operation and Development Office of the Inspector General Parliamentary Assembly of the Council of Europe Prosecutor General’s Office Prime Minister First Ukrainian International Bank RossUkrEnergo Sluzhba Bezpeky Ukrainy (Security Service of Ukraine) Swedish International Development Cooperation Agency xvii

SME TI UBD UHHRU UN UNCAC UNDP USA USAID

Small and medium enterprises Transparency International Ukrainian Bank of Development Ukrainian Helsinki Human Rights Union United Nations United Nations Convention against Corruption United Nations Development Program United States of America United States Agency for International Development

xviii

Acknowledgments I am deeply indebted to many people for their support in completing this dissertation, without which the work would not have been realized. First and foremost, I would like to express my gratitude to Professors Tobias Debiel and Andrea Gawrich, my supervisors, for providing me with guidance, useful critiques and helpful encouragements. I highly appreciate the degree of freedom they gave me to unfold my research ideas and, at the same time, their guidance that allowed me to maintain steady development in my research. Constructive feedback on content and methodology, provided by the participants of the Ph.D. workshop “International relations/Peace and Development studies” was greatly valued. Therefore, I would like to thank the workshop’s organizers—Professors Tobias Debiel, Walter Eberlei, Christof Hartmann, Hartwig Hummel, Cornelia Ulbert and the team of the Institute for Development and Peace—for providing a comfortable space for the exchange and discussion of research ideas. I would like to express my appreciation to the Hanns Seidel Foundation for the generous funding of my research. I am particularly grateful to Prof. Hans-Peter Niedermeier, Dr. Michael Czepalla and Prof. Rudolf Streinz for their support and sage advice in my professional life in academia and beyond. I also wish to acknowledge the generous research funding provided by the Centre for East European and International Studies (ZOiS) which enabled me not only to finalize my thesis but also to greatly profit from the valuable feedback of my Ph.D. fellows during colloquium and conference meetings. I am also grateful to the Petro Jacyck Foundation, which enabled my research stay at the University of Toronto, Centre for European, Russian and Eurasian Studies. In particular, I would like to thank Profs. Lucan Way and Matthew Light for the enriching discussions and valuable ideas exchanged during my research while at CERES. I would also like to extend my thanks to the Research Centre for East European Studies (Forschungsstelle Osteuropa—FSO) at the University of Bremen for hosting me during the data collection period and kindly providing access to their xix

databases. Advice given by Prof. Heiko Pleines during my stay at FSO and after has been a great help in advancing my research. My personal gratitude goes to Daria Kaleniuk, Dr. Oksana Nesterenko and Prof. Andriy Meleshevych, who involved me in the development and the work of the Anti-Corruption Research and Education Centre in Ukraine. I highly appreciate the possibility of lecturing anti-corruption activists and researchers in Ukraine, which allowed me to test and to improve my research ideas, as well as gain deeper insight into the topics of corruption and anti-corruption in Ukraine through continuous exchange with experts. I would also like to thank all interview partners, who shared their valuable expertise on the topic with me. In particular, I am grateful to Prof. Mykola Khavroniuk for his openness in providing me with highly appreciated legal expertise in the anti-corruption field on several occasions. My Ph.D. research time became a highly exciting journey thanks to many young scholars, who were keen to develop the community of corruption researchers and dared ambitious joint projects in this field. In particular, the German-speaking KorrWiss network and the international Interdisciplinary Corruption Research Network became my “home in corruption research.” Among network founders and participants, respected colleagues like Aiysha Varraich, Anna Schwieckerath, Annika Engelbert, Eduard Klein, Ina Kubbe, Jamie-Lee Campbell, Jessica Flakne, Johann Steudle, Marina Povitkina, Nils Köbis, Sofia Wickberg, Steven Gawthrope became dear friends, who not only shared the same excitement for the research topic, but were always also open to constructive feedback and encouragement in the long research process, full of uncertainties and doubts. My sincerest thanks to you! My deep appreciation goes to the senior member of the ICRNetwork, Prof. Bo Rothstein, who not only provided valuable feedback on my research but also gave good advice and mentoring on academic work in general. Through mutual research and education projects with Oleksandra Keudel and Olena Petrenko I have learned how highly rewarding investing time in and contributing efforts to joint activities can be. Thank you both for being pleasant partners and supportive friends.

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Finally, I would like to thank my family and foremost my husband for believing in me, backing me and giving me hope and strength in times of uncertainty. I highly appreciate your patience and support throughout this process.

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Foreword Although it is challenging to research corruption, this book provides an innovative conceptual and empirical contribution to both research areas, corruption and transformation studies alike. The study is based on a Most Similar Systems Design through an intracase comparison of three presidencies: Leonid Kuchma (1994– 2005), Viktor Yushchenko (2005–2010) and Viktor Yanukovych (2010–2014). The book investigates the following research questions: Why do presidents in Ukraine use different political strategies and discursive framings to address corruption? How do they utilize corruption as a tactic to maintain political domination in hybrid regimes? The book applies both positivist and constructivist approaches. The empirical analysis reveals the role of corrupt practices in sustaining political domination. Furthermore, it demonstrates impressively that anti-corruption policies in a hybrid regime like Ukraine can be understood as discursive framing strategies applied by political leaders to ensure and legitimize their political domination. The book studies how different regime trajectories under authoritarian or semi-democratic rule led to different corruption practices. In a cartel-like deal, Kuchma managed to construct a centralized system of corruption that traditionally framed the problem along a principal-agent approach. Yushchenko, on the other hand, could not centralize elites and attempted to secure power through a decentralized system in which he discursively emphasized European values in the fight against political corruption. However, he was unable to present himself credibly to the population as a politician of a new type. In a way, as Oksana Huss contends, he became the victim of his own discourse. Yanukovych, in turn, succeeded in monopolizing corruption because of his “political machine”, the Party of Regions. His political discourse remained deliberately vague and shaped by metaphors, which made it difficult to measure the success of anti-corruption policies.

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Despite these differences, the three presidents shared a willingness to adapted their framing strategies to account for the constellation of their political opponents and addressed the expectations of external actors. Furthermore, their administrations were all initially supported by the population—and failed to adjust their strategies appropriately as their popularity ratings declined. In summary, this book provides an important contribution in a challenging empirical research field. It corresponds to the state of the art and provides an in-depth case study based on an analytically attractive theoretical and methodological framework. Dr. Tobias Debiel Professor of International Relations and Development Policy at the University of Duisburg-Essen Dr. Andrea Gawrich Professor of International Integration at Justus Liebig University of Giessen

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1.

Introduction

Since the early 1990s, studies of transformation processes and hybrid regimes, as well as of corruption and anti-corruption policies, have intensified. The leading studies of hybrid regimes identified endemic political corruption as those regimes’ immanent characteristic (Åslund 2015; Hale 2015; Havrylyshyn 2017; Levitsky and Way 2010). Nevertheless, there is a lack of systematic research concerning the interdependence between hybrid regimes, their trajectories, and corruption (Pech 2009). This thesis aims to enrich transformation studies by incorporating corruption research and closing the knowledge gap between the “(dys)functionalities” of corruption practice and framing (Debiel and Gawrich 2013), in particular in hybrid regimes. Ukraine demonstrates an appropriate empirical example to study such interdependencies. On the one hand, a turbulent transformation process and several regime oscillations occurred after the collapse of the Soviet Union. With regard to the transformation process, since its independence Ukraine has been host to three different regime trajectories of high volatility. The administration of President Leonid Kuchma (1994–2005) saw shades of authoritarian tendencies. After the Orange Revolution in November 2004–January 2005, hope grew for a democratic reorientation. Between 2010 and 2014, however, President Viktor Yanukovych reverted to the authoritarian trajectory, which was violently abandoned in the course of the Maidan Revolution in 2013–2014. Thus, the transition process in Ukraine has oscillated between semi-consolidated democracy and semi-consolidated authoritarianism but remains stable in its hybridity. On the other hand, rather counter-intuitively, through all these years, the level of corruption in Ukraine has perennially been well above average, even though Ukraine’s Freedom House democracy score improved between 2005 and 2009 (see Figure 1). Both revolutions—the Orange Revolution and the Maidan Revolution—were initiated because of widespread discontent among the population at corruption. During the Orange Revolution, electoral fraud was the spark that inflamed a popular uprising against the ruling elite. During the 2013– 1

2

CORRUPTION AND ANTI-CORRUPTION POLICIES

2014 Ukrainian revolution, one of the main demands of the protesters included the removal of the corrupt Yanukovych regime and punishment of those involved in political corruption.1 Figure 1:

Freedom House Nations in Transit democracy score 1999–2014 Nations in Transit Democracy Score 1999-2014

7 6 5 4 3 2 1

Local Democratic Governance

National Democratic Governance

Governance

Electoral Process

Civil Society

Independent Media

Judicial Framework and Independence

Corruption

20 14

20 13

20 12

20 11

20 10

20 09

20 08

20 07

20 06

20 05

20 04

20 03

20 02

20 01

19 99 -2

00 0

0

Democracy Score

Source: Freedom House Nations in Transit democracy score, 1999–2014. Author’s depiction. The score 1–2.99 indicates consolidated democracy, 3–3.99 Semi-consolidated democracy, 4–4.99 Transitional or hybrid regimes, 5–5.99 Consolidated authoritarian regimes, and 6–7 Consolidated authoritarian regimes. In 2005, due to methodological changes, “governance” was divided into two subjects of analysis— national and local democratic governance. Available online at: https://freedomho use.org/report/nations-transit/2017/ukraine, last accessed 21 June 2018.

Within Ukraine, this book analyzes three cases of corruption framing and practice for political domination under Leonid Kuchma (1994– 2005), Viktor Yushchenko (2005–2010) and Viktor Yanukovych (2010–2014). The reason for this focus is the decisive role that presidents have due to Ukraine’s semi-presidential political system (Carrier 2012; Choudhry et al. 2018; Matsuzato 2005; Protsyk 2003). 1

According to the December 7–8, 2013 survey conducted by the Ilko Kucheriv Democratic Initiatives Foundation and the Kyiv International Institute of Sociology, 75 % of Maidan participants claimed that the dismissal of the government and early presidential elections were necessary, and 50 % considered it crucial to punish the corrupt political elite. 1,037 respondents were questioned. See “Maidan-2013,” Fond “Demokratychniinitsiatyvyimeni Ilka Kucheriva, Available online at: https://dif.org.ua/en/article/maydan-2013-khto-stoit-chomu-iza-shcho, last accessed 21 June 2018.

INTRODUCTION

1.1.

3

The research puzzle

The concept of competitive authoritarianism (Levitsky and Way 2010) forms the main theoretical framework for the assessment of transition processes in Ukraine in this study. The definition of competitive authoritarianism is based on the partial relevance and selective application of formal democratic rules. Political competition and the existence of an uneven playing field between incumbents and the opposition are crucial for this concept. The in-between-ness between democracy and authoritarianism is an important characteristic of competitive authoritarian regimes. As with democracies, in competitive authoritarianism elections shape actors’ strategies, even though competition is not necessarily fair. Because elections are not merely a façade, wide popular support is highly desirable to remain in power. At the same time, similar to authoritarian regimes, incumbents are able to manipulate state institutions and resources to such a degree that political competition is seriously limited. Another limitation is that ruling elites are fragmented, and control over political, administrative and economic resources is divided among several oligarchic groups. In this situation, to strengthen political power and to secure co-optation of elites, incumbents need to gain the acceptance and support of elite networks. The constant need of incumbents to balance between public and elite support under conditions of competitive authoritarianism makes corruption a controversial issue for the ruling elite. This controversy constitutes, in turn, the research puzzle of this project. The basic assumption is that every political leadership aims to maintain political domination by all means (Levitsky and Way 2010; Way 2005a; Bueno de Mesquita et al. 2005). However, in hybrid regimes, elites face permanent challenges to their political domination, which may interrupt incumbent political control and challenge their re-election (Levitsky and Way 2010, p. 20). These permanent challenges to political domination cause a serious dilemma for the ruling elite: On the one hand, thwarting the challenge requires a blatant assault on democratic institutions (i.e., stealing elections or closing parliament). Because such challenges are legal and generally perceived as legitimate (both at home and

4

CORRUPTION AND ANTI-CORRUPTION POLICIES abroad), openly repressing them may be quite costly. On the other hand, if incumbents allow democratic procedures to run their course, they risk possible regime change and losing power. In effect, such challenges force incumbents to choose between egregiously violating democratic rules, at the cost of international isolation and domestic conflict, and allowing the challenge to proceed, at the cost of possible defeat (Levitsky and Way 2010, 20).

1.2.

The research question

The research question of this study addresses the core of the dilemma described above: Why do presidents in Ukraine use different political strategies and discursive framings for dealing with corruption? How do they practice corruption as a tactic to maintain political domination in hybrid regimes? It is assumed that the political leadership of a hybrid regime needs to practice corruption as a rational action in order to maintain its dominance. Since corruption is an expected behavior, political leaders risk losing the support of the strategic elite if they refuse to favor their clients during the redistribution of public resources. However, the costs of blatantly practicing corruption can be too high due to international pressure and the risk of losing popular support and the resulting damage to electoral prospects. Especially since the mid-1990s, corruption, as a topic, has become increasingly important in international politics, and has resulted in the establishment of several international anti-corruption regimes by the mid2000s (Moroff 2005). International actors, such as the World Bank, the International Monetary Fund (IMF), the United Nations (UN), the Council of Europe (CoE), the Organisation for Economic Cooperation and Development (OECD), as well as Transparency International (TI) have developed a variety of instruments—from conditionality during financial assistance (IMF, EU) to control and peer review mechanisms (OECD, CoE) as well as mechanisms of “shaming and blaming” (e.g. TI Corruption Perception Index)—in order to force national governments to introduce anti-corruption

INTRODUCTION

5

measures.2 Thus, considerable credits and development assistance are reliant upon the implementation and success of anti-corruption measures. Citizens, too, are increasingly aware of the negative consequences of political corruption and they condemn blatantly corrupt practices. As indicated above, the main trigger of the Orange Revolution was electoral fraud. Also, removing the corrupt political elite was among the chief demands during the Euromaidan. Both revolutions witnessed a change of political leadership, although they did not change the regime.

1.3.

The central argument

The central argument of this study is that under conditions of instability and permanent oscillation, political leaders in pursuit of political domination instrumentalize both public framing and the hidden practice of corruption. They engage in corruption in order to increase their power and material resources. The practice of corruption allows cooperation with strategic partners or exclusion and coercion of one’s opponents. Framing corruption is applied to develop anti-corruption policies in a particular way that legitimizes and institutionalizes the political domination of a presidency that has been achieved by means of corrupt practices. In other words, corrupt practices and anti-corruption policy are two sides of the same coin: they are highlighted and exercised to maintain domination on an uneven playing field by maintaining a prevalence of resources and hierarchies in the constellation of actors. The theoretical assumption of this study is that different patterns of corrupt practices and framing fulfill varying functions. The analysis of corrupt practices and framing under different regime trajectories will be applied to demonstrate the interdependencies of political tactics utilizing corrupt practices and the trajectories of a hybrid regime. Thus, the answer to the empirical question about

2

For the evolution of international anti-corruption regimes and their instruments and mechanisms, see Moroff 2005; Chene and Dell 2008; Sousa, Larmour, and Hindess 2010.

6

CORRUPTION AND ANTI-CORRUPTION POLICIES

framing and practicing corruption as tactics for political domination in Ukraine will contribute to the theoretical question: What functions does political corruption have in hybrid regimes and how do different tactics of framing interdepend with hybrid regime trajectories? At the edge of transformation and corruption studies, this work combines theoretical concepts from both fields of research. In transformation studies, this combination enriches the explanatory potential of political corruption as an intervening variable in hybrid regimes. Corruption research will be enriched through the concept of the system of corruption as an immanent part of a hybrid regime. Studying the system of corruption marks an important shift from the focus on quantitative assessment of the level of corruption to the in-depth assessment of the dynamic mechanisms and implications of the system of corruption. The system perspective assumes that the features and implications of corruption are not the same in all contexts, even though high scores on the quantitative scale of corruption may suggest that they are. This approach allows analyzing different patterns of how the system of corruption operates, and what implication the system has on political and economic development. Most importantly, it assists in explaining the failures of the anti-corruption policies in place and designing innovative tools to counteract corruption.

1.4.

Methods of data collection and analysis

For the data collection and analysis, the following methods have been applied: Explorative expert interviews, process tracing, qualitative content analysis and textual legislation analysis. Explorative expert interviews At the outset of this study, ten explorative expert interviews were conducted (Gläser and Laudel 2010). The aim of the expert interviews was twofold: to review initial theoretical assumptions about the particularities of political corruption in Ukraine, and to identify specific assumptions about varieties of the system of corruption

INTRODUCTION

7

under different presidents and the factors that influenced these variations. The explorative interviews were designed as open-ended questions. Three central questions were posed to all experts, while clarifying questions differed depending on the specific subject of conversation and the area of expertise. The three central questions were: Q. 1: What are the particularities of political corruption in Ukraine? Q. 2: Are there any differences in the evolution of political corruption under different presidents in Ukraine? Q. 3: Why do you think the respective differences occurred? The length of the interviews varied between 30 and 90 minutes. Upon agreement with the experts, most of the interviews were recorded and transcribed for further analysis. The criteria for the expert selection were knowledge of the issue of political corruption in Ukraine, ability to provide precise information and willingness to share it, and availability of the expert (based on Gläser and Laudel 2010, 117 ff.). In addition, experts from different fields of work were selected in order to obtain a holistic overview of political corruption in Ukraine. As a result, experts from anti-corruption civil society organizations, international organizations, journalists, academics, and parliamentary employees were interviewed (Annex 1: Overview of the expert interview partners). It is worth highlighting the important role of civil society as a source of information on political corruption and the assessment of anti-corruption. In Ukraine, multiple CSOs, in particular at the national level, professionalized their political role as watchdog organizations (Beichelt et al. 2014; Solonenko 2015; Worschech 2017). In the context of a politically dependent judiciary and prosecution, CSOs (among others, Anti-Corruption Action Centre, Chesno, Opora, Transparency International Ukraine) as well as the investigative journalists of Nashi Hroshi, Ukrainska Pravda, Hromadske Radio became the only sources of societal control over executive and legislative branches of power, while investigating and revealing political corruption. Besides, very few independent and established think tanks (among others, the Centre of Policy and Legal Reform, Ilko Kucheriv

8

CORRUPTION AND ANTI-CORRUPTION POLICIES

Democratic Initiatives Foundation, Razumkov Centre, the Ukrainian Centre for Independent Political Research) became a critical source for the analytical assessment of Ukrainian policymaking, including anti-corruption policies. For this reason, the investigations of the publicly renowned journalists and activists and the expertise of selected think tanks are an important source providing information about corruption practices and an impartial assessment of anti-corruption policies and infrastructure for this study. At the same time, the critical voice of civil society evolved in the course of time. For instance, there are very few investigations about political corruption in the mid-1990s, while there were several murders of investigative journalists, including the prominent case of Heorhiy Gongadze, in that decade. In the third case study, however, there are multiple organizations and individual journalists working and publishing on the issue of corruption. Thus, the change of political context that provided a window of opportunity for politically critical CSOs to evolve is, indirectly, an object of interpretation in the elaboration of regime trajectories. Process tracing For the analysis of the research question “How do presidents in Ukraine practice corruption as a tactic to maintain political domination in hybrid regimes?” process tracing has been applied. Compared to other methods for structuring case studies, the use of process tracing offers several advantages. First, the purpose of this study is to analyze the functions of corruption in the trajectories of different regimes. Process tracing made it possible to tackle the dynamic of the regime and trace changes in political tactics. Second, this method is “commonly defined by its ambition to trace causal mechanisms” (Beach and Pedersen 2013, 1). This explicit focus on causal mechanisms differentiates process tracing from the typical congruence methods (George and Bennett 2005) that are restricted by the strict causalities between dependent and independent variables (Wendt 1998, 105). As Beach and Pedersen (2013, 4 ff.) summarize:

INTRODUCTION

9

Congruence investigates correlations between X and Y, whereas processtracing investigates the working of the mechanism(s) that contribute to producing an outcome. Process-tracing methods go beyond correlations by attempting to trace the theoretical causal mechanism(s) linking X and Y.

Thus, in the empirical case studies, process tracing of corrupt practices in pursuit of political domination reveals the functions of corruption in the process of regime oscillations with regard to prevalence of resources and the constellation of actors. Third, the internal process of strategy building by the actors is hidden and only the assessment of external activities makes statements about actors’ strategies possible. Process tracing reveals how the political tactics of each president changed and adapted according to the regime dynamic, which in its totality allows generalization about a general strategy and its success. Qualitative content analysis In order to conduct framing analysis, qualitative content analysis of presidential speeches, citations, and press conferences mentioning corruption between 1994 and 2014 was conducted. The data covers about 1,200 news articles, from the databases of Factiva and Integrum, texts of speeches, and autobiographies. The data was collected in two steps. In a first step, official speeches of each president, such as the annual address to the parliament or to the nation, were collected in the digital archive of the Verkhovna Rada—the Parliament of Ukraine and its official publication “Holos Ukrainy.” By means of an electronic search for the term “corruption,” only relevant speeches were selected for the content analysis. In the second step, in the databases of the electronic newspapers Factiva and Integrum, I conducted a search for direct quotes or interviews by the presidents published in the press. The search inquiry included the term “corruption” (in both Ukrainian and Russian spelling), the name of the president and a verb that indicates an action by the president (e.g. “said,” “mentioned,” “indicated,” etc.). The search inquiry was limited to a text unit of 5 words. The final data set excluded duplications and contained only articles with direct quotes by a president. The central unit of analysis was a direct quote of a president with regards to the term “corruption” and not the

10

CORRUPTION AND ANTI-CORRUPTION POLICIES

interpretation of a journalist. Given this focus, reflections about political affiliation or ownership of the media are not of interest for this analysis. The list of sources exploited for the search in the databases is provided in Annex 2. Data analysis was conducted with MaxQDA. The essence of the qualitative content analysis is “assigning successive parts of the material to the categories of a coding frame” (Schreier 2014, 170). Coding was done in a systematic and simultaneously flexible way that aimed at reducing the data and selecting relevant aspects of the meaning (Schreier 2014, 170). The concept-driven approach was selected to analyze data in line with the four main theoretical approaches to corruption and the concept of framing (elaborated in Chapter 3.2). This means that main framework of categories was developed in advance, covering the description and definition of corruption, its causal interpretations and judgment, as well as recommended remedies (Entman 1993). However, in the process of data analysis, the categories were revisited and expanded (Schreier 2014, 174). The codebook is summarized in Annex 3. Given the large number of sources, the use of numerical data for internal generalizability was useful for revealing framing patterns, although the research was designed and conducted as a qualitative study (Maxwell 2010). The book provides only selected citations of presidential speeches as examples that reflect each framing pattern most precisely.3 Textual legislation analysis In order to analyze how public framing of corruption influences anti-corruption policies, textual analysis of anti-corruption legislation was conducted. Annex 4 contains the list of anti-corruption legislation between 1991 and 2014, analyzed in the study. Importantly, the legislation was analyzed independently of its implementation, since the aim is to analyze the anti-corruption policy as a contested space between multiple political actors. The analytical framework 3

The sources cited as an example for the framing are listed in the bibliography as “Primary sources for the framing analysis.” Several online newspapers, such as Ukrainska Pravda and UNIAN, serve also as a source of information for the overall analysis in this study and are included in the list of references.

INTRODUCTION

11

of this analysis follows the framing analysis of corruption. It examines the assumption that, depending on the conceptual framing of corruption, anti-corruption policy is exploited by the political leadership to increase their political domination.

1.5.

The structure of this study

The study is structured into theoretical and empirical parts. The theoretical part, chapters 2 to 5, conceptualizes corruption, hybrid regimes, and theorizes the interdependency between the system of corruption and the dynamic of hybrid regimes. The conceptualization of corruption is done in two different research paradigms—the empirical-analytical approach (Chapter 2) and social constructivism (Chapter 3)—in order to unfold the complexity of the corruption phenomenon. Chapter 2.1 introduces the empirical-analytical and social constructivist approach, while the rest of the chapter conceptualizes corruption in line with the first research logic. In particular, chapter 2.2 identifies corrupt practices by defining the core characteristics of corruption. Further, in chapter 2.3, a variety of different forms and mechanisms of corruption are presented, while focusing on the difference between two equilibria—corruption as an exception or as a norm. Chapter 2.4 aims to analytically sharpen the blurred lines between corruption and other forms of particularism. Chapter 2.5 theoretically conceptualizes the system of corruption and its variation. Chapter 3 is dedicated to the analysis of corruption through the constructivist lens as well as its systematic confluence with the empirical-analytical approach. In particular, this chapter elaborates how different empirical concepts of corruption can be utilized through framing. Chapter 3.1.1 defines corruption as an empty signifier and discusses the implications of such an approach for the construction of political identities. Further, this chapter introduces the concept of framing as a key tool for using the topic of “corruption” in political tactics and synthesizes the implications of a poststructural perspective for political domination. Chapter 3.2. discusses a variety of agency- and institution-centered explanatory approaches to corruption that can be exploited for different framing

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CORRUPTION AND ANTI-CORRUPTION POLICIES

tactics. These approaches are summarized in Table 2, Chapter 3.3 includes an overview of the possible functions for different framing tactics. Chapter 4 conceptualizes hybrid regimes in the context of transformation studies and the role of corruption therein. Chapter 4.1 provides a general overview of the concept of hybrid regimes in order to contextualize this research within the field of transformation studies. Chapter 4.2 introduces the characteristics of hybrid regimes and focuses in particular on the uneven playing field. It contextualizes the idea of uneven playing in the literature on presidentialism and discusses the interplay of formal and informal institutions in hybrid regimes. Chapter 4.3 elaborates an interdependence between the type of corruption system and trajectories of hybrid regimes. In particular, the type of corruption system is connected to the patterns of elite interaction and distribution of public resources. Chapter 4.4 operationalizes actors’ action and conceptualizes political strategy and tactics for political domination in regime dynamics. Chapter 5 applies the theoretical concept of the system of corruption to the political system of Ukraine, which allows the combination of transformation studies and corruption research and the application of relevant concepts to the case of Ukraine. Chapter 5.1 introduces the term “oligarchs” and elaborates upon their role in the political system. Chapter 5.2 tackles a model for the system of corruption within Ukraine. While most corruption researchers work with rather static structural typologies, a dynamic model of the system of corruption was developed for this study. It is essential to be able to analytically consider dynamics, when researching corruption in hybrid regimes, because permanent oscillation is one of their defining characteristics. The model of the system of corruption explains the role of corruption in regime dynamics and allocates distinct forms of political corruption in the political cycle. This model arrays different forms and mechanisms of political corruption in a coherent interdependency. Additionally, the model allows locating individual actors and their agency in a time-specific context. This chapter concludes with a discussion of the role of political

INTRODUCTION

13

corruption in the durability of the hybrid regime in Ukraine (Chapter 5.3). The empirical part of the study consists of three case studies of corrupt practices and framing as political tactics under three Presidents: Leonid Kuchma (Chapter 6), Viktor Yushchenko (Chapter 7), and Viktor Yanukovych (Chapter 8). All three case studies are structured in the same way and consist of five parts. The first part identifies the point of departure for the strategy of the president with a focus on the initial power resources and constellation of actors in the political system. Next follows an analysis of the particularities of the corrupt practices as tactics for political domination. The synthesis of the second part summarizes the implications of corrupt practices for the president’s access to power resources and dynamics in the constellation of actors, which is crucial for the trajectory of the regime. The third part is dedicated to the analysis of corruption framing as a tactic for political domination. Framing tactics are considered the basis for the anti-corruption policy, analyzed in the fourth part. The synthesis aims to show how different frames of corruption influence anti-corruption policy. Further, it demonstrates how anti-corruption policy is exploited by presidents for political domination. The conclusion in the fifth part provides an assessment of the general strategy for political domination, its success and the tactics utilized to achieve it. The focus of the analysis is on the functions of corrupt practices and framing for the prevalence of power resources and interaction with other actors (external points of reference) in order to create hierarchies in the constellation of actors. Chapter 9 concludes the study with a synopsis and comparative analysis of the empirical research. It discusses implications of this research for further anti-corruption activities and provides recommendations. Finally, the chapter provides prospects for future research.

2.

Conceptualizing corruption: Definitions, typologies and explanatory approaches

2.1.

From worldview to the concept

The approach adopted in this book begins with conceptualization as a bridge between worldview and abstract thoughts on the one side and empirical evidence on the other (Figure 2). Worldviews remain mostly hidden (Creswell 2014; Stykow et al. 2010, 146 ff.), leaving conceptualization as the only visible façade to allow assumptions about the basic philosophical ideas of the researcher to become known. To grasp the differences of the worldview, it is useful to examine how the connection between language and reality is presented. Figure 2:

From worldview to the concept Worldview Theory/Theoretical approach Concept => Definition Operationalization Indicator

Source: Own depiction

At one pole, a positivist worldview clearly distinguishes between language and reality, shaping the empirical-analytical approach in the research. In this paradigm, knowledge is based on observation and measurement of objective reality (Creswell 2014). Accordingly, a definition or concept is meaningful only if tested via empirical evidence. Thus, language is only a tool to relay empirical reality (Stykow et al. 2010, 146). Methodologically, such a paradigm requires that all theoretical concepts present in the research must be operationalized and proven by nominal indicators. At the other end of the spectrum, social constructivists consider reality closely interconnected with language. Language

15

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CORRUPTION AND ANTI-CORRUPTION POLICIES

represents an independent system, able to evolve and influence reality (Ball, Farr, and Hanson 1989; Berger, Luckmann, and Plessner 2016, 38 ff.). In the context of the constructivist paradigm, concepts and definitions become the object of research. The focus shifts to the deconstruction of concepts, or the analysis of their varying and sometimes contradictory meanings, as well as their political power as it unfolds in language. A “pragmatic worldview” combines both paradigms, mentioned above (Creswell 2014, 39). Stykow et al. explain this paradigm as “realism.” As in the empirical-analytical approach, the existence of reality independent of language is accepted; however, those concepts and definitions that are impossible to grasp are also real (Stykow et al. 2010, 148). The pragmatic worldview allows inference about the influence of language on political reality. Reflecting on the fundamental understanding of how language and reality are interrelated is crucial for this work, as this study aims to create an analytical bridge between rhetoric and the hidden practice of corruption and political reality. This work argues that only the combination of both the empirical-analytical and constructivist perspectives allows one to unfold the complexity of the phenomenon of corruption. It implies that the practice of corruption is real, with all its negative societal consequences, acknowledged and underpinned by extensive research.4 Therefore, it is crucial to elaborate a working definition of corruption in order to differentiate corruption from other malpractices (see Chapter 2.2–2.5). The operationalization of corruption in existing research will allow identification and analysis of the role of corrupt practices in political tactics. At the same time, the crucial role of framing is recognized, and the 4

Rothstein and Tannenberg (2015) provide an extensive overview of literature on the negative effects of corruption: on development in society and its deterrence of foreign direct investment (Méon and Sekkat 2005; Mo 2001); its negative relation to private investment (Mo 2001); its stifling of innovation and entrepreneurship (Anokhin and Schulze 2009); its undermining of the legitimacy of the state (Dahlberg and Holmberg 2014); its negative impact on healthcare spending (Transparency International 2006); its decrease in the return on investment in the health sector (Lewis 2006); its lowering of education attainment (Akçay 2006); and its depreciation of social trust and social capital (Rothstein 2005; Rothstein 2011).

CONCEPTUALIZING CORRUPTION

17

argument is made that different meanings assigned to “corruption” as a term carry different consequences in politics and for society accordingly (see Chapter 3).

2.2.

Core characteristics of corruption

With an increasing academic interest in the topic of corruption— from hardly any articles and panels on corruption in the 1990s to a large number of special issues and conferences dedicated to corruption less than thirty years later (Rothstein and Varraich 2017, 7)— attempts to define corruption have understandably increased. The most common definition refers to corruption as an “abuse of entrusted power for private gain.” Researchers have highlighted several potential shortcomings inherent in this definition (Debiel and Pech 2010, 54; Gawrich and Debiel 2016, 634): First, the phrase “abuse of power” suggests a violation of formal rules. Formal rules might be adopted under corrupt influence, making them in the process corrupt as well. Second, the phrase “private gain” is problematic, since corruption might be used to gain political power, primarily but not solely for material enrichment. Finally, the phrase “entrusted power” is usually associated with public office; however, entrusted power can encompass situations where the public places its trust in an individual who is expected to make impartial judgments, similar to a referee in sporting contests. In this regard, Arnold Heidenheimer differentiates between those definitions of corruption centered on public office, and those on public trust (Heidenheimer, Johnston, and Le Vine 1989; Heidenheimer and Johnston 2002). While the first type considers public office a prerequisite to identify corruption, the second type is broader and shifts the core of corruption to the violation of public trust with or without political office. Despite a broad critique of the definition of corruption (Olteanu 2012, 39), the phrase “abuse of entrusted power for private gain” contains the central characteristics that allow identifying corruption, differentiating it from other malpractices (Köbis and Huss 2017, 153 ff.). The first characteristic is entrusted power, which means that both sides—public and private—are involved. In other words, an actor is exposed to corruption only if the public has placed its trust

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and empowered the aforementioned actor to act in the interests of the public. However, the actor needs to permanently weigh his or her public position against private interests, which leads to the second core characteristic of corruption—crossing the line between public and private interest. In this study, it is important that entrusted power results in public office, so that political corruption can be focused upon. Thus, the second characteristic of corruption is a deviation from the rule of separation between public and private—the abuse of public trust. This characteristic is central in one of the classic definitions of corruption (Nye 1967): Corruption is behaviour which deviates from the formal duties of a public role because of private-regarding (personal, close family, private clique) pecuniary or status gains; or violates the rules against the exercise of certain type of private regarding influence (cited in Philp 2005, 44–45).

Critical researchers increasingly point out that not all societies distinguish as strongly between public and private spheres as Western democracies do (Gephart 2009). But in support of a universal concept of corruption, Rothstein (2014) introduced the “public goods theory of corruption.” Rothstein argues that all societies produce some set of public goods and when those who are responsible for managing the public goods convert them into private goods, people generally condemn it as abuse (Rothstein 2014, 741). For this reason, “damage to public interest” by trespassing the line between public and private, which is implied in the word “abuse,” is an inevitable element of the definition, independently of varying normative context. Should an individual entrusted with public office combine their work for the public with private interest, it should not be immediately regarded as corruption. The presence of only the two above-mentioned characteristics is not sufficient to denote corruption if a third, private advantage, for the person in power, is absent. Corruption can only be positively identified if the actor was entrusted with public power but used this position for private advantage. Private advantage is not necessarily personal but can include advantage for the members of the family or a private clique. Instead of the term “gain,” this work uses the term “advantage,”

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19

which indicates that not only monetary gain is considered, but also forms of corruption that aim to gain advantages over opponents by using public resources. Usually, this leads to another characteristic, which is the social cost of corruption to the public incurred through reduced (by monetary corruption) or mismanaged (by social corruption) public resources. These core characteristics allow distinguishing corruption from other malpractices, like theft, collusion, nepotism, extortion, etc. All malpractices can be related to corruption or even be a form of corruption, but only in circumstances where they combine the above-mentioned characteristics.

2.3.

Varieties of corruption

Alongside the definition and elaboration of core characteristics, the differentiation of varying forms of corruption allows operationalization of the term for the purposes of this study. The decision regarding which forms will be emphasized depends largely on the discipline and research foci in which the study is located. Recently, there have been a few attempts to cluster different approaches of the forms of corruption. For instance, Jennifer Bussel argues for a more explicit but pragmatic approach to typologies of corruption and states that “a diversity of typologies, rather than one primary typology, may be most analytically useful” (Bussell 2015, 22). Together with a researcher in behavioral economics, Nils Köbis, the author of this work has developed an atlas of forms of corruption that allows better interdisciplinary communication in collaborative corruption research (Köbis and Huss 2017). Based on the three core characteristics of corruption, we elaborated several dimensions for each characteristic, so that corruption researchers from different disciplines can easily locate the form of corruption they are researching in a broader context and show how their research is related to other forms of corruption. In the context of the interdisciplinary atlas of forms of corruption, this work highlights the difference between the high political and low administrative forms of corruption, grand and petty corruption, corruption

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occurring on the input and output side(s) of the political processes as well as monetary and non-monetary forms of corruption. In addition to these forms of corruption, two other characteristics that influence the researcher’s choice of definition of corruption are added: First is the difference in frequency of corrupt practices, that is, whether we are dealing with corruption in a context in which it is an exception, or in a context in which it is the rule. This difference is essential to contextualize subsequent research in this study, to be elaborated below. Second, we introduce a three-level zoom factor to contextualize the subject and actors in corruption research: the individual micro-level, the organizational meso-level, and the country and society macro-levels. In this study, the aggregation of the macro and micro levels is explored, since the focus on the country’s president means that individual behavior should be considered, alongside the context in which it takes place. 2.3.1.

Distinguishing context: Corruption as an exception vs. corruption as the norm

Identifying the frequency of corruption, whether as a systemic problem or only an occasional deviation from the rules, is widely applied in existing research. In the atlas of forms of corruption, we highlighted this differentiation not as a form of corruption, but rather as a governance context in which corruption takes place (Köbis and Huss 2017, 168). The context influences the perceptions, definition, characteristics and forms of corruption, as well as problem-solving approaches. Thus, even if one uses the term “corruption,” since its core characteristics remain the same, the phenomenon has different implications and varying meanings depending on the context. Alina Mungiu-Pippidi provides a very useful and clear comparison of both contexts (see Table 1: Governance context of corruption practices). The point of departure for analytic differentiation is to identify the central “norm” of governance, represented as “ethical universalism” (Mungiu-Pippidi 2015, 15). The norm is set with regard to an impartial distribution of public goods. Mungiu-Pippidi identifies two contexts, A and B. In “Context A,” the ideal type of governance is ethical universalism where corruption

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is an exception. Alternatively, “Context B” describes a state in which public goods are distributed based on particularism and can be expropriated by the most powerful individuals at nearly unlimited discretion. In the latter scenario, we analyze the “clusters of corruption” rather than singular instances or particular forms: If particularism is the rule of the game, we are likely to find a cluster of corruption practices: vertically structured favoritism (clientelism, patronage), horizontally structured favoritism (negative social capital networks, “old boy networks”), kinship-motivated particularism (nepotism, ethnic favoritism), but also embezzlement, bribery, and extortion. (Mungiu-Pippidi 2015, 16)

Table 1:

Governance context of corruption practices

Features of ideal types of governance regimes

Context A

Context B

Corruption is an exception

Corruption is the norm

Definition

Individual behavior in which public authority is abused resulting in undue private profit

Observable

Public/private separation

Problem-solving approach

Social practice where particularism (and not ethical universalism) informs the majority of government transactions resulting in widespread nepotism, discrimination Corruption is invisible; to re- Corruption is visible through overt behavior, flawed proveal it whistleblowing is cesses, as well as outcomes/ needed. consequences (undue wealth) Fused. Permeable border, with Enshrined as a norm, with access allowed and transpar- patrimonialism the norm and conflict of interest ubiquitous ent as a lobby, and ex(one person belongs to both changes between the two sides at the same time) sides sequential in time (revolving doors) Principal-agent (restore con- Collective action trol)

Source: depiction based on the publication and presentation5 of Mungiu-Pippidi (2015 and 2018).

5

The relevant part of the presentation is available online at: https://www.youtu be.com/watch?reload=9&time_continue=263&v=zI1HicpvQfo, last accessed 31 August 2018.

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Similarly, Cartier-Bresson described “Context B” as “social exchange corruption” based on corruption networks: … the corruption network allows for illegal transactions based on mercantile relationships of competition, hierarchy (obedience), and solidarity (confidence). (Cartier-Bresson 1997, 440)

Here, corruption can manifest itself through patron-client relations in the form of a vertical network, or through a horizontal network, connecting decision-makers beyond their public offices (Stefes 2003, 123). Under these conditions, when political decision-makers are able to organize corruption (in terms of rent-seeking) through legislation and through patronage in the state apparatus, society is very rarely able to make a difference for its own advantage. In other words, institutions facilitate corrupt exchanges, by producing stable expectations for the parties involved (Cartier-Bresson 1997). In contrast to occasional market corruption as evidenced in “Context A,” corruption in “Context B” demonstrates a kind of stability, which rests on a peculiar mix of asymmetrical power and solidarity, implicit and actual coercion, as well as an emphasis on mutual benefits and voluntarism (Roniger 1994, 4 [cited in Stefes 2006, 19]). As a result, corruption is even able to adapt to revolutionary changes like those occurring as a result of regime collapse. This fact further stimulates interest in studying the qualitative, rather than quantitative, changes in corruption during societal transformation processes. In this study, corruption will be analyzed according to the parameters of “Context B.” In order to systematize “corruption clusters” on the political level, in chapters 2.5 and 5, a model of the system of corruption that demonstrates the role of different mechanisms of corruption for the hybridity of political regimes is provided. 2.3.2.

Distinguishing relevant forms of corruption

For this study, several forms of corruption are of particular interest. Analytically, this work differentiates between high political and low administrative corruption, grand and petty corruption, corruption on the input and output side(s) of political processes as well as monetary and non-monetary forms of corruption.

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Political (“grand”) corruption in this research is distinguished from administrative (“petty”) corruption (Stefes 2006; Stykow 2004; von Soest 2013) (Figure 3, vertical axis). Even though the distinction between petty and grand corruption is ambiguous, it is important to separate them in analytical terms: petty corruption is what citizens experience daily, in their encounter with public administration and when using public services. It occurs in the law implementation process and involves lower-level officials and smaller amounts of bribes. In contrast, political corruption usually occurs at the higher levels of the government and within varying parts of the state apparatus, targeting the process of law formulation (input legitimacy). Political corruption, therefore, represents more than a deviation from formal and written legal norms. According to Andvig and Fjeldstad: Political corruption is when rulers abuse laws and regulations, or sidestep, ignore and tailor laws and regulations to benefit their private interests. (2001, 11)

Figure 3:

Dimensions of corruption Corruption in the lower levels of the policy implementation process (output legitimacy) administrative corruption Monetary tools

petty corruption

Non-monetary tools corruption form: nepotism, patronage, particularism, clientelism, patrimonialism

corruption form: bribery (active), extortion (passive) Corruption in the the policy formulation process (input legitimacy) grand corruption political corruption

Source: Author’s depiction, relying on Stykow (2004).

In addition to distinguishing types of corruption by actor (highand low-level politicians) and goal (law implementation or law

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formulation process), it is also important to distinguish by method or tool utilized (Figure 3, horizontal axis). In the narrow sense, corruption is always associated with bribery, which entails “illegal payments to public officials in return for receiving special privileges and/or services that the briber is not entitled to” (Stefes 2006, 15). This kind of corrupt activity usually refers to monetized corruption. However, this narrow concept is not sufficient for the analysis of corruption in transitioning post-communist countries with systemic corruption (“Context B”). In this study, the tools and methods of corruption are conceptualized more widely. As suggested by C. von Soest (2013) in his research on systemic corruption, acts of corruption have to be integrated into a larger conceptual framework, which also encompasses other features of personal rule. Accordingly, “systemic corruption is an expression of personalised politics” and it is embedded in a web of personal or neo-patrimonial relations (von Soest 2013).

2.4.

Corruption as an umbrella concept

There is a broad variety of concepts, related to corruption, that scholars use to describe corruption-based hybrid regimes, and in particular Ukraine. These include preventive and coercive clientelism (Matsiyevsky 2016), oligarchic neopatrimonialism (Fisun 2012), patronal politics (Hale 2015), blackmail state (Darden 2008), and machine politics (D’Anieri 2005) among others. What all epithets share is an emphasis on the importance of the role of corruption; however, they do not elaborate a clear interdependency between all these concepts and corruption. Conceptual clarification is needed in order to correctly identify the mechanisms of corruption and distinguish them from other forms of informal politics. Rothstein and Varraich treat corruption as an “umbrella concept” that links multiple interrelated concepts such as patrimonialism, patronage, clientelism, since they share a sort of family resemblance to corruption (Varraich 2014; Rothstein and Varraich 2014, 2017) (see Figure 4). At the same time, however, these are established concepts and need to be differentiated.

CONCEPTUALIZING CORRUPTION Figure 4:

25

Corruption as the connecting core

Clientelism Blat

Patronage

State Capture

Corruption

Kruhova poruka

Patrimonialism Nepotism

Source: Author’s adapted depiction, based on Varraich 2014; Rothstein and Varraich 2014, 2017.

On this basis, conceptual clarification, based on the work of Varraich and Rothstein (2014, 2017), is provided below. However, the overviews are modified and include supplementary concepts, relevant to the specific context of Ukraine. The focus of this conceptual work will be on the functions of corruption-related phenomena (Debiel and Gawrich 2013). 2.4.1.

Particularism and conflict of interest

Rothstein and Varraich define particularism as a “central ingredient of corruption” (Rothstein and Varraich 2014, 64). The opposites of particularism are impersonal rule (North, Wallis and Weingast 2009), ethical universalism (Mungiu-Pippidi 2006), or impartiality (Rothstein and Teorell 2008). Thus, in Figure 4, particularism is depicted as the broader context for clientelism, patronage and patrimonialism. All these phenomena can be described as corruption if the three core criteria from the previous chapter are met. Thus,

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corruption always means particularistic behavior, but particularism is not always corruption. The stage preceding particularistic exchange is conflict of interest. Rothstein and Varraich indicate that “the root of conflict of interest is the distortion of impartiality” (Rothstein and Varraich 2014, 64). While all concepts mentioned above, including corruption, denote action, conflict of interest delineates a situation in which there is a risk for a particularistic exchange to unfold.6 Although a conflict of interest per se is not wrong, the action which is subsequently taken may lead to corruption. In order to differentiate situations, in which there is only a risk of corruption, from those in which corruption already exists, the terms “potential” and “real” conflict of interest are useful (Hughes and Huss 2017, 18). Corruption occurs in the event of a genuine conflict of interest, when the potential for the private interests of the involved officials to affect impartiality in decision-making is not resolved. Blat as a regional example of particularism The practice of blat in the (former) Soviet Union serves as a very good example to illustrate the ambiguity of particularism in a gray zone between corruption and the legitimate use of social capital. Although blat usually refers to petty and everyday corruption, which is not explicitly the subject of this study, it is important to explain this region-specific, cultural feature, since—as Martin Carrier states—“institutional history shapes individual and collective preferences, and consequently affects perceptions” (Carrier 2012, 88). In other words, understanding this informal practice as a cultural background is useful to illuminating the pervasiveness of corruption on the political level.

6

The International Encyclopaedia of Ethics defines conflict of interest as “a situation in which some person (whether an individual or corporate body) stands in a certain relationship to one or more decisions. … On the standard view, a person has a conflict of interest if, and only if, that person (a) is in a relationship with another requiring the exercise of judgment on the other’s behalf and (b) has a (“secondary,” “unusual,” or “adverse”) interest tending to interfere with the proper exercise of such judgment” (cited in: Rothstein and Varraich 2014, 63).

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Ledeneva conducted the most prominent research to study this informal practice in the Soviet Union. She defines blat as: … the use of personal networks for obtaining goods and services in short supply and for circumventing formal procedures. Blat networks channelled an alternative currency—an informal exchange of favors—that introduced elements of the market into the planned economy and loosened up the rigid constraints of the political regime. (Ledeneva 2009, 257)

Although blat is sometimes considered a corrupt practice, Ledeneva points out that such an assumption is misleading. Blat can be useful in gaining access to a decision-maker and perhaps to pay a bribe (Ledeneva 2009, 262), which makes blat a precursor of corruption. In the economy of shortage, in order to survive and solve daily problems, blat networks had an important function to obtain “food, goods, and services that people were entitled to have” (Ledeneva 2009, 259). However, the author also states that these “grassroots networks that balanced the rigidity of [the] authoritarian regime” were not able to channel their power into the creation of a robust civil society in the post-Soviet period, which resulted in the disproportionate influence of “networks of power” (Ledeneva 2009, 267). By the time the Soviet Union collapsed, blat was widespread among political elites. This informal practice led to the exclusion of ordinary people from the rights and opportunities new market economies offered (Ledeneva 2009, 266). Blat had the following implications for the functioning of the networks of power: Networks on the top operate on familiar principles of informality that impose certain norms of reciprocity and informal constraints on people in official positions: blurred boundaries between friendship and the use of friendship; helping friends at the expense of public/corporate resources or access; recruitment into networks according to a particular logic—it could be loyalty, dependence or transgression/compromised recruit—rather than the logic of competition and professionalism. (Ledeneva 2009, 269)

A prominent researcher on blat in Ukraine, Tetiana Kostiuchenko defines it “as the use of interpersonal connections for obtaining services and ‘getting things done’ when interacting with institutions and authorities” (Kostiuchenko 2018, 57–58). Her sociological

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findings suggest that there are considerable differences in understandings and practices of blat between those born in the Soviet Union and subsequent generations of Ukrainians (Kostiuchenko 2018, 57–58). 2.4.2.

Clientelism

Varraich relies on the widespread definition of political clientelism in Hopkin, namely, “the distribution of selective benefits to individuals or clearly defined groups in exchange for political support” (Hopkin 2006, 2, cited in Varraich 2014, 5). This definition allows the derivation of two characteristic conditions of clientelism that will be discussed below: reciprocity and trust. Another condition, often referenced as a central one in existing research, is asymmetry of power. However, recent research on clientelism shows that this condition can be questioned. According to Hopkin’s definition, reciprocity is the central element of clientelism: on one side is the delivery of goods or services, which pay for political support, mostly in the form of voting, at the opposite end. A prerequisite for clientelism is the existence of trust between both parties, since there is a time difference in the exchange. Trust can be built through iteration of the exchange. Despite reciprocity and mutual benefit from the exchange, clientelism is based on asymmetrical power relations. Matsiyevsky (2016, 134) derives this characteristic from an argument relating to the political monopoly on resources: A patron needs to have access to resources before he is able to divide them in a particularistic way. Thus, political monopoly is immanent to clientelism. The stronger the political monopoly on resources, the higher the power position of the patron in the hierarchy and the weaker the competition will be. Kettering (1988, 425) likewise argues that, despite reciprocity, clientelism is an unequal and vertical relationship, where the patron is the superior and the client, the inferior. Kettering defines asymmetry of power through the possibility of “punishment,” should the client not “deliver” the expected support. In other words, the hierarchy between patron and client indicates that

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clientelism is not only a beneficial exchange based on trust but can also be coercive if the trust is broken. Varraich revises the characteristic of asymmetry of power and highlights several cases of “new clientelism” in her research, “where clients with higher incomes and living standards, effectively no longer tied by the burden of ‘loyalty,’ are able to shop for patrons” (Varraich 2014, 9). This results in a shift of power from a vertical dyadic relationship to one that is horizontal (Rothstein and Varraich 2017, 75). This “new clientelism” has different implications for governance in hybrid regimes vis-à-vis “old clientelism,” which will be empirically substantiated in the case of Yushchenko’s presidency. Although clientelism is mostly associated and analyzed hand in hand with corruption, it is not the same. Clientelism can be a structural form of corruption with an emphasis on its social aspects (Della Porta and Vannucci 1999; Mungiu-Pippidi 2006, 2015). The overlap of the two concepts is provided by blurring the line between private and public by violation of public office (MungiuPippidi 2015; Rothstein and Varraich 2017). The main difference, listed by Muno (Muno 2016, 652), is the lack of a personal element and the absence of continuity in the concept of corruption. 2.4.3.

Patronage

Patronage is often used interchangeably with clientelism (Varraich 2014, 13). However, there exists a difference between the two. Muno discusses two variations of patronage (Muno 2016, 652), as an “electoral resource” corresponding to clientelism in the broad sense of an exchange of public resources for political support, or, central to this thesis, as an “organizational resource” (Kopecký, Mair, and Spirova 2012) corresponding to “machine politics” (D’Anieri 2005). This variance facilitates differentiation between clientelism and patronage. While clientelism encompasses a variety of favors, advantages and services in return for votes, patronage narrows this offer to public offices and appointments to positions in the state. The job is perceived as a reward for organizational loyalty to the patron.

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While clientelism is mostly associated with transitioning and developing countries, patronage is also common in the developed world. Unlike clientelism, patronage is openly present, when the victorious political force appoints “its” people to different public offices in the wake of an election. Patronage becomes a form of corruption under two circumstances: First, when public offices are obtained in return for bribes or kickbacks; or, second, when public offices are used as an administrative resource by the ruling elite to disadvantage the opposition in elections. Use of administrative resources as mechanism of corruption The use of administrative resources is a widespread and highly relevant form of political corruption in Ukraine. It is defined as the influence of officials using their powers on political developments, in particular the course, results and other elements of the election process with the purpose of staying in power (Razumkov Centre 2009, 12).

Opora, an elections watchdog organization in Ukraine, provides an extensive list of different forms of use of administrative resources (Aivazovska and Neberykut n.d.): 





Institutional administrative resources—the use of civil servants and state infrastructure for particular interests of the incumbent political elite, while the access to such resources is denied to other political actors, especially those of the opposition, e.g. organized participation of civil servants in the electoral campaign of the incumbent political elite; Budgetary administrative resources—the use of state budget funds or means for the benefit of parties or their candidate, e.g. direct distribution of state budgeted funds to potential voters during the electoral campaign of the incumbent political elite; Enforcement administrative resources—the use of law enforcement offices, such as police, the security services, or the Prosecutor’s office in the interests of parties or their candidates to intimidate or repress their opponents, e.g. criminal prosecution of the opposition;

CONCEPTUALIZING CORRUPTION 



31

Executive administrative resources—decision-making in favor of the ruling elite, e.g. selective sanctions or extraordinary control of the private companies and donors who sponsor opposition; Media administrative resources—the use of state media for interests of the ruling elite, e.g. hidden political advertising in favor of the ruling elite and against the opposition.

In a nutshell, patronage is mostly possible without corruption, but the system of corruption cannot exist without patronage. Patronage is the necessary prerequisite for the emergence of particularistic exchanges, like clientelism or corruption, for it is mainly the ability of the political leadership to control state positions that allows the manipulation of state resources in a clientelistic or corrupt way (Kopecký and Scherlis 2008, 357 cited in: Rothstein and Varraich 2017, 86). 2.4.4.

Control in clientelistic and patronage networks

Kruhova poruka (Ukr.) is close in meaning to vicious circle, however, includes the added layer of mutual control being exerted upon the members of the circle. This practice was widespread in the Soviet Union, especially under circumstances of permanent central oversight and individual control. Ledeneva defines it as a situation in which all the members of a particular group or circle are held jointly responsible for the actions and obligations of its individual members, and each individual member in turn can be held responsible for the actions and obligations of the group as a whole. (Ledeneva 2013, 91)

Ledeneva published an interview excerpt with the authors of anticorruption legislation in Ukraine that reveals the role of kruhova poruka in corruption: [In the 1990s, the mafia entered] networks of control and backup (kruhova poruka), the most harmful and ineradicable legacy of the past, which provides protection for people of their circle … [D]eputies of the parliament are backed up by the administrative authorities. Administrative officials do not have the same legal immunity as deputies, but they are backed up by the security and police forces. Whenever cases are raised against high-up officials they are suspended or closed. Every administrator would back up his staff, because he knows if he does not do it, the day comes when he himself

32

CORRUPTION AND ANTI-CORRUPTION POLICIES will have to rely on someone else’s support. This mechanism follows the same pattern as professional expertise in medicine or court—the inspection of complicated cases such as unfortunate surgery or prejudiced sentence consists of the same surgeons and judges who can find themselves in a similar situation. (Ledeneva 2013, 105)

The relevance of kruhova poruka for the persistence of political corruption in Ukraine was revealed when, in September 2016, for the first time two whistleblower judges testified about it in the Parliament of Ukraine. 7 Senior judges exercised pressure on their colleagues to force them to make decisions that unlawfully were in the interests of local politicians. Kompromat is another tool of control in clientelistic networks, very closely interwoven with the logic of kruhova poruka. The practice of kompromat was widespread and used in the Soviet Union. Ledeneva defines kompromat: The word kompromat has no direct equivalent in English. Its literal translation—“compromising material”—refers to discrediting information that can be collected, stored, traded, or used strategically across all domains. … In English, the essence of kompromat is best grasped by the phrase “blackmail files” that are gathered or fabricated for political or business purposes. (Ledeneva 2013, 58)

Ledeneva differentiates political kompromat from economic, criminal and private kompromat. Political kompromat includes disclosure of information about an individual’s abuse of office and power, relations with oligarchs, political incompetence or disloyalty (Ledeneva 2013, 60). Economic kompromat consists of information about illegal economic activities, including the misappropriation of budget funds, embezzlement, offshore activity, giving and accepting of bribes, etc. (Ledeneva 2013, 61). Criminal kompromat includes knowledge of involvement in criminal activities, ties to organized crime, contract killings, and violence. The last type consists of controversial information about an individual’s private life. Corruption is a perfect tool to create kompromat. Its logic is exploited for what Keith Darden terms a “blackmail state” (Darden

7

The author was present and participated in the public meeting, a full record of which is available. Additionally, the issue was broadly covered in the press.

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2008), where corruption can reinforce the administrative hierarchy and strengthen the state.8 According to Darden, two preconditions are necessary for the instrumentalization of corruption to prosper alongside formal institutions and at the same time to strengthen the state’s hierarchy. These preconditions occur when corruption can be both the carrot and the stick. As Darden explains, on the one hand, institutional graft considered to be “a second salary” or “alternative form of compensation” is set against awareness of the “informal system of payments” through privileged access to information (e.g. surveillance), and the ensuing ability to exert informal pressure on formal subordinates by threat of sanctions. The “threat of exposing and enforcing” corruption as wrongdoing has a particularly strong influence on lower level officials. The severity of this sanction allows the state leadership to practice a systematic form of blackmail, with payment exacted not in cash but in obedience. (Darden 2008, 41–42)

In summary, kruhova poruka, kompromat and the blackmail state as mechanisms of informal control in clientelistic and patronage networks reveal the complexity and interwoven nature of corruption in other informal practices, making it insufficient to study them separately. This mechanism thereby shows the importance of researching corruption clusters instead of singular symptoms. Importantly, these informal forms of control make personal connections less important, which differentiates clientelism and patronage from patrimonialism and nepotism. According to Darden: Critically, a state that relies heavily on graft to secure compliance, although not a legal bureaucracy, may still be very much a state in the Weberian sense: it is monopolistic, hierarchical, impersonal, and effective in performing the coercive and extractive tasks of statehood. The state remains monopolistic so long as there is no parallel organization—such as a clan, tribe, or party— that informally substitutes its own organization for the hierarchy of the state and both principal and agent are within the state apparatus. It remains hierarchical insofar as it establishes a clear informal chain of command that 8

Darden differentiates between three types of graft: state-weakening, state-benign and state-strengthening (Darden 2008, 41). For Ukraine under Kuchma, he applies the third form.

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CORRUPTION AND ANTI-CORRUPTION POLICIES complements the formal administrative hierarchy of the state. And in contrast to patrimonialism or a traditional patron-client network, authority is impersonal; compliance is based on a clear—merely informal—structure of monetary incentives rather than long-standing ties of mutual obligation. (Darden 2008, 43)

As stated above, hierarchy and monopoly are central principles that secure the functioning of the state, based on the logic of clientelism and patronage. Thus, it is natural in this context for the political leadership to strive toward increasing influence, especially on surveillance and law enforcement bodies. 2.4.5.

Patrimonialism

Patrimonialism dates back to Max Weber, who referred to it as a special case of patriarchal domination (Weber 1922). Theobald applied this concept to a specific regime, one operating on the basis of a particularistic exchange of resources (jobs, promotions, titles, contracts, licenses, immunity from prosecution, etc.) between key figures in government and strategically located individuals (trade union leaders, businessmen, community leaders, etc.) (Theobald 1982). In return for these resources, the government or heads of state receive economic and political support. In this context, Varraich describes patrimonialism as a “metamorphosis of clientelism and patronage” (Varraich 2014, 21). Henry Hale introduces the closely related term patronalism as a more general notion, tending to subsume all the concepts above, including patrimonialism (Hale 2015, 22 ff.) Patrimonialism focuses on the personal nature of the exchange. Thus, the personal relation is derived from the patriarchal domination that is the core of the definition. While in a patron-client relationship, the personal factor in the exchange becomes relevant due to iteration, and initially the personal relationship does not matter, patrimonialism builds on the existence of the personal, family or clique ties in the particularistic exchange. The “corrupt core” of patrimonialism is based on a particularism that is immanent to the patrimonial relationship and is the opposite of rationallegal models.

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The term neopatrimonialism has seen an increase in popularity. Varraich describes neopatrimonialism as a hybrid system with an established structure of the ideal rational-legal bureaucracy; however, in this case, the governance mode itself has patrimonial features (Varraich 2014, 23). Oleksandr Fisun (2012) applies the concept of neopatrimonialism to analyze politics in the post-Soviet space. He elaborates three regional features of post-Soviet neopatrimonialism: 1. The formation of a stratum of rent-seeking political businessmen and/or neopatrimonial bureaucrats who use a combination of élan, politics, and property in order to achieve economic goals. 2. A more or less private appropriation of governmental administrative resources, primarily coercive and aimed at the fiscal functions of the state, and which are used largely to defeat any political opposition and eliminate economic competitors. 3. The crucial role of informal patron-client networks for the structuring of political and economic processes. (Fisun 2012, 91)

Kerstin Zimmer made use of the concept to describe politics in Ukraine under Kuchma’s presidency accordingly: … under Kuchma Ukraine finally developed into a neo-patrimonial state: the president formally and informally controlled many aspects of political and economic life by applying neo-patrimonial strategies and using the formal legal and administrative framework for the preservation of this power. (Zimmer 2008, 276 ff.)

When analyzing recent developments in Ukraine, Fisun highlights a specific function of neopatrimonialism in the country, namely, that it contributes to the institutionalization of political pluralism via a series of formal and informal power-sharing arrangements between the major players (Fisun 2015, 1). Nepotism can be considered a form of patrimonial particularistic exchange, restricted to the family. Nepotism means exploitation of an official position to unfairly benefit a family member or friend by providing them with a job or favors (Hughes and Huss 2017, 19). As a subtype of the conflict of interest, nepotism is not necessarily corruption unless the conflict of interest remains unresolved. Nepotism in Ukraine is close to the phenomenon of kumivstvo

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(“godparent relationship”) or to cronyism. In the case of cronyism, the exchange of favors and privileges is based on close friendship ties. Unlike in clientelistic and patronage networks, patrimonial networks rely less on the instruments of informal control. Instead, it is natural for political leadership to focus in this context on strengthening one’s family or clique and subordinating or excluding other actors from the undertaking. 2.4.6.

State capture

Unlike previous definitions, state capture is viewed as a clear type of corruption while other concepts are located in the gray zone. Hellman et al. define state capture as the efforts of firms to influence the contents of legislation, rules, laws, decrees or regulations (i.e. the basic rules of the game) through unofficial payments by private actors to public officials … With capture, firms seek to extract rents from the state by distorting the basic rules of the game to their own advantage. (Hellman et al. 2000, 4)

This definition makes state capture very close to the concept of lobbyism; however, the clear identification with corruption stems from the presence of unofficial private payments to public officials. The fact that state capture takes place on the input side of the political process makes this form of corruption especially dangerous, since, depending on the rules and regulations, it can shift corruption from the illegal to the legal sphere. Alternatively, on the output side, the authors define a kickback as: unofficial payments by private actors to public officials in order to gain government contracts … With kickbacks, firms seek to extract rents by skewing the implementation of government policy to their own advantage. (Hellman et al. 2000, 4)

Both forms of corruption are incorporated in the concept of a system of corruption. The idea of state capture is reflected through the diminished role of citizens in the political process and the increasing role of oligarchs and financial industrial groups (FIGs) instead. The system of corruption does not, however, limit corruption to business as its only cause. Moreover, corruption on the input and output

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side(s) is brought into logical connection, while other relevant forms of corruption on the output side, beyond kickback in public procurement, are considered. In summary, conceptual clarification and delimitation of related concepts is crucial for this study in order to identify the role of different forms of corruption in sustaining hybrid regimes. For the use of the above-mentioned concepts in the empirical part of the study, it is important to highlight two analytic distinctions: First, these concepts must be separated into forms of corruption on one side and the logic according to which the regime functions (mainly informally) on the other. For instance, patronage is considered here to be a form of corruption, owing to its potential use of administrative resources as a possible mechanism, while machine politics is treated as an overarching description of a regime in which patronage plays an important role. Thus, while clientelism, patronage, and nepotism will be considered forms of corruption, neopatrimonialism and patronalism are considered terms denoting the logic according to which political regimes function. Second, all concepts are connected by the logic of particularism that creates a potential conflict of interest for a political actor that is not corruption per se. In order to identify the concepts above as corrupt practice, three core characteristics—(1) availability of the public office (2) violation of entrusted power for (3) private advantage—must be present, but this is not always the case. Mostly, practices like clientelism or patronage and the logic of particularism are central in order to sustain the system of corruption, since they bring the holders of political office advantageous positions and undermine fair competition.

2.5.

System as an analytical concept for corruption clusters in hybrid regimes

In this work, the author identifies corruption, when three core characteristics are met: the actor is entrusted with public power and holds political office; he or she misuses this position by crossing the line between public and private interest to receive monetary or nonmonetary advantage for private (including family and personal

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network) gain. The focus is on grand political corruption that takes place in “Context B,” where corruption is the norm—as defined by Mungiu-Pippidi (see Chapter 2.3.1). Analysis of political corruption in this context is plausible only via a cluster of different corruption mechanisms, instead of singular corruption cases or forms. The conceptualization of corruption clusters as the system of corruption provides a framework to better understand the role of separate forms and mechanisms of corruption for the operation of the entire political system in hybrid regimes. Besides, the concept of the system of corruption allows us to analytically capture its dynamic and assess regime oscillation. This is what Hale defines as a “reorientation of scholarship from a logic of regime change to a logic of regime dynamics” (Hale 2015, 15). 2.5.1.

Defining the system of corruption

The concept of the system of corruption is closely interrelated with the term “system.” “System” denotes a set of structures (institutions) and rules (procedures) that stimulate rule-based interaction of political and societal actors with the aim of sustaining functionality and the circular reproduction of the system (Merkel, Wagener, and Brückner 2015, 33). In post-Soviet countries the term sistema (Rus. for system) is commonly used to define a specific type of governance structure,9 including the political regime and its formal and informal institutions, as well as structures and processes that influence participants’ behavior (Shevtsova 2003). As Ledeneva describes: The vicious circle of sistema reproduction is based on its nontransparency: networks of insiders are tied together by following an unwritten code; members are recruited on the basis of loyalty; they are initiated and compromised; rewards and punishment are distributed on the basis of extralegal criteria; and the foundations of belonging to networks of power are hidden behind formal appointments and are nontransparent, feeding back into the reproduction of the sistema. (Ledeneva 2009, 269–270) 9

“Recent content analysis of interviews with Russian elites shows that sistema is the third most frequently used term after ‘business’ and ‘money’” (Oleinik 2008, 69, cited in: Ledeneva 2009, 268). Shevtsova defines the Russian system as “a specific type of governance structure whose characteristics include paternalism, the state domineering over the individual, isolation from the outside world, and ambitions to be a great power” (Shevtsova 2003, 16, cited in: Ledeneva 2013, 13).

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This system operates in the environment built by both a state’s society and international actors. The concept of a system of corruption has to be differentiated from the phenomenon of systemic corruption. While systemic corruption aims at describing permanently repeating corrupt practices and processes that follow certain patterns, independently of the scale of corruption, the concept of the system of corruption focuses on structures and governing forms of formal and informal institutions by means of corruption and aims to analyze the role of grand political corruption in all its forms upon the political system. It is important to highlight three essential aspects of the system of corruption approach: First, the approach implies that widespread corruption is not a cultural problem, but primarily a structural one. In other research, the problem with corruption has been seen alternatively as historically ingrained within culture (Grødeland 2010; Miller et al. 2001). Framed in public ethics theory, the latter approach focuses on culturally specific social norms governing ethics within a society. Although it cannot be neglected that history and unwritten societal norms are deeply anchored in each other, this cultural approach can be misleading for an analysis of widespread corruption. As empirical findings from Afro barometer’s 2006 survey show, even in societies with widespread corruption people understand and consider corruption unethical and punishable (Rothstein and Varraich 2014, 30). As Rothstein and Varraich point out, The reason, why people, although condemning corruption, participate in corrupt practices seems to be that they understand the situation as a ‘collective action’ problem where it makes little sense to be ‘the only one’ that refrains from using or accepting bribes and other kickbacks (Rothstein and Varraich 2014, 31).

In other words, widespread corruption has little to do with the ethical norms of a certain society, but rather with structural preconditions that allow (or prohibit) following its ethical norms. Second, in cases where formal institutions are developed and state laws are adopted under corrupt conditions (Debiel and Pech 2010, 54), corruption should be analyzed not only at the output end

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(policy implementation), but also at the input side (aggregation of interests and decision-making) of the political process (Börzel, Pamuk, and Stahn 2008, 10). The system of corruption concept allows analysis of both. Third, corruption is not a problem of the country’s formal, institutional framework but rather one of the informal structures of governance which corruption instantiates. The main role of formal rules, such as a constitution, lies primarily in shaping informal expectations and not in being followed as a legal document (Hale 2015, 10). Therefore, the system of corruption approach focuses on the informal structures of the political system in order to identify the role and persistence of corruption within it. 2.5.2.

Typology of the system of corruption

Four syndromes of corruption by Johnston (2005, 2014a) or continuum of governance regimes by Mungiu-Pippidi (2015) suggest corruption is rarely the same, so that not its quantitative, but rather its qualitative characteristics have an impact on the political system. This claim is substantiated by the empirical research of Hale (2015) and Stefes (2006). In this study, great reliance is placed on the analytical differentiation between centralized and decentralized systems of corruption, as elaborated by Stefes (2006). The metaphor of one or several pyramids, applied also by Hale (2015), allows us to tackle the level of competition for public resources. Based on the empirical research conducted for this study, the explanatory limits of Stefes’ initial conceptualization were identified. In particular, the centralized system of corruption does not explain such an empirical case as the system of corruption under the presidency of Yanukovych. Therefore, I introduce the monopolized system of corruption as the extreme form of a centralized system. Decentralized system of corruption A decentralized system offers an initial point of analysis. A decentralized system of corruption usually exists under conditions of political instability and fragmentation of the ruling elite; for example, owing to interruption in the system of corruption caused by the failure of political authority:

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Under these circumstances, new governments find it subsequently difficult to convince the heads of the various networks (or clans) to succumb to the new rulers. (Stefes 2008, 76)

Corruption remains systemic, but it lacks central oversight. In such a case, several pyramids of corruption exist side by side, depriving the political leadership of being the exclusive beneficiary of illicit activities taking place under its watch (Stefes 2006, 3). Moreover, the merger of political power and economic resources is imperfect, preventing the political leadership from reinforcing its rule through patronage and clientelism. Highly fragmented economic resources open the door to the rise of opposition. Political competition is one of the results of such a system. Accordingly, it sustains a plurality of media and provides an opportunity for society to raise a critical voice. Thus, according to Stefes, any political leadership that seriously attempts to stay in power will counteract a decentralization of systemic corruption. (Stefes 2008, 75)

The most extreme manifestation of the decentralized system of corruption is the state of civil war. Centralized system of corruption On the contrary, the centralized system of corruption requires strong leadership that is able to exert high levels of control and often corresponds to authoritarian rule. It is not necessary for the leader at the top to be directly involved in corrupt transactions, but, rather, for him to be able to manage the clusters of corruption surrounding him. Political leadership strives to dominate structures of corruption in order to tie the economic elite to its rule by guaranteeing certain benefits in return for exclusive financial support during political campaigns (Stefes 2006, 29). The ability to control the structures of corruption reinforces the power of the leadership. Formal authority provides access to informal sources of power, which in turn reinforce formal authority. The fusion of political and economic power stabilizes the political regime but also prevents the development of a genuine democracy and stifles opposition, as illicit gains can be used to distort political process to such a degree that governments become unaccountable to their citizens. Thus, as

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Stefes asserts, if offered a choice between a centralized and a decentralized system of corruption, rational political leaders prefer the former to the latter (Stefes 2008, 76). Essential to this type of system is not only the ability to control structures of corruption, but also to be able to limit corrupt activities especially at lower levels of the state apparatus. Stefes asserts that political leadership in a centralized system of corruption has “an interest in curbing corrupt activities, because the costs of widespread corruption among lower officials outweigh the benefits that accrue for example in form of bribes that flow to the top” (2006, 29). Hale describes the single pyramid of authority as “a giant political machine based on selectively applied coercion and reward, on individualized favour and punishment” (Hale 2015, 11). Thus, corruption is instrumentalized as both stick and carrot. Political leadership does not necessarily gain material advantages from corrupt action, but often allows the corrupt action of other influential actors in order to secure their loyalty, but also to be able to coerce them by means of blackmail (Darden 2008). Monopolized system of corruption Monopolization of corruption is an extreme form of its centralization. In a monopolized system of corruption, political leadership relies on a very narrow circle of individuals. The main goal of leadership in this system is not only to manage structures of corruption, as in a centralized system, but also to be a part of them personally and to take them over. The governance structure of such a system bears little resemblance to a pyramid but has a straight top-down vertical form. Such a system is designed to be beneficial to very few actors, increasingly eliminating not only political competition, but excluding potential competitors among oligarchs or other groups of influence from the system. A monopolized system has devastating implications for both economy and polity. The monetary resources from corrupt action flow from the lowest level upward, reinforcing petty corruption. In other words, public officials at the lower level, who are involved in corrupt action, are forced to relay a certain share of their income to the very top. The monopolization of corruption results in increased

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prices for all corrupt transactions, since there is no competition in delivering “corrupt services.” This has a negative impact on smalland medium-sized enterprises, on individuals as well as on public servants. Moreover, all income from corruption flows to a limited circle of participants, who launder money abroad. As a consequence, essential amounts of money are removed from circulation in the national market (including the black market), which indirectly destroys the country’s economic system.

3.

Combining constructivist and empiricalanalytical perspectives on corruption

Concepts of corruption from the previous chapter closely followed the empirical-analytical approach. The existing definitions used to identify and describe a reality where corruption is practiced were elaborated upon to differentiate its forms and delimit corruption from other practices. This perspective, while necessary, has reached its explanatory limits. For example, the existing frameworks fail to explain why the anti-corruption industry flourishes in hybrid regimes (going so far as to include government involvement), but continuously fail to tackle the core of the problem; or why the topic of corruption is often very popular or even the central theme in the electoral campaigns of political forces that are in practice deeply engaged in corruption. Although empirical analysis of corrupt practices is crucial for understanding how hybrid regimes operate, a constructivist perspective allows the criticism that actor- and structure-centered analysis of corruption is an attempt to hit a moving target, since the meaning of corruption can vary with time and context. Therefore, in this chapter, a social constructivist perspective, in addition to the empirical-analytical approach, will be applied to the analysis of corruption in order to fully explore the role of corruption and anti-corruption in sustaining hybrid regimes. Constructivist perspectives focus chiefly on the meaning assigned to the empty signifier of “corruption.” Thus, in addition to the analysis of institutions, actors, and decision-making that promote the persistence of corruption, the focus shifts to the analysis of different meanings assigned to the term “corruption” and how those meanings shape political reality.

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3.1.

Constructivist perspective

3.1.1.

Corruption as an empty signifier

Starting from the central assumption that the meaning of corruption can vary with time and context, the main feature of an empty signifier is that it is always reversible, and its meaning is fixed only temporarily. An empty signifier means “a symbolic nodal point in the construction of discourse through which different political contestations, identities and demands can be articulated” (Koechlin 2013, 23). Koechlin describes the functions and properties of an empty signifier as follows: … empty signifiers enable both the articulation of dissent as well as the production of consensus in society. Hence, they play a constitutive role for the possibility of society as such; they are a necessary condition for the (re)organisation of political order. Oscillating within this tension between plural and potentially antagonistic views on the one hand, and the potential of socially acknowledged, universalised representations on the other hand, empty signifiers are always reversible. (Koechlin 2013, 23–24).

Following constructivist logic, the connection between corruption as an empty signifier and politics is rooted in construction of the term within the hegemonic struggle. Hegemony here means “an articulatory practice evolving out of the interplay of the logics of equivalence and difference and based on the temporal filling of a dislocated social structure by means of empty signifiers” (Nabers 2015, 146). Here, the concepts of hegemony and discourse are closely interwoven. Nabers refers to their interrelation as follows: Different discourses compete for hegemony, that is, they constantly struggle to fix particular meanings in a way that makes them look like universal ones. (Nabers 2015, 104).

Importantly, discourse is defined as a structure, created around nodal points—what Laclau and Mouffe (1985, 2001) call “the temporary fixation of meanings” (cited in Nabers 2015, 115). For the articulation of nodal points, use of an empty signifier seems the most suitable tool.

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Nabers describes the characteristics and purposes of an empty signifier that allow its recognition in the midst of an abundance of other concepts and terms: Empty signifiers are characterized by an indistinct or nonexistent signified, that is, terms that can have different meanings and can thereby serve to unite disparate social movements. They have no fixed content and can embrace an open series of demands. […] Empty signifiers have three interrelated purposes: First, they signify the universal; second, they provide a name for the chain of equivalences; and third, by embodying the ideal of universality, they keep the equivalential sequence indefinitely open.” (Nabers 2015, 116–17).

“Corruption” is the phenomenon that corresponds to all these purposes and thus fulfills the requirements to become a powerful medium in the competition for hegemony perfectly. First, the term “corruption” has no fixed content. International organizations deliberately operate with a vague meaning of corruption. For instance, the UN (2003) refrains from defining corruption and Transparency International uses a broad definition—“corruption as abuse of (public) power for private gain”—that is also full of ambiguous terms that change their meaning depending on context.10 Some scholars define corruption as an “umbrella term” for many other associated practices, such as clientelism, patronage, state capture (Varraich 2014; Rothstein and Varraich 2014, 2017), or fraud, bribery, extortion (Langseth 2002, 3), but also moral decay (Franziskus, Ruh, and Sievernich 2014), etc. Second, “corruption” is perfectly suitable to provide a name for a chain of equivalences. The “umbrella function” of the term shows that empty signifiers are never completely empty. Corruption raises powerful, mostly negative associations, when mentioned (Rothstein and Tannenberg 2015, 45). Research on corruption as an empty signifier in Africa shows this: 10

The term “power” is extremely problematic, because both its meaning and its latitude differ between public office power, decision-making power in the private sector, and discursive power, etc. The relationship between public and private is also very ambiguous, since few societies separate the two along clear, formal lines. The word “misuse” can indicate either a violation of the formal rules (illegal behavior) or a violation of public trust (illegitimate behavior) and can differ according to the nation/culture it is applied to. Finally, both dimensions—legality and legitimacy—depend greatly on local and temporal context (Debiel and Pech 2010, 54).

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CORRUPTION AND ANTI-CORRUPTION POLICIES The difficulty of defining corruption on the one hand, and the threatening image it evokes on the other hand seems to lend itself to metaphorical language. Speaking of corruption frequently means speaking in terms of decay and illness. The ‘rotten society’ noted above invokes a society deteriorating physically and morally. (Koechlin 2013, 14)

Third, “corruption” signifies not only normativity but also universality. In general, the public associates corruption with the notion of bad governance rather than with the quality of government or absence of good governance (Rothstein 2014; Rothstein and Tannenberg 2015). Rothstein argues: “terms like of ‘good’ or ‘quality’ are inherently normative [as is corruption]” (Rothstein 2014, 739). If corruption is a normative term, the question of the universality of this norm is underlined: Is the norm valid and legitimate on a global scale (universal) or does this norm differ from society to society and culture to culture (relative)? (Rothstein 2014, 740). On the one hand, a limited number of researchers have raised the critique that “the international anti-corruption agenda represents a specific western liberal ideal that is not easily applicable to countries outside that part of the world” (e.g. Heidenheimer 2002 cited in: Rothstein 2014, 740). On the other hand, scholarship relies heavily on the “public goods theory of corruption” (Rothstein 2014, 741) claiming that all societies produce some kind of public goods and “when those who are responsible for managing the public goods convert them into private goods, people generally see this as morally wrong,” which stresses a very similar understanding of what corruption independent of cultural context precisely is. This argument makes the widespread claim for the universal applicability of corruption as a term normatively bad. In summary, the central function of the term “corruption” is its universality in terms of negative normative perception, but at the same time, another function of “corruption” is that one can assign different meanings to it as an empty signifier. Due to these two functions, corruption becomes highly political, since it provides a platform for competing discourses in hegemonic struggles and therewith for fomenting a process of crisis and change.

CONSTRUCTIVIST AND EMPIRICAL-ANALYTICAL PERSPECTIVES 3.1.2.

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From articulation to construction of social identities and institutions

The theoretical basis for the role of corruption framing and anticorruption policy in the political struggle for domination is provided by Nabers’ discourse theory of crisis and change (Nabers 2015). Nabers describes the process (depicted in Figure 5) from the rhetorical articulation of challenging points to political institutionalization in practice as follows: Any hegemonic process can then be traced along the lines of … political ontology […]: Starting with the articulation of a particular political crisis (of lesser or greater extent), which must in some way be connected to sedimented practices to be credible, and moving to the competition between different political forces to hegemonize the political field, resulting in the acceptance of a certain interpretative framework of identification (actual hegemony) and its eventual routinization and political institutionalization. … [T]his final act of institutionalization causes feedback effects on the discursive articulation of the crisis, new interpretative frames start to compete, and politics continues. Theoretically, this circle never ends … (Nabers 2015, 146–47)

Figure 5:

The theory of crisis and change Sedimented practices Dominating meaning of corruption

Institutionalization

Dislocation

Materialization of the imaginary—Anticorruption policy

Role of corruption in (political) crisis, accusations of corruption

Antagonism Hegemonic struggle, transcendental legitimization, raising antagonism of corrupt vs. non-corrupt

Source: Adapted from (Nabers 2015, 152), modified by the author

One of Nabers’ major arguments is that “politics is about the actual process of filling the empty place of social identity” (Nabers 2015, 192). Imposing a certain interpretive framework for identities is an

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essential part of the hegemonic process. Here, it is important to explain first what social identity is and how it is constructed and, second, to identify when an empty space of identity appears (crisis and dislocation) and how competition for its occupancy takes place. Social identity is an element of self-perception, based on relation to a relevant social group (Tajfel 1978; Tajfel and Turner 1986; Turner and Oakes 1986). This “group” is conceptualized as a collection of individuals who perceive themselves to be members of the same social category, share some emotional involvement in this common definition of themselves, and achieve some degree of social consensus about the evaluation of the group and of their membership in it. (Tajfel and Turner 1986, 15)

Importantly, such identifications are mostly rational and comparative, because they provide a system of orientation for self-reference in comparison to the other (Tajfel and Turner 1986, 16). Thus, from the social psychology perspective, there are two important theoretical principles with regard to construction of social identity: First, individuals strive to achieve a positive self-concept and maintain positive social identity; and second, the evaluation of one’s group is determined through favorable comparisons with the positively perceived in-group and some relevant out-group (Tajfel and Turner 1986, 16). In the discourse theory of crisis and change, the main focus rests on analysis, how the in- and out-group can be created by means of language. Here, the construction of social identities follows the logic of equivalence and difference, while the articulation of signifiers in one particular way and not another is a matter of special importance: The logic of equivalence constitutes the fullness of a community by linking together a plurality of unfulfilled demands, while difference contradicts this logic. Different identities are grouped together in opposition to another camp to form a chain of equivalence, yet identities appear to be fixed by articulating a subject into a sequence of signifiers. (Nabers 2015, 111).

In the hegemonic struggle, any discourse will seek to assert its dominance and to transform particularity into the “illusion of universality” (Nabers 2015, 115). This is done by the temporary fixity of meanings—the nodal points. The nodal point is a “discursive point

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around which particular signifiers get articulated into a chain of equivalence” (Nabers 2015, 115). The dominant or hegemonic discourse is able to provide the framework for social in- and out-group identities that are at least temporarily stable. Importantly: [T]he only possibility of having a true outside would be that the outside is not simply one more, neutral element but an excluded one, something that the totality expels from itself in order to constitute itself. (Laclau 2007 cited in: Nabers 2015, 112).

This means that social identities, constituted through inside and outside logic, are hierarchical, since the fact of exclusion is not neutral, but implies subversion. From this perspective, relations between in-group and out-group are steeped in power (Nabers 2015, 114), which makes the creation of social identities the essential element of the hegemonic process. However, the agents’ identity remains incomplete, guaranteeing the continuity of politics (Nabers 2015, 109). The antagonistic relationship between self and other implies “the openness of one identity to be infected by another” (Nabers 2015, 113). This antagonism opens the door to dislocation: Dislocations are crucial in the understanding of processes of social change, as they produce structural gaps that have to be filled, [that is,] situations of fragmentation and indeterminacy of articulations. (Nabers 2015, 166)

In summary, the theoretical cycle described above provides the foundation for the analysis of how the meanings of corruption change over the course of a hegemonic process. The starting point is a widespread understanding of corruption within a society as a cumulative process. Initially, this meaning is broadly accepted as universal. However, certain events, like for instance corruption scandals, can call the universality of the meaning into question. This is when crisis is afoot. Thus, crisis can be understood as a test for the universality of the dominant meaning. Crises provide a new space for competition between multiple meanings. Competition becomes visible in the attempts to create identities of the in- and out-group, since exclusion in this context means domination. The identity of a non-corrupt self is usually created through the exclusion of corruption. Thus, the winner of the hegemonic discourse frames “corruption” in a way that

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allows adopting the identity of “non-corrupt.” This dominance is materialized in anti-corruption policy, which institutionalizes meanings and leads to practice through policy implementation. 3.1.3.

Framing corruption as a tool in political tactics

Framing is a useful instrument to fill an empty signifier with necessary meaning. This work uses the concept and operationalization of framing developed by Robert M. Entman (1993), who defines framing as follows: To frame is to select some aspects of a perceived reality and make them more salient in a communicating text, in such a way as to promote a particular problem, definition, causal interpretation, moral evaluation, and/or treatment recommendation for the item described. Typically frames diagnose, evaluate, and prescribe … Frames, then, define problems—determine what a causal agent is doing with what costs and benefits, usually measured in terms of common cultural values; diagnose causes—identify the forces creating the problem; make moral judgments—evaluate causal agents and their effects; and suggest remedies— offer and justify treatments for the problem and predict their likely effects. (Entman 1993, 52; emphasis in original)

Entman continues and describes the manner in which frames work. Their primary function is to highlight certain information about the subject and to downplay or omit other information. The main tool for achieving this is salience, or, “making a piece of information more noticeable, meaningful, or memorable to audiences.” (Entman 1993, 53). Although the presence of frames in a text does not necessarily mean that they have influence on the audience, issue salience increases the chances that the receiver will perceive information, discern and process its meaning. According to Entman: Texts can make bits of information more salient by placement or repetition, or by associating them with culturally familiar symbols. However, even a single illustrated appearance of a notion in an obscure part of the text can be highly salient, if it comports with the existing schemata in a receiver’s belief systems. (Entman 1993, 53)

Entman states that framing is crucial in exerting political power. Even more, frames in a public discourse “imprint power,” since they register the identity of actors and interests that competed for domination (Entman 1993, 55).

CONSTRUCTIVIST AND EMPIRICAL-ANALYTICAL PERSPECTIVES 3.1.4.

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The role of corruption and anti-corruption in hegemonic struggle

With all the necessary attributes of an empty signifier present, corruption is a perfect theme to craft social identities according to the logic of equivalence and difference. Depending on the meaning assigned to the term, political actors can develop the identities of a non-corrupt self through exclusion of corrupt others, in a process which necessarily entails subversion. Should a political actor succeed in creating a meaning of corruption that allows self-representation as non-corrupt, and exclude his opponents as corrupt, this actor creates a hierarchy and domination over the group of others. This logic allows unique perspectives on the functions of anticorruption policy for political domination. If corruption in practice is applied to obtain illegitimate advantages and secure political domination, then anti-corruption is a continuation of corruption by other means. Anti-corruption policy institutionalizes certain meanings of corruption that succeeded in the hegemonic struggle. Anticorruption policy legitimizes control and punishment against those who are defined as corrupt. The actor who is in charge of anti-corruption activities automatically occupies a dominant position. But if the meaning of corruption is fluid, different actors can assume different positions, namely, dominant and dominated ones. This perspective suggests that anti-corruption policy in hybrid regimes is not only a subject imposed by the global trend of good governance, but a highly competitive space, where different actors attempt to impose their meanings. In line with the definition above, the framing analysis of corruption in this study will involve questions relating to the manner in which presidents defined corruption, described its causes and evaluated its consequences as well as what remedies they suggested. The analysis of anti-corruption policy will be conducted along similar lines: Even if anti-corruption policy was not implemented, the correlation between the framing of corruption and the suggested anti-corruption strategy will reveal the effectiveness of the ensuing political tactics.

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In order to systematize different options for the framing of corruption and their implications for anti-corruption policies and power relations, the next section will summarize the primary explanatory approaches to corruption.

3.2.

Theoretical explanatory approaches to corruption: Agency vs. institutions

Theoretical approaches and disciplinary frames as an initial point of departure for social inquiry are crucial in explaining political and social outcomes. The essence of social inquiry for political outcomes revolves around the question of whether political outcomes are a result of the context—structures, institutions, norms, etc.—or a result of the conduct—the agency—of political actors, or a combination of both. In other words, different approaches are based on different assumptions: do people engage in corrupt behavior or corrupt schemes because of their will, individual motives and interests to do so, or because of the context—the structural preconditions? The corresponding ontological position of the meaning attached to the term “corruption” has an influence on how the phenomenon of corruption is understood and which anti-corruption strategies are developed—if any. This overview is by no means exhaustive but focuses on relevant theoretical frameworks to provide the context for the framing analysis of corruption. 3.2.1.

Agency-centered micro-perspective

In corruption research, economic explanations of corruption have been the most cited and also the most influential for policy formulations (Andvig and Fjeldstad 2001, 37). For economists, the center of their inquiry is agency—the rational individual actor, his behavior and action. According to this ontology, the level of utility defines actions and preferences of the homo economicus. Among actor-centric micro-perspectives there exist different schools (cf. Dauner and Voigt 2015; Merkel and Wagener 2015). Neo-classical economics suggests that the actor is fully rational, informed and strives for the maximum utility, while neo-institutional

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economics predicts that the rationality of the actor is restricted, the actor missing information and ready to accept satisfactory results. In the latter context, the market plays a crucial role in decision-making; it is a coordination instrument that delivers information about prizes, quality, supply, demand, etc. Owing to rising transaction costs relating to use of the market, a fault line has developed along which economists define the main role of institutions, namely, the minimization of transaction costs in the market (rational choice institutionalism). In other words, the role of institutions is to provide restrictions that influence cost-benefit calculations of the actors’ actions. Corruption as deviant behavior The micro-perspective of the social world, with a strong focus on an individual’s conduct and behavior, allows for the assumption that corruption is a deviant behavior or intertwined with the moral pathology of an actor (Rimke 2010). Central to this perspective is the idea that criminality is inherent in the individual. There is a causal chain from bad character to corrupt acts. The root cause of corruption is found in defects in human character and predisposition to criminal activity. Individuals with moral deficiencies engage in corrupt practices out of greed and selfishness. This perspective leads to the idea that “bad apples corrupt good barrels” and not the other way around. “Explanations that rely on an individual’s propensity to do bad things dominate both explanations for corruption and regulatory responses” (Torsello and Taylor 2016). Thus, the implied solution is removal of corrupt individuals. In public discourse, this perspective remains very popular, as researchers demonstrate (e.g. Wickberg 2016), despite essential critiques illuminating the complexity of the environment in which individuals act (e.g. Torsello and Taylor 2016). Principal-agent approach Neo-classical economics takes this environmental complexity into consideration, while continuing to focus on agency. Since the end of the 1970s political economists, in particular, Susan Rose-Ackerman (1978) and Robert Klitgaard (1988), considerably influenced

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how corruption and global anti-corruption policies have been understood. Their approach is based on two central ideas: First, corruption is a deviant action of the individual, so the problem lies with the agent, not the institution; and second, corruption is a crime of calculation, not passion (Klitgaard 1998, 4). The basis for these assumptions is the principal-agent model (Klitgaard 1988, 69 ff.) which reflects the hierarchical relation between subordinates and superiors in public and private organizations. Thus, corrupt transactions occur in the interaction between three actors: principal, agent, and client. The principal is assumed to be honest. Klitgaard describes the context for corrupt action as follows: The principal (P) enlists an agent (A) to provide a service to himself or to a client (C). A has discretion over that service. A may use that discretion in an illicit manner for a personal gain; doing so may create harm to the principal. Information about what A and C do is asymmetric, and it is expensive for P to overcome this asymmetry. (Klitgaard 1988, 73)

Thus, from an economic perspective, an agent will engage in corruption if according to his calculation the benefits from corrupt action outweigh the costs, including “moral” ones, it may incur. The client follows a similar logic. Along these lines, a principal-agent problem stems from two assumptions: First, the principal and agent have diverging interests; second, the agent has more information than the principal (information asymmetry) (Rose-Ackerman 1978; Klitgaard 1988). Due to asymmetry of information, the principal is unable to perfectly monitor the actions of the agent, and so the agent has some discretion to pursue their own interests. These assumptions provide “the basic ingredients of corruption,” and result in the venerable formula: Corruption = Monopoly + Discretion – Accountability, which means: Illicit behavior flourishes when agents have monopoly power over clients, when agents have great discretion, and when accountability of agents to the principal is weak. (Klitgaard 1988, 75)

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Corruption in society is often described as a dual principal-agent problem. In the first instance, a political leader is cast as the “principal” and tasked with monitoring the actions of bureaucrats (agents) in order to keep them accountable. Without the ability to perfectly monitor their actions, however, rationally-minded bureaucrats use their discretion over resources to extract rents when the opportunity arises. The second principal-agent problem occurs when public officials (bureaucrats or politicians) are conceptualized as the “agent” and the public, more generally, are cast as the “principal.” Following the principal-agent logic, the implications for anticorruption are obvious. The “honest” principal is willing and able to impose the following measures (Klitgaard 1988, 75 ff.): remove corrupt agents and appoint/elect honest ones; introduce institutions of rewards and penalties; increase transparency to be able to collect information about the agent, and modify attitudes about corruption, changing the “moral costs” of being corrupt. Major critiques (e.g. Andvig and Fjeldstad 2001, 89 ff.), however, point out that this approach cannot work in systematically corrupt societies, because there is no “honest” principal willing or able to control the agent and the agent’s interaction with the client. Persson at al. bring this critique to a point: Rather, the rewards of corruption—and hence the existence of actors willing to enforce reform—should be expected to depend critically on how many other individuals in the same society that are expected to be corrupt. To the extent that corruption is the expected behavior, at least the short-term benefits of corruption are likely to outweigh the costs. Consequently, insofar as corruption is the expected behavior in a particular society, we should expect the key instruments to curb corruption in line with the principal-agent anticorruption framework—that is, monitoring devices and punishment regimes—to be largely ineffective since there will simply be no actors that have an incentive to enforce them. Important to note is that this holds true even if we assume perfect information and even if everyone condemns corruption and realizes that a less corrupt outcome would be more beneficial for the society at large. (Persson, Rothstein, and Teorell 2013, 450–451)

This critique leads to the alternative explanations of corruption in the context of an institution-centered approach.

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CORRUPTION AND ANTI-CORRUPTION POLICIES Institution-centered macro-perspective

An alternative to the actor-centered micro-perspective is the institution-centered macro-perspective on the social world, used predominantly by political and social scientists. At the heart of their inquiry is structure or context—a setting within which political practices and processes take place. “Structure” refers to the ordered nature of social and political relations, to the fact that behavior tends to be ordered over time (Hay 2002). Examples of structure range from laws, rules, regulations (formal and informal) and norms, conventions, and shared values to repression, coercion, management, governance, etc. According to this ontology, institutions are systems of rules that structure the courses of action a set of actors may choose. There likewise exist different schools of thought within the institution-centered perspective (Dauner and Voigt 2015). Historical institutionalism, for example, suggests that power asymmetries and path dependencies, caused by historically embedded formal and informal institutions, define actors’ actions (power-centered approach), while sociological institutionalism suggests that social acceptance, cultural and societal rules influence actors’ actions. In the first case, institutions are conceptualized as formal and informal procedures—laws, rules, regulations—that can gradually change, while in the second case, institutions refer to societal norms, conventions, and values which hardly change. Sociological institutionalism assumes actors similar to homo sociologicus, stressing the embedded nature of the actor in society. Additionally, some political and social scientists share economists’ affinity for rational choice institutionalism, based on the utilitarian approach. This approach suggests that actors reproduce institutions foremost to reduce uncertainty and optimize costs and benefits. The institutions change accordingly in the event of instability—the so-called “big-bang approach” (Dauner and Voigt 2015, 55). Corruption as collective action This approach is the closest to the agency-centered economic perspective, since the actor’s action is here assumed to be rational. In response to the critique of the principal-agent explanation of

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corruption, researchers conceptually use “collective action problems” to explain the endemic corruption in most societies (Persson, Rothstein, and Teorell 2013). A collective action problem (Olson 2003, 1990), occurs when group members refuse to act collectively toward a common goal that is in the best interest of all individuals in a group. Instead, group members find it in their individual interest either to not contribute to a common goal at all or to limit their contributions, ensuring that the collective benefit is not realized to its fullest potential. In other words, collective action theories question the underlying assumption of the principal-agent approach that all societies contain at least one group of actors willing to act like “principals” and, as such, enforce such regimes. Thus, in the context of systemic corruption, it is rational to act corruptly, since corrupt behavior is expected. The short-term costs of being honest are comparatively high since this will not change the “rotten game” but disadvantage the individual without foreseeable benefit (Persson, Rothstein, and Teorell 2013, 457). Similarly, Hale explains corruption as a “social equilibrium”: Given that everyone expects everyone else to behave [in a corrupt] way, it makes no sense for an individual to behave differently … Such people may all hate corruption and prefer a system where rules are impartially enforced. But so long as they do not expect everyone else to change his behavior at the same time, they are caught in dilemma that is captured by the title of Rasma Karklin’s book, The System Made Me Do It. And by “doing it,” they can make a case that they are in fact morally right under the circumstances. (Hale 2015, 20)

If corruption is characterized by repeating patterns and becomes a norm that shapes actors’ expectations, corruption can be defined as an informal institution (Gawrich and Debiel 2016, 638). Corruption as an informal institution Defining corruption as an informal institution is a useful addition to the analytical toolkit in conceptualizing systemic corruption, since it points to the “self-reproducing properties of institutions” and emphasizes the role of social norms “as coordinating mechanisms that sustain particular equilibria” (Saint-Martin 2015, 78–79). There is a growing body of literature conceptualizing corruption as an informal institution, in order to separate it from occasional

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corruption (Darden 2008; Helmke and Levitsky 2004; Lauth 2000; Saint-Martin 2015; Stefes 2006). Helmke and Levitsky define informal institutions as “socially shared rules, usually unwritten, that are created, communicated, and enforced outside of officially sanctioned channels” (Helmke and Levitsky 2004, 727). Against this background, institutionalized corruption means that all participating actors are familiar with the underlying norms and rules of systemic corruption and do not question them (Stefes 2003, 123). These rules and norms of systemic corruption determine the behavior of the majority of political decision-makers. Informal institutions are often characterized as “highly resistant to change, possessing a tenacious survival ability” (Helmke and Levitsky 2004, 731). Helmke and Levitsky refer to Lauth’s explanation, which argues that informal institutional change is likely to be an “extremely lengthy” process because informal rules “do not possess a center which directs and co-ordinates their actions” (Lauth 2000, 25). Thus, the conceptualization of corruption as an informal institution implies the ability of corruption to persist and to adapt to a new situation, even one as major as regime and constitutional change. Institutional explanations of the causes of corruption In political science, when studying corruption, the institutional approach is very common, and emphasis is made on the formal or informal aspects of power and political organization. Under such circumstances, the central assumption is that deficiencies in the political system, and in particular the “democratic deficit” (e.g. Doig and Theobald 2000), cause corruption. In other words, political systems that are deficient in democratic power-sharing formulas, checks and balances, accountable and transparent institutions and procedures of the formal and ideal system of democratic governance are susceptible to corruption. The underlying statement is endemic of a grossly negative relationship between democracy and corruption, which does not necessarily connote a positive relationship between autocracy and corruption. Elaborating the implications for anti-corruption, it is important to stress the strong focus of conventional political science

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on formal institutions. Thus, the main anti-corruption measure is the change of formal institutions, such as the constitution, laws, and regulations. On the one hand, the rescinding of old laws is expected to boost the market through deregulation, privatization, and liberalization. On the other hand, a (new) legal framework should strengthen democratic institutions (including parliaments, judiciaries and the specialized bodies for political participation, supervision, and control), as well as civil society (including the media), and generally reinforce public sector reforms. Corruption as a cultural phenomenon Sociological institutionalism goes beyond the rational understanding of formal and informal institutions. Accordingly, institutions not only reduce transaction costs, but shape identities and the preferences of actors. This perspective minimizes the role of agency, and stresses the mechanical reaction of the actors to the norms and rules of their external surroundings (Stefes 2015, 128). This view of corruption implies a strong emphasis on informal aspects of power. Non-monetary, informal networks, as opposed to monetary bribes, misuse of trust instead of misuse of public office, private gain in the form of increased influence instead of material enrichment, are the main differences to the approach adopted in economics and classical political science. The neo-patrimonial approach is a prominent example of such an explanation of corruption, as it places a strong focus on personal relationships as the foundation of the political system (clientelistic networks) and denotes a weak distinction between public and private spheres. These factors undermine formal rules and institutions and open up both to political and bureaucratic corruption. The state is considered “merely a façade that masks the realities of deeply personalized political relations, clientelism and political corruption” (Andvig and Fjeldstad 2001, 40). Corruption from this perspective is viewed as a part of the culture, of the norms, values, and power relations embedded in a society. Thus, it is almost impossible to tackle corruption, since the phenomenon is deeply rooted as a societal norm.

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Synthesis: Variety of corruption meanings as framing options

Following the overview of the explanatory approaches to corruption provided above, this work shall cluster them in four broad groupings: deviant behavior of individuals, agent-centered, institution-centered, and cultural approaches. In the comparative Table 2 these meanings are summarized in line with the core framing elements. Further, the context (prospects) in which use of a certain frame will be most effective and the possible functions of the frames for political tactics in hybrid regimes are provided. In this section the focus shall be placed on explanation of these additional parts, since the rest of the table is a summary of the above. Framing corruption as the deviant behavior of an inherently criminal mind can be useful for selective investigations and dismissing personalities from their positions. In the context of the system of corruption, this approach also allows creating a substantial number of “statistical cases” to positively present the anti-corruption aspirations of the ruling elite. Framing corruption with the principal-agent approach, where political leadership represents itself as a principal, is extremely fruitful for political tactics in a hybrid regime for several reasons: First, this framing is the easiest way to create hierarchies and set the principal as an ultimate authority, making it the most effective for those embracing order and strong leadership. Second, whoever takes the role of the principal can legitimately widen his or her formal authority, including use of surveillance, selective punishment, and control mechanisms. Third, identifying those low-level civil servants and bureaucrats as a source of corruption keeps the excluded group of corrupt others very diffuse. This leaves all options open to the principal to flexibly create coalitions with strategic partners and selectively exclude ad hoc opponents and disloyal partners. The institution-centered framing of corruption as a system or as the problem at a high-political level is useful as a claim for regime change and is usually a good tool for the opposition. By means of this frame it is logical to separate the whole of the old regime as an ultimately corrupt order and create the prospect for a new

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regime. This frame challenges sedimented practices and can be used as a delegitimizing tool for (collective) political actors. Finally, framing corruption as a deep-rooted societal norm and a cultural problem is a convenient excuse in the context of unsuccessful political reforms and shifts responsibility from individual politicians to unspecific, historic factors that cannot be changed. The four conceptual frames of corruption will be applied in the empirical analysis in order to identify and to compare the framing tactics by three presidents of Ukraine. For all varieties of meanings, the core use of framing remains the same: A person or a group who dominates the meaning and succeeds in excluding corrupt others, constructs a non-corrupt self, which is part of the process of subordination and creation of hierarchy. The assumption is, however, that the selected meaning of corruption will differ in the context of diverse regime trajectories. This meaning influences anti-corruption policies and infrastructure, suggested by a president in a way that allows him to increase personal and institutional domination. This feature transforms anti-corruption policy into a highly contested space, where different actors struggle for hegemony.

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Table 2:

Variety of corruption meanings as framing options

Meaning Criminology: De- Economics: viant behavior ap- Agency-centered approach Frame proach elements Conceptual- Individual crime; ization Exception from the rules Context

Definition of the problem

Causal interpretation

Forms of corruption

Anti-corruption policy

Principal-agent problem; exception/norm

Prospect for quick Prospect for orimprovement der, strong leadership, establishing control Defects in human Corruption = Mocharacter and pre- nopoly + Discretion – Accountadisposition toward criminal ac- bility; Information tivity asymmetry between principal and agent and low probability of being caught Bureaucrats and Individuals with moral deficiencies low-level public engage in corrupt servants (agents), striving for pripractices out of greed, selfishness vate enrichment Monetary Monetary, administrative corruption Dismissing corrupt individuals (“bad apple corrupts good barrels” logic)

Functions of (Selective) the frames dismissal/replacfor political ing individuals tactics

Source: Author’s graphic

Political science: Institution-centered approach

Systemic, political Norm in the socicorruption; infor- ety; informal institution; collecmal institution tive action Prospect for reProspect for gradgime change ual, historic development Democratic deficit

Problem of highlevel political institutions; failure of the political system Monetary and social tools of corruption, such as clientelism Increasing costs of Broad, indirect corruption through: anti-corruption strengthening con- tools at the highlevel (e.g. abolishtrol authority of ing political imthe principal => munity); setting improving access independent antito information (transparency/sur- corruption agenveillance); increas- cies ing punishment, shaming & blaming

Increasing formal authorities; control; surveillance; selective punishment

Anthropology: Cultural approach

Delegitimizing political actors; challenging sedimented practice

Long-time iteration; Deep-rooted informal practice that shapes expectations; Part of the culture, norms, values embedded in the society Historic legacy of the previous regime

Primarily social tools of corruption; corrupt informal practices Education; communication; awareness raising

Excuse for ineffective reforms, persistence of corruption

4.

Conceptualizing hybrid regimes and the role of corruption in them

4.1.

Hybrid regime concepts at a glance

The end of the Cold War in the early 1990s was accompanied by the collapse of numerous authoritarian regimes around the world. 11 The “formal architecture of democracy” became a role model for the political system in new states (Fukuyama 1992; Levitsky and Way 2010). As a result, scientific literature of this period focused on regime transition toward democracies (Way 2005a, 232). Hybrid regimes were categorized as incomplete or transitional democracies (Schmotz 2015). Very soon it became clear that the assumption that newly independent states were moving in a democratic direction lacked empirical footing. Already at the end of the 1990s, the conceptual focus in the literature shifted to “democracy with adjectives” (Collier and Levitsky 1997) or “diminished subtypes” of democracy (Schmotz 2015). These denote political regimes that fulfill such minimal conditions for democracy as free and fair elections, yet exhibit important democratic deficits. The most prominent example is the concept of defective democracy, developed by Merkel, Puhle and Croissant (2003). Defective democracy is a deviation of embedded democracy due to certain shortcomings. Croissant et al. refer to free and fair elections as the core element of embedded democracy. From this point, they deduce four partial regimes and concept11

“‘[P]olitical regime’ is understood as a particular political game, consisting of two basic elements: (1) a set of actors, or players, who possess available resources and pursue certain strategies for achieving their goals and (2) a set of institutions, or the actual ‘rules of the game,’ which impose certain constraints on or provide certain incentives for the political actors’ actions” (Gel’man 2008, 158). A similar, strategy-centered definition of political regime is applied by Hale in paraphrasing Munck’s (1996, 6–8) definition: “A political regime is a set of rules that are at least strategically accepted and not normatively opposed by major actors and that govern which individuals have access to the most important state positions, how such access is obtained, and how binding state decisions are made. Importantly, these rules can be informal as well as formal” (Hale 2015, 15 n. 32).

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ualize potential defects in each of them. The correspondent defects result in four ideal types of defective democracy: illiberal, exclusive, delegative, and enclave democracies. As a reaction to criticism of “overstretching the concept of democracy” (Schmotz 2015, 562) through hybrid regime cases, new concepts of “autocracies with adjectives” appeared at the beginning of the 2000s. Against this background, electoral authoritarianism (Schedler 2006) or rigged-election autocracies (Bueno de Mesquita et al. 2005, 8) are further examples of the conceptual attempts to embrace hybrid regimes. These refer to authoritarian regimes that foresee multi-party elections, yet in which political competition is greatly slanted in favor of incumbent decision-makers, which excludes the possibility of the opposition winning. Timm Beichelt identifies the approach to conceptualization of hybrid regimes through diminished types of democracy and authoritarianism as a pure types strategy in the construction of hybrid regimes. This conceptualization strategy takes its point of departure from the pure types of democracy and authoritarianism, separated by a clear line: “in that sense every political regime belongs to either one or the other type” (Beichelt 2012, 16). Hybrid regimes are defined as close to the dividing line B1 (see Figure 6). Despite conceptualization of the diminished subtypes of democracy and authoritarianism, the dichotomy between democracy and autocracy remains. This creates a “conflict of aims.” The required differentiation of political regimes leads to overstretching the concepts of democracy and authoritarianism and does not reflect the uniqueness of hybrid regimes as such (Schmotz 2015, 562).

CONCEPTUALIZING HYBRID REGIME

B1 C1

A1 Authoritarianism

Democracy

B2 A2

B4 B3

Authoritarianism

C2

Ideal Democracy

Totalitarian Regime

Pure types versus fuzzy types of regimes

Ideal Democracy

Totalitarian Regime

Figure 6:

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Democracy Hybrid Regime

Source: (Beichelt 2012, 17).

According to Beichelt (2012, 16), the opposite fuzzy-type strategy of conceptualizing hybridity is to create a space for established regime types, leaving a deliberate gap between democracy and authoritarianism. This deliberate gap between pure types allows for the existence of a hybrid regime with qualitatively distinct characteristics, which implies the coexistence of democratic and non-democratic elements as well as a complex relation between these elements (Beichelt 2012, 18; also Hale 2015, 5). As an example of the suggested approach, Hale argues that the dynamic between authoritarian and democratic trajectories can create a sort of regime equilibrium; cyclical behavior can be characteristic of distinct regime types (Hale 2015, 8). As visualized in Figure 6, B3 indicates the core of such a genuine regime type, while B2 and B4 represent regimes that are on the edges of the regular types A2 and C2. Hale furthermore contends that the conceptual switch from the pure-type to the fuzzy-type is particularly useful if the status between democracy and autocracy changes regularly. In cases that combine properties of both pure and fuzzy types, such as Armenia, Georgia, Kyrgyzstan, Moldova, and Ukraine, the research focus is

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the main criterion for selecting proper conceptualization. Beichelt states that the fuzzy type strategy is useful in particular to shift the research focus from that of regime change to a logic of regime dynamics (Beichelt 2012, 21).12 Thus, in this research, Ukraine is conceptualized as a hybrid regime with qualitatively distinct characteristics, according to the fuzzy-type logic. The first reason is that Ukraine is stable in its oscillation and the second is that this thesis focuses on regime dynamics and not regime change.

4.2.

Characteristics of hybrid regimes

In this work, Ukraine is identified as possessing hybrid regime characteristics based on the theoretical concept of competitive authoritarianism (Levitsky and Way 2010). Competitive authoritarian regimes are civilian regimes in which formal democratic institutions exist and are widely viewed as the primary means of gaining power, but in which incumbents’ abuse of the state places them at a significant advantage vis-á-vis their opponents. (Levitsky and Way 2010, 5)

Although Beichelt locates competitive authoritarianism in pure-type logic, he stresses the high propensity of competitive authoritarian regimes to oscillation. Levitsky and Way capture this vulnerability by introducing different regime trajectories into their theory. These trajectories allow us to grasp and analyze systemic change within hybrid regimes as a dynamic process. Additionally, the concept of competitive authoritarianism allows the study of the hybridity of a regime beyond a narrow focus on elections. An advanced analysis of interactions beyond elections is necessary to grasp the complexity of the hybrid regime, and not

12

For instance, Hale’s research is based on the logic of regime dynamics, upon which he elaborates as follows. Unlike the logic of regime change, the logic of regime dynamics “not only can anticipate the transition of a system from one type to another but can capture how the moving parts of highly patronalistic politics (such as oligarchic networks and regional political machines) arrange and rearrange themselves in regular, even predictable ways that might on the surface look like a regime ‘change’ but that in reality reflect a stable core set of informal institutions and operating principles” (Hale 2015, 15).

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only elections as a separate feature. At the same time, explanatory approaches of regime hybridity beyond the focus on elections are an exception (Schmotz 2015). The concept of competitive authoritarianism offers such an exceptional approach to the analysis of hybridity, since it uses the organizational power of incumbents and international linkage as central explanatory variables of regime dynamics (Levitsky and Way 2010). Moreover, Levitsky and Way stress the importance of a reasonably level playing field as a defining feature of democracy, alongside the classical criteria of civil liberties and civilian control over the military (Levitsky and Way 2012, 36). Thus, in the following section, this work will highlight the differences between hybrid regimes and ideal regime types based on the concept of competitive authoritarianism. Thereafter, the characteristics that are unique to hybrid regimes will be explored. 4.2.1.

Distinguishing hybrid regimes from democracy and authoritarianism

In contrast to full-scale or electoral authoritarianism, which excludes the possibility for an opposition electoral victory, this outcome remains open in competitive authoritarian regimes. The opposition has a legal and legitimate opportunity to win due to the existence of meaningful democratic institutions (Levitsky and Way 2010, 20). Therefore, competitiveness is a substantially important regime characteristic that influences the behavior and expectations of political actors (Levitsky and Way 2010, 16). At first glance, an opposition electoral victory can appear to signal regime change, but in reality, it is in most cases a mere rearrangement of elites, while the operating principles of the regime and a core set of informal institutions remain stable (see also Hale 2015, 15). Incumbents attempt to avoid open violation of democratic rules, such as repression of the opposition and the media. Instead, the ruling elite is more likely to use subtle forms of persecution, such as bribery, co-optation, use of tax authorities, compliant judiciaries, and exploitation of other state agencies for the political purposes of the incumbents. These subtle forms allow the ruling elite both to “legally” harass and persecute the opposition as well

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as to pre-empt criticism of their own trespasses against democratic rules (Levitsky and Way 2002, 53). In order to distinguish hybrid regimes from consolidated democracies, Levitsky and Way define the minimal attributes of democracy. They refer to the core criteria of democracy, such as civil liberties and the effective power to govern, which have been incorporated into the overall meaning of democracy and are viewed as necessary conditions for competitive elections to take place (Levitsky and Way 2010, 6). However, multi-party elections are present in most hybrid regimes. Therefore, Levitsky and Way go beyond a “Schumpeterian,” or elections-centered definition of democracy and introduce supplementary core criteria to assess regime hybridity, namely, the existence of a reasonably level playing field between incumbents and opposition (Levitsky and Way 2010, 6). Hence, what distinguishes competitive authoritarianism from democracy is the fact that incumbent abuse of the state violates at least one of three defining attributes of democracy: (1) free and fair elections;13 (2) broad protection of civil liberties; and (3) a reasonably level playing field between incumbents and opposition (Levitsky and Way 2010, 7). Although the characteristic of the level playing field is closely related to the dimensions of free and fair elections and civil liberties, “a skewed playing field includes indirect abuses that are often more subtle and hidden from critiques than many electoral or civil liberties violations” (Levitsky and Way 2012, 33). For example, a ruling elite can hamper opposition access to the media and to the resources needed to be competitive in elections. Under these conditions, even clean elections are unfair (Levitsky and Way 2012, 34). Instead of direct repression as in consolidated authoritarian regimes, an uneven playing field undermines the opposition’s ability to organize between elections (Levitsky and Way 2012, 34). Therefore, the features of the playing field extend beyond elections, which makes it important to treat this attribute as a separate dimension.

13

Elections are considered free when there is virtually no fraud or intimidation of voters, and fair when opposition parties campaign on relatively even footing (Levitsky and Way 2010, 7).

CONCEPTUALIZING HYBRID REGIME 4.2.2.

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Uneven playing field

An uneven playing field in competitive authoritarian regimes represents a gray zone, where political corruption plays an important role in introducing asymmetries of power and gaining advantage over the opposition. Levitsky and Way define an uneven playing field: … one in which incumbent abuse of the state generates such disparities in access to resources, media, and/or state institutions that opposition parties’ ability to organize and compete for national office is seriously impaired. These disparities rarely emerge naturally; rather, they are rooted in illicit or authoritarian behaviour, including partisan appropriation of state resources, systemic packing of state institutions and state-run media and politicized distribution of state resources, concessions and licenses. (Levitsky and Way 2012, 30 ff.)

There are three main criteria used to identify a playing field as uneven: First, state institutions are widely abused for partisan ends; second, the incumbent party is systematically favored at the expense of the opposition; and third, the opposition’s ability to organize and compete in elections is seriously handicapped (Levitsky and Way 2012, 30). A certain degree of incumbent advantage exists in all democracies, but when incumbent manipulation of state institutions and resources is so excessive and one-sided that it seriously limits political competition, it becomes incompatible with democracy (Levitsky and Way 2010, 6). Kenneth Greene (2007, 2009) defines this phenomenon as a hyper-incumbency advantage. He argues that dominant political forces win elections before election day, despite meaningful electoral competition and “without engaging in bone-crushing repression or persistent outcome-changing fraud,” because they bias competition in advance: … the incumbent’s resource advantages and the costs the incumbent impose on challengers make elections substantially unfair. (Greene 2007, 2)

Levitsky and Way highlight three dimensions in which the political playing field may be skewed and asymmetries in access to power emerge (2012, 30 ff.). The first of these is resource disparity, in which incumbents directly appropriate state resources or use the

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state to skew access to private sector finance. Skewed access to finances has a major impact between elections; however, it is often overlooked in evaluations of whether elections are free and fair. The second dimension is unequal media access through either state monopolization of broadcast media or a close link between incumbents and private media via proxy ownership, bribery, or other corrupt means. De facto incumbent control of private media—achieved through informal proxy or patronage arrangements—might not be viewed as a violation of civil liberties, whereas closing down a newspaper is viewed as such (Levitsky and Way 2010, 6). The third dimension refers to unequal access to the law in the form of politicized control of the legal system (Levitsky and Way 2012, 32). This includes control of the judiciary, prosecutor’s office, national security service, electoral authorities, etc. The dimensions enumerated above are closely connected to political corruption. For example, once state resources have been heavily misused for partisan ends, the opposition loses any access to state resources, and has no other choice but to submit to the ruling elite. Otherwise, the opposition gradually fades in importance. Clientelism and patronage, as widespread forms of political corruption, are central tools to control the legislative branch and secure preferential (i.e. unequal) access to the law. This unequal access allows the ruling elite to avoid punishment, all the while being able to prosecute opponents. In summary, in a hybrid regime one can define the central rule of the political game: the main goal is to win political competitions in such a way that extra-legal means may be thereafter controlled. The most effective way of doing so is to gain advantages over opponents before elections. In other words, the main tactic of the political game in hybrid regimes is to create and maintain domination of the uneven playing field. 4.2.3.

Power asymmetries in semi-presidentialism

This study assigns a central role to presidents among other actors involved into political game. This focus on presidents—and not parliaments, governments or oligarchs—seems plausible in the

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context of the fundamental debate about the role of presidentialism for democracy and transformation (Linz 1990; Mainwaring and Shugart 1997). In his seminal essay “The Perils of Presidentialism,” Juan Linz elaborates arguments why presidentialism potentially hampers sustainable democracy or sustains a regime’s hybridity. Three of Linz’s arguments are of particular interest for this study. First, Linz argues that a presidential system is susceptible to conflict between the president and the legislative branch of power, since both are directly elected. In Linz’s words, president and parliament have competing claims to “democratic, even plebiscitarian, legitimacy” (Linz 1990, 53). Importantly, unlike in case of partisan political competition, present in any democratic system and resolved by elections, there are no democratic principles to resolve the disputes resulting from the institutional competition between executive and the legislature (Linz 1990, 63). It means that the strong role of a president, assigned to him or her in a constitutional way, naturally provides an incentive to exploit informal means for political domination. In the case of Ukraine, the onset of the conflict between the president and parliament took place during the negotiations over the Constitution in the early 1990s (see Chapter 6.1.1). The inability to resolve this conflict of institutions eventuated in a vague semi-presidentialism that provided a fertile soil for utilization of patronage and clientelism by a president (Carrier 2012; Hale 2006; Matsuzato 2005; Protsyk 2003). Second, presidentialism introduces the “winner-takes-all” rule into politics, which is very likely to result in a “zero-sum game” if a president represents a minority. (Linz 1990, 55 ff.), Linz elaborates: … the conviction that the president possesses independent authority and a popular mandate is likely to imbue a president with a sense of power and mission, even if the plurality that elected him is a slender one. Given such assumptions about his standing and role, he will find the inevitable opposition to his policies far more irksome and demoralizing than would a prime minister, who knows himself to be but the spokesman for a temporary governing coalition … (Linz 1990, 56)

All three Ukrainian presidents under investigation were elected in the second round and none of them enjoyed significant support of the electorate reaching at least 60%. Nevertheless, all three

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presidents were following the “winner-takes-all” rule with all the negative implications listed by Linz. Finally, the challenge of the “winner-takes-all” logic is emphasized by the “rigidity of the president’s fixed term in office” (Linz 1990, 56). Unlike in parliamentary republics where coalitions are formed and opposition parties have the possibility to influence politics, in a presidential system winners and losers are strictly defined for the entire term of the presidential mandate. As Linz points out: The zero-sum game in presidential regimes raises the stakes of presidential elections and inevitably exacerbates their attendant tension and polarization. (Linz 1990, 56)

The challenges to a consolidated democracy that come with the strong role of a president are clearly traced in the case studies of the three presidents in Ukraine. These three implications of presidentialism—increased institutional competition, “winner-takes-all” rule, and rigidity of outcome for the fixed term in office—make the strategies and tactics of the presidents for reaching and maintaining their political domination highly relevant to the outcome of the political game. This pattern promotes the structural approach to regime assessment as one of open vs. limited access order (North et al. 2009). The assumption in line with this approach is that for a president in a (semi-)presidential hybrid regime, the logical trajectory is toward a limited access order and away from an open one in order to secure political domination and his re-election. 4.2.4.

The interplay of formal and informal institutions in hybrid regimes

Here, Fritz Scharpf’s definition of institutions as “systems of rules that structure the courses of actions that a set of actors may choose” (Scharpf 1997, 38) is used. This concept of institutions is not limited by formal rules but includes informal rules and social norms that are accepted by actors. Systemic corruption can be conceptualized as an informal institution in this sense (see Chapter 3.2.2).

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Functions of institutions In actor-centered institutionalism, institutions fulfill two functions: First, institutions provide the context for an actor’s actions, which can be encouraging, enabling or restricting (Mayntz and Scharpf 1995, 43). Institutions define the rules for the distribution and use of power, as well as responsibilities and authority dependencies (Mayntz and Scharpf 1995, 40). Second, institutional rules can create corporate actors14 (Mayntz and Scharpf 1995, 48). At the same time, there are reversal processes whereby actors reproduce institutions by following crucial institutional rules and norms. There are three explanatory approaches present in existing research which explain why actors reproduce institutions. These were initially sketched by Mahoney (2000 cited in: Stefes 2015, 129 ff.) and are: utilitarian, cultural, and power-centered approaches. The first approach follows a largely functionalist logic, which assigns a system-stabilizing role to institutions and implies that actors maintain institutions because they are interested in their function. Institutions give them a direct benefit or reduce transaction costs and simplify cooperative behavior. However, this approach misses the idea that institutions produce winners and losers (Stefes 2015, 131). The second, a cultural explanatory approach, implies that actors follow institutional rules and norms because they are convinced of their legitimacy. Institutions serve as “cognitive land maps.” Even if actors decide to change institutions, they will do so on the basis of perception, shaped by existing institutions. This approach overlooks the assumption that institutions compete for support. Unlike the two previous approaches, the third, power-centered approach assumes that institutions are contested, and reproduction of institutions requires numerous actors. The self-reinforcing process lies in the distribution of power where the winners have an interest in increasing power to support the existing institutional order (Stefes 2015, 131). 14

Actor-centered institutionalism takes into account not only individual actors but also corporate actors consisting of groups or coalitions of individuals with different perceptions, preferences and action opportunities (Merkel, Wagener, and Brückner 2015, 72). Hence, the term “actor” can include both individuals and also organizations involved in interaction (Scharpf 1997, 43).

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The power-centered approach is that adopted for the purposes of this study. It highlights the role of asymmetric power structures in analyzing institutional development. The power-centered approach implies that institutions, which influence the political playing field, develop as a result of conflict between actors with uneven power resources (Stefes 2015, 128). At the heart of this approach lies the assumption that power reproduces power and institutions serve as the motor of this process. It means that the winner imposes his institutions upon other actors and inhibits possible change. At the same time, the losers have to accept these institutions, even though they either reluctantly cooperate or persistently boycott them. Hence, from this perspective, institutions not only influence actor’s strategies, but also distribute power resources among them. Simultaneously, institutions signal to actors which strategies can be potentially successful or not, influencing the manner in which power is exercised (Stefes 2015, 128). In competitive authoritarian regimes both formal and informal institutions play an equally important role in political domination. In the following section, the particularities of the formal and informal institutions in hybrid regimes demonstrate the plausibility of the power-centered approach to explain why actors reproduce these particular kinds of institutions. Particularities of the formal institutions Following the logic of the power-centered approach, Hale (2015) argues that the main role of formal institutions in general, and constitutions in particular, is not in being followed, the latter as a legal document, but in shaping informal expectations of those holding ultimate power. According to Hale, this function of constitutions is based on the logic of collective action and caused by the power of expectation (Hale 2015, 10). For instance, a constitution that declares a single dominant chief executive can anchor the head of state in his role as patron 15 by creating an expectation as to who embodies 15

Hale defines hybrid regimes in post-Soviet states as patronal societies: “Patronalism refers to a social equilibrium in which individuals organize their political and economic pursuits primarily around the personalized exchange of concrete rewards and punishments, and not primarily around abstract, impersonal

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ultimate power in a country. The ultimate power allows “not only to push for policies one supports, but also to direct favors to allies and to target opponents for punishment” (Hale 2015, 10). As a result of this expectation, a country’s elites have a strong incentive to have the empowered head of state on their side. Inversely, the opponents of the chief executive lose any chance of support. At the same time, if the constitution is designed to empower the parliament, it creates political competition between political actors and changes the expectations of elites. Combining the logic of an uneven playing field and the function of a constitution that shapes expectations about hierarchies of different actors leads to the assumption that political actors apply all means to not only exploit material state resources for their advantage, but also to reproduce formal institutions that increase their legitimate power while in office. Particularities of corruption as an informal institution The centrality of informal institutions, inter alia organized corruption, is considered another crucial characteristic of oscillating hybrid regimes (Hale 2015, 8; Levitsky and Way 2010, 28). As mentioned above, political corruption enables and promotes an uneven playing field and is a tool for sustaining power asymmetries without violating formal democratic institutions. Conversely, the existence of an uneven playing field provides fertile soil for political corruption, by permitting key conditions for corruption to prosper. Jain highlights three conditions required for corruption: monopolistic power, a strong willingness and ability to misuse that power, and finally, (economic) incentive for the misuse of power (Jain 1998, 18). Monopolistic power16 is likewise extrapolated by Levitsky and Way, who argue that “[an] uneven playing field emerges under conditions that facilitate incumbent control over key state and

16

principles such as ideological beliefs. … Patronalism, then, involves collective action based far more on extended networks of actual acquaintance …” (Hale 2015, 20). Monopoly over a good or service is also a central element in the conceptualization of corruption introduced by Klitgaard (1988, 1998).

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societal resources” (Levitsky and Way 2012, 37), which means nothing more than a high degree of monopolistic power on the side of incumbents. There are several scenarios, depending on the region, which reinforce conditions for monopolistic power in competitive authoritarian regimes. In post-Soviet countries, Levitsky and Way consider incumbent control over key state and societal resources to be a legacy of incomplete post-communist transitions. The singleparty regime of the Soviet Union fused state and ruling party, blurring the division between bureaucrats and party cadres and, subsequently, between state and party properties. After the collapse of state socialism in 1989–1991, formal constitutional change and multi-party elections were introduced; however, these didn’t immediately change the previous methods utilized by politicians. Incumbents retained dominant control over societal resources and remained in power in a multi-party context. Moreover, privatization was a special component of post-communist transition. In most post-Soviet states, governments used “insider privatization” which helped them to establish extensive patronage ties to a new business elite. As a result, incumbents were able to develop a “virtual monopoly over access to finance and media, preventing non-state actors to emerge and challenge the government” (Levitsky and Way 2012, 37). The second element is willingness and ability to misuse monopolistic power. Incumbents in hybrid regimes are often not able to achieve their goals through formal democratic institutions, and the costs for changing those formal institutions are prohibitive (Levitsky and Way 2010, 27). These conditions create incentives for incumbents to employ informal mechanisms of control and coercion while maintaining the formal architecture of democracy. Informal institutions are more difficult for international observers to identify, so they provide an appropriate instrument to sustain autocratic tendencies under the formal democratic architecture (Levitsky and Way 2010, 27). The ability to misuse public office for private gain results from the incumbent’s monopoly over procedures and services. Political corruption goes hand in hand with legislative corruption, or the misuse of legislative powers by incumbents (Jain 1998, 22). Through legislative corruption, incumbents

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create conditions for abusing public resources and decreasing the impact of constraints from outside (e.g. society, external actors). The third element is (economic) incentive to misuse power. It is widely held in research on corruption that the incentives to misuse power can be twofold: private self-enrichment and/or increasing power. In hybrid regimes, increases in power and re-election serve as particularly important incentives for engaging in corruption (Debiel and Pech 2010, 55; Miller et al. 2005). Barro (1973) defines reelection and increases in influence as “political income,” which is closely connected to corruption in hybrid regimes. According to Barro, there are various ways in which political income can be transacted. Two examples he uses are: payments from recipients of government contracts in such forms as campaign contributions, and second, provision of personal services, particularly during political campaigns, from holders of public employment (Barro 1973, 23).

4.3.

Dynamic of hybrid regimes and the role of corruption

4.3.1.

Scenarios of elite interaction and corresponding type of corruption systems

The question about which factors influence regime trajectories in hybrid regimes is a central one for transformation studies. As noted in the previous chapter, the focus of this study is on the structure of elites and different grades of access to public resources. A relevant theoretical framework has been developed by Vladimir Gel’man (2008), who explains different outcomes of post-Soviet transformation through the structures of the elite and constellations of power. The constellation of elites, defined by lines of elite integration (the capacity of segments of the elite to coordinate their actions) and elite differentiation (the autonomy of elite segments vis-à-vis the state and vis-à-vis each other), affects the distribution of resources possessed or mobilized by elite factors. The distribution, amount, and relative value of resources, in their turn, affect various elite strategies, which can be divided into coercive and collaborative strategies. (Gel’man 2008, 160)

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Gel’man states that elites select their strategy depending on the distribution of resources and relative costs of strategy. Calculations of the costs are based on the actor’s perceptions, perceptions that are affected by institutions and the level of uncertainty (availability of adequate information). Gel’man identifies coercive and collaborative tactics of interaction. Depending on the tactics and distribution of resources, there are four scenarios of strategic interaction. 17 These scenarios correspond very well to the different types of corruption systems, initially elaborated by Stefes (2006) and developed previously in Chapter 2.6.2 on the typology of the system of corruption. Such an analytical framework allows combining theoretical ideas from corruption research and transformation studies. (see Table 3) Table 3:

Scenarios of elite interaction

Interaction tactics Conflict tactics:

coercion or exclusion

Cooperation tactics:

Balance of resources

agreement of rules or cooptation

“War of all against all”/ Decentralized system of corruption One-sided prevalence of “Winner-takes-all”/ Monopolized system of resources => political domination corruption => coercion/exclusion

“Struggle according to the rules”/System of checks and balances “Cartel-like deal”/ Centralized system of corruption => co-optation

Even distribution of resources

Source: Adapted and modified from (Gel’man 2008, 162).

In the first scenario (“war of all against all”) continuity of conflict, leading to instability, is reflected. The status quo under such a scenario persists only as long as the distribution of resources remains even and the costs of coercion are cheaper than the costs of cooperation. (Gel’man 2008, 161)

17

Heiko Pleines uses a similar framework to explain different strategies economic elites use to influence decision-making (Pleines 2005). He highlights that rules (institutions), resources and the constellation of actors decide upon a strategy of co-optation or confrontation for interacting with the economic and political elite (Pleines 2005, 47–55).

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This scenario corresponds to the logic of the decentralized system of corruption. It can be the point of departure for democratization, since the inability of political leadership to control civil society and coerce opponents, by default, promotes pluralism. If the balance of resources in a decentralized system shifts to favor a particular side, one of the two scenarios of one-sided prevalence of resources is likely to appear. Should a prevalence of resources be established, the dominant actor needs to calculate the costs of coercion: If the cost of coercion is higher than that of cooperation, the dominant actor will have different preferences. He might offer the subordinated actor a tacit agreement, which can be termed a cartel-like deal. This means that the dominant actor would share some of his resources with the subordinated actor, while retaining control over major decisions without constraints from the subordinated actor. The subordinated actor is likely to be co-opted by the dominant actor, and given that he suffers from a deficit of resources, has no incentives to challenge the status quo. (Gel’man 2008, 162)

The “cartel-like deal” corresponds to the centralized system of corruption. According to Gel’man, “cartel-like deals” are vulnerable to oscillation due to their “lack of self-enforcement mechanisms”: If the cost of coercion becomes relatively cheaper than the cost of cooperation, the dominant actor is more likely to turn to repression of the subordinated actors than to share his powers, and the scenario effectively becomes one of “winner takes all.” (Gel’man 2008, 162)

In “winner-takes-all,” one actor (leader, dominant party, ruling clan, etc.) receives all powers and is able to rule “without significant cooperation from other actors who then become subordinated to him.” The dominant actor is likely to oppress real or potential opposition due to the relatively low costs of coercion. If the dominant actor is capable of ensuring his dominance through institutional guarantees of the status quo, the regime achieves a stable equilibrium due to the lack of incentives for change for all actors. (Gel’man 2008, 162)

This scenario indicates a path to consolidated authoritarianism. Following the system of corruption logic, “winner-takes-all” corresponds to the monopolized system of corruption.

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“Struggle according to the rules” or institutional compromise is possible only under two conditions: “if resources are evenly balanced and if coercion is relatively costly” (Gel’man 2008, 163). Gel’man states that typically all sides prefer mutual coercion or “winnertakes-all,” unless they are simultaneously willing to shift to mutual cooperation; however, the latter is an exception. As the following section will show, the system of corruption in a hybrid regime functions in a way that favors political leadership through access to public resources after at least one cycle—a period of legislation in power. In summary, the concept of the uneven playing field provides a specific context for the interpretation of political domination. This work defines political domination as an advantageous position due to created hierarchies and the prevalence of resources. This position can be reached by means of existing resource prevalence and/or the ability to include or exclude, co-opt or coerce other actors. Thus, two dimensions are combined: First, the prevalence of resources— political actors aim to not only increase their material resources, but also their formal authority permanently in the political arena. Second, domination in the constellation of actors: In a hybrid regime, political domination goes beyond the coercion capacities in authoritarianism or electoral support in democracies. Both are important, including co-optation of the strategic economic elites. Importantly, political domination becomes a central goal for political actors, since it is the only way to stay in the game due to the logic of the uneven playing field. 4.3.2.

Operationalizing regime dynamics

One unique feature of this study is the attempt to grasp and explain each regime’s dynamic through the type of corruption system in place. Most authors of the relevant transformation or structural literature on corruption conduct comparisons of different cases. However, a new perspective on the functions of corrupt practices and framing emerges through tracing the process of change in the political tactics in each case. Political strategy and the tactics of

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actors require continuous re-assessment of the changing environment, which compels the perpetual adaptation of their actions. Both analytical models utilized—the model of the system of corruption and the concept of regime trajectories—are dynamic models which permit change to be grasped. In the empirical study, change is operationalized following Gel’man’s matrix, with different scenarios for the elite’s interactions and control of resources (see Chapter 4.2.4, Table 3). The empirical analysis will demonstrate that all three presidents started their terms in the context of the decentralized system of corruption, but ending in three different contexts. According to the theory, every political leader in a hybrid regime aims to reach the “winner-takes-all” scenario, thus each office holder necessarily applied different tactics and had fluctuating levels of success in reaching his goals. The process of sketching the point of departure and the final scenario reveals how different tactics of corrupt practices and their framing contributed to the specific dynamic of each regime. The tactics reveal the strategy of the president. Should the president attempt to increase his political domination by extra-legal means, this indicates that he moves toward scenarios with a onesided prevalence of resources. The conflict or co-optation tactics indicate whether the strategy is to achieve monopolization or centralization of power over public resources. To identify the point of departure in the matrix, this work analyzes the tactics of the president during his first electoral cycle. Empirically, the tactics of corrupt practices are analyzed during the first legislative cycle, from the election of the president until the next parliamentary elections. Nevertheless, corrupt practice does not explain how the president addresses an important point of reference, namely, the voter. It also does not explain how he legitimizes the increase in power vis-à-vis the international community, which expects improvements in anti-corruption measures. In this regard, the tactics are revealed in the analysis of the framing of corruption and how the framing changes depending on the changes in the environment and new constellations of actors. The rhetoric becomes institutionalized in the anti-corruption policy, which constitutes the final stage of the analysis. Altogether, this allows a

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comprehensive picture of the role of framing and corrupt practices as political tactics for achieving political domination in hybrid regimes.

4.4.

Operationalizing actors’ action: political strategy and tactics in hybrid regimes

4.4.1.

The interplay of structural context and individual actors’ action

Actor-centered institutionalism provides an analytical framework to assess the complexity of the political system, by taking into account structures and constellations of power along with the subjective assessments, strategies and actions of relevant actors (Merkel and Wagener 2015, 71 ff.). The actor’s action is understood as elite18 action. Even though elite actions were essential for the transformation process, socio-economic structures, political institutions, internal influence and historical path dependencies subsequently built a framework for elite action (Merkel, Wagener, and Brückner 2015, 65). One important analytical challenge for the simultaneous research of both actors’ behavior and structural context is how to aggregate individual decisions into collective action and to project them at the systems level (Merkel, Wagener, and Brückner 2015, 65). Coleman’s sociological macro-micro-macro model, known as Coleman’s bathtub or boat, is a helpful concept for solving the aggregation problem of both levels (Coleman 1990). Coleman’s model 19 considers both the structuralist and behaviorist perspectives, which reflect individual action and the structural influence of institutions on it (Figure 7). From a sociological perspective, the institutional framework and structural factors reflect the macro-level (system level). They develop a

18

19

Elites are defined as “small minorities of actors, placed in highest authority and power positions in social and political systems, competing against other elites or against the population for the leadership in a society” (Kaltwasser 2015, 721). Ger. Transl. by the author. Kubbe (2015) and Klein (2017) have developed this model further, adapting it to study corruption.

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normative and cultural environment for the personal decisions of a single actor, which take place at the micro-level (level of action). Simultaneously, the actor’s decisions and actions have an impact at the macro-level, namely upon the institutional framework and structural factors, resulting in permanent change to the entire system. Figure 7:

Applying Coleman’s bathtub to the research of corruption

Source: Adapted from Coleman 1990, Esser 1993, Kubbe (2015) and Klein (2017).

In this study, “social situation” reflects a given regime trajectory. In all three empirical cases, the point of departure is a decentralized system of corruption that usually indicates a regime trajectory towards democracy. Regime trajectory builds a frame for the actor’s action and a greater broader political constellation. The dimension of analyzed actors is narrowed to the president due to his strong position in the decision-making process in Ukraine. However, in the context of the semi-presidential political system in Ukraine, his influence is limited and other actors as well as different constellations of actors in the polity strongly shape the field of presidential action. For the purposes of this study, focus on the president’s action is confined to his framing and practice of corruption. Finally, in this study, the aggregation of individual action into “collective effect” reflects the system of political corruption that occurred as a result of the action. In other words, the system of corruption occurs as a result of a certain regime trajectory and individual actors’ decisions.

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Coleman’s bathtub model has two advantages in this study: First, it allows consideration of both the rational strategic decisions of an actor as well as institutional influence upon them. Second, this analytical framework allows tracing the change and showing how an actor’s action at the micro-level affects the environment on the macro-level. 4.4.2.

Defining strategy and tactics

In this study, political tactics are defined as the deliberate, successoriented and situation-based actions of an actor that lead to the fulfillment of a personal strategy. Further, the definition of political strategy developed by Raschke and Tils is utilised, namely, that strategies are success-oriented constructs, built on situation-based calculations of goals, resources and environment. (Raschke and Tils 2008, 12, Ger. transl. by the author)

In other words, strategy sets the goal and tactics are the strategic actions that brings an actor to his goal. Figure 8:

Strategy circle

(re-) assessment of the environment

interaction—

calculation—

external process of strategymaking

internal process of strategic thinking

Source: Author’s depiction, based on Raschke and Tils 2008.

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Both strategy and tactics are based on the perpetual assessment of the environment and reflection upon perceived possibilities (Figure 8). Raschke and Tils differentiate between internal processes of strategic thinking and external processes of strategy making (Raschke and Tils 2008, 13). In the process of perpetual reflection between both dimensions, actors perpetually re-assess their environment and adjust their interactions accordingly. The external dimension includes interaction with other strategic actors. Interaction allows the exertion of influence upon other actors, but also susceptibility to change owing to external influence. However, the main decisions are made during the internal process of strategic thinking. The inner process consists of three pillars: orientation framework, strategic calculation, and strategic compass (Raschke and Tils 2008, 13 ff.). Orientation framework is a starting point for strategic thinking that reflects actors’ possibilities for action (time frames, formal and informal rules, and constellations of actors) and main reference points for the action in a political system. In democracies, the main external reference point is the electorate, which is the main subject of the entire political action. In hybrid regimes, electoral support is not sufficient. Another subject of political actors’ action is strategic (economic) elites, who possess considerable economic resources and are able to influence political competitions singlehandedly. Strategic calculation reflects the causal relation perceived by actors between available resources, relevant environmental conditions and selected goals (Raschke and Tils 2008, 15). Strategic calculations are success oriented. Strategic compass is a personal, cognitive and normative instrument to navigate under conditions of high uncertainty. As a rule, the internal dimension of strategic thinking is hidden, therefore empirical assessments of a strategy are based on evident facts. However, strategic action externally assigned to an actor often provides the only way to gain insights about strategic thinking because of the limited information about the internal dimension of strategic actors (Raschke and Tils 2008, 14). In this sense, political tactics (external dimension) indicate what strategy an actor follows, independently of its success.

88 4.4.3.

CORRUPTION AND ANTI-CORRUPTION POLICIES Actors’ strategic calculations in hybrid regimes: Goals, resources, environment

Strategic calculation is a dynamic, ongoing process during which actors reflect upon the causal relationship between available resources, relevant environmental conditions, and selected goals (Raschke and Tils 2008, 15). To grasp this dynamic, it is necessary to identify what the strategic goals of the political leadership in the hybrid regime are, as well as the available resources and particularities of the environment. Goals Since strategy is a success-oriented construct in the politics of hybrid regimes, success denotes achieving and maintaining political domination on an uneven playing field. Thus, the calculations and political tactics of the political leadership are aimed at the ultimate goal of political domination. Calculating how to reach political domination takes place in the endless re-assessment of the available resources and the environment. Resources The choice of tactics between cooperation and conflict depends heavily on resources. As Gel’man argues: “the actors’ choice of strategies is primarily based upon the relative amount and value of the resources the actors possess and their capacity to mobilize them” (Gel’man 2008, 160). Resources include access to political financing, support, formal authority, as well as support of the voters. Chapter 5, on the system of corruption in Ukraine, demonstrates that financial resources, mostly gained by corrupt means, are crucial to sustain and dominate an uneven playing field. Formal authority in hybrid regimes becomes an important resource due to its power to shape expectations. Formal authority is necessary for the capacity to co-opt and to coerce. For instance, the constitution influences the perceptions of strategic elites about who is the ultimate power holder. These perceptions are even more important in the horizontal, decentralized, clientelistic networks, where clients select patrons, and patrons compete for clients. And last but not

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least, popular support is a valuable resource of the political leader in a hybrid regime. The practice and framing of corruption as political tactics are used to increase resources, as corruption provides not only additional material and power resources. Anti-corruption can be a door to access both considerable material resources in the form of foreign assistance and power resources in the form of extended authorities. By framing corruption, the design of anti-corruption policy is influenced. The control of anti-corruption activities provides legitimate access to powerful control and surveillance instruments. If the president succeeds in imposing his framing of corruption as dominant, he gains prevalence of power resources. Moreover, the topic of corruption is a crucial nodal point in building a competitive discourse, and acceptance of certain discourses in society can provide electoral support to the president. Environment Raschke and Tils elaborate the term “central points of reference” (zentrale Bezugsgröße) that political actors identify depending on their goals for calculation of their action (Raschke and Tils 2008, 15 ff.). For example, according to the authors, in democracies the citizens/electorate remain an ultimate point of reference. Since the operationalization of success and the definition of goals in hybrid regimes are different than in democracies, this study uses four main external reference points for the actors’ strategy, relevant in a hybrid regime: citizens, Western donors, opponents, and strategic elites (Figure 9).

Sources: Author’s depiction based on the three pillars of authoritarian stability (Gerschewski 2013).

External points of reference for strategic interaction

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Figure 9:

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As in democracies, electoral support for the incumbent is an important resource to consolidate power in hybrid regimes. Western donors are another important point of reference for the strategic action of the political leadership. In particular, the World Bank, IMF, UN, OECD, EU and Council of Europe provide considerable credits and technical development assistance to Ukraine, as a country in transition (Shyrokykh 2017). Their monetary instruments are based on conditionality as an instrument of external governance (Lavenex and Schimmelfennig 2009; Onopriychuk 2017; Shyrokykh 2018). Since the mid-2000s, reining in corruption has become an increasingly important condition for Western donors to issue financial support to countries in transition. As in authoritarian regimes, in hybrid regimes the co-optation of strategically important economic elites, who are the central source of political finance, is as important as legitimacy (Gerschewski 2013). Electoral opponents in hybrid regimes do not necessarily represent ideological political opposition. In the logic of the system of corruption, there is no meaningful ideological opposition. Opponents to the political leader/president in hybrid regimes can rise from the economic elites, mainly oligarchs, who decide to support other political figures. Nevertheless, other (collective) political actors, such as the parliament or prime minister, or civil society, can become opponents, if they compete for political domination against the president. The analytical line between opponents and the strategic elite is given in two modes of interaction with the political leader: competitive and non-competitive (Gel’man 2008). Competition relates to the distribution of resources. On the one hand, conflict and attempts to coerce central actors reveal opponents; on the other hand, cooperation and attempts to co-opt unmask strategic elites. This work operationalizes cooperation through the creation of predictability. Conceptualizing corruption as an informal institution (Chapter 3.2.2) allows the counterintuitive assumption that elites reproduce this informal institution to build trust and predictability in a highly uncertain environment, where the function of the formal institutions is limited. Thus, corruption, especially by social means in such forms as clientelism, patronage, and nepotism

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functions as an instrument to build groups and coalitions. Corruption by its material means creates an instrument of additional incentives and rewards for political supporters; it becomes a main tool of co-optation. Additionally, for the purposes of this study, conflict is operationalized as exclusion and subordination. Here, it is suggested that anti-corruption rhetoric in hybrid regimes is used as a tool of subordination, to legitimize selective punishment, although rhetorically it is proclaimed to be a tool of trust-building within the society. Thus, the counterintuitive assumption is that political leadership is interested in controlling and dominating anti-corruption policy for two reasons: First, access to the legitimate instruments of selective punishment; second, legitimizing increasing power through the narrative of corrupt others and a non-corrupt self. In the context of dynamic re-assessment of the environment, the different tactics of the presidents determined the individual actors’ role as either opponent or co-opted strategic elite, both subject to fluctuation. These tactics also depend upon the constellation of actors. The constellation of actors defines power hierarchies and access to resources: “Actor constellations” are meant to represent what we know of the set of actors that are actually involved in particular policy interactions—their capabilities (translated into potential ‘strategies’), their perceptions and evaluations of the outcomes obtainable (translated into ‘payoffs’), and the degree to which their payoff aspirations are compatible or incompatible with one another. (Scharpf 1997, 72)

An important assumption in this study is that the corrupt practices of the president should be seen as political tactics aiming to interact with opponents and strategic elites, while corruption framing represents attempts to generate public support and legitimize political domination, created through corrupt practices.

5.

The system of corruption in Ukraine and its role in sustaining regime hybridity

In Chapter 2.5 the system of corruption was conceptualized. This chapter aims to empirically elaborate the functions of the system of corruption for the hybrid regime in Ukraine.20 This analysis is important for the study in two ways: First, it provides an empirical explanation for the theoretical assumption about the central role of corruption as an informal institution in hybrid regimes. It shows how “corruption clusters” as identified by Mungiu-Pippidi (2015) are interwoven and what role separate mechanisms of corruption play in a general context. Second, this chapter describes the “winner-takes-all” logic of the political game, in which presidents have held office (Chapter 4.2.3). Thus, this analysis is crucial to understand the context underlying the actions of Ukraine’s presidents.

5.1.

The role of the oligarchs

The main feature of Ukraine’s system is a close interdependency between politics and oligarchic 21 business (Pleines 2016, 106). Oligarchs are important informal state actors. Inna Melnykovska (2015, 3) describes them as “hybrid rational actor[s] that simultaneously participate in politics and economics.” Importantly, oligarchs do not determine who holds ultimate power in the state, as Heiko Pleines points out: 20 21

This chapter was previously published in an edited volume (Bertelsen 2017). “Oligarchs” refers to individuals who own the largest enterprises in a country, have control over its media as well as their own direct representatives in politics— briefly, “politically active entrepreneurs” (Pleines 2016, 114). Often, economic terminology such as “big business” (Melnykovska 2015) or “financial-industrial groups (FIGs)” (Razumkov Centre 2010) stand for the political “oligarchy.” Pleines collected empirical data on Ukrainian oligarchs, freely accessible online: http://www.forschungsstelle.uni-bremen.de/UserFiles/file/table-oligarchsoverview.xls, last accessed 30 August 2018. According to his operationalization of the term “oligarch,” he identified a total of 29 oligarchs from 2000 to 2015 in Ukraine and analyzed their strategies of political influence. Of particular note are his criteria for defining the term “oligarch” (Pleines 2016, 114).

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CORRUPTION AND ANTI-CORRUPTION POLICIES … oligarchs are not the major power brokers in Ukrainian politics, as they have always sought accommodation with those having or gaining political power, i.e. the oligarchs do not determine who wins political power, but they act as catalysts for an ongoing change by giving additional support to the winning side. (Pleines 2016, 105)

Also Serhiy Kudelia (2016) has demonstrated that since the early 2000s oligarchs and politicians are mutually interdependent upon one another and must permanently adapt their strategies in order to build strong coalitions: In the early 2000s a new type of political organization emerged in Ukraine with oligarchs no longer playing a decisive role. While contributing financial resources to beefing up the organizational muscles, they shared control with, or even followed the lead of, charismatic politicians or influential government administrators with access to state funds. They also operated as umbrella organizations for smaller political parties eager to collude to acquire influence and access to funds. (Kudelia 2016, 70)

Against this background, the main impact of competition among oligarchs sees political pluralism rise by default. This pluralism appears at a first glance as democratic competition, but, on closer inspection, it lacks any commitment to democratic standards (Kudelia 2016). It is possible to identify three main strategies Ukrainian oligarchs use to intervene in politics (Halling and Stewart 2016; Pleines 2009 and 2016): the use of informal networks of corruption between oligarchs and politicians; direct participation in politics including political office; and control of the media in Ukraine and its usage as an important tool of political influence. An ultimate task of oligarchs in politics is to identify the power center, to establish dependency ties, and to secure a majority in the supported center of power.

5.2.

A system of corruption model

At the end of 2015, Mikheil Saakashvili, by then head of the Odessa regional administration, described Ukraine as a “joint-stock company” owned by oligarchs (Ukrainska Pravda 2015).22 Oligarchs are 22

Similarly, Åslund defined the Parliament of Ukraine as “Ukraine’s real stock exchange” (Åslund 2009).

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primarily driven by economic preferences (Melnykovska 2015, 3). For them, politics is business: they invest considerable amounts of their private funds into politics for personal gain. Business logic defines their political behavior, which illuminates the structural preconditions for large-scale corruption in Ukraine. The Ukrainian model of the system of corruption includes the four core elements of a formal democratic political process, as well as incorporated informal incentives and the corruption mechanisms behind them (see Figure 10). Figure 10: Perpetual cycle of corruption in Ukraine’s political process

Source: Huss 2017, 323. The “state” in the figure represents formal institutions, such as the constitution and laws.

Ukraine’s model is identified here as the system of corruption, 23 since corruption is the central element in the regime’s hybridity. Corruption is the only “game in town” (Persson, Rothstein, and Teorell 2013, 465), and serves as a tool for both the material gain of single actors and for securing their dominant positions in the 23

This section is based on a previously published article (Huss 2017).

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“networks of power.”24 Traditionally, the ruling elite holds an advantage, as they are able to modify the rules of the game in their favor. This uneven playing field is a contested space but ultimately the competitors are forced to follow its rules if they want to be successful. Although struggle is common in democracies under the rule of law, authoritarian regimes employ repression tactics against the opposition. In hybrid regimes, such as Ukraine, the opponents simply “lose the game” when violating the rules of the system.25 In the following section, the particular elements of Ukraine’s model offered in Figure 10 will be described. Special attention will be paid to political parties, which serve as a vehicle for oligarchic influence, and to elections as the actors’ important investment in the scheme of corruption. An analysis of these actors’ ability to influence the rules after electoral victory and to create a favorable environment for their private interests will be provided. Ultimately, this discussion will facilitate our understanding about the creation of an uneven playing field, in which corruption plays a significant role. This is what the Razumkov Centre report on political corruption identifies as a “full corrupt cycle”—“when authorities pursue the goal of enrichment, and the gains are used to preserve (expand) powers” (Razumkov Centre 2009, 5). 5.2.1.

Political parties

Political parties in Ukraine are often viewed as an entry point for oligarchic influence into politics (Figure 10, Step 1) (Huss 2016a).26 Experts, such as Alla Voloshyna, a senior analyst of TI Ukraine,

24

25 26

The term “networks of power” is used by Ledeneva (2009, 267) and refers to informal structures of power, in which decisions are taken not on the basis of formal rules, but of personal relationships. A related term used by Hale (2015, 10) is “patronalistic networks,” where “networks” are the “sinews of power” used for the informal distribution of resources and applied for coercion. For examples, see Levitsky and Way (2012, 35). In an interview, the lawyer of the think tank Media Law Institute, Tetiana Semiletko, compared dependency of the political parties on oligarchic finance to drug addiction and maintained that public funding of political parties is crucial to prevent the addiction of political parties to private finance. (Tetiana Semiletko, interview with the author, Kyiv, 28 October 2015).

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consider them to be the “birthplace” of political corruption in Ukraine (2015). The September 2015 corruption scandal involving the former Radical Party MP Ihor Mosiichuk, who was recorded taking bribes, confirms this view (Hromadske Radio 2015). On this recording, Mosiichuk revealed a simple “formula” of corruption and how political parties are financed in Ukraine: “The party runs for elections, it needs money. Help the party, and the party will help you.”27 According to Voloshyna, this formula applies to all political parties represented in parliament since 2014.28 Special characteristics of the party system in Ukraine According to the basic principles of democracy, political parties and elections are essential elements of the democratic representation process. As a rule, parties reflect the socio-economic cleavages in society. Elections allow different social groups to represent their interest on a fair competitive basis. However, political parties in Ukraine serve “as business platforms for certain groups or persons rather than as channels for citizen interests” (Kjellström et al. 2010, 2). In other words, the majority of Ukraine’s political parties are predisposed to political corruption. Although direct signs of political corruption are only visible in holders of public office, the susceptibility of political parties to corruption has to be seen in the wider context of corrupt political schemes (Razumkov Centre 2009, 6). Thus, many political parties in Ukraine are technological projects established for possible sale to politicians or businessmen lacking any party affiliation but in need of the parties’ abilities prior to elections. 29 This reality might explain the parties’ considerable 27

28

29

Verkhovna Rada, “Shokin pokazal v Rade video, na kotorom Mosiychuk beret vziatki,” YouTube, September 17, 2015, length 08:07, translated by the author, https://www.youtube.com/watch?v=ixAK0h1ByfI&frags=pl%2Cwn, 04:25– 04:39, last accessed 30 August 2018. Recent examples of illegal political financing among parties represented in the 2014–2019 Parliament include the Bloc of Petro Poroshenko (Feshchenko and Kryvko 2018) For instance, in 2009, the former Prime Minister of Ukraine Arseniy Yatsenyuk took over the “Democratic Front” (Demokratychnyi front) political party and renamed it after his own civil organization, “Front for Change” (Front zmin) (Ukrainska Pravda 2009). Oleksandr Lavrynovych, Vice Chairman of the

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fragmentation: in 2017, there were 352 registered parties in the country.30 Many existed only on paper and did not actively participate in Ukraine’s political life. Obviously, a political ideology has only a minor impact on a party’s politics. Instead, many parties and blocs, such as the Bloc of Petro Poroshenko, or of Julia Tymoshenko, are designed by and feature their leaders. In general, the “parties of power,” i.e. those that are “business projects,” are politically “centrist,” at least in their slogans (Protsyk and Walecki 2007, 202). It is no surprise, therefore, that political parties developed to protect the private interests of individual politicians or oligarchs will lack the trust of citizens and will have low membership. In a survey conducted jointly by the Ilko Kucheriv Democratic Initiatives Foundation and Razumkov Centre in November 2015, 79.2% of survey respondents reported that they did not trust political parties, with a mere 3.5% of survey respondents holding membership in a political party.31 These conditions have created a deficit in political parties’ accountability to citizens and a substantial distance between voters and politicians. The political party system in Ukraine developed under conditions of poor regulation of party funding. Membership fees are irrelevant to parties due to extremely low membership (Khmara and Kovryzhenko 2014) and public funding was introduced only in 2015, but has not been implemented. Consequently, the major source of party funding has been private corporate donations. Most

30

31

Parliament, stated that some political parties in Ukraine were created to protect business interests (Ukrainska Pravda News 2009). “Politychni partii,” Departament derzhavnoi reiestratsii, last accessed 15 May 2018, http://ddr.minjust.gov.ua/uk/ca9c78cf6b6ee6db5c05f0604acdbdec/poli tychni_partiyi/. This survey was conducted by the Ilko Kucheriv Democratic Initiatives Foundation and Razumkov Centre Sociological Service between the 14th and 22nd of November 2015 in all regions of Ukraine, except Crimea and the occupied territories of Donetsk and Luhansk regions. A total of 2,009 respondents were questioned. “Iakoiu miroiu vy doviriaiete politychnym partiiam?”, Tsentr Razumkova, http://old.razumkov.org.ua/ukr/poll.php?poll_id=1086, last accessed 30 August 2018; “Chy ie vy chlenom iakois politychnoi partii?”, Tsentr Razumkova, http://old.razumkov.org.ua/ukr/poll.php?poll_id=1085, last accessed 30 August 2018.

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importantly, there is no limit on how much money an individual or corporate contributor can donate. As a result, one or two oligarchs are able to support a party “with hidden cash” so that the voters are usually ignorant of who the party’s donors are and what political course will be taken by the party (Khmara 2014). Political parties created in the early 1990s as a reflection of the socio-economic cleavages in society proved to be increasingly unsuccessful. They were obliged to compete for influence with top-down created parties of power and parties created as a politico-technological shell with a purpose to sell. Another serious problem is the lack of control instruments for the funds of political parties. Political parties in Ukraine are accountable only to the state tax administration, which ensures sure that all taxes are paid, but it does not question the sources of funding. The lack of an independent body within the state that would effectively control private funding exacerbates the problem with political parties in Ukraine. Political parties are obliged to publicly report their yearly income, expenses, and assets. However, in their reports, they are not required to mention the names of their donors and the amounts of their contributions, as there are no precise content requirements for such reports. Furthermore, there is no administrative or criminal liability for deception or fraud in financial reporting in Ukraine. In addition, some experts have suggested that most political parties have secret funds and the incomes they report are only the tip of the iceberg (Protsyk and Walecki 2007, 192). In summary, it is possible to identify several important characteristics of the party system in Ukraine; these are technological election- or business-projects aiming at achievement of pragmatic individual or FIG economic interests, which explains the extremely high number of parties and low level of citizen trust in them. The susceptibility of political parties to corruption corresponds to their individual, as opposed to ideologically-centered nature. What is corrupt about political parties? Politics is about partisanship and the external influence of different interest groups is an inevitable element of the multi-party political system. Indeed, in the case of party funding, the line between fair

100 CORRUPTION AND ANTI-CORRUPTION POLICIES and legal articulation of interests and corruption is very thin. With regards to the political financing of parties, most of the isolated actions by an actor may not exhibit any direct signs of political corruption; however, the way the political party system in Ukraine operates is closely connected to political corruption schemes in a wider context (Razumkov Centre 2009, 6). For this reason, it is important to differentiate legitimate lobbying from corruption in the form of bribes and kickbacks for government favors. Both are based on the idea that political actors represent the interests of their corporate sponsors. In Ukraine, the line between them is blurred, since “there is a very poor understanding of where legitimate forms of lobbying end and where illegitimate ones begin” (Smilov 2007, 13). Another distinction in corruption within political parties, as pointed out by Smilov, is … between cases where the payments are accepted for the personal enrichment of politicians and cases where the money is taken for parties or for campaign purposes. (Smilov 2007, 14)

In most cases, personal gain goes hand in hand with political fundraising. One of the first cases demonstrating the junction between political fundraising and private enrichment was that of Pavlo Lazarenko, the former Prime Minister under Leonid Kuchma: Lazarenko led Hromada, the All-Ukrainian Association, one of the first “business project” parties. Hromada was considered Lazarenko’s personal political resource (Razumkov Centre 2010, 6) and he subsequently faced charges of laundering US$ 114 million allegedly stolen using corrupt schemes involving his political party (Protsyk and Walecki 2007, 200 ff.). This stands in stark contrast to the Kohl scandal in Germany, which demonstrates that the reputation of politicians is harmed less when parties are the beneficiaries of illegal financing (Smilov 2007, 14). Another problem is that the shadow economy, as well as organized crime, is an important source for funding political parties in Ukraine (Kuzio 2014b, 316). Once it gains political influence, a party can assure the non-interference of police and prosecutors into criminal activities. Another problem occurs when members of government misuse their position of power to refill their party’s funds

THE SYSTEM OF CORRUPTION 101 by extortion of state-owned enterprises. According to Smilov, it is common that [d]onations by public enterprises are facilitated by widespread political patronage in the appointment of managing directors and board members of publicly owned enterprises in the region. (Smilov 2007, 16)

As a result, public money flows either directly or indirectly through party-related foundations and NGOs into party coffers. 5.2.2.

Elections

Free and fair elections are the primary source of democratic legitimacy for the ruling elite. They are an essential part of the democratic process that allows citizens to choose their representatives for a limited term. As foreseen in the Constitution of Ukraine, parliament is elected every four and the president every five years, by universal, equal and direct suffrage. Due to the mixed electoral system in Ukraine, in parliamentarian and local elections single candidates are as important as political parties providing candidate lists. Special characteristics of elections in Ukraine Elections represent a substantial investment in the business of politics for both political parties and single candidates (Figure 10, Step 2). As Anders Åslund, the long-standing economic advisor to various governments in Ukraine has stated: Ukrainian election campaigns are among the most expensive in the world. The 2010 presidential campaign and the 2012 parliamentary campaign each cost about $ 1 billion or 0.5 percent of GDP. In relation to GDP, that is 1,000 times more than a US election campaign. (Åslund 2015, 121)

Even though the 2014 parliamentary elections were considerably cheaper (between US$ 250 and US$ 300 million) (Sorochan 2014), these amounts appear to be too high for political parties without oligarchic support. Moreover, according to Kuzio (2014b, 316), efficient control of electoral funds seems problematic, as the candidates spend approximately three times more for elections than they officially declare in financial reports.

102 CORRUPTION AND ANTI-CORRUPTION POLICIES The mass media, and above all television, forms the main battlefield for political forces, where political advertising constitutes the lion’s share of their expenses during elections. According to the NGO Chesno (Ukr. for honest), candidates spent on average 70% of their electoral campaign funds on mass media advertising (Shevchenko and Semiletko 2014). It comes as no surprise that Ukrainian oligarchs divided television space, the most important sphere of influence during election campaigns, among themselves. By late 2013, four oligarchs owned 85% of television broadcasting in Ukraine (Real’na Economica 2013). Kuzio has noted that: Gas tycoon Dmytro Firtash owns the Inter channel, Ukraine’s most popular channel … Donetsk oligarch Rinat Akhmetov owns the Ukrayina channel … Oligarch Igor Kolomoyskyy owns [the] 1 + 1 channel [as well as JN1—the Jewish news channel] while Viktor Pinchuk owns ICTV, New Channel and STB. (Kuzio 2014b, 316–317)

Traditionally, since Ukraine’s independence, each president controlled the First National Channel (State Channel One), using it as part of the president’s state-administrative resources. Ukraine’s broadcasting is overloaded with superficial, often camouflaged, political commercials and dubious marketing tricks because legal restrictions that would enhance its quality are minimal (Khmara and Kovryzhenko 2014). To be sure, the imperfections and gaps in legislation and a serious contradiction between the laws on political parties and elections allow political parties to easily bypass those restrictions on electoral campaigns and political advertising.32 What makes the matter worse is that very little space is allotted to serious political debates and to interviews of the candidates, which would familiarize the Ukrainian public with their political views and the ideological programs of their parties. Corruption mechanisms in elections The legal gaps described above refer mostly to the problems accompanying long-term party dependence on oligarchic financing. 32

“Proekt zakonu pro vnesennia zmin do deiakykh zakonodavchykh aktiv Ukrainy shchodo zapobihannia i protydii politychnii koruptsii,” No. 2123a from 19 June 2015, Verkhovna Rada Ukrainy, http://w1.c1.rada.gov.ua/pls/z web2/webproc4_1?pf3511=55653, last accessed 30 August 2018.

THE SYSTEM OF CORRUPTION 103 However, it is important to be aware of immediate corruption risks during elections. There are three main types of corruption during elections: that involving the drawing up of election lists, the subordination of voters, and the use of administrative resources. Corruption during the drawing up of election lists entails the circulation of considerable sums of money as places on the lists are bought and sold. Further, this process witnesses the provision of a gamut of corrupt activities ranging from loyalty commitments (parochial corruption) to monetary rewards (political bribery). Effective legislation defining “closed” lists of political parties or blocs implies a strict order of candidates on the lists that cannot be changed or influenced by voters. The purchase and sale of ranks on election lists is common knowledge in Ukraine. 33 Politicians themselves have raised this issue in the media. In 2014, MP Ihor Skosara, reported paying US$ 6 million for a “safe” seat in parliament during the 2012 elections—to be placed on the list of the “Batkivshchyna” Bloc (ZIK.ua 2014). Similar statements were made by MPs in 2006, reporting that a “safe” spot on the list of the Party of Regions cost US$ 5 million while a rank in the “risk zone” could be purchased for US$ 3 million (Razumkov Centre 2009, 11). Even though this form of corruption has been communicated publicly, it is not easy to prove payment for a list rank, especially when these transactions are disguised as legitimate funding for an election campaign. This practice remains widespread in the majority of parties and blocs, and has been identified as “business as usual” during elections (Razumkov Centre 2009). Second, electoral fraud technologies are another typical malpractice. Electoral fraud “involves influence on the citizens’ will, encouraging its exercise in a way conducive to gaining (keeping) power by a certain political force or its candidate” (Razumkov Centre 2009, 11). The schemes of electoral fraud are always similar: candidates hire brokers, who communicate the offer to voters, often among students. During elections, voters have to send a photograph from the voting booth showing the number of their passport 33

According to the Razumkov Centre’s public opinion poll, 73 % of Ukrainian citizens are aware of such cases. (Razumkov Centre 2009, 11).

104 CORRUPTION AND ANTI-CORRUPTION POLICIES and the ballot with a vote for the “proper candidate.” The reward for the vote is approximately 15 EUR. The most recent cases of ballot buying reached the courts after local elections in Ukraine in 2015 (Virna 2015). A local candidate in Chernivtsi spent UAH 20,000 (approx. EUR 1,000) engaging three students to organize ballot buying at the university for UAH 350 (approx. EUR 17) per vote. Within a short period, the students found 71 takers who agreed to sell their vote for UAH 250 (approx. EUR 12). The students were tried for criminal wrongdoing, but their financier was not. The third type of corruption during elections is the use of state administrative resources, as already defined in Chapter 2.4 on corruption as an umbrella term. Ultimately, this type of corruption is directly connected to the constitutional powers of the incumbent president. Regional (oblast) governors are appointed by the President of Ukraine and have the status of civil servants. Simultaneously, most governors are active members or regional leaders of political parties loyal to the President. This double position, regardless of conflict of interest, enables the effective use of administrative resources at all administrative levels. The use of administrative resources is considered to be a widespread practice in Ukraine, introduced for the first time during the 1998 parliamentary elections under the presidency of Leonid Kuchma (Razumkov Centre 2010, 5). The subsequent elections in 2002 saw large-scale employment of administrative resources in favor of the ruling elite (OSCE report 2002). However, the scale reached its climax during the presidential elections in 2004: in fact, the falsification of election results in favor of the pro-government candidate, Viktor Yanukovych, resulted in the Orange Revolution. The election was proclaimed invalid. Even though the opposition candidate, Viktor Yushchenko, won the new round of elections in 2004, none of the sponsors or organizers were held responsible, except for a few lower level actors (Razumkov Centre 2009, 12). Parliamentary elections in 2006 and 2007 under the presidency of Viktor Yushchenko were recognized as free and fair (according to Freedom House and the OSCE), since the use of administrative resources was reduced to a minimum and occurred only occasionally in a decentralized form. However, constitutional changes

THE SYSTEM OF CORRUPTION 105 strengthening the power of President Yanukovych in 2010 increased corruption risks. During the Yanukovych presidency the absolute majority of governors were representatives of the propresidential Party of Regions and all main positions in civil services were under control of the President (Chervonenko 2015). Thus, the use of administrative resources was effectively reactivated during the parliamentary elections in 2012. 5.2.3.

Political influence

The initial investments in a party and a single candidate during electoral campaigns serve a final goal—to extract profit by gaining personal power (Figure 10, Step 3). To the “corrupt” mind, power means the ability to influence the decision-making processes at state institutions and to manage state resources through legislation in favor of personal well-being. In other words, the actors in power should be able to alter or modify the “rules of the game” at any moment, depending on their goals and public interests. Informal rules and structures in political decision-making Beyond the formal separation of powers and the prescribed operating procedures of key political institutions, informal structures are of great importance for governing in hybrid regimes like Ukraine. In fact, informal arrangements among members of the ruling elite determine who is in charge of formal institutions. After elections, the extensive trade in “formal” political positions begins. According to Åslund (2014, 67), the ruling party (or coalition) offers high bidders “profitable jobs” (khlibni mistsia), including posts chairing state committees and running state enterprises. Additionally, there exists a beneficial trade in judgeships and provincial governorships, since governors are presidential appointees in Ukraine. Three groups of actors engaged in political corruption during the political output-process can be identified. The first group mostly includes oligarchs and financial-industrial groups, significant investors who strive for political power to preserve and increase their assets. Oligarchs do not necessarily hold political positions, but they own political parties and influence the character of political forces in both the legislative and executive branches.

106 CORRUPTION AND ANTI-CORRUPTION POLICIES Typically, they use technologies of “encouragement” in the form of cash, posts, or pressure to create either a “situational majority” for voting on special issues (e.g. appointments and dismissals), or to build coalitions for major decisions (Razumkov Centre 2009, 14). The second group consists of “businessmen”-politicians, profiting from their lobbying work in shaping the politics and economy of the country. They buy seats in the party list or finance their own election campaigns from private resources and trade their seats or votes for profit. In between is a third group, known as “gray cardinals,” who are the informal leaders and play a key role in the decision-making process. This small group of actors is of particular importance. They are not in the political limelight, but they initiate and shepherd issues crucial to their interests (Leshchenko and Naiem 2014). Every political force in parliament has its “gray cardinal.” This group of actors consists of prominent businessmen, who also managed to become parliamentarians (Åslund 2014, 67). As a rule, “gray cardinals” are in charge of their political party’s hidden funds (obshchak). In addition, these individuals are entrusted with trading the key positions (Åslund 2014). Corruption mechanisms in political decision-making Although during election campaigns political corruption can be characterized as “indirect,” the legislation process illuminates political corruption in its pure form as a misuse of entrusted power for personal gain. In an expert interview, Presniakov describes that at this stage the “privatization of state resources takes place in the form of trading of political positions or influencing policy directions.”34 Ukrainian political elites seem to be extremely inventive: their corrupt “income” comes from several sources. First, many enrich themselves during different stages of the legislative procedures,35 beginning with the registration of a bill to its final reviews. 34 35

Ivan Presniakov, interview conducted and translated by the author, Kyiv, 15 April 2014. See the table of corruption risks and examples of misuse of power at every stage of the legislative process in Razumkov Centre (2009, 18).

THE SYSTEM OF CORRUPTION 107 “Outsiders” establish contact with members of the Rada, and through them are able to influence the law-making process (Razumkov Centre 2009, 17). Simultaneously, the conflict of interest issue is not regulated by the corresponding legislation. The second prominent source of corruption is the purchase of votes. Members of Parliament can profit from changing their faction not for ideological reasons, but on the basis of material incentives offered. This is quite a typical phenomenon in Ukraine, when politicians blatantly change faction in parliament. This practice received a special term in Ukrainian—tushkuvannia (party-switching). Against the background of the diminished importance of political ideology, it became very common for parties and politicians to change factions in Parliament. The first instance of the “mass migration from faction to faction” in parliament took place after the 1998 parliamentary elections: under the influence of the presidential branch and business structures loyal to the president, national deputies changed party affiliation, which modified the political structure of the parliament, in this case to the benefit of the head of state (Razumkov Centre 2010, 5). The Constitution of 2004 introduced the “imperative” mandate in order to stabilize the political structure of parliament and limit MP defection from one faction to another. As a consequence, for example, the government was formed not only by a simple majority of MPs, but by factions of parties that have a sufficient number of MPs on their list, in order to constitute such a majority. Even though it was not fully implemented, this rule restricted parliamentary corruption, while preventing the purchase of single MPs from other factions (Riabchuk 2012, 11). However, during Yanukovych’s presidency this rule was abolished. In 2010, more than 50 MPs from the opposition violated their party discipline and joined the pro-presidential majority (Freedom House 2006). Consequently, for the first time since the independence of Ukraine, parliament did not check the President’s executive power. This violation of the “imperative” mandate paved the way for “monopolisation of influence on the entire system of governance” (Razumkov Centre 2010, 15) by Yanukovych and his party.

108 CORRUPTION AND ANTI-CORRUPTION POLICIES Roman Zabzaliuk’s case is symptomatic: In 2012 Zabzaliuk, an MP, published audio tapes of his conversation with Ihor Ryabkov, the leader of the pro-government group, who offered him an initial payment of US$ 500,000 and a monthly payment of approximately US$ 25,000 for changing from the opposition faction to the pro-government one (Ukrainska Pravda 2012). Clearly, once parliamentarians change parties, mechanisms exist to control their voting patterns. Along with formal parliamentary division into factions, informal groups are built around “gray cardinals” and other individual leader, who succeed in gathering parliamentarians around them, independently of factional loyalty. As a result, a majority of parliamentarians turn into “button-pushers” (this phenomenon is known in Ukraine by the term knopkodavstvo): instead of representing the will of their electorate or constituency, they follow instructions from “gray cardinals.” Thus, a handful of informal leaders who arrange voting outcomes make the actual decisions in the Ukrainian Parliament. Corrupt activities are difficult to prove, and thus investigations have not been successful. The principle of checks and balances plays a limited role, and informal rules and structures of governance effectively play into the hands of corrupt individuals. All parliamentary forces use such mechanisms of coalition building and vote collection (Razumkov Centre 2009, 14), which have already become informal rules. Therefore, there have not been any successful investigations into these processes, regardless of changes in government. 5.2.4.

Political outcome side

During the stage of policy implementation (Figure 10, Step 4), the system of corruption is fully established with its actors securing key executive positions. Judiciary and law enforcement institutions alike form an integral part of corrupt informal networks. Not surprisingly, the procedural rules of policy implementation are stacked in favor of the incumbent political forces. This is the stage when oligarchs and the various FIGs which invested throughout the process have an opportunity to make a handsome profit.

THE SYSTEM OF CORRUPTION 109 There are several ways of turning a profit from state resources.36 The state budget is the largest source for embezzlement of public funds; therefore, most corruption schemes either target money on its way to the budget (e.g. taxation) or public spending from the state budget (e.g. public procurement). For instance, a corruption scheme involving withholding value-added tax (VAT) refunds from exporting companies is very popular. VAT forms around one third of the state budget and therefore is the main source of income in the state budget. 37 Former Prime Minister Yatsenyuk described VAT as “the most corrupt tax in the country” (Forbes Ukraine 2014). State officials in charge of the State Tax Administration extort around 20 % of the corresponding VAT refunds. 38 Under conditions of extreme indebtedness to exporting companies, private business has no other choice but to pay the bribe and receive at least part of the refund. There are also numerous cases of illegitimate VAT refunds—known as the “taxation gap” (podatkova iama)—and an even higher percentage of bribes surrounding these. Under Yanukovych, this percentage even increased. According to the Head of the State Tax Administration, Ihor Bilous, VAT fraud between 2010 and 2014 cost the country a quarter of its national budget (Bullough 2014, 8). Another way to turn a profit from state resources is personal enrichment by embezzling money directly from the state budget. For instance, receiving state subsidies allows a privileged circle of people to enjoy energy subsidies, amounting to approximately 7.5 % of GDP, according to the IMF (Åslund 2014, 65). Additionally, trade in natural gas, not only gas produced in Russia but also in Ukraine, offered a platform for vibrant corrupt activities. According to Åslund (2014, 65), half the volume of domestically produced Ukrainian gas, produced at an extremely low cost, “wound up

36 37 38

For different examples of corrupt schemes at a high political level, see Åslund 2014; Bullough 2014. For an overview of VAT in Ukraine, see Boiarchuk 2014. Investigations by the US Department of Justice, in the case of an Archer Daniels Midland subsidiary in Ukraine in 2013, showed that firms in Ukraine were paying bribes of around 20 % of the corresponding VAT refunds between 2002 and 2008. For the detailed case description, see US Department of Justice (2013).

110 CORRUPTION AND ANTI-CORRUPTION POLICIES being leaked to the commercial sector” and sold for the same very high price charged by Russia since 2009. Another profitable corruption scheme is to target the US$ 50 billion annual state procurement budget (Bullough 2014, 8), at least 30 % of which was systematically embezzled in the form of kickbacks between 2010 and 2014.39 This amount (US$ 15 billion) almost equals the value of IMF loans approved in order to support Ukraine’s economic reform program in April 2014. Embezzling budget money during public procurement transactions takes place in the form of kickbacks. This entails “a corrupt practice which typically occurs in connection with a public procurement process when a company pays a procurement officer to illegally award the contract to the company in return for a bribe.”40 This is a rather narrow definition, which covers only one possible form of corruption in a public procurement transaction. But under the conditions of systemic corruption and proximity between business and politics, there is evidence of schemes where companies win tenders due to patronage and close connections to decision-makers, or even where decision-makers are beneficiary owners of those companies that win the competition. For this reason, kickbacks mean the difference between the paid price for the product or service and the market price of the same product or service, independently of who profits from the inflated price.

5.3.

Synthesis: An uneven playing field as a result of corruption practices

The last element (Figure 10, Step 5) in the system of corruption illuminates how political corruption sustains a hybrid regime. The concluding arrow in the circle means the ability of the ruling elite to 39

40

This is an average amount, calculated by “Nashi Hroshi” (“Our Money,” an online initiative of journalists and activists dedicated to uncovering corruption in public procurement) in cases under scrutiny during the Yanukovych regime. Additional information on public procurement fraud was collected during the interview with O. Shalaiskyi, “Nashi Hroshi” editor in chief, conducted by the author, Kyiv, 29 April 2014. Business Anti-Corruption Portal: Corruption Vocabulary, available online at: http://www.business-anti-corruption.com/about/about-corruption/vocabul ary.aspx#Kickbacks, last accessed 30 August 2018.

THE SYSTEM OF CORRUPTION 111 restore the funds of their political party and to strengthen their own position through corruption. Incumbents manipulate state institutions and pilfer public resources by means of corruption to an extent that seriously limits political competition. Other political actors replenish their electoral funds by selling goods and services, while the ruling elite simply uses state resources for their political and personal interests (Åslund 2014, 67). Consequently, an uneven playing field emerges providing the ruling elite with the hyper-incumbency advantage (Greene 2007, 2009). This denotes the victory of dominant political forces before election day because they bias competition in advance. Thus, corruption is not only a goal for politicians and oligarchs, for the ability it offers to enrich themselves, but also a means to maintain political domination on the uneven playing field. Ultimately, corruption is an integral part of the system, which enables its smooth functioning. As an informal institution, corrupt behavior is a widely accepted rule that shapes expectations among participating actors. It means that within the system there is no serious opposition to the regime as such. There are opponents to individual personalities in key positions, such as the president or prime minister, but no ideologically different parties. Everyone who plays this political game sustains the rules of corruption. Serious opposition can come only from the environment in which the system operates as a qualitatively new input. An important, logical consequence for the regime dynamic of the system of corruption model is that the regime that operates according to these rules develops naturally toward a centralized system of corruption and thereby to authoritarianism. After completing each circle, a political leader strengthens his positions with additional material and power capacities. So even if the beginning of the circle is a decentralized system of corruption with fragmented resources and high competition, each pass around the circle means increasing centralization, in which more and more competitors are either co-opted or leave the political game. Acting in the context of the system of corruption has the following implications for the presidents’ political tactics: First, it poses the challenge of accommodating contradictory demands. The

112 CORRUPTION AND ANTI-CORRUPTION POLICIES stability of the system depends to a great extent on the input (support and demand from outside the environment) and the ability of the system to respond to the demands from the environment in the form of outputs (decision-making) and outcomes (implementation of the decisions made) (Merkel, Wagener, and Brückner 2015, 36). For the system in Ukraine, input comes not only from society and its citizens. Oligarchs represent another powerful informal state actor, shaping both the demand and supply sides of the system (Huss and Petrenko 2019). If a president aims to secure his political domination in a hybrid regime, he has to react to demands from both citizens and oligarchs. However, citizens and oligarchs have rather contradictory expectations with regards to the distribution of public resources. Oligarchs engage in politics in order to support private business interests and gain advantages from the distribution of public resources (Pleines 2016), while ordinary voters expect an impartial distribution of public resources. Since the oligarchs do not decide upon who holds power, feedback from the voters remains crucial for the political leadership to maintain their political domination. Second, corruption as an informal institution creates expectations that open possibilities, but also restrict actors’ actions. Corruption is not a morally deviant behavior in this context, but a rational one that becomes a norm by perpetually repeating. Collective actors reproduce corruption in an important informal institution to strengthen their dominant position, given that power reproduces power and institutions have the role of motor in this process (Stefes 2015). As an informal institution, corruption shapes certain expectations for the actors involved. For presidential political tactics, it means that political corruption is an important instrument to maintain domination by means of co-optation and prevalence of resources. At the same time, corruption as an institution creates serious restrictions, limiting the capacity of the president to act in a way deviating from common expectations. Third, the system of corruption naturally directs the hybrid regime’s trajectory toward centralization of power. With regard to the different types of corruption systems (Chapter 2.5.2), the model supports the assumption that, in a hybrid regime, political leaders

THE SYSTEM OF CORRUPTION 113 follow the “winner-takes-all” rule and prefer a centralized system of corruption to a decentralized one. With each rotation, the political leadership strengthens its power. This logic contradicts the linear model of societal development from a closed to an open access order, discussed by Johnston (2005, 2014a) or Mungiu-Pippidi (2015). A decentralized system of corruption can endure for some time, if there are several strong actors unable to co-opt each other but have equal access to public resources (e.g. president and prime minister as double-executive). In such a scenario, formal institutions have a decisive role, since they shape expectations about the power resources of different actors and influence leaders’ potential to co-opt strategic partners (Hale 2015, 2011).

6.

Case study of the political domination of Leonid Kuchma: Functions and implications of the centralized system of corruption

The presidency of Leonid Kuchma is usually analyzed as a hybrid regime with authoritarian tendencies (e.g. Darden 2008; Kuzio 2005; Way 2005b; Zimmer 2008). However, closer analysis of regime dynamics reveals that Kuchma came to power in the context of informal decentralization of power and resources. The mid-1990s in Ukraine were characterized by the conditions of high institutional insecurity, accompanied by political competition between the legislative and executive branches of power, as well as competition for economic resources in a poorly regulated market economy. The constitutional regulation of the formal authorities was at the center of the political struggle. Despite institutional compromise that formally resulted in the semi-presidential political system with blurred regulations of power, Kuchma succeeded in consolidating his power and creating a centralized system of corruption. Table 4:

Regime trajectory and tactics under presidency of L. Kuchma

Interaction tactics reg. opponents and partners

Balance of resources Even distribution of resources

One-sided prevalence of resources

Conflict tactics:

Cooperation tactics:

coercion or exclusion

agreement of rules or cooptation

Outset:

Goal:

“Struggle according to the rules” System of checks and balances Result:

“Winner-takes-all” Monopolized system of corruption

“Cartel-like deal” Centralized system of corruption

“War of all against all” Decentralized system of corruption

115

116 CORRUPTION AND ANTI-CORRUPTION POLICIES This chapter analyzes corrupt practices and framing as a vehicle for the political domination of President Kuchma. Here, it is argued that both corruption and anti-corruption were instruments to reach a “cartel-like deal” and co-opt many different groups on an ad hoc basis (Table 4). The rationale behind these tactics was to outmaneuver powerful actors by playing them against each other. Framing corruption as a principal-agent problem created a political identity for the president as a strong principal, willing and able to control his agents. This narrative was used to legitimize the increasing political domination of Kuchma and justify authoritarian tendencies, such as surveillance and the selective prosecution of opponents. This frame of corruption was institutionalized in the anti-corruption policy largely initiated by the president.

6.1.

Outset: Regime trajectory, power resources and constellation of actors

Leonid Kuchma entered office only 3 years after Ukraine became independent. Both state and society were in an active transition phase, culminating in the negotiations for the new Constitution, adopted in 1996. The early stage of Kuchma’s presidency, thus, was characterized by the competition for authority between the Legislative (Verkhovna Rada) and the Executive (Government and the President) branches of power, and their attempts to secure a dominant position in the new institutional framework of the polity (see also Chapter 4.2.3). The conflict between president and parliament had two sources: First, an institutional one, entrenched in the constitutional process starting in 1990. The Constitution of 1996 was the product of compromise and did not contain any clear provisions regarding power-sharing and conflict resolution by cohabitation. Second, a political one, rising from the conflicting results of parliamentary and presidential elections in 1994: While the parliamentary elections were won by the Communist Party, Kuchma, who won the presidential elections, represented the centrist political position.

CASE STUDY OF LEONID KUCHMA 117 6.1.1.

Fragmentation of power: Institutional and political competition

The change of political institutions during perestroika created a foundation favorable to the development of a semi-presidential political system with an inherent conflict between president and parliament (Matsuzato 2005, 49). Already the first “Concept of the New Constitution of Ukraine” from 1991 recommended that the president should propose his candidates for the Cabinet of Ministers to the Verkhovna Rada (the parliament) to gain their confirmation (Matsuzato 2005, 49). At the same time, the president was supposed to direct the activities of the Cabinet of Ministers directly—as a chief executive rather than head of state—while he was prohibited from dissolving parliament (Matsuzato 2005, 49). Recommendations to strengthen the role of the president in several concepts of the new constitution failed repeatedly until 1996. The Rada was the de facto most powerful and influential institution in the state in early 1990s. All powers of the Communist Party of Ukraine were transferred to the Verkhovna Rada in 1991. As a result, the Rada combined legislative, executive, controlling and administrative functions. According to the Razumkov Centre, the Rada “defined the scope of the competence of other institutes [sic] and bodies of state governance” in addition to its great influence on the formation and work of the government (Razumkov Centre 2003, 4). On the other hand, the president did not have significant influence on the work of the Rada. When the first president of Ukraine—Leonid Kravchuk—attempted to extend his executive powers, it inflamed a political conflict and resulted in the early termination of powers of both the president and parliament (Razumkov Centre 2003, 4). Early parliamentary and presidential elections in 1994 were the result of such contraposition and unclear division of power. The institutional conflict was exacerbated by the contradictory turnout of the early parliamentary and presidential elections in 1994. 41 The Communist Party, revived in 1993 and led by Petro

41

For a detailed analysis of the 1994 elections, see Birch 1998.

118 CORRUPTION AND ANTI-CORRUPTION POLICIES Symonenko, obtained the greatest number of seats in the first multiparty parliamentary elections of March/April 1994 (Birch 1998, 96). The socialist leader Oleksandr Moroz42 became speaker of the parliament. It was rather surprising that a few months later, in July 1994, the non-partisan, liberal reformer Leonid Kuchma won the presidential elections, and not the leader of the Socialist Party (also supported by the communists) Oleksandr Moroz. Thus, fragmentation of power was deep not only in the institutional but also in the political dimension. Further, the formal institutions tasked with regulating competition for political domination were undergoing contentious negotiation. Ukraine adopted its Constitution only in 1996, the last postSoviet country to do so, more than five years after the declaration of independence from the Soviet Union. (Matsuzato 2005, 49). The distribution of power between the president and parliament as well as control of the government and local authorities were the most contentious issues in the constitutional process (Karmazina 2007, 197; Razumkov Centre 2003, 3). The draft constitution put forward by the left-wing-dominated parliament, suggested that the speaker of the parliament should be elected and become the most influential decision-maker in the country. Kuchma’s project, however, aimed at a clear separation of powers, the abolishment of local self-governance and the introduction of presidential representatives in regional governments (Karmazina 2007, 198; Matsiyevsky 2016, 140). Thus, both political forces sought greater control and domination. Inspired by the visit of the American President Bill Clinton, the Rada adopted Kuchma’s draft law on 18 May 1995 (Matsiyevsky 2016, 140) with a simple majority. Although the president formally became the representative of the executive branch, presidentialism was not yet constitutionally anchored (Karmazina 2007, 201). With strong support among the population, Kuchma called a 42

“Moroz was the leader of the Socialist Party of Ukraine, which was the main pillar of the Ukrainian left before the re-emergence of the Communist Party in October 1993. He was also the presidential candidate supported by the left … Moroz distanced himself from the authoritarian ‘socialism’ established under Soviet rule, and declared his support for a multi-party political system” (Birch 1998, 99, 104).

CASE STUDY OF LEONID KUCHMA 119 constitutional referendum, but this was vetoed by the Rada. In the wake of this rejection, Kuchma and the Rada signed a constitutional agreement on 8 June 1995.43 Although the document failed to solve the dispute between the two sides,44 it accelerated the constitutional drafting process. The Constitution became a kind of compromise between different political forces at the expense of the checks and balances mechanism. While the political right attained their goal of a “constitutional expression of the national idea” and the political left cemented the “social character” of the state, President Kuchma maintained wide authority in domestic and foreign policy (Matsiyevsky 2016, 143). The president obtained the following authorities: 

 

43

44

Appointing (with the agreement of parliament) and dismissing (personally) the prime minister, Prosecutor General, one third (6 of 18) judges of the Constitutional Court, creation of courts, definition of the number of judges, and appointment of judges for the first 5 years (all other judges are appointed by the parliament); Signing statutory provisions (acts) which were obligatory for implementation by the government; Abolishing any statutory provisions of the government;

“Kostytutsiinyi dohovir mizh Verkhovnoiu Radoiu ta Prezydentom Ukrainy pro osnovni zasady orhanizazsii vlady ta funktsionuvannia derzhavnoi vlady I mistsevoho samovriaduvannia v Ukraini na period do pryiniattia novoi Konstytutsii Ukrainy”, 8 June 1995, available at: http://zakon5.rada.gov.ua/ laws/show/1к/95-вр/ed19950608, last accessed 30 August 2018. Matsuzato analyzes the factors which prevented presidentialism in the 1990s as follows: “The tendency toward pure presidentialism in the constitutional agreement was unrealizable. First, this agreement contradicted the existing semipresidential characteristics of state administration that had consolidated during 1992–95, and therefore the cost of the transition to another constitutional regime would have been enormous. Second, during the period when the agreement was effective (June 1995–June 1996), the prime minister’s post continued to be occupied by such figures as Evhen Marchuk and Pavlo Lazarenko, independent, to an extent, from Leonid Kuchma. Third, legal effectiveness of the agreement was questionable since this document did not gain the support of the constitutional majority (three hundred deputies) of the Supreme Rada. Fourth, Ukraine had been incorporated in the Council of Europe and other European structures unsympathetic to pure presidentialism” (Matsuzato 2005, 50).

120 CORRUPTION AND ANTI-CORRUPTION POLICIES 



Appointing (according to the recommendation of the prime minister [PM]) members of the cabinet, heads of “other central state authorities,” heads of regional state administrations, the head of the Security Service of Ukraine, and the National Security and Defense Council; Creating consulting and supporting state agencies, reorganizing ministries and other central state authorities according to the recommendation of the PM.

Although the authority of the president diminished when seen against the Constitutional Agreement of 1995, the executive branch remained fully subordinated to the president. Further, through his edicts and appointments of judges, the president had influence on the legislative and judicial branches of power (Matsiyevsky 2016, 144). Another gap in the Constitution was confusion surrounding which branch of power the president represents. On the one hand, the president had enormous influence on the actions of the prime minister; on the other hand, he was able to avoid responsibility by singling out the prime minister and his government for their failures. This gap provided Kuchma with an opportunity to take the office of president as an authority “above all” (Karmazina 2007, 205). This rhetoric came to the fore during a parliamentary speech on 21 March 1997: I would like to remind those present that the president is the head of state. He is not constrained by any of the branches of power, therefore he is appointed to play an important role in all of them … Often there is an attempt to present the president as the head of the executive branch and to accuse him of all economic and social problems. I suggest to my opponents to carefully read the Constitution.45

At the same time, Kuchma often neglected constitutional regulations himself, undermining their role (Karmazina 2007, 205; Matsiyevsky 2016, 145).

45

Annual address of the President L. Kuchma to the Parliament of Ukraine, 21 March 1997, available online at: http://iportal.rada.gov.ua/meeting/stenogr/ show/4042.html, last accessed 30 August 2018.

CASE STUDY OF LEONID KUCHMA 121 In summary, such conflicting institutional and political constellations of power lacking formal regulation allow two conclusions about the departure point for Kuchma’s presidency: First, it was anything but natural that Leonid Kuchma managed to consolidate presidential power under such fragmentary conditions. Second, formal institutions are not able to explain the subsequent regime trajectory toward a centralization of presidential power, since they were not yet in place. The political struggle surrounding the Constitution reveals just how important the formal source of authority was. However, the formal institutions were primarily an indicator of who possessed the ultimate source of power. Therefore, political domination was reached not by following the rules of the game, but by all available means, including informal ones. 6.1.2.

Points of reference for strategic interaction

In addition to the formal institutional competition for authority between the president and parliament, several other groups became notable sources of competition for a one-sided prevalence of power and resources. These groups became important points of reference for strategic action—either co-optation or coercion—by the president. Kuchma publicly labelled his opponents a “symbiosis of actors interested in a weak, dysfunctional and amorphous authority.”46 According to Kuchma, these actors included: 

  

46

“Some regional and local political elites that were able to expand their power—especially economically—at the cost of the weak central government; organized criminals attempting to become the ‘fifth branch of power’; a group of entrepreneurs, who built their business on cheating; bureaucrats, who take advantage of power vacuums to treat state property as their own;

Speech of President L. Kuchma, “V imia rozvytku ukrains’koi kul’tury”, Vystup na III vseukrainskomu plenumi tvorchykh spilok mytsiv Ukrainy, 9 November 1995. Translated by the author. Cited in: V. M. Lytvyn and Smoliy 2000, 85–86.

122 CORRUPTION AND ANTI-CORRUPTION POLICIES 

political forces on the extreme left and extreme right who followed principles, per Kuchma, of ‘the poorer the state and the more anarchy present—the easier and faster control can be grabbed.’”47

Each of these groups and their position toward the president will be analyzed below. Regional political and economic elites Historic research of power geography in the Soviet Union shows that regional economic elites in Ukraine emerged much earlier than the 1990s. For instance, the Dnipropetrovsk regional elite played a crucial role already in the Soviet Union (Kulick 2014; 2018; 2019). In particular, the directors of “Yuzhmash” (Production Association Yuzhny Machine-Building Plant)—the aerospace and missiles manufacturer—had a direct line to the General Secretary in Moscow and influenced not only Soviet Ukraine, but the entire Soviet Union. Thus, the regional clans were often organized around representatives of the former nomenklatura or “red directors.” The role of regional elites in independent Ukraine evolved differently in comparison to other post-communist countries. While in the Russian Federation or the Czech Republic sectorial interest groups emerged, in Ukraine different cross-sector enterprises were organized regionally (Pleines 2005). Private sector associations were fragmented, small and poorly organized. Therefore, in order to influence politics, regional companies merged with regional political representatives and parties to exert influence on the national level.48 Some regional leaders managed to establish local “parties of power” to control both the economy and the political landscape in their regions (Karmazina 2007, 206). The most prominent example was the head of the Dnipropetrovsk regional state administration, Pavlo Lazarenko, who later became chair of the All-Ukrainian 47 48

Ibid., translated by the author. An exception to this is provided by the case of the strong agrarian and coal mining lobby in Ukraine, which managed to organize its own political parties that were represented in the Rada. However, these parties were also regionally restricted and integrated into the regional networks of Dnipropetrovsk or Donetsk (Pleines 2005).

CASE STUDY OF LEONID KUCHMA 123 Union “Hromada,” entered the Rada, and went on to become the Prime Minister of Ukraine. In the merger of politics and business, regional political and economic leaders opened the door into national politics. President Kuchma understood the role of the regional political and economic clans and their manner of functioning better than most. Before entering national politics as prime minister, Kuchma served as a director of “Yuzhmash” in Dnipropetrovsk, mentioned above. He was aware of the fact that local elites from the industrially developed regions, like Donetsk and Dnipropetrovsk, as well as Kyiv, were not interested in a strong central power that would control them (Karmazina 2007, 206). They were able to start businesses and reorganize social life in their regions without oversight or interference from above. Thus, it was rather challenging to find a proper approach between co-optation and coercion. Organized Crime In the early 1990s, regional business and politics were closely interwoven with organized crime. This is laid bare in the unique study of violence and crime in Ukraine’s transition in the 1990s, conducted by Taras Kuzio (2014a). While on the regional level, “organized crime and the political establishment were like either side of a coin” (Kuzio 2014a, 195), on the national level they posed a threat to presidential authority and the further consolidation of power. Keith Darden highlights the relation between president Kuchma and criminal syndicates as follows: Criminal syndicates, such as the ‘thieves-in-law’49 of the Soviet underworld, presented a threat to and violation of the informal command structure of the state apparatus, and the Ukrainian leadership cracked down on them. For example, a report made by the Interior Minister Kravchenko details the efforts to destroy a criminal syndicate that had become powerful in Vinnitsa, one of Ukraine’s Western regions (oblast), and penetrated the state apparatus. (Darden 2008, 48)

49

“Thieves-in-law” (“thieves-with-a-code-of-honor”) is a term that had been used in the USSR to describe criminal fraternities that emerged in the late 1920s and survived the entire Soviet period (Varese 2001, 125). The term refers to professional criminals who hold high positions within organized crime.

124 CORRUPTION AND ANTI-CORRUPTION POLICIES Despite such threats, there was no unified approach to combating crime or tackling other violations of the law. Investigations and prosecution depended on whether they were connected to informal state institutions or not: only those illegal activities that were not part of the informal state institutions were subject to enforcement (Darden 2008, 48). On the edge between organized crime and politics, Darden distinguishes four types: … an important distinction is made between the treatment of four types of officials: ‘criminal’ officials, who threatened the state’s authority by virtue of their obedience to principals outside of the state apparatus (such as thieves-in-law); ‘selfish’ officials, who broke the law to achieve personal wealth and did not pass their receipts up for use by their superiors; ‘disloyal’ officials, who sought to usurp existing leaders or supported those who challenged the existing state leadership; and ‘compliant’ officials, who violated certain laws but adhered to the informal institutional hierarchy. The first three categories of officials violated the informal principal-agent relationship and were subject to punishment. Only the compliant officials were not subject to law enforcement but were nonetheless monitored by their superiors in the state. (Darden 2008, 49)

Thus, the president used the state capacity against actors only if they strengthened themselves and challenged the principal. Bureaucrats Bureaucrats as the embodiment of the state executive apparatus, were a convenient group to criticize for two reasons: First, they represented an abstract group, which allowed avoiding unnecessary conflict with opponents, who might become co-opted in the future. Critiquing specific individuals or political groups meant open conflict and would remove the option to co-opt them. Therefore, an abstract, non-political group of bureaucrats became a scapegoat for many problems in the state. Second, criticism of bureaucrats allowed the creation of principal-agent identities, where the president was presented as the principal. In such a situation, strengthening the executive power of the president—the principal—seemed a logical solution. Rhetorical framing of bureaucrats as an abstract opponent materialized in a broad administrative reform underway in Ukraine at the time. On 2 October 1997 Kuchma issued decree No. 1089/97

CASE STUDY OF LEONID KUCHMA 125 “On the state commission for administrative reform in Ukraine,”50 which sought to prepare and implement radical administrative reforms. As a result, until 1999, around 100 other presidential decrees and 300 governmental legal acts on increasing efficiency and decreasing the number of bureaucrats were signed (Karmazina 2007, 194). Concurrently, the number of state employees increased by 34,800 until 2000, testifying to the gap between rhetoric and action. Political forces on the extreme left and right Kuchma associated all left political parties, including socialists, social democrats, and communists with the “extreme left” (Karmazina 2007). The socialists were tied to Oleksandr Moroz— the Speaker of the Parliament and Kuchma’s chief opponent throughout the mid-1990s. Kuchma used any opportunity to criticize them, mostly as a “fake umbrella under which real communism hid” (cited in: Karmazina 2007, 207, transl. by the author). According to Kuchma, Ukrainian communists were under the influence of Russian communists who aimed to “destroy Ukraine as a subject of international relations” (cited in: Karmazina 2007, 207, transl. by the author). At the opposite end of the spectrum, political forces on the extreme right never posed a direct political threat to Kuchma and he opportunistically both criticized and praised state nationalism (Karmazina 2007, 209). Such positioning toward different political ideologies allowed Kuchma to occupy the political center and appear to represent a balanced political intention between a social and liberal state. Moreover, in the presidential elections of 1999, Kuchma managed to use the Communist Party as “pocket opposition” to play off the real opposition—the socialist Oleksandr Moroz.51

50

51

Ukr.: Ukraz Prezydenta Ukrainy “Pro polozhennia pro derzhavnu komisiiu z provedennia v Ukraini administratyvnoi reform”, 02 October 1997, No. 1089/97, http://zakon2.rada.gov.ua/laws/show/1089/97/ed19971002, last accessed 30 August 2018. In the presidential elections of 1999, Kuchma used electoral manipulations to play Moroz off against the Communist Party leader Symonenko. In the second round, Symonenko did not have any chance to win against Kuchma.

126 CORRUPTION AND ANTI-CORRUPTION POLICIES 6.1.3.

Synthesis

In summary, Kuchma became president under conditions where the formal authority of that office was not clearly defined, and the Verkhovna Rada—the Parliament of Ukraine—was the most powerful institution, combining legislative and executive tasks. Further, the communists held a parliamentary majority and ideologically opposed Kuchma as a centrist and liberal president. Despite this situation, from an early point, Kuchma enjoyed strong popular support and trust. The consolidation of power that Kuchma managed to achieve until 1999 was anything but natural. In the early 2000s, the first three groups of Kuchma’s opponents merged, the state executive apparatus was under the control of the president, and all political parties, including ideologically extreme ones, became technological projects of oligarchs eager to enter parliament. The next section elaborates the role of corruption in this outcome.

6.2.

Corrupt practices as tactics for political domination

Kuchma’s regime is often described as epitomizing “electoral clientelism” (Birch 1997), “electoral authoritarianism” (D’Anieri 2001), and “competitive authoritarianism” (Kuzio 2005; Way 2005b). An in-depth analysis of Kuchma’s presidency conducted by Mariia Karmazina (2007) replicates the very first decisions of the president, analyzed in this section. She describes them as “early symptoms of an authoritarian personality” (Karmazina 2007, 190, Ukr. transl. by the author). According to the Freedom House analysis of Ukraine, in Kuchma’s second term, especially in 2002 and 2004, the political regime in the country came closest to authoritarianism (Figure 11). Where 1 is the highest and 7 is the lowest level of democratic progress, a score between 4 and 5 indicates a hybrid regime that has not yet reached either a consolidated democracy or authoritarianism.

CASE STUDY OF LEONID KUCHMA 127 Freedom of the press, civil society and electoral processes had the worst values in comparison to subsequent presidencies, while corruption, media repression, and governance undermined democracy the most. Figure 11: Freedom House Nations in Transit democracy score 1999–2004 Nations in Transit Democracy Score 1999-2004 7 6 5 4 3 2 1 0 1999-2000

2001

2002

2003

Governance

Electoral Process

Civil Society

Independent Media

Judicial Framework and Independence

Corruption

2004

Democracy Score

Source: Nations in Transit, Freedom House assessment from 1999 to 2004. Author’s depiction. https://freedomhouse.org/report/nations-transit/2017/ukraine, last accessed 30 August 2018.

Given the initial fragmentation of power analyzed above, the question arises as to how it became possible for Kuchma to set the authoritarian trajectory of the regime under conditions of vivid competition for power and what role corruption played in it. In this section an analysis of how Kuchma exploited an informal institution of corruption for his political tactics, especially in his first term, is made, ultimately arguing that corrupt practices reveal that Kuchma’s initial strategy was to create a monopolized system—“winner-takes-all.” However, he only partly succeeded: Kuchma managed to gain a onesided prevalence of resources by means of a “cartel-like deal” corresponding to the centralized system of corruption (Table 7).

128 CORRUPTION AND ANTI-CORRUPTION POLICIES 6.2.1.

Neo-patrimonial decision-making between 1994 and 1998

As indicated in the conceptual section (0), patrimonialism represents a metamorphosis of clientelism, where the emphasis is shifted to the personal nature of particularistic exchanges of resources. In other words, decision-making and key appointments are based on personal trust and connections, instead of meritocracy and the impartiality of professionalism. Neo-patrimonial logic is appropriate especially for assessing the first three years of Kuchma’s rule. He formed his team based exclusively on personal connections. Neo-patrimonial logic in Kuchma’s politics is visible through the network analysis of his appointments (Kononchuk, Pikhovshek, and Mykhailchenko 1996, 3 ff.). Between 1994 and 1996, he appointed 206 officials, including 54 high-level officials from his circle in Dnipropetrovsk. Karmazina (2007, 209) describes patrimonial appointments throughout the entirety of Kuchma’s presidency as follows: … it seems that they the entrusted individuals got the chance to stay in power forever. Year by year they moved horizontally and vertically up and down in governmental structures. Sometimes they even resigned in order to come back in the new role of presidential player. (Karmazina 2007, 209, Ukr. transl. by the author)

While those entrusted by Kuchma perpetually rotated and changed their positions, 52 government staff turnover was very low. Throughout the eight Ukrainian governments between 1990 and 1997, a total of 284 positions were occupied by a mere 156 individuals (Karmazina 2007, 210), which means that some ministers moved from one government to another. The high frequency of changes in government highlights government’s role in the mid1990s as a “scapegoat” for all wrongdoing in politics. In this context, Karmazina raises the issue of consequences for individual

52

For instance, the head of presidential administration, Dmytro Tabachnyk, who became known as the “second person in the state,” resigned at the end of 1996. However, he returned as a consultant to the presidential administration in early 1997. Yuriy Yekhanurov moved from a position as head of the state property department to the position of Finance Minister and, later, Head of State Entrepreneurship (Karmazina 2007, 2010).

CASE STUDY OF LEONID KUCHMA 129 ministers who acquired poor reputations. She argues that personal relations trumped professional reputation (Karmazina 2007). Those entrusted by Kuchma constituted an elite which aided one another in maintaining and expanding authority in line with the logic of reciprocity in a particularistic exchange. 6.2.2.

Change of the political domination strategy: From exclusion to co-optation

In the semi-presidential regime, relations between the president and prime minister are an indicator of the power capacity of the political actors beyond their formal authority. Both parliament and president have influence on the appointment of the prime minister. Thus, the degree of the prime minister’s dependency on the president and the shifts of power within the double executive leadership reveal the constellation of power in the polity. Ukraine’s semi-presidentialism under Kuchma demonstrates comparatively frequent and significant shifts in power distribution between political executives (see Table 5), although the formal framework remained the same (Carrier 2012). Vitaliy Masol was appointed PM by the first Ukrainian president, Leonid Kravchuk, and remained in office until 1995. The next two PMs following Masol, and appointed by Kuchma, revealed the weaknesses of the patrimonial system in a semi-presidential regime, since they turned into competitors for Kuchma after beginning their terms loyal to him. Carrier analyzes the factors that accelerated the competition for power between the president and the prime minister: First, both had at their disposal vast resources outside the institution. … Marchuk was able to rely on the information resources of the security services of Ukraine, which he headed prior to his appointment as prime minister, while Lazarenko had control over the powerful Dnepropetrovsk clan. Second, they both were able to appoint key allies to top positions in the state apparatus, a prerogative that they used significantly more than other prime ministers … Finally, and perhaps more importantly, they both had serious presidential ambitions, as illustrated by their confrontational behavior against Kuchma and their building-up of a parliamentary support base. (Carrier 2012, 105)

130 CORRUPTION AND ANTI-CORRUPTION POLICIES Following his resignation, Marchuk maintained relations with the president. He was appointed secretary of the National Security and Defense Council in 1999 and became Minister of Defense in 2003. Lazarenko, however, continued accumulating his personal resources and influence following his resignation. Pavlo Lazarenko 53 was previously Head of the Dnipropetrovsk regional state administration and the First Deputy PM in the Marchuk Government. Similar to Kuchma’s tactics, Lazarenko started creating his own team, bringing in 7 ministers from his circle in Dnipropetrovsk (out of a total of 27 ministers). Lazarenko exerted particularly strong control over the energy sector. First, he appointed Anatoliy Minchenko—“Stariyshyna dnipropetrovtsiv”—to State Minister for Energy and gave him a status similar to that of deputy PM (Matsiyevsky 2016, 150). Second, Lazarenko created advantages for and protected the Dnipropetrovsk-based “Yedyni enerhetychni systemy Ukrainy” company engaged in transferring gas from the Russian Federation to Ukraine. The president of the company was the Dnipropetrovsk MP Yuliya Tymoshenko. Lazarenko became a real threat to Kuchma, since he used his resources to build his own political party “Hromada” and gained support in parliament. This confrontation split the Dnipropetrovsk clan into two factions: pro-Kuchma and pro-Lazarenko. In this confrontation, the Prosecutor General started an investigation against the former PM for embezzlement of state property. In 1998, Lazarenko was arrested and put on trial in the USA for money-laundering, corruption, and fraud.

53

For more about Lazarenko’s premiership, corrupt practices, and prosecution, see Leshchenko 2013.

CASE STUDY OF LEONID KUCHMA 131 Table 5:

Power relationships between Kuchma and his prime ministers

Prime Minister

Period

Vitaliy Masol

Jun 1994–Mar 1995

Yevhen Marchuk Pavlo Lazarenko

Mar 1995–May 1996 May 1996–Jul 1997

Valeriy Pustovoitenko Viktor Yuschenko

Jul 1997–Dec 1999

Anatoliy Kinakh Viktor Yanukovych

May 2001–Nov 2002 Nov 2002–Jan 2005

Dec 1999–May 2001

Relationship Background/ Clan affiliation Peaceful Nomenklatura representative Mixed Former KGB general Incompatible Dnipropetrovsk/ rival Peaceful Dnipropetrovsk/ loyal Peaceful “Independent” technocrat Peaceful Kyiv clan* Incompatible Donetsk clan

Source: Carrier 2012, 107, modified. * The Kyiv clan was favored under Kinakh’s premiership since its leader Viktor Medvedchuk reached the position of Head of the President’s Administration.

After the challenge of Lazarenko, Kuchma changed his involvement in patron-client networks: where the nomination of Lazarenko was a reward to the Dnipropetrovsk clan for promoting Kuchma during his presidency, all subsequent nominations for PM revealed tactics akin to “preventive clientelism” (Matsiyevsky 2016, 146 ff.). Although the prime minister was dependent on the president, he sought to decrease this dependency and increase his own power resources. The goal of the “patron”—the president—is to secure political domination. Accordingly, the president has to prevent other actors from challenging his preeminent position. The main instrument of prevention is not punishment but providing different access to resources to varying strategic actors (regional clans), so that they play off against each other, but politically support the president in return. At first, Kuchma appointed his personal friend who had proven his loyalty as Minister of the Cabinet of Ministers—Valeriy Pustovoitenko. The ongoing confrontation between the president and parliament led to the resignation of Pustovoitenko in December 1999. In view of the economic crisis, Kuchma appointed a technocrat as PM, Viktor Yushchenko, the head of the National Bank of Ukraine. Yushchenko renewed the cabinet (retaining only 35 % of

132 CORRUPTION AND ANTI-CORRUPTION POLICIES former staff) and implemented successful economic reforms. His popularity among the population and in parliament was growing, while Kuchma’s was decreasing. With majority support in parliament and broad freedoms in decision-making, for the first time there was real cohabitation in Ukrainian politics. Although Yushchenko was the only PM who had the power support to change constitutional practice towards emi-presidentialism, he remained loyal to Kuchma’s regime (Matsuzato 2005, 52). Following Kuchma’s nomination, the loyalist Kinakh became “an instrument for allocation of resources and subject of clan influence” (Matsiyevsky 2016, 158, Ukr. transl. by the author). The next candidacy of Yanukovych was a tactical move meant to play the Donetsk clan off against a Kyiv clan that had increased its power under Viktor Medvedchuk during his term as head of the presidential administration (Matsiyevsky 2016, 160). While Kuchma was playing the Kyiv and Donetsk clans against each other in the early 2000s, his rivals from the Dnipropetrovsk clan—led by Yuliya Tymoshenko—started building a political opposition together with Yushchenko, and formed the Orange coalition. In summary, the analysis of the power relations between the president and the prime ministers reveals a shift in the strategy for political domination. Kuchma changed the neo-patrimonial approach and the preferential treatment of the Dnipropetrovsk clan when the prime minister, Pavlo Lazarenko, challenged the president’s authority. Kuchma altered his political tactics from strengthening one clan to playing different clans (especially the Dnipropetrovsk, Donetsk and Kyiv clans) off against each other. In terms of the theoretical framework, this meant the shift from a “winner-takes-all” scenario (via the exclusion and coercion of opponents) to the “cartel-like deal” by means of co-optation of opponents. In the new constellation, the post of prime minister became an instrument of co-optation. 6.2.3.

Patronage

The core of patronage is a particularistic exchange of public offices and state jobs in return for institutional loyalty (Chapter 2.4.3). Party patronage is a common notion in partisan politics; it is widespread in consolidated democracies and doesn’t necessarily involve

CASE STUDY OF LEONID KUCHMA 133 corruption. However, in hybrid regimes the system of corruption wouldn’t be possible without patronage. Personal control of state institutions by means of patronage allows securing impunity and preventing any investigations. Appointments in the state apparatus are essential to presidents in semi-presidential systems for two reasons: First, they open access to state resources. For instance, patronage under Kuchma paved the way for the future use of administrative resources (Ukr. “adminresurs”) in order to manipulate elections and secure enough votes to win the next presidency, a thoroughly corrupt practice. Thus, the use of adminresurs represents the point where patronage delivers both institutional and political support to the patron. This aspect of patronage enables what D’Anieri (2005) calls “machine politics” 54 Second, Kuchma’s patronal appointments were an instrument for maintaining political support in a highly insecure institutional environment. In semi-presidential regimes, the dualism of executive power (shared between the president and the prime minister) means a high degree of uncertainty (Carrier 2012, 83). In such an environment, patronal appointments fulfill several functions, according to Protsyk: they are an instrument “to reward loyalists, attract the hesitant, and co-opt rivals” (Protsyk 2004, 648). Additionally, appointments are extremely useful to balance rival factions. In his analysis of Kuchma’s appointments, Protsyk concludes: Kuchma rewarded weak factions and punished factions that were growing too strong by appointing or dismissing their members to or from key government positions. (Protsyk 2004, 651)

The scale of patronage under Kuchma becomes all the more striking when comparing presidential appointments of that time in Ukraine

54

Originally, the study of machine politics referred to urban politics in the US in the early twentieth century. According to D’Anieri: “The basic idea was that a dominant party organization could maintain control for long periods of time by using a combination of patronage, favoritism, and intimidation to skew elections decisively in its favor. This led essentially to single-party rule in many US cities, despite ostensibly democratic institutions” (D’Anieri 2005, 232). The term “political machine” refers mostly to the formally democratic one-party system. However, instead of an ideological basis that reflects the political preferences of voters, the “machine” is nonideological and based on particularistic exchange (D’Anieri 2005, 233).

134 CORRUPTION AND ANTI-CORRUPTION POLICIES and Russia. Kuchma issued substantially more appointment decrees in Ukraine than were issued in Russia, as the comparative analysis of the number of presidential appointment decrees shows (Protsyk 2004, 649) (Figure 12). Besides, in comparison to Russia, where Yeltsin and Putin made appointments exclusively in the ministries subordinated to their office, Kuchma appointed deputy ministers “across the whole spectrum of cabinet ministries” (Protsyk 2004, 650). Although Russian and Ukrainian presidents have comparable appointment powers, Kuchma’s constitutional powers were constrained by the Rada, especially in the early stage of his presidency (Protsyk 2004, 650). Protsyk explains that Kuchma was compensating “for his political and institutional weaknesses” by extensive appointments: A highly politicized upper echelon of the civil service, a recurrent problem in transitional and developing countries against which numerous World Bank publications warn repeatedly, has been a by-product of actions taken by a politically insecure president trying to build a comprehensive patronage base and consolidate the powers of his relatively new office. (Protsyk 2004, 650–651)

Thus, patronage became an alternative means to increase political domination in the context of the high political and institutional competition between the president and the parliament. Figure 12: Number of appointments by presidential decree in Russia and Ukraine

Source: Protsyk 2004, 649.

CASE STUDY OF LEONID KUCHMA 135 The following subsections will provide an analysis of how patronage was useful to establish strong presidential rule in settings of high institutional uncertainty. Presidential administration and representatives of the president From the very first day of his presidency, Kuchma started reorganizing the Administration of the President (AP). One year later, the number of civil servants in the AP tripled and reached 595 employees (Karmazina 2007, 189). The AP was growing not only in numbers, but also in political importance. Pleines shows that the AP became in fact a “second government” (Pleines 2005, 68). Melnykovska confirms that the AP became an instrument to counterbalance the Cabinet of Ministers by giving some governmental functions to the AP (Melnykovska 2015, 11). Some experts described the influence of the AP as extending even beyond that of the executive. Assessments of the political role of the AP have referred to it variously as the “main source of legislative, executive and judicial power,”, “alpha and omega of systematic state repression,” and “shadow cabinet” (Karmazina 2007, 277). Presidential advisors played a special role on staff. According to Melnykovska, the position of advisor in the AP allowed Kuchma to co-opt from among the group of entrepreneurs: The position of presidential advisor in Ukraine, especially valuable to the symbiotic relationship between the President and business groups, was held for a long time by such oligarchs as Vadym Volkov and Oleksandr Rabynovich. The career of businessman Andriy Derkach is a pertinent example: in 1996 he was appointed as presidential advisor on foreign trade, and two years later became the chief of Kuchma’s election team. (Melnykovska 2015, 4)

The representatives of the president—his “eyes and ears”—in different political institutions became an extension of influence by means of the executive staff. Thus, the representative of the president in the parliament was an important position that Kuchma introduced in November 1995, in the middle of the highly disputed constitutional process and conflict between himself and the Rada (Karmazina 2007, 202). A comparable position to the representative of the president in the parliament was Minister of the Cabinet of Ministers. For

136 CORRUPTION AND ANTI-CORRUPTION POLICIES instance, Kuchma kept Valeriy Pustovoitenko—a loyalist from the Dnipropetrovsk clan—in the position of Minister of the Cabinet of Ministers to additionally control the government. Pustovoitenko was one of the key members of the People’s Democratic Party (Narodno Demokratychna Partiia, NDP), founded in February 1996. The NDP became the first “party of power,”55 ironically given its slogan: “Our roof is the President” (Karmazina 2007, 211). Pustovoitenko exercised control over three prime ministers from 1994 to 1997—Vitaliy Masol, appointed by Kravchuk; former KGB general Yevhen Marchuk, who acted independently of the president; and Pavlo Lazarenko. In 1997, Pustovoitenko himself became prime minister. In 2001, Kuchma introduced the position of State Secretary of the Cabinet of Ministers. Different from many European countries, the state secretary was appointed by the president for his entire term in office, not that of the government. Regional administrations Strengthening the executive vertical of power was one of Kuchma’s first priorities (Karmazina 2007, 202). The aim was to subordinate regional (Ukr. oblast’) state administrations to the executive branch of power and minimize the influence of local political forces on decision-making (Karmazina 2007, 198; Matsiyevsky 2016, 140). Thus, presidential decree No. 430/94 of 6 August 1994 “On provision of executive governance structures in regions”56 subordinated governors to the president, instead of the government, and established a presidential vertical of executive power from community to state (Karmazina 2007, 195). On 11 October 1994, in his address to the parliament, Kuchma stated his expectation that the executive vertical “has to penetrate all structural levels of the state, from the president to city and

55 56

“Party of power” indicates “groupings of representatives supporting the views of the President” (Smilov 2008, 3). Ukraz Prezydenta Ukrainy “Pro zabezpechennia kerivnytstva strukturamy vykonavchoi vlady na mistsiakh”, 06.08.1994, No. 430/94, http://zakon2.rada. gov.ua/laws/show/430/94, last accessed 30 August 2018.

CASE STUDY OF LEONID KUCHMA 137 village.” 57 Thus, in 1994 and 1995, Kuchma dismissed 21 heads and 25 first deputies of regional state administrations (Ukr. oblasna administrattsiia) in 24 regions in Ukraine (Karmazina 2007, 190). In their place, he appointed people predominantly from his circle (Matsiyevsky 2016, 138). Regional representatives of the president were given considerable authority. Oleh Protsyk has compared the verticals of power in Ukraine and Russia. His analysis shows that the presidential representatives in the regions, and later the heads of the regional state administrations, enjoyed substantially greater powers on the regional level than the presidential representatives in the regions in Russia (Protsyk 2004, 650). National Security and Defense Council of Ukraine and law enforcement agencies The National Security and Defense Council of Ukraine (Ukr. RNBO; hereafter, NSDC) became another instrument to counterbalance the Cabinet of Ministers and the parliament in addition to the PA. The NSDC is an institution that coordinates and controls the work of the executive in the field of security and defense (Constitution of Ukraine, Art. 107). The head of the NSDC is the president, who accordingly appoints the council. From 1995–1998, the secretary of the NSDC—Volodymyr Gorbulin—was very influential, but in 1999 the NSDC came under complete control of the PA (Karmazina 2007, 247). The law enforcement agencies were also under strong presidential influence as the guarantor of national security per the Constitution: For instance, Kuchma appointed and personally dismissed the Minister of the Interior and higher commanders of the army, based on the recommendations of the PM. These competences were broadened when Kuchma created the new position of Representative of the President in the Security Services of Ukraine (Ukr. SBU) in the late 1990s.

57

In: “Shliakhom radykalnykh eknomichnykh reform,” 11.10.1994, Ukr. transl by the author.

138 CORRUPTION AND ANTI-CORRUPTION POLICIES Also, the office of the Prosecutor General played a special, political role. Kerstin Zimmer summarizes this role as follows: The prosecutor general is appointed by the President (with the consent of the Verkhovna Rada), and in essence functions as the head of a political police which serves to control and eliminate political competitors to the president. (Zimmer 2008, 282)

Bearing in mind that the president had strict control over law enforcement, it is striking that by the end of Kuchma’s presidency in 2005, the number of law enforcement staff had increased by 17 times and accounted for 1 % of the population (Karmazina 2007, 273). Judiciary According to the Constitution of 1996, the president in agreement with the Rada could appoint and dismiss the Prosecutor General, one third (6 of 18) judges of the Constitutional court, create courts, and define the number of judges as well as appoint them for the first five years (Matsiyevsky 2016, 177). In this way, the president was able to influence a large segment of the judiciary. An additional challenge for the democratic separation of powers was the fact that the state court’s administration was responsible for the funding, education, organization, and information support of judges and courts. Thus, the legislative branch was formally dependent on the executive. This constellation safeguarded the impunity of the executive’s leadership and made “rule by law,” including selective prosecution of opponents, possible. Implications Patronage influenced the regime trajectory toward authoritarian rule. As the Freedom House index shows, media and civil society censorship, as well as the abuse of the electoral process, were the main shortcomings that caused the regime to drift toward authoritarianism. D’Anieri analyzes patronage in Ukraine as machine politics, identifying two main goals of the Kuchma political machine: winning elections and controlling parliament afterward (2005, 233).

CASE STUDY OF LEONID KUCHMA 139 The first important step to maintain power, in a formally democratic country, was to make Kuchma as popular as possible and to manage public sentiment, foremost by control of the media. The political machine made effective censorship possible. Political and economic elites heavily manipulated the media from the mid-1990s onward by means of propaganda tools as well as the intimidation of journalists and selective law enforcement (D’Anieri 2005, 235; Dyczok 2006, 235). Pressure on media owners was evidenced in two major ways: either by purchasing the media outlet outright or by squeezing its leadership. Marta Dyczok indicates alternative instruments of censorship, such as the manipulation of broadcasting licenses, restriction of distribution networks, and at times, personal threats and physical intimidation of the media owners and journalists (Dyczok 2006, 227). The most infamous cases of physical intimidation (ultimately death) were those of Georgii Gongadze and Ihor Aleksandrov (Diuk and Gongadze 2002; World Bank 2001). In addition, the AP dictated the content that media outlets were supposed to broadcast and focus upon, known as temniki, a political technique roughly equating to “small topics,” borrowed from Russia.58 The importer was Viktor Medvedchuk, an individual closely connected to Putin through a godfather relationship, and head of the AP in 2002 (Dyczok 2006, 226). Temniki were compiled in a daily bulletin, up to 10 pages long, sent unofficially from the AP to the major media and news outlets. This bulletin prioritized information that was to be covered and provided framing for the major issues. Temniki were sent on plain paper and were difficult to trace to the AP, although this was, as researchers have indicated, the only plausible source (D’Anieri 2005, 236; Dyczok 2006, 227). The OSCE reports on elections in Ukraine from 1998 and 1999 identified media as “one of the most important shortcomings,” owing to biased broadcasts and the harassment of journalists (OSCE

58

Dyczok provides the background of teminiki: “This was a technique invented by Russian PR experts Marat Gelman and Gleb Pavlovsky and used successfully in 2000 to help Putin win the presidential election in Russia” (Dyczok 2006, 226).

140 CORRUPTION AND ANTI-CORRUPTION POLICIES 1998; 1999). The Parliamentary Assembly of the Council of Europe and the UN Human Rights Committee recognized that freedom of expression and information were under threat in Ukraine. The vertical dimension of patronage was especially useful in providing control over local governments and securing votes in elections. Ukraine’s ruling political group constructed an organized system of distributing patronage, collecting votes, and coercing opponents which was both vertically integrated from the central to the local level and horizontally integrated, with different tactics being used in a coordinated fashion to achieve key goals. (D’Anieri 2005, 234)

Patronage enabled the use of administrative resources, a practice introduced by Kuchma for the first time during the 1998 parliamentary elections (Razumkov Centre 2010, 5). In the presidential elections in 1999, patronage enabled the effective harassment of opponents. For instance, the state tax police forced publication of the income returns of financial contributors to the campaign of opposition candidate Oleksandr Moroz. Protsyk and Walecki show that Moroz’s corporate donors became “subject to harassment by different state inspections and several were forced into bankruptcy” (Protsyk and Walecki 2007, 203ff.). The following elections in 2002 saw large-scale employment of the administrative resource in favor of the ruling elite (OSCE 2002). Usage reached its apex during the 2004 presidential elections, to such an extent that the falsification of election results in favor of the pro-government candidate Viktor Yanukovych resulted in the Orange Revolution. The election was declared invalid. Even though the opposition candidate Viktor Yushchenko won the new round of elections in 2004, none of the sponsors or organizers of the previous regime were held responsible, except for a handful of lower-level actors (Razumkov Centre 2009, 12). Thus, particularistic appointments of loyal people in the state apparatus not only allowed selective coercion of opponents, but secured immunity for the political leadership.

CASE STUDY OF LEONID KUCHMA 141 6.2.4.

Clientelism

While patronage was a useful tool to secure institutional loyalty to Kuchma and co-opt regional clans, clientelism became a useful tool to secure political support in the parliament and co-opt big business and entrepreneurs. The definition of clientelism used here is “[the] distribution of selective benefits to individuals or clearly defined groups in exchange for political support” (Hopkin 2006, 2). Clientelism was already widespread in Ukraine before Kuchma’s presidency. Moreover, his predecessor Leonid Kravchuk used privileges as a tool of co-optation. The former Speaker of the Parliament Lytvyn recalls: … those who were the most active opponents of the awards were themselves swimming in them: cars, apartments, prestigious trips abroad, etc. Opposition “soloists” were silenced at a higher price—through their involvement in governmental structures (AP, Government). Besides, he President Kravchuk also made use of the old policy of sending his opponents abroad. (Lytvyn 1997, 293; cited in: Karmazina 2007, 150, Ukr. transl. by the author)

This section analyzes different forms of clientelism and their functions in the competition for political domination. Presidential awards The “mild” form of clientelism that Kuchma used from the beginning of his presidency was the distribution of diverse awards. At first glance, this is a natural procedure to recognize distinguished citizens for their extraordinary deeds. But two aspects indicate that Kuchma was misusing this practice. First, state awards were dispensed in a non-transparent way. Karmazina shows in her research of Kuchma’s presidential decrees that the number of awards was published only with the date, number and title, but without naming the person who received it (Karmazina 2007, 218 ff.). Similar nontransparency was apparent in the number of state delegations going abroad. There is no information about the names of participants in such delegations. In general, in two years of his presidency, from July 1994 to June 1996, Kuchma signed over 100 documents designated “not for public release” (Ukr. ne dlja druku), while Kravchuk

142 CORRUPTION AND ANTI-CORRUPTION POLICIES only signed a few dozen such documents during his entire presidency (Karmazina 2007, 195). The second striking aspect about the awards is that, formally, parliament and not the president was charged with their dispensation. For instance, Kravchuk was entitled to award only the Honorary Award of the President of Ukraine, while Kuchma designated almost all prominent state decorations as presidential ones (Order of Khmelnitsky, Yaroslav Mudryi or Kniahynia Olha). 59 In addition, on 22 September 1996, he introduced the Special Order of Merit first, second, and third class. Public sector jobs Clientelism overlaps closely with patronage in cases where lucrative jobs in the public service sector are awarded. A very thin line distinguishes clientelism and patronage: Both imply the particularistic award of lucrative positions in return for loyalty, but the logic of patronage foresees governance of intact institutions, while in clientelism the position itself is the reward, which means that the prior functionality of the institution is not of importance. Within two years, President Kuchma created many new state institutions—committees, commissions, councils, foundations, and agencies subordinated to his office either directly or indirectly (in the cases where Kuchma appointed Chairs; see Table 6 below). Only a handful of the new committees were subordinated to the government or to the ministries; most had been created by the president as well (specifically, the Ministry for the coal industry, the Ministry for press and information, the Ministry for fishery, and the Ministry of environmental protection and nuclear security) (Karmazina 2007, 193). According to Karmazina, most of these institutions were ineffective in their work, since the purpose of their existence was to employ the “right” people (Ukr. svoji) necessary to sustain clientelistic networks. (Karmazina 2007, 191).

59

Only on 16 March 2000 did the law “On State Awards of Ukraine” regulate the procedure for such commendations.

CASE STUDY OF LEONID KUCHMA 143 Table 6:

State institutions created between July 1994 and June 1996

Commission/Committee/Council subordinated to the President on issues:

Commissions with Chairs, appointed by the President on the following issues:

Social protection of the population Citizenship State decorations and awards Nuclear politics Statistics

Regulation of import Anti-damping investigation of export De-monopolization of economy Support of research on national security Foundation of professional cooperation “Ukraine” Coordination of international development help State awards in science and technology Financial assets and stock market

Agrarian and land reform Reconstruction of cultural heritage Maritime policy Economic reforms Structural and organizational reforms in the coal industry Biomedical technologies National agency on information issues Woman, motherhood and childhood Legislation initiatives Social re-orientation of workers Foundation for support of local selfgovernance

Commissions subordinated to the Government on the following issues: Standardization, meteorology and certifications Prevention of bankruptcy Gas and oil industry Gardening and winery Television and radio broadcasting

Source: Author’s depiction, based on Karmazina 2007, 190 ff.

Apart from this, Kuchma appointed around 80 MPs to executive positions, which was only possible because of the vague separation of legislative and executive powers and regulation that allowed MPs to combine both (Matsiyevsky 2016, 138). Following clientelistic logic, such appointments imply political loyalty in return. Subsidies for businesses The Law of Ukraine of 199560 and the decree of the President of 1998 “On Financial-Industrial Groups (FIGs)” paved the way for the creation of big business structures that monopolized the economy and 60

Ukr. Zakon Ukrainy “Pro promyslovo-finansovi hrupy v Ukraini,” 21.11.1995, No. 437/95, http://zakon2.rada.gov.ua/laws/show/437/95-вр/ed19951121, last accessed 30 August 2018.

144 CORRUPTION AND ANTI-CORRUPTION POLICIES killed off small and medium businesses (Karmazina 2007, 233). Article 4 of Law No. 437/95 provided diverse subsidies and tax exemptions, while Article 3 regulated the process of a FIG’s creation. According to Article 3, the Cabinet of Ministers decided on the creation of the FIGs, which allowed closely connecting political and economic decisions. At the same time, the increasing role of political parties was entrenched in the Constitution of 1996. This fact necessitated that the FIGs create their own political parties to gain influence in the legislative branch. In the 1990s, the FIGs possessed enough economic resources to provide funding for political parties. Thus, the parties running for parliament in 1998 were more than 90 % funded by legal entities (Razumkov Centre 2010, 5). Political parties became the bridge between big business and politics (Melnykovska 2015). Clientelism became a useful tool to co-opt FIGs, economic privileges were given in exchange for their political and financial support by the parties of power in the parliament. One way of doing so was to provide advantages to the FIGs during privatization, as well as economic subsidies through the creation of “free economic zones.” Privatization in Ukraine was a non-transparent process, excluding most of the general population (Paskhaver and Verkhovodova 2007). For instance, small enterprises underwent socalled “pre-privatization preparation”—when their revenue decreased, employees were fired, and technologies were destroyed, in order to lower the privatization price of an enterprise. Big strategic enterprises were also bankrupted. These practices involved criminal groups, MPs and law enforcement agencies (Karmazina 2007, 227). For the bidding FIGs, access to information and political protection were crucial. Another example of clientelistic privileges 61 were the “free economic zones,” or areas free of taxes and subsidized by the state. Parliament adopted Law No. 2673 “On the creation and

61

For examples of clientelistic schemes in different sectors of the economy, see Balmaceda 2013; Horovetska, Rudloff, and Stewart 2017; Pleines 2005; Stewart 2013.

CASE STUDY OF LEONID KUCHMA 145 functionality of the free economic zones” on 13 October 1992. Kravchuk made use of this law only once and created the “ChopInter-Port” free custom zone. Between 1995 and 1999 Kuchma created nine free economic zones (Karmazina 2007, 228). For example, decree No. 650/98 of December 1998 “On the special economic zones and special mode of investment activities in the Donetsk region,” which created two free economic zones for 60 years named “Donetsk” and “Azov.”62 These zones were free of payments for land, free of VAT and import tax payments and other state fees. Thus, the status of the free economic zone gave the green light to pursue regional business interests and receive advantages over competitors. At the same time, foreign investment in the free economic zones remained very low. These regulations massively skewed fair economic competition in the country and gave an impetus to the steep development of the shadow economy (Karmazina 2007, 230). There were two implications of clientelism: Parties loyal to the president received access to government resources, enhancing their chances in inter-party contests in return for their political support (Protsyk and Walecki 2007, 204). Clientelistic logic made parties of power attractive to the MPs from other factions. As a result of interplay between the president, oligarchs and parliament, the structure of parliamentary factions often changed (Razumkov Centre 2010). For instance, Matsiyevsky shows that in the parliamentary elections on 31 March 2002 the president’s “For a United Ukraine!” bloc gained 121 seats; however, a few months later on 5 May, when the parliamentary faction was created, the bloc already numbered 175 MPs. This rose a month later to 185 MPs and, at the end of the year, to 193 (Matsiyevsky 2016, 166). When Yushchenko became president in 2005, 8 political groups left the “For a United Ukraine!” bloc, leaving only 11 MPs.

62

Ukr. Ukaz Prezydenta Ukrainy “Pro spetsialni ekonomichni zony ta spetsialnyi rezhym investytsinoi diialnosti v Donetskii oblasti”, 24. 12. 1998, No. 650/98, http://zakon2.rada.gov.ua/laws/show/356-14/ed19981224, last accessed 30 August 2018.

146 CORRUPTION AND ANTI-CORRUPTION POLICIES Implications Where, between 1990 and 1995, new parties were mainly created “from the bottom,” by public initiative, representing the main cleavage of that period between the political left (CPU, SPU, the Peasant Party) and the right (Rukh, URP), under Kuchma political parties became a target for regional clans, FIGs, as well as the president and the government, all of which had the same goal of increasing their influence on legislation through their own political parties. The role of the political parties shifted from the representation of socio-economic groups in society, based on political ideology, to a pragmatic one of “business projects” and “parties of power,” which greatly lowered the democratic regime trajectory. In the crucial phase of economic transition, clientelistic logic paved the way for the regulations that blurred the line between public and private and allowed particularistic exchange between the president and strategic economic groups. The subjects of this exchange were economic subsidies and tax liberalizations in exchange for political support of the president in parliament by the parties funded and dependent on the FIGs. As a result, at the cost of healthy economic competition, Kuchma moved to create a simple pro-presidential parliamentary majority in 2000 (Pleines 2005, 70). This was not sufficient, however, to change the Constitution. Kuchma’s political tactics of “preventive clientelism” maintained the fragmentation of different groups that Kuchma managed to integrate in the “cartel-like deal.” In this context, not only rewards, but also instruments of punishment and control were important. 6.2.5.

Non-coercive control: Corruption-based kompromat and blackmail

Kuchma reached the “cartel-like deal” scenario by means of patronclient networks. This scenario dictates that the person in power has a prevalence of resources, which makes patron-client relation hierarchic. In hierarchical clientelistic networks, the reciprocal exchange of goods and services mostly takes place in an asymmetrical way (Matsiyevsky 2016, 139). The asymmetry of power lies in the

CASE STUDY OF LEONID KUCHMA 147 coercive power of the patron over the client. In other words, the patron has resources not only to reward, but also to punish the client, in case he or she demonstrates disloyalty. Under Kuchma, this asymmetry of power was revealed during Lazarenko’s prosecution: so long as Lazarenko remained loyal to the president, there was no penalty for embezzlement of public resources. When the client turned against the principal and challenged his position, however, the power asymmetry adopted prosecuting and punishing the client, who broke his loyalty, as a valid measure. Such asymmetry in the networks of corruption creates a vicious circle—kruhova poruka: The clients support the patron not only for rewards or from fear of punishment, but because they fear regime change (see also Chapter 2.4.4). Former President Kravchuk described this principle with regard to sustaining the regime of Kuchma: Personal environment has much more power than the nominal holder of this power. For the personal environment of the power holder change of the regime is dangerous, since in the case of change, the prosecutor general can open investigations against them. Therefore, they go to their leader every day and convince him: “without you everything will fall apart.”63 (cited in: Karmazina 2007, 211, Ukr. transl. by the author)

Two factors reinforce the asymmetry between the corrupt networks: First, the patron has access to information about the client, which allows control of the client’s activities, and access to the compromising information—kompromat 64 —in order to publicly legitimise prosecution if necessary. Second, the patron has power resources to influence law enforcement agencies, which allows selective application of law (rule by law, instead of the rule of law). Kuchma fulfilled both requirements by means of patronage—personal appointments in the executive state apparatus. Corruption is an appropriate subject to create the kompromat and use it for blackmail. In the quantitative analysis of 132 states, 63 64

Leonid Kravchuk “Naistrashnishe, shcho vlada zaraz zhyve za zakonamy torhivli”, Den’, No. 19, 03.02.1999. “The essence of kompromat is best grasped by the phrase “blackmail files that are gathered or fabricated for political or business purposes.” (Ledeneva 2013, 58)

148 CORRUPTION AND ANTI-CORRUPTION POLICIES Keith Darden shows that institutionalised corruption can reinforce the administrative hierarchy and strengthen the state, if it is instrumentalised for kompromat. (2008, 41) Surveillance triangle:The SBU, Ministry of the Interior and Tax Administration In the Soviet Union, the KGB had a monopoly of surveillance and unlimited access to “kompromat mining.” (Ledeneva 2013, 67). However, from the 1990s on, the post-Soviet states fragmented the work of the KGB and split it among different state institutions. In Ukraine, a triangle of Kuchma’s blackmail state consisted of three strategic institutions—the SBU, the Ministry of the Interior and the Tax Administration. Formally, the law enforcement agencies were directly or indirectly subordinated to the president, so Kuchma was entitled to appoint their heads. Informally, the appointments followed neo-patrimonial logic: only proven people from Kuchma’s entourage were assigned strategic positions in the state apparatus. When Kuchma consolidated power, from April 1998 until February 2001, the head of the SBU was Leonid Derkach, a former colleague of Kuchma at “Yuzhmash” in Dnipropetrovsk. Previously, he had served as a state advisor for Customs. The Minister of the Interior, Yuriy Kravchenko, came into government together with PM Marchuk. Despite high attrition, Kravchenko remained in his strategically important post remarkably long—from July 1995 until March 2001. Previously, from 1994 until 1995, he headed the State Customs Committee—an important position that indicated proximity to the president. The appointment procedure with tax authorities was different: The State Tax Administration was created only in 1996 and was not considered a powerful agency at its inception. In the mid-1990s, it was more prestigious to work for law enforcement, the SBU or agencies that enabled access to privatization. The “founding father” of the State Tax Administration was Mykola Azarov—a powerful member of the Donetsk clan. There were two reasons for Kuchma to appoint Azarov head of the State Tax Administration: As an MP, Azarov shrewdly joined the pro-presidential coalition and communicated his loyalty by political support. Kuchma came to

CASE STUDY OF LEONID KUCHMA 149 increasingly involve trustworthy people from other regional clans, in order to balance regional influence. In a very short time, Azarov developed the State Tax Administration into a powerful political instrument. In 1996, Kuchma issued a decree to create the tax police.65 Azarov turned the tax police into a tool of surveillance and coercion. As the Administration’s head, Azarov became a member of the NCDS and a member of the Committee against Corruption and Organized Crime. In summary, power over the surveillance triangle granted sufficient access to information for collecting kompromat. In the environment where corruption was institutionalized but formal institutions vague, it was hardly a big challenge to have kompromat on any serious opponent in the state. Corruption-based kompromat was the basis for further blackmail. Principles of Kuchma’s blackmail state Some evidence of use of corruption-based blackmail as a political tactic is provided by tapes that were secretly recorded by former presidential guard Mykola Melnychenko.66 Darden (2008) analyzed the tapes to reconstruct how the blackmail state under Kuchma functioned. Based on Darden’s analysis, it is possible to highlight several principles of Kuchma’s blackmail state: First, officials were allowed, or even encouraged to embezzle state resources. The SBU and Tax Service controlled corrupt activities, and sometimes, even supported them (Darden 2008, 46). 67 65

66

67

Ukr. Ukaz Prezydenta Ukrainy “Pytannia derzhavnykh podatkovykh administratsiy”, 30. 10. 1996, No. 1013/96, http://zakon2.rada.gov.ua/laws/show/1013/96, last accessed 30 August 2018. Ukr. “Frahmenty Rozmov Leonida Kuchmy Iz Zapysiv, Zroblenykh Ofitserom Mykoloiu Melnychenkom.” 5 July 2001. Arkhivy Forumiv Maidanu. Maidan.org.ua. http://maidan.org.ua/arch/lib/989254347.html, last accessed 30 August 2018. As an example, Darden provides a translation of the conversation between Azarov and Kuchma about Igor Bakai—then head of Ukraine’s state oil and gas company Naftohaz. Azarov reveals that he supported Bakai with information about corruption schemes; however, Bakai was not careful enough to hide it from the public: “Azarov: Now, concerning Naftohaz, I invited Bakai, as we agreed, and showed him all of these accounting records [skhemy]. My people did this, [people] I trust. I talked to Oleksandr Mykhailovych, found out how much was actually coming in, and told him [Bakai] exactly the following: ‘Well, Iggy, at a minimum, you put a hundred million in your pocket. Minimum. You

150 CORRUPTION AND ANTI-CORRUPTION POLICIES Information was valuable not for prosecution, but to informally eliminate the information asymmetry between the principal and the agent. Second, authorities conducted extensive monitoring and carefully gathered incriminating evidence. Importantly, the kompromat, based on corruption cases, was collected at all levels, from the lowest in the villages to top-level officials. Independent of the amount of the bribe—in thousands, or in millions of dollars—not the fact of illegality was stressed, but availability of the information. The most extensive exploitation of kompromat was to secure votes in the presidential elections of 1999. The dialogues between Kuchma and Azarov on the Melnychenko tapes reveal how extensively the blackmail was used across the country (Kyiv Post 2001). The legal imperfection of the tax system was convenient in this case, since multiple contradictions allowed finding kompromat on anyone. Third, law enforcement agencies selectively prosecuted in cases of political disloyalty. The illustrative cases were investigations against former PM Lazarenko and Vice PM Tymoshenko— both members of the Dnipropetrovsk clan, who dared to oppose Kuchma and ended up in prison. The case of Tymoshenko after she financed an alternative candidate for the Presidential elections in 1999—Oleksandr Omelchenko—was discussed between Kuchma and Derkach, the head of the SBU, on the Melnychenko tapes, translated and analyzed by Darden: Derkach (speaking to Kuchma): I have a plan laid out for dealing with Yuliya, and if, tomorrow, it suddenly becomes necessary, it will be set in motion. I have materials on contraband, criminal activities … [a criminal investigation that] is not over and was never closed, just set aside. The material is just lying there. That is, we could open it up tomorrow and bring her in. (Kyiv Post 2001 cited in: Darden 2008, 47) understand, of course, that I will not expose you. I give you two weeks, a month at maximum’—and I showed him the accounting records—‘Destroy all the papers that bear witness directly or indirectly to all that you have been up to. You did everything stupidly and senselessly.’ And I showed that he was doing everything stupidly and senselessly … Kuchma: Absolutely. I told him, ‘Listen, dearie, nobody is going to cover your ass.’ Azarov: I tell you, everything could have been done intelligently, but no, he did it so that any stupid auditor would notice his sham expenditures records, even a stupid one” (Darden 2008, 46).

CASE STUDY OF LEONID KUCHMA 151 In fact, formal prosecution and law enforcement were applied selectively. However, according to the informal rules of the political game, legal punishment was exercised as a consequence if the “informal contract” of the principal-agent relationship was broken. Darden analyzes an illustrative case: In one conversation, Azarov reports that Didenko, an official at the state oil and gas company, has stolen US$ 184 million dollars by transferring the funds to fictional companies under the control of himself and Igor Bakai. Again, it is important to note that Azarov and Kuchma are not concerned about the fact of the embezzlement but that the embezzlement was not being passed up the state hierarchy according to the informal rules of the game. Here, the principal-agent relationship—the informal contract—has broken down and needs to be enforced (Darden 2008, 48).

At the end of the tape, Kuchma states that he intends to dismiss both Didenko and Bakai from their posts as a consequence of breaking the informal contract. 6.2.6.

Synthesis

The theoretical framework (Chapters 4.2 and 4.3) suggests that political leaders in the hybrid regime are interested in reaching the “winner-takes-all” scenario, which secures a prevalence of resources and a dominant position in the power networks due to exclusion or coercion of other actors. The analysis of corrupt practices and shifts in patterns reveals that Kuchma’s initial strategy, based on the monopolized system of corruption, was only partly successful: Kuchma achieved a prevalence of power resources; however, instead of achieving exclusion of other actors, he changed his tactic towards co-optation and created a centralized system of corruption, which corresponds to the “cartel-like deal” scenario. Corruption as an informal institution is a central intervening variable for reaching political domination. Analysis of the constellation of power at the beginning of Kuchma’s presidency substantiates this assumption. In 1994, Kuchma faced strong institutional competition from parliament and political competition emanating from left-wing political forces, while formal institutions for the regulation of political competition were not yet in place. As a “child of compromise,” the Constitution did not introduce a clear system of

152 CORRUPTION AND ANTI-CORRUPTION POLICIES checks and balances. Nevertheless, Kuchma succeeded in consolidating his power in the decentralized system of corruption. On the crest of the Soviet legacy, where blat and the use of informal networks were commonplace, Kuchma, as a former “red director,” knew how to establish and use clientelistic networks. Initially, the president relied on the neo-patrimonial logic and his inner-circle from the Dnipropetrovsk clan. Exclusion of all other clans was indicative of the monopolization strategy. This direction changed, however, when rivals from within his clan grew too strong. Co-optation of other strategic actors became a new necessity. Key representatives from different regional clans obtained lucrative positions in the state apparatus that gave them privileged access to public resources. This was the logic of “preventive clientelism”: Kuchma received broad political support in exchange for privileged treatment of his clients; at the same time, when one clan became too powerful, another clan was granted access to resources in order to stunt creation of a potential opponent. This required skillful balancing between strategic partners who were potentially opponents. Co-optation instead of exclusion provided an impulse toward authoritarianism, all the while preventing authoritarian consolidation. Corruption was a central tool to keep potential opponents as co-opted partners. When this practice became institutionalized, it gave birth to a vicious circle—kruhova poruka—in the form of the socalled blackmail state, where regional economic players turned into critical political actors, interested in sustaining the established hybrid regime. In contrast to the initial approach, the blackmail-state did not necessarily follow patrimonial logic, and personal connections became less important. Although strategic positions, like the “blackmail triangle,” were held by a trusted few, the rest of the executive vertical was controlled by means of kompromat stemming from corruption.

CASE STUDY OF LEONID KUCHMA 153

6.3.

Corruption framing as a tactic for political domination

In this section, a fundamental empirical question is analyzed: How did Kuchma frame corruption during his presidency and what social identities did he aim to create by means of this empty signifier? The central focus here is placed on the creation of in- and outgroups by means of exclusion. In line with the theory (Chapter 3), it is subsequently argued that the creation of antagonistic group identities is a useful tool to institutionalize hierarchies which contribute to the goal of political domination. 6.3.1.

Antagonism of strong principal and “invisible enemy”

In the elections of 1994, the leaders of all main political parties focused on three issues: Ukraine’s relations with Russia, organized crime, and particularly (in connection with the latter) corruption. Birch analyzed political campaigns in 1994 and explains: The third issue of concern to the Ukrainian electorate in 1994 was crime, which was linked in the minds of many to corruption by government officials. Given that this was the most frequent explanation for government incompetence, the crime/corruption issue represents an important aspect of the electorate’s evaluation of power-holders and those aspiring to that status. But unlike the dimensional issues of economic reform and relations with Russia, crime/corruption is a non-dimensional valence issue, on which different voters had different levels of intensity of feeling, rather than different views. (Birch 1998, 100–101)

Already during the parliamentary elections, different political parties attached varying meanings to the term “corruption.” For instance, Rukh, a right-wing political party that emphasized the value of nation-building, connected the problem of corruption to the nonparty nomenklatura and depicted them as the “most dangerous” political force in Ukraine (Birch 1998, 102). At the same time, the socialists “sought to link together the growing crime and corruption in society with irresponsible economic liberalization and the other self-serving policies of the current powerholders” (Birch 1998, 103). Kuchma represented the non-party Inter-Regional Bloc for Reforms, whose credo was “economics above politics” (Birch 1998,

154 CORRUPTION AND ANTI-CORRUPTION POLICIES 104). According to Birch, Kuchma used the parliamentary election campaign to launder his image as an unproductive former prime minister: By allying himself with an oppositional group, he was able to distance himself from the ‘Party of Power’ and stake out the political territory he would then seek to occupy in the race for the presidency. (Birch 1998, 105)

The thematic focus on economy and self-presentation as a liberal reformer was well received publicly, and subsequently, in July 1994, Kuchma became the second president of Ukraine. The problem of corruption was one of the first issues Kuchma addressed at the beginning of his term. On 5 August 1994 he gave a speech at the general meeting of the Ministry of the Interior and other law enforcement agencies. He dedicated the speech to “strategically important problems” in the country, including “the ‘mafiazation’ of Ukrainian society.” In this speech, Kuchma constructed a discursive context for widespread corruption. He introduced the narrative of an “invisible” enemy—criminals, who increasingly overlap with the official state government. This narrative became an overarching frame when addressing urgent economic and security problems68 as well as political crisis in society: The (socio-economic) situation is critical and requires immediate economic and political anti-crisis measures. Among numerous factors that intensify the self-destruction of the Ukrainian economy are those either near to the criminal sphere or having an obvious illegal character. Given the political assessment of the situation, we have to recognize: We have a fifth branch of power in Ukraine. It is the power of the shadow economy and illegal enrichment. This power has grown and become stronger by stealing from the state and people. This power is invisible. However, today this power is almost consolidated. This power has real influence in all branches and levels of government, it defines the direction of our economic regime, and influences law enforcement, media, and public opinion on different issues.” (Holos Ukrainy 1994, 3, Ukr. transl. by the author)

Against the background of intense institutional and political competition for authority and competences in the new Constitution, it 68

As a rule, Kuchma was strongly committed to an economic perspective in his views on politics and society. He maintained this perspective, even while referring to problems of state security.

CASE STUDY OF LEONID KUCHMA 155 is remarkable to discern how Kuchma undermined the Rada’s legitimacy and sowed the seeds of mistrust in law enforcement by highlighting the “mafia’s” influence. In the same speech, he said: The “fifth power” consists partly of criminals, who first acquired their large assets by criminal means and then transitioned into legal businesses. Now they are actively trying to acquire political authority. Many of them bribe public officials and law enforcement officers, who cover them in response. The more experienced of them go to any cost to indirectly support political parties, and individual politicians. These activities became widespread during the election campaign. There are even well-known cases of mafiosi trying to enter parliament. Some law projects in parliament stem from the influence of this “fifth power.” (Holos Ukrainy 1994, 3, Ukr. transl. by the author)

On the assumption that “identity can only be established by drawing a line between the mythical Inside and a negative Outside” (Nabers 2015, 156), the narrative of the “invisible enemy” and the semi-criminal “fifth power” does nothing more than create a negative out-group while positioning the Self as the positive opposite. Another advantage of the “invisible enemy” narrative is that the opponent remains diffuse, providing double hedging: First, no particular opponent is named, therefore any opponent can be framed as the “enemy,” but at the same time, there is enough space for co-optation, if the opponents become strategic partners. Second, diffuse problems are convenient for deflecting from personal political failures, since perpetually new meanings and sub-problems can be assigned to the diffuse “invisible enemy.” 6.3.2.

Framing of corruption as a principal-agent problem

In the context of the fight against the invisible semi-criminal enemy, Kuchma addressed corruption more specifically and filled the empty signifier of “corruption” with very particular content. In a speech from August 1994, Kuchma defines the problem and provides a detailed causal interpretation: For effective counteraction, it is necessary to clearly define the nature of this phenomenon, its deep roots. I will focus only on several reasons for this growing cancer in our society. First, it is a shadow economy … Second, unfortunately, under conditions of governmental re-organization and deep societal changes, a certain segment of state officials—from the lowest to the

156 CORRUPTION AND ANTI-CORRUPTION POLICIES highest level—could not resist the temptation to enrich themselves at the cost of society. Economic conditions, and an atmosphere of impunity at the highest political level created a breeding ground for this situation. So-called “state rackets” were established. Bribery and corruption became indispensable characteristics of certain state offices and organizations. Previously, the most powerful turned the authority of their office and state property into the means of personal enrichment. It is especially dangerous for the state when high-level officials in the government create economic schemes which allow obtaining higher profits, in particular, for those who are under their influence, or promote self-enrichment and crush the businesses of competitors. All this was happening under the cover of the state authority that people had entrusted with very different tasks. (Holos Ukrainy 1994, 3, Ukr. transl. by the author)69

Definition and causal interpretation While, in his speeches, Kuchma made no clear reference to international anti-corruption initiatives, the reasoning behind this framing of “corruption” is indicative of the economist’s approach to the phenomenon, so common in the global anti-corruption discourse of 1990s (Andvig and Fjeldstad 2001, 37; Klitgaard 1988; RoseAckerman 1978). The definition and causal interpretations of the problem reflect three central ideas, relevant to the political economists’ understanding of corruption: First, corruption is a deviant action of individuals (e.g. “a certain segment of state officials”). In another speech Kuchma indicates: “Corruption—this is always people, human resources” (Uriadovyi kurier 1999, 3–4, Ukr. transl. by the author), thus it is more about agency than institutional context.70

69

70

Another example Kuchma highlighted at the end of the same year: “Let’s be honest: Regardless of all measures, the criminal situation keeps intensifying today. Although the President controls all processes in the state and does everything to resolve the conflict in favor of legitimate power, it is obvious that organized crime and corruption represent a threat to Ukraine. The so-called “fifth power” is in fact competing with the state. I see the main reasons for that in the planned economy that created the fertile soil for criminals, including those in the government, and the resulting large gaps in legislation that created a supportive regime for those who enrich themselves at the cost of the people, as well as in the inefficient work of law enforcement institutions” (Uriadovyi kurier 1994, 4), author’s translation. Formal institutions, such as laws and regulations, play the role of the “market” for the calculation of incentives and risks when engaging in corruption.

CASE STUDY OF LEONID KUCHMA 157 Second, corruption is a crime of calculation, not passion (Klitgaard 1998, 4). In other words, individual officials are corrupt, because the risk—the probability of being caught and punished— is very low (e.g. “atmosphere of impunity”) and the gains and profit from corruption are high. Finally, the focus is only on monetary forms of corruption (e.g. “bribery” or “economic schemes, which allow obtaining higher profit”). As a rule, Kuchma does not address other, social forms of corruption, such as cronyism, clientelism, patronage, and nepotism. The description given corresponds to a conceptualization of corruption as a principal-agent problem,71 where the president is the principal and bureaucrats and public servants are the agents. Thus, according to the narrative, bureaucrats—the Other—misuse their entrusted power, because of the “low level of their morality” and because of impunity. Their ultimate goal is private self-enrichment. Such a framing of corruption boosts the political image of the honest principal—the Self, who is willing and able to control corrupt agents—Others (corrupt bureaucrats and public servants). 6.3.3.

Suggested remedies

Naturally, the remedies against corruption aim at legitimizing the increased authority of the president as a principal. In the principalagent theory, information is a central element for control, since missing information means power asymmetry and loss of control. Availability of information means the ability to control corruption. To position himself within the context in which the “fifth power” increasingly gains influence in all spheres of society, Kuchma persuasively highlighted that he is well-informed and knowledgeable about the nature, degree of consolidation, and manner in which the

71

Corruption in society is often described as a double principal-agent problem. In the first instance, a political leader is cast as the “principal”; he is tasked with monitoring the actions of bureaucrats (agents) in order to keep them accountable. Without the ability to perfectly monitor their actions, however, rationallyminded bureaucrats use their discretion over resources to extract rents when the opportunity arises. The second principal-agent problem occurs when public officials (bureaucrats or politicians) are conceptualized as “agents” and the public, more generally, as the “principal.”

158 CORRUPTION AND ANTI-CORRUPTION POLICIES “fifth power” functions. He “analyzed” and “studied” the situation, which suggests that he possessed information about the processes going on “in the shadows.” Accordingly, he has the power to control corruption. As Kuchma stated in the speech of August 1994: As a president of Ukraine, I perfectly understand the meaning of such a statement, made by the highest political office. Therefore, I want to ensure you that before proclaiming the formal existence of this (fifth) political power, we deeply analyzed the situation in the state administration over the last years, the international economic activities, the situation in the state and market sectors of the economy. We studied in detail information from law enforcement, security, and the intelligence services. Given this, I assert, at present there is indeed a fifth semi-criminal branch of power in Ukraine. At the same time, I don’t want to act as a cheap populist and make drama out of it. I am perfectly aware that today this power doesn’t have a single center, there are internal clashes which didn’t allow this power to take full control over the state and media. However, the growing tendencies of this power are dangerous. Today, we have one last chance to stop the mafiazation of Ukrainian society. (Holos Ukrainy 1994, 3, Ukr. transl. by the author)

Also, in his later speeches with regards to issues of corruption, Kuchma referred frequently to facts based on statistics and numbers. He also used very concrete examples of corrupt schemes and described them publicly in detail (e.g. Uriadovyi kurier 1999, 3–4). None of his successors so heavily underlined their access to such information. Strengthening one’s position of responsibility and control through access to information is a demonstration of the power of the Self over the corrupt Others. For the effective fight against the mafia we need a strong state, especially its executive and judicial branches of power. … A strong executive branch of power in Ukraine will be developed under all conditions. No one should doubt it. Even those, who until now wanted to see the institution of the President only as a representative one. (Holos Ukrainy 1994, 3, Ukr. transl. by the author)

This narrative is a convenient excuse for the inefficiency of the entire state apparatus, especially law enforcement and bureaucracy, because the “invisible enemy” might have influenced some of them. Following this argument, the president suggests that the only way to win is to strengthen presidential power, designating the president as the ultimate authority able to counteract corruption.

CASE STUDY OF LEONID KUCHMA 159 I understand that if a high-level politician is involved in a case, even the highest law enforcement officer will not be able to deliver justice. It requires the political will of the highest political leadership. My first executive order72 demonstrates this will. The most important element for me was to demonstrate that the President is ready to challenge and fight the criminal world. I mean not the hooligans on the street, but millionaires, who misuse their office, rob people and leave the general population without medicine, oil, and other vital products. The President revealed manifested the will, attacked, but the army law enforcement agencies remained in hiding. There are no solved cases. We have to find out why. I understand that there are objective preconditions for that. Perhaps the cases where high-level officials are involved cannot be resolved autonomously by law enforcement agencies. Therefore, I believe it is reasonable to create special investigation groups, independent of other agencies and subordinated directly to the President only. Alongside economic measures, these groups will seriously fight the “fifth branch of power.” This is our priority … (Holos Ukrainy 1994, 3, Ukr. transl. by the author)

In addition to the empowerment of the president, the narrative of the “fifth power” that influences politics undermined the main opponents of the President—parliament, the media, some political forces, and select individuals. We have to be perfectly aware that the increased fight against the “fifth branch of power” will face active resistance. This will not be only resistance by force but also by refined political activities. We are fighting a power that has huge financial assets, numerous media, and influence on government organizations, press and television. They are able to mobilize the support of serious intellectual potential and famous people. But the truth is on our side. I am sure we will win. (Holos Ukrainy 1994, 3, Ukr. transl. by the author)

In summary, Kuchma framed corruption as a principal-agent problem that was useful to establish his political identity as an honest president, willing to control corrupt bureaucrats and public servants. He used the narrative of an “invisible enemy,” who influences other branches of power by means of corruption, as an antagonistic out-group to underline his good intentions to fight this enemy.

72

Here, Kuchma refers to Decree No. 396/94 of 21 July 1994 “On immediate measures to increase the fight against organized crime,” (Ukr. “Pro nevidkladni zakhody shchodo posylennia borot’by zi zlochynnistiu”) that the president signed on his second day in office, http://zakon3.rada.gov.ua/laws/show/396/94/ed19 940721, last accessed 30 August 2018.

160 CORRUPTION AND ANTI-CORRUPTION POLICIES 6.3.4.

Crisis and change: Framing shift toward perpetual corruption in society

Kuchma’s presidential crisis was caused by two interrelated events.73 The first of these was the testimony in 1999 of the former PM, Lazarenko, about the involvement of Kuchma in corrupt schemes. This testimony was given owing to Lazarenko’s own complicity in corrupt activities. Parallel investigations of the Ukrainian Prosecutor General and accusations of money laundering emanating from a Swiss court led to Lazarenko’s arrest and sentencing in the USA.74 During the trial, he testified about the involvement of Kuchma in corrupt schemes. The second event was the “tape scandal” in 2000, when Kuchma’s bodyguard Melnychenko published tapes revealing Kuchma’s style of government by blackmail, his involvement in corruption, as well as his relation to the murder of the investigative journalist Georgii Gongadze (Vasylenko 2011). These two events challenged the image of Kuchma as the principal, willing and able to control corruption. The framing of corruption as a problem of the Other bureaucrats and politicians, corrupted by the “invisible enemy” was not sufficient to present Kuchma as any different than a corrupt Other. In addition to these events, Kuchma consolidated his power, and public criticism of the authoritarian tendencies of his regime became widespread. As a reaction to this crisis, in 2000, Kuchma began shifting his framing tactics. He partly continued using the old narrative of the “invisible enemy,” but instead of directing it toward the political state agencies (most of which had come under his control) the frames addressed the media and foreign countries: 73

74

The terms “crisis” and “event” are based here on Dirk Nabers’ theory of crisis and change (2015), elaborated in Chapter 3. According to this, “event” means a situation where the universality of the dominant discourse is in question. An event can create a crisis if the discursive status quo is undermined. The function of the “crisis” is to provide a new space for competition between multiple discursive meanings. Lazarenko fled to the US, asking for political asylum, because he was politically persecuted by the Kuchma regime. Lazarenko moved from the position of PM to the opposition and was preparing to challenge Kuchma in presidential elections in 1999. A detailed description of the Lazarenko court case in the US is offered by the investigative journalist Serhiy Leshchenko (2012, 2013).

CASE STUDY OF LEONID KUCHMA 161 Leaders and ideologists of the criminal economy began their attempts to manipulate public opinion and distort the people’s consciousness. Recently, the situation in the information space has grown increasingly reminiscent of the conflict between criminal groups. Moreover, fake patriots help in this conflict between criminal economic structures, involving diplomatic representatives of other countries, international organizations, as well as foreign media. They have created an image of Ukraine as one of the most corrupt countries in the world. (Prezydents’kyi visnyk 2000, 4–5, Ukr. transl. by the author)

From the mid-1990s, the global anti-corruption agenda developed and led to pressure on political leaders, especially in transition and developing countries, to provide explanations for the high level of corruption. As a reaction to foreign accusations of corruption, Kuchma adopted the position that corruption is not (only) a Ukrainian problem and there is no reason to talk about the particularly high level of corruption in the country. During his visit to Lisbon at the end of October 2000 (just before the tapes were published), he said: “Corruption” is not a Ukrainian term. It was brought to us and Ukraine is not an exception to the rules in force all around the world. But we are talking about it out loud and do not hide these facts of corruption like some other countries. (Interfax International DAINB 2000, Ukr. transl. by the author)

During this press conference, Kuchma also emphasized that Ukraine initially started the investigation of former PM Lazarenko,75 and instead of being perceived as a positive signal, it was framed as a negative one. Another change in Kuchma’s framing tactics at the end of his presidency was the narrative of corruption as a historical problem, and one which impacted the whole of society and its culture. Kuchma refers to the problem of corruption as an inheritance from the Soviet era. In his speech during the All-Ukrainian Council against organized crime and corruption and for human rights in early 2004, Kuchma listed three peculiarities of corruption in Ukraine. This late perspective on corruption differs from the one he provided 10 years earlier: 75

The case of Lazarenko was indeed one of the most prominent corruption cases that anti-corruption agencies under Kuchma raised. However, there is a consensus in the literature that the investigation of Lazarenko in Ukraine was of a political nature, since he was rising as a potential electoral competitor for Kuchma in the 1999 presidential elections.

162 CORRUPTION AND ANTI-CORRUPTION POLICIES Despite the global dimensions of corruption, every country has its own national particularities of corruption. The Ukrainian peculiarities are the following: First, it was inherited from the time of the Soviet nomenklatura. Corruption was reinforced in Ukraine during privatization—the process tightly connected to different forms of crime. This process has continued until now … Second, corruption is perpetual, it tends to adapt and to imitate itself, as seen in the national and regional decision-making process. … In reality, it means that state officials are perpetually trying to keep corruption as an option for themselves. Third, there is a peculiar corrupt thinking that is unfortunately the main obstacle in fighting this evil. Often, the public has a skewed perception of bribes, cronyism, and misuse of power as the norm. (Uriadovyi kurier 2004, 3–5, Ukr. transl. by the author)

This passage reveals another important issue in the conceptualization of corruption: corruption as a systemic, perpetual problem, able to adapt to (formal) changes. The perspective on corruption as a problem of “corrupt thinking” in the entire country and of “society’s corrupt consciousness” suggests that corruption is anchored through history in culture, and worldviews, making it an inescapable phenomenon that is impossible to change. In line with the argument that corruption is perpetual and adaptable, such rhetoric in the year of the presidential elections can be interpreted as Kuchma’s cop out for 10 years of inability to create effective anti-corruption policies from atop the executive. From the offensive framing tactics that brought increasing authority for Kuchma at the beginning of his presidency, a shift to more defensive framing tactics at the end of his term is noted. 6.3.5.

Popular attitudes

In the mid-1990s, during the constitutional negotiations and division of powers, Kuchma relied on public support. Also, in the early 2000s, sociological polls showed that in comparison to other state institutions, Ukraine’s president best corresponded to the ideal representation of authority in mass consciousness (Figure 13). The Rada received the worst assessment. Given that in the early years of his presidency Kuchma often claimed the influence of the “invisible enemy” in the Rada, this poll indicates that the president dominated the discursive space. In the context of high institutional competition for formal authority, Kuchma managed to obtain the

CASE STUDY OF LEONID KUCHMA 163 highest level of public satisfaction with his own work, while his main opponent—the Rada—received the worst assessment. Figure 13: Perception of state authorities: comparative assessment

Source: Sociological survey conducted by the Ukrainian Centre for Economic and Political Studies between 25 January and 5 February, 2000. 2010 individuals were questioned in all of Ukraine’s regions; the sampling structure corresponded to Ukraine’s adult population structure (Bychenko and Zhdanov 2000).

Following the 1999 presidential elections and the publicity surrounding the Kuchma case, the attitude of the international community became increasingly concerned at the high prevalence of corrupt practices, even though it backed Kuchma so as to avoid the authoritarian path taken by Belarus (UCEPS 2000, 5).

164 CORRUPTION AND ANTI-CORRUPTION POLICIES Figure 14: Survey of support for Leonid Kuchma, 2000–2004

Do you support the activity of President Kuchma? 60 40 20

Fully support

Support certain actions

Do not support

Difficult to answer

Jul.04

Okt.04

Jan.04

Apr.04

Jul.03

Okt.03

Apr.03

Jan.03

Okt.02

Jul.02

Apr.02

Jan.02

Jul.01

Okt.01

Jan.01

Apr.01

Jul.00

Okt.00

Apr.00

0

Source: Sociological Service of the Razumkov Centre, recurrent survey 2000–2015, http://old.razumkov.org.ua/eng/poll.php?poll_id=67, last accessed 30 August 2018.

While the poll above was conducted before the tape scandal, from 2000 onward the number of Kuchma supporters continuously declined owing to various factors (Figure 14). On the eve of the 2004 presidential elections, experts estimated that Kuchma’s nomination was convenient for the FIGs’ political groups; however, popular attitudes were very different: 77 % of those polled indicated that they wanted fundamental change in the political course and only approx. 3 % believed that Kuchma’s reelection would improve the situation in the country (Zhdanov, Lytvynenko, and Yakymenko 2004, 8). 6.3.6.

Synthesis

The analysis of framing tactics applied by Kuchma reveals how the president used the empty signifier “corruption” to create antagonistic identities through exclusion of the “corrupt others.” It is possible to conceptualize corruption in different ways. At the beginning of his presidency, in the context of high competition for authority, the president applied a conceptualization of corruption as a principal-agent problem. This approach allowed Kuchma to publicly present himself as a principal, willing to control corrupt

CASE STUDY OF LEONID KUCHMA 165 agents. This narrative became central to Kuchma’s reasoning for expansion of his formal authority and was used to legitimize the nearauthoritarian practices of his regime—surveillance and the selective punishment of opponents. This framing became a discursive basis for Kuchma’s anti-corruption policy. Based on the meaning assigned to “corruption,” Kuchma institutionalized his discourse in the form of anti-corruption policy. The next section will focus on analysis of the anti-corruption policy itself. In his second presidential term, Kuchma was confronted with the crisis stemming from Lazarenko’s testimony and the tape scandal. Kuchma’s public support was decreasing. Under these conditions, the framing of corruption as a historical and cultural problem immanent to society fulfilled the function of an excuse for the ineffectiveness of reforms and the persistence of corruption. The shift in the framing of corruption due to the political crisis created a contested space for the new meaning assigned to corruption. “Crisis” in Kuchma’s corruption discourse paved the way for the opposition to fill “the empty space of identity” by giving “corruption” a new meaning.

6.4.

Assessment of the anti-corruption policies

Very little historical analysis of anti-corruption policy in Ukraine has been conducted. The research of the Institute of Applied Humanitarian Research in Kharkiv is worth mentioning (IAHR 2012a) for it provides a historical overview of anti-corruption legislation in Ukraine and anti-corruption assessments based on interviews. Nevertheless, the research done by the IAHR has two shortcomings: First, it provides mostly descriptive overviews, lacking in theoretical inquiry. The second shortcoming is its pervasive assumption of anti-corruption as a positive phenomenon per se, which leads it to miss important critical perspectives on the functionality of anti-corruption policy for purposes of political domination. The reconstruction of Kuchma’s anti-corruption policy helps to revise several widespread assumptions about anti-corruption and poses three central arguments: First, anti-corruption policy

166 CORRUPTION AND ANTI-CORRUPTION POLICIES became a contested space for the main actors who competed for power—the president and parliament. This assumption arises from the constructivist logic elaborated in Chapters 3 and 6.3. According to this, anti-corruption policy materializes the claim of a dominant actor to the identity of a non-corrupt principal and subordinates opponents to the status of “corrupt other” through exclusion. Second, anti-corruption policy is usually assessed as declaratory or non-functional if it doesn’t reduce corruption. This claim, however, neglects the negative effects of dysfunctional anti-corruption policy. Thus, my counterargument here is that anti-corruption policy under Kuchma was not declaratory, but functional. However, from the beginning it was conceptualized for purposes other than reducing or preventing corruption. This argument leads to the third one: Kuchma’s anti-corruption policy was an important instrument for establishing political domination, since it was developed in line with the principal-agent approach to the conceptualization of corruption (Chapter 3.2.1) that favors the central role of the principal in the fight against corruption and provides him with powerful instruments to do so. The following analysis of the actors involved in anti-corruption and institutions will substantiate the three arguments above. 6.4.1.

Constellation of actors and control of corruption in early 1990s

The issue of corruption became relevant in Ukrainian politics simultaneously with the country’s independence. It was conceptualized as a challenge involving organized crime and associated primarily with economic crimes. The term “corruption” was subsequently introduced in a legislative context and the names of agencies primarily responsible for the fight against organized crime. Parliament was the main driving force behind early anti-corruption legislation, monitoring, and control initiatives. In late 1992, parliament created a temporary commission of deputies for the fight against organized crime, corruption, and bribery. 76 The 76

Regulation No. 2894 from 19 December 1992 “On the creation of the temporary commission of the deputies of Verkhovna Rada for the fight against organized

CASE STUDY OF LEONID KUCHMA 167 temporary commission was entrusted with creating a parliamentary group for monitoring law enforcement agencies and the courts. Practically, the group was investigating the reasoning behind closed criminal cases. One year later, three parliamentary commissions joined forces to prepare a package of laws to tackle the challenge of increasing organized crime.77 Among them: laws on the fight against organized crime, on public service, on the fight against corruption, on protection of judges and law enforcement agents, on money laundering, etc. In June 1993, parliament adopted Law No. 3341 “On organizational and legal foundations for the fight against organized crime”78 that indirectly addressed the issue of corruption as a matter of organized crime, although no definition of corruption was provided. In line with the Law, the president was responsible for coordination of the law enforcement agencies, while parliament controlled the fight against organized crime. The responsibility to investigate organized crime was entrusted to the special departments of the Ministry of the Interior and the SBU. The Coordination Committee on the Fight against Corruption and Organized Crime79 under the president of Ukraine became responsible for the coordination of the special departments and provided an exchange platform (Art. 5, Law No. 3341, Ukr.). The president of Ukraine was the Head of the Coordination Committee that consisted of the representatives of all the agencies involved in the fight against corruption and organized crime. The Parliamentary Commission had the main control function over the agencies.

77

78

79

crime, corruption, and bribery,” Ukr. transl. by the author, http://zakon3. rada.gov.ua/laws/show/2894-12/ed19921219, last accessed 30 August 2018. Regulation No. 3207, from 07 May 1993 “On urgent measures for fighting organized crime and corruption,” Ukr. transl. by the author, http://zakon0.rada .gov.ua/laws/show/3207-12, last accessed 30 August 2018. Law No. 3341, from 30 June 1993 “On organisational and legal foundations for the fight against organised crime,” Ukr. transl. by the author, http://zakon3. rada.gov.ua/laws/show/3341-12/ed19930630, last accessed 30 August 2018. Initially, the Committee was created on 18 June 1993 as a committee on organized crime by the Decree of the President No. 561/93; the term “corruption” was added with the new decree of President Kravchuk No. 218/93 on 26 November 1993, http://zakon2.rada.gov.ua/laws/show/218/93/ed19931126, last accessed 30 August 2018.

168 CORRUPTION AND ANTI-CORRUPTION POLICIES The Parliamentary Commission for the Fight against Corruption and Organized Crime was responsible to control the implementation of the Law and apportion resources in the fight against organized crime and corruption. All the above-mentioned authorities were obliged to provide an annual report to parliament. The most important power, however, was parliament’s compulsory agreement, necessary to create and to abolish special departments for the fight against corruption and organized crime, as well as to appoint and dismiss the heads of these departments and the assigned prosecutors (Art. 24, Law No. 3341, Ukr.). Moreover, the commission was entitled to initiate law enforcement activities against public servants or to issue compulsory propositions for investigations to the Prosecutor General (Art. 25, Law No. 3341). In the case of refusal, the Commission was entitled to initiate an independent investigative group and even raise the issue of the appointment of a new independent prosecutor in parliament. The permanent Parliamentary Commission on the Fight against Organized Crime and Corruption was created on 3 June 1994.80 The head of the Commission was Hryhoriy Omelchenko, a former member of the Communist Party and head of the respective department of the SBU, a position he had occupied until the new convocation in April 1998. The role of the Parliamentary Commission was diminished and its functions were limited to legislation in the course of increasing the powers of the president. On 2 March 1999, the Commission transformed became the Parliamentary Committee on Legal Provisions for the Fight against Organized Crime and Corruption81 and the Parliamentary Committee for the Fight against Organized Crime and Corruption on 23 March 2000.82

80 81 82

Regulation No. 51/94, Ukr., http://zakon3.rada.gov.ua/laws/show/51/94вр/ed19940603, last accessed 30 August 2018. Law No. 461-14, Ukr., http://zakon3.rada.gov.ua/laws/show/461-14, last accessed 30 August 2018. Law No. 1593-14, Ukr., http://zakon3.rada.gov.ua/laws/show/1593-14, last accessed 30 August 2018.

CASE STUDY OF LEONID KUCHMA 169 6.4.2. .

Political domination by means of anti-corruption institutions

Kuchma’s early anti-corruption rhetoric (see Chapter 6.3) was supported by vigorous legislative activities, which resulted in the subsequent development of the national anti-corruption policy. On his second day in office, Kuchma issued Decree No. 396/94 “On immediate measures to increase the fight against organized crime,” 83 which also tackled the issue of corruption and ordered parliament to adopt a Law on the fight against corruption. One month later, on 27 August 1994, Kuchma issued Decree No. 484/94 “On increasing the fight against corruption and other economic crimes.”84 This decree stated support for the creation of a joint investigative group for economic crimes that would consist of the Prosecutor General’s Office, the SBU, and the Ministry of the Interior. The Cabinet of Ministers would provide all necessary resources for the operation of this group. Coordination of the work was provided by the Coordination Committee on the Fight against Corruption and Organized Crime under the president. Some weeks earlier, in a speech, Kuchma had already communicated that special investigative groups must be subordinated to the president (Holos Ukrainy 1994). Coordination Committee on the Fight against Corruption and Organized Crime under the president of Ukraine One year after Kravchuk created the Coordination Committee under the president in 1993, Kuchma introduced amendments85 that widened the authority and rights of the Coordination Committee considerably. In addition to coordinating functions, the Committee received control functions, initially exercised by parliament, among them:

83 84 85

Decree of the President No. 396/94, Ukr., http://zakon3.rada.gov.ua/laws/ show/396/94/ed19940721, last accessed 30 August 2018. Decree of the President No. 484/94, Ukr., translated by the author, http://zak on3.rada.gov.ua/laws/show/484/94, last accessed 30 August 2018. Decree of the President No. 829/94 “On measures for improvement of the work of the Coordination Committee on the fight against corruption and organized crime,” Ukr., http://zakon2.rada.gov.ua/laws/show/829/94/ed19960131, last accessed 30 August 2018.

170 CORRUPTION AND ANTI-CORRUPTION POLICIES control of the law enforcement agencies, other state executive bodies, enterprises, organizations of all kinds of property, of the subject of the fight against crime and corruption, protection of rights and freedoms, legal interests, life and the health of citizens and rights of legal persons. 86

Other tasks included collaboration with civil society and anti-corruption agencies abroad, the right to initiate legislation, providing practical and methodological help to the regional coordination committees, coordination of research and analytical work, and public information campaigns. The main duties of the Committee were identified as follows: Based on the reports of the ministries and other central and regional executive authorities, the Committee sets priorities that are compulsory to execute; undertakes control visits to state agencies and enterprises for investigation of tax evasion; requests all documentation necessary for control. The important role of the Coordination Committee among political actors became especially visible in autumn 2003, when President Kuchma dismissed Prosecutor General Vladyslav Piscun from his position on the recommendation of the head of the Committee Olha Kolin’ko (Ukrainska Pravda 2004). Further restructuring and clarifications of the work of the Committee defined that it is not the president, but the head of the Committee, appointed by the president, who chairs the anti-corruption body.87 The president also appoints the deputy of the Committee, who chairs the sub-division for coordination of the law enforcement agencies and other state bodies on crime prevention in the economy. The Administration of the President provides all necessary organizational and technical support for the work of the Committee. While previously the Parliamentary Commission had broad authority in the early anti-corruption infrastructure, from 1995 the Coordination Committee on the Fight against Corruption and Organized Crime under the president of Ukraine became the central hub of anti-corruption activities. Its increased role allowed both the 86 87

Decree No. 829/94, http://zakon2.rada.gov.ua/laws/show/829/94/ed1996 0131, Ukr., last accessed 30 August 2018. Decree No. 654/94, Ukr., http://zakon2.rada.gov.ua/laws/show/654/94/ed1 9941101, last accessed 30 August 2018.

CASE STUDY OF LEONID KUCHMA 171 control of actions and implementation of the selected decisions with regard to corruption. At the same time, no blame was directly attributed to the president for his failures in anti-corruption policy; the chair of the Committee, who was replaced regularly, had the role of scapegoat. On 7 April 2004, the Constitutional Court of Ukraine recognized the Coordination Committee as non-compliant with the Constitution of Ukraine.88 The examination took place as a result of a constitutional challenge by 56 MPs, filed by the head of the Parliamentary Committee on the Fight against Organized Crime and Corruption, Volodymyr Stretevych, and the deputy of the Parliamentary Committee on Legal Politics, Mykola Katerenchuk. National Bureau of Investigations Another attempt by the president to control the fight against corruption and organized crime was the National Bureau of Investigations, created by the decree of 24 April 1997.89 This institution was created to conduct pre-trial investigations in especially difficult criminal cases. The Bureau was fully subordinated to the president, who appointed and dismissed its director, regional heads, and decided about its structure and composition. The directors of the Bureau, appointed in 1997, were people close and loyal to the president. The first director, Oleh Lytvak, moved from presidential aide on legal issues to head of the Coordination Committee on the Fight against Corruption and Organized Crime under the President of Ukraine to director of the Bureau in April 1997. This was a turbulent time of constant government change owing to the growing conflict between the PM, Lazarenko, and the president. When Lazarenko was dismissed, Kuchma appointed Vasyl Duryndets’, the former First Vice Prime Minister of Ukraine and head of the Coordination Committee in 1996, as acting PM. When Valeriy Pustovoitenko was appointed as a regular PM, 88 89

Decision of the Constitutional Court, v009p710-04, Ukr., http://zakon3.rada. gov.ua/laws/show/v009p710-04, last accessed 30 August 2018. Decree of the President No. 371/97 “On the National Bureau of Investigations,” Ukr., http://zakon2.rada.gov.ua/laws/show/371/97, last accessed 30 August 2018.

172 CORRUPTION AND ANTI-CORRUPTION POLICIES Duryndets’ became director of the Bureau of Investigations and his predecessor Lytvak became acting Prosecutor General. The rotation of these two personalities shows that both anti-corruption institutions were important to the president and no random people were appointed to chair them, given that the position of the First Deputy Prime Minister and “aide to the president” indicated loyalty and close ties. One year later, on 6 July 1998, the Constitutional Court of Ukraine recognized the National Bureau of Investigations as noncompliant with the Constitution of Ukraine. 90 The examination took place as a result of a constitutional challenge by 45 MPs, and was filed by the head of the Parliamentary Committee on the Fight against Organized Crime and Corruption, Hryhoriy Omelchenko. Both cases in the Constitutional Court, on the National Bureau of Investigations (1998) and on the Coordination Committee (2004), initiated by the related committee in parliament, suggest that the issue of anti-corruption remained an important battleground between parliament and the president. Since the early beginnings of anti-corruption policy in 1993, the competition between the two institutions—the Parliamentary Commission and the Coordination Committee under the president—was a competition for influence. 6.4.3.

Conceptualization of corruption in legislation

First anti-corruption law On 5 October 1995, the Rada adopted the first anti-corruption law— Law No. 356 “On the fight against corruption.”91 This was an important and innovative step, as similar laws had hitherto not been ratified in other former republics of the USSR and international anti-corruption regimes were not yet in place. Despite many shortcomings, the Law identified corruption as a problem in public discourse. It became the foundation for anti-corruption legislation for

90 91

Decision of the Constitutional Court v010p710-98, Ukr., http://zakon2.rada. gov.ua/laws/show/v010p710-98, last accessed 30 August 2018. Law No. 356/95, Ukr., http://zakon3.rada.gov.ua/laws/show/356/95-вр/ed 19951005, last accessed 30 August 2018.

CASE STUDY OF LEONID KUCHMA 173 the next decade, until the new Law “On the Grounds of Corruption Prevention and Counteraction”92 was adopted in 2009. Despite being 14 years in force, Law No. 356 did not affect the issue of corruption because of several important shortcomings. First, the persons liable for corruption, according to its text, were public servants as well as the people’s deputies of Ukraine and of local councils. In other words, No. 356 only targeted low- and midlevel state employees and officials and excluded the country’s highlevel political leadership, in particular the president and ministers, as well as judges, from liability for corruption. Second, although the people’s deputies were identified as liable for corruption, most rules, restrictions and regulations of No. 356 target bureaucrats and not politicians. Accordingly, Art. 5 contains a long list of restrictions for public servants in order to prevent corruption. Moreover, the Law prescribed financial control for public servants in the form of compulsory declarations of their income and property, to be submitted to the State Tax Administration. Third, the law entailed only administrative liability93 and was inconsistent with the Criminal Code, which made it harmless. Fines for corrupt acts ranged between 15 and 25 non-taxable income minimums (between 320 and 530 EUR) and dismissal from public service. Instead of reducing corruption, No. 356 was fundamental for the creation of principal-agent hierarchies. It targeted middle- and low-level officials and aimed to counteract corruption by two major means: First, by increasing transparency in the form of declarations, not, however, for oversight by the general public, but for the State Tax Administration, which allowed better control of public services. And second, by introducing rules and means of executive control, as well as administrative punishment, which did not considerably increase the costs of corruption, but opened the door to the selective prosecution of corruption.

92 93

Law No. 1506-VI, En., http://zakon3.rada.gov.ua/laws/anot/en/1506-17, last accessed 30 August 2018. Prior to 5 April 2001, and the passing of the new Criminal Code, active and passive bribery were not criminal acts.

174 CORRUPTION AND ANTI-CORRUPTION POLICIES National program on the fight against corruption Corruption was prominently addressed in the “Overall program for the fight against crime for 1996–2000,” adopted by the president in September 1996. 94 Nevertheless, a few months later, in April 1997, Kuchma adopted a specific program to counteract corruption—the “National program on the fight against corruption,” 95 which highlighted the negative role of corruption among other forms of organized crime. The program criticized parliament for poor legislative practices. It also stated that, although corruption was a threat to national security, the Law “On the fight against corruption” was not effectively in use. At the same time, the document criticized law enforcement agencies and executive bodies for their inefficient and ineffective work. The main liability for corruption was repeatedly assigned to the public servants and people’s deputies. This conceptualization of corruption fits the principal-agent framing strategy, which aimed at presenting the president as the main authority able to counteract corruption, because other authorities are either corrupt or powerless. The focus remained on corruption as an economic crime. In the first action plan for the implementation of the program,96 most suggestions for action tackled the economic dimension of corruption (IAHR 2012a, 8). A further action plan of March 1998 confirmed the purely economic approach to the problem of corruption: Corruption in the state is based on the shadow economy and abuse in the economic sector. […] Corruption flourishes primarily in privatization—the 94 95 96

Decree of the President No. 837/96, Ukr., http://zakon2.rada.gov.ua/laws/ show/837/96, last accessed 30 August 2018. Decree of the President No. 319/97, Ukr., http://zakon5.rada.gov.ua/laws/ show/319/97, last accessed 30 August 2018. The government played the central role in the implementation and monitoring of the national program. In the course of one year, the government issued several regulations, each of them with well-elaborated tasks and assessments. Regulation No. 388 of 24 April 1997 listed 43 suggestions for action and Regulation No. 763 of 14 July 1997 provided an assessment of these actions. Regulation No. 345-98-n of 20 March 1998 provided an action plan for central and local executive authorities, including analytical activities, elaboration of further action plans, implementation of financial control mechanisms in public service and some state companies.

CASE STUDY OF LEONID KUCHMA 175 priority direction of the state’s economic activities. […] It is necessary to ramp up the fight against corruption and crime in the field of external economic activities, where 1,200 crimes were revealed. 97

A prominent novelty of the action plan of 1998 was an international anti-corruption perspective, which introduced a new dimension into the national anti-corruption policy. For instance, paragraph 9 prescribed the organization of a permanent international information campaign through diplomatic representatives of Ukraine abroad and in international organizations concerning anti-corruption measures in Ukraine. Paragraphs 15 and 18 requested analysis from law enforcement agencies of the fight against corruption as well as anti-corruption policies abroad and elaborate propositions for national anti-corruption policy. Even though Ukraine became a member of the Council of Europe in 1995, it is worth noting that the first international anti-corruption treaties were only signed two years later, in 1999—the Council of Europe Criminal Law Convention on Corruption of 27 January 1999 and the Civil Law Convention on Corruption of 4 November 1999.98 So, at that time, motivation for integration into the international anti-corruption regimes arose from internal political will, rather than from external international pressure. The Concept of the Fight against Corruption The national program on the fight against corruption paved the way for elaboration of the first long-term national anti-corruption strategy. On 24 April 1998, Kuchma issued the “Concept on the Fight against Corruption 1998–2005.”99 The general provisions of the Concept listed damaging consequences and diverse forms of 97

98

99

Regulation No. 345-98-n of 20 March 1998, “On the assessment of the central and local executive authorities’ implementation of the Law ‘On the fight against corruption’ and ‘National program on the fight against corruption’,” Ukr. translated by the author, http://zakon3.rada.gov.ua/laws/show/345-98-п, last accessed 30 August 2018. Kuchma signed both, but ratification followed only under Yushchenko on 19 September 2005 for the Civil Law Convention and on 27 November 2009 for the Criminal Law Convention. Decree of the President of Ukraine No. 367/98 of 24 April 1998, http://zak on2.rada.gov.ua/laws/show/367/98, last accessed 30 August 2018.

176 CORRUPTION AND ANTI-CORRUPTION POLICIES corruption. It stated that anti-corruption measures must combine preventive, law enforcement, and repressive measures. Anti-corruption policy actors included: law enforcement agencies, intelligence agencies that provide law enforcement with necessary information, actors who directly or indirectly prevent the causes of corruption, and coordination agencies. Among the main principles of anti-corruption policy were listed: democratic governance, rule of law and human rights protection, systemic and overall character, cooperation of public authorities and civil society, international collaboration. The four directions of anti-corruption activities included: prevention, improvement of legislation on liability for corruption, control of implementation of legislation, increasing investigation and punishment of activities. The Concept’s summary of the causes of corruption was conceptualized much more broadly than in previous documents that reduced corruption to a purely economic problem. Corruption was recognized as a more complex issue with “historical roots and social causes.” 100 Further, causes were divided into five categories. The political category was mostly reduced to the moral and professional shortcomings of public servants and the passivity of society. The economic category indicated a lack of transparency in taxation, privatization and subventions, and the greed of public servants. The legal category focused on the lack of legislation for strict control of public servants, the formal character of the system for asset declaration of public servants, legal collisions, and passive law enforcement practices. The administrative category highlighted poor regulation of decision-making, favoritism instead of meritocracy in appointments, members of criminal groups in public service, the slow process of personal checks and controls, and the lack of special anticorruption departments in state agencies. Finally, the socio-psychological category tackled low civic culture, the moral decay of public servants and their supervisors, and a lack of whistleblowing. In line with those five groups of causes, the Concept listed five groups of anti-corruption measures. These were: corruption 100 Ibid., Ukr. transl. by the author, http://zakon2.rada.gov.ua/laws/show/367 /98, last accessed 30 August 2018.

CASE STUDY OF LEONID KUCHMA 177 prevention arising from liberalization and deregulation of the economy; administrative reform; further development of legislation and optimizing of the reorganization of authorities and functions between the central state and local self-governance; improving ethical principles of work in all agencies and state institutions that provide services to the citizens; and impartial law enforcement and control of assets. Further, the Concept provided regulations for the state agencies, especially with regard to revealing and punishing corruption. Among these measures were the creation of special anti-corruption departments and secret appointments of employees who would monitor and reveal corruption, as well as mechanisms of control operations by other agencies than law enforcement. Other suggestions were to improve statistical services on corruption and introduce a single state register of persons believed to be involved in corruption and under surveillance. In other words, the Concept provided the normative basis for establishing surveillance, increasing control by law enforcement and other specialized agencies, as well as for centralizing information about corrupt public servants. Implementation of the anti-corruption strategy The Concept was implemented through the annual action plans of the government.101 The main obstacles to its effective implementation were inconsistencies and collisions in the content of the president’s Concept and the action plans of the government (Kudelia 2016, 61; IAHR 2012a). Several powerful anti-corruption measures in the Concept were either neglected or sharply modified in the action plans. First, although the Concept prescribed the implementation of priority measures on the prevention of corruption, the prevention mechanisms were elaborated very vaguely in the documents. At the same time, the description of the punishment for corruption was very detailed. Moreover, measures for the prevention 101 Regulation No.799-99-n from 10 May 1999, “On the action plan for the fight against corruption in 1999”, http://zakon2.rada.gov.ua/laws/show/799-99-п, last accessed 30 August 2018. Regulation No.1050-2000-n from 3 July 2000, “On the action plan for the fight against corruption in 2000”, http://zakon2. rada.gov.ua/laws/show/1050-2000-п, last accessed 30 August 2018.

178 CORRUPTION AND ANTI-CORRUPTION POLICIES of corruption were not included in the action plans (IAHR 2012a, 20). Thus, the anti-corruption measures implemented had a primarily repressive, and not a preventive, character. The fact that rather low numbers of corruption cases reached the courts and resulted in sentences indicates the non-systematic character of punishment. Second, civil society participation in anti-corruption policy was formally declared as important in the Concept. Assessment by international organizations, however, noted that there was no active involvement of NGOs (OECD 2004b, 7). Third, the Concept highlighted the importance of transparency and asset declarations of civil servants for better control. At the same time, since the public and civil society did not have control of the information, financial control shifted to the Ministry of Justice and the State Agency (Ukr. “holovderzhsluzhba”) under the president. As a result, although the Concept included procedures aimed to prevent corruption, the action plans were clearly focused on punishment and repressive measures. Moreover, such important recommendations as the elimination of the immunity of the people’s deputies and limiting the immunity of judges were not reflected in the action plans, despite their place in the Concept. 6.4.4.

Synthesis

In line with the post-structuralist perspective on corruption, one of the main assumptions of this study is that the actors involved in anti-corruption policy compete in a contested space to influence this policy field. Politically influential actors use the principal-agent approach to corruption in order to create hierarchy. In practice, the principal-agent approach to corruption suggests that some actors are impartial, and others are prone to corruption. The supposedly fair actors take over the control and punishment of corruption, which subordinates other actors and institutions to that control mechanism. The main goal of the principal-agent framing tactic is to increase the legitimacy of the principal in public opinion. Analysis of the early anti-corruption policy in Ukraine revealed that anti-corruption policy was a contested space between parliament and the president. Initially, parliament was the main

CASE STUDY OF LEONID KUCHMA 179 actor shaping anti-corruption policy. But Kuchma set the problem of corruption and anti-corruption policy very high on his priorities list. From the beginning of his presidency, he actively shaped anticorruption legislation through the national anti-corruption program and first anti-corruption strategy. He subsequently gained full control through the empowerment of the Coordination Committee on the Fight against Corruption and Organized Crime under his direction. The framing of corruption as a principal-agent problem became a basis for the content of Kuchma’s anti-corruption policy. Based on the meaning assigned to corruption as a problem of lowand mid-level public servants, Kuchma institutionalized the antagonistic identities of the president as the honest principal and public servants as abstract agents in the form of the anti-corruption policy. His anti-corruption policy consisted of three pillars: First, he created a special coordination committee against corruption and organized crime, subordinated directly to his office, also appointing and dismissing the key figures in this area. This structure gave him ownership over the content of the anti-corruption policy. Second, the president’s anti-corruption policy aimed at increasing executive control over the agents. Instead of corruption prevention, the main focus was placed on repressive measures. The principles of transparency and accountability were applied to introduce mechanisms of surveillance and executive control. Third, the president assigned responsibility for anti-corruption implementation to the government and law enforcement institutions. According to the new Constitution of 1996, both the government and law enforcement agencies were squarely under presidential influence. The selective prosecution of such corruption cases as Lazarenko (Leshchenko 2013) or the imprisonment of Tymoshenko in 2001 for bribing Lazarenko (Leshchenko 2011) confirms the use of anti-corruption mechanisms to legitimize coercion of opponents. Importantly, these opponents undermined not only formal rules, but informal rules and the role of the “patron.” The latter provided the reason for punishment, while the former is only a pretext. At first glance, if conceptualizing corruption with principleagent logic, President Kuchma, as the main driver of anti-

180 CORRUPTION AND ANTI-CORRUPTION POLICIES corruption initiatives in the state, elaborated a solid anti-corruption policy that addressed the main factors causing corruption: Information asymmetry between the principal and the agent and the low costs of corruption because of impunity (Klitgaard 1988). However, counteracting these challenges by transparency, accountability, and law enforcement is natural to consolidated democracies with rule of law, an independent judiciary, and control over civil society. In the hybrid regime, the anti-corruption mechanisms based on the principal-agent logic reinforce executive control by selective punishment and legitimize rule by law instead of rule of law. Such an anti-corruption framework does not foresee control of the corrupt principal. Therefore, these measures support authoritarian tendencies in the hybrid regime, for the principal legitimizes the corrupt use of state resources to increase his political domination.

6.5.

Conclusion

This chapter analyzed the manner in which President Kuchma applied corrupt practices and framing as tactics for political domination. Process tracing between the decentralized point of departure in the first term and the centralized system of corruption evidenced in the second term of his presidency reveal that it was anything but natural for Kuchma to attain political domination. Besides, the vacuum created by a lack of formal institutions in the early 1990s suggests that political domination was reached primarily by informal means. The use of neo-patrimonial practices reveals the strategy toward a monopolized system of corruption and the “winner-takesall” scenario (Table 4). In Kuchma’s early clientelistic networks, the primary focus was on loyalty and belonging to a close circle of friends. Such selection logic indicated the exclusion of other groups from access to state resources. However, when a representative of Kuchma’s own regional clan grew too strong and challenged the president, he adapted his tactics accordingly. Advanced networks of clientelism and patronage were not based on personal relations but rather on the logic of rewards and non-coercive control. Here, corruption played a central role: it was tolerated and even

CASE STUDY OF LEONID KUCHMA 181 reinforced when loyal clients misused public resources. At the same time, the patron-client networks created a system of non-coercive control. This control included collection of kompromat relating to corruption and the use of blackmail as well as selective punishment. These informal developments were combined with the public framing of corruption as a principal-agent problem. This frame aimed to create a public demand for a strong principal. And Kuchma presented himself as an honest principal, willing to control abstract corrupt agents. It became a discursive basis for the entrenchment of the strong presidential authority in the Constitution of 1996. The principal-agent framing of corruption has been institutionalized in anti-corruption policy. Initially, anti-corruption policy was a competitive space for domination between parliament and the president, since the actor who dominated the public discourse on corruption had a tool to create antagonistic identities and exclude opponents. However, Kuchma created legal norms and structures that subordinated the entire policy field to the president. Anticorruption became an instrument for the legitimization of selective coercion and reinforced the blackmail state. In his second term, Kuchma reached the “cartel-like deal” scenario, corresponding to a centralized system of corruption (Table 4). In line with the theory, the political leader in this scenario has a prevalence of resources. At the same time, he cooperates with other strategic actors, although he has the capacity to impose the terms of cooperation. Corruption framing, and practice fulfill the function of prevalence of resources and co-optation of strategic partners. Prevalence of resources Kuchma reached prevalence of power and resources by means of patron-client networks. Patronage in the appointments for the key positions in the state apparatus outbalanced the shortcomings of formal authority in the semi-presidential system. During the later stages of his rule, patronage was exploited to rig the elections in favor of Kuchma and the parties of power. Clientelism initially outbalanced the strong role of parliament in the political system and

182 CORRUPTION AND ANTI-CORRUPTION POLICIES allowed Kuchma to create a pro-presidential majority in parliament. Framing corruption as a principal-agent problem aimed to create a public discourse that supported the strong role of the executive branch of power and the president in particular. Creation of Kuchma’s own political identity as a strong principal, willing to control corrupt agents, legitimized increasing presidential authority, even if this authority exceeded formal rules. Co-optation Institutionalized corrupt practices on the high political level were employed as a reward for clients. Thus, the president’s personal enrichment was not at the forefront of corrupt practices; rather, providing controlled access to state resources for different strategic groups was. In exchange, agents’ parties provided political support to Kuchma in parliament. Non-coercive control in the form of kompromat and blackmail draws an analytical line between voluntary cooperation and coercive co-optation, which ultimately meant the “capacity to tie strategically relevant actors (or a group of actors) to the regime elite” (Gerschewski 2013, 22). Corruption-based kompromat and the blackmail state created a vicious circle. The regional clans and FIGs supported the status quo and Kuchma’s regime for fear of possible prosecution for corruption in the event of regime change. Also, the antagonistic identities resulting from the framing of corruption as a principal-agent problem provided a good basis to create a narrative of the abstract “invisible enemy,” instead of excluding certain actors as “corrupt others.” Such framing tactics were flexible, since inclusion or exclusion was possible on an ad hoc basis. Such flexibility allowed the legitimation of selective prosecution for corruption. Implications Despite Kuchma’s political domination in the second term of his presidency, the tactics of “preventive clientelism” raised several influential regional and individual actors. Although the fragmentation of economic resources was particularistic, competition for

CASE STUDY OF LEONID KUCHMA 183 access to resources prevented Kuchma from consolidating authoritarianism and reaching the “winner-takes-all” scenario. His dominant role was management of the clientelistic network. For the hybrid regime, such a development indicates an authoritarian trajectory without reaching the ideal stage of consolidated authoritarianism. In circumstances where corruption is instrumentalized, anticorruption policy and institutions became closely embedded in the logic of the system of corruption: Anti-corruption policy, especially if it is framed as a principal-agent problem, provides the legal basis to establish surveillance and control different groups and actors. Extensive surveillance and a subordinate law enforcement were powerful instruments to combat organized crime and to co-opt regional businesses and political clans. However, these instruments were applied selectively. Their primarily goal was to eliminate any possible opposition to Kuchma. Rule by law instead of the rule of law made it possible for Kuchma to remain president for 10 years— the longest term since independence—and to safeguard personal impunity guarantees independent of revolutionary changes of power.

7.

Case study of the political domination of Viktor Yushchenko: Functions and implications of the decentralized system of corruption

This chapter will examine the trajectory toward democracy after the Orange Revolution and analyze the role of corrupt practices and framing as political tactics in a highly competitive and decentralized environment. In the first section, the revisionist approach to factors pointing to the democratization of Ukraine after the Orange Revolution is applied and the case is presented that the regime remained hybrid. In the second section the political leadership’s application of corrupt practices to reach “one-sided prevalence,” instead of “cooperation according to the rules” is demonstrated. Ultimately, Yushchenko failed in his strategy and the regime remained trapped in a decentralized system of corruption (Table 7). The third section analyzes the tactics of framing of corruption as a problem on the high political level, in order to create identities and exclude opponents as “corrupt others,” while the final section analyzes how the framing of corruption was institutionalized in the anti-corruption policy of Yushchenko.

185

186 CORRUPTION AND ANTI-CORRUPTION POLICIES Table 7:

Regime trajectory and tactics under presidency of V. Yushchenko

Interaction tactics reg. opponents and partners

Balance of resources Even distribution of resources

One-sided prevalence of resources

7.1.

Conflict tactics:

Cooperation tactics:

coercion or exclusion

agreement of rules or cooptation

Outset and Result: “War of all against all” Decentralized system of corruption

“Struggle according to the rules” System of checks and balances Goal:

“Winner-takes-all” Monopolized system of corruption

“Cartel-like deal” Centralized system of corruption

Outset: Regime trajectory, power resources and constellation of actors

Several prominent authors claim that Ukraine overcame competitive authoritarianism and democratized after the Orange Revolution (Gel’man 2008; Gould and Hetman 2008; Hale 2011; Levitsky and Way 2010). Levitsky and Way for example score outcomes as democratic “if regimes remain democratic for at least three presidential/parliamentary terms and/or were democratic at the end of 2008” (Levitsky and Way 2010, 21). When analyzing Ukraine in particular, the authors state: Ukraine democratized after 2004. Despite repeated internal crises, President Yushchenko governed democratically, and parliamentary elections in 2006 and 2007 were free and fair. In 2010, Yanukovych defeated Tymoshenko and Yushchenko in presidential elections that were widely considered free and fair. (Levitsky and Way 2010, 220)

At the same time, the authors admit that “Ukraine’s democratization—an outcome that is not predicted by our theory—thus remained quite fragile in 2010.” (Levitsky and Way 2010, 220) Indeed, the assessment of the formal governance framework and structure of the elites below will show the following changes after the Orange Revolution: First, the structure of the elites became

CASE STUDY OF VIKTOR YUSHCHENKO 187 more fragmented; second, the role of the opposition and of parliament was strengthened through constitutional reform; correspondingly, the role of the president was weakened. In the absence of Kuchma, the blackmail state became non-functional and censorship of the press loosened as it no longer had central oversight. These conditions became favorable to the development of key democratic indicators, such as free and fair elections, active civil society, and freedom of the press. This section argues that despite the change of political leadership and several factors indicating political pluralism, the system of corruption remained in place, hindering democratic consolidation. Ukraine remained a hybrid regime; however, the decentralized structure of the system of corruption, by default. allowed democratic appearances. The Nations in Transit (NiT) Index shows the score of democratic improvement in Ukraine, which has yet to reach its highest level, even following the Revolution of 2014. 102 In 2006, Ukraine had a democracy score of 4.21 and in 2007 and 2008 4.25, with 1 representing the highest and 7 the lowest level of democratic progress (see Figure 15). However, with its perpetual fluctuation between 4 and 5, Freedom House assesses Ukraine as a hybrid regime that has not democratized fully: Countries receiving a Democracy Score of 4.00–4.99 are typically electoral democracies that meet only minimum standards for the selection of national leaders. Democratic institutions are fragile and substantial challenges to the protection of political rights and civil liberties exist. The potential for sustainable, liberal democracy is unclear. 103

102 Nations in Transit, assessment of Freedom House from 2005 to 2010. https:// freedomhouse.org/report/nations-transit/2017/ukraine, last accessed 30 August 2018. 103 A score between 1 and 2.99 indicates consolidated democracy, between 3 and 3.99 semi-consolidated democracy, between 4–4.99—transitional or hybrid regimes. For Nations in Transit Methodology, see: https://freedomhouse.org/re port/nations-transit-methodology, last accessed 30 August 2018.

2005

Civil Society Judicial Framework and Independence Democracy Score

Independent Media

Corruption

2009

Electoral Process

2008

National Democratic Governance

2007

Local Democratic Governance

2006

Nations in Transit Democracy Score 2005-2010

2010

Source: Nations in Transit, assessment of Freedom House from 2005 to 2010. Author’s depiction. https://freedomhouse.org/report/nationstransit/2017/ukraine, last accessed 30 August 2018.

0

1

2

3

4

5

6

7

Figure 15: Freedom House Nations in Transit democracy score 2005–2010

188 CORRUPTION AND ANTI-CORRUPTION POLICIES

CASE STUDY OF VIKTOR YUSHCHENKO 189 With regard to single indicators in hybrid regimes, three indicators improved considerably under Yushchenko: First, independent media rose two points, from 5.5 in 2004 to 3.5 in 2008, despite most media remaining under oligarch ownership. However, [g]overnmental censorship, known in the past as temniki (government instructions designed to control the content of media broadcasts), was canceled even before the new government took power as an immediate outcome of the Orange Revolution. (Freedom House 2006)

Thus, without central oversight from the AP, electronic and print media became plural. Politically, the same access was provided to both ruling and opposition media. Second, the pluralism of the press offered an opportunity for different political parties “to deliver any message to society” (Freedom House 2007), which significantly affected the electoral process. The parliamentary election campaign in 2006 was “competitive and dynamic and was covered comprehensively by media” (Freedom House 2007). According to the reports of major international observation missions, the parliamentary elections in 2006 and in 2007 were free and fair. The environment surrounding the 2006 parliamentary elections was generally free of pressure, intimidation, or harassment against any political party or bloc or any specific parts of the electorate. Some Western observers noted that this election was the most open and democratic in Ukraine. (Freedom House 2007)

In 2007 and 2008, Ukraine reached its highest score of 3 in electoral process, which corresponds to the score of semi-consolidated democracies and had improved considerably by 1.5 points compared to the presidency of Kuchma. Finally, after the Orange Revolution, Ukrainian civil society reached the score of 2.75. This is the only field of the evaluation where Ukraine has reached the score of consolidated democracies. According to the NiT assessment of 2006: Unlike the Kuchma government under Leonid Kuchma, the current authorities do not interfere in the third sector by levying permanent taxes and other

190 CORRUPTION AND ANTI-CORRUPTION POLICIES checks, accusing NGOs of serving foreign powers, or creating additional barriers and obstacles to NGO activity. (Freedom House 2006)

At the same time, Freedom House shows that “little effective policy has been implemented to support civil society and encourage NGO activity in Ukraine” (Freedom House 2006) and “Ukrainian NGOs lack sustainable funding, which makes them dependent on grants from foreign foundations” (Freedom House 2007). In summary, the NiT index provides evidence that under the political regime of President Yushchenko the trajectory toward democratization changed; however, consolidation was not achieved and the regime remained hybrid. Low political will to actively support civil society indicates that the proliferation of societal activities was possible due to the lack of pressure, and availability of external support, rather than active support from the government or administration. Also, improvements in the electoral process and freedom of the media became possible by default, since Kuchma’s patronage system had collapsed. Despite these positive assessments, three other indicators of democratic development—national and local democratic governance and corruption104—remained at the same level, and the score for judicial framework and independence decreased each year after the Orange Revolution, reaching a low score of 5 in 2009. The indicators for local governance and corruption correspond to scores in semi-consolidated autocracies. 7.1.1.

Renewal of the elite

Yushchenko’s background: revising the image of a new politician Yushchenko’s role as a pro-Western reformer and opposition leader during the Orange Revolution gave credence to the impression that he was a new, promising politician, who would be able to democratize the country. However, Yushchenko’s early political carrier shows that he was supportive of and loyal to Kuchma. Even after 104 According to the Freedom House methodology, it is a characteristic of hybrid regimes that “[c]orruption is widespread and presents a major impediment to political and economic development,” which will the subject of analysis in the next section.

CASE STUDY OF VIKTOR YUSHCHENKO 191 rhetorically condemning Kuchma’s regime during the Orange Revolution, as president Yushchenko refrained from launching serious investigations into and prosecution of his predecessor’s tenure. Yushchenko entered politics in 1993 as head of the National Bank of Ukraine. He was regarded as a successful and reform-oriented banker. In 1996, the European Bank for Reconstruction and Development awarded Yushchenko the title of “banker of the year” and in 1997 Global Finance, a magazine, ranked him sixth among the world’s best bankers (Bazaluk and Blazhevych 2016, 119). Indeed, Yushchenko successfully dealt with hyper-inflation, implemented challenging monetary reform, introduced the national currency— hryvnia—created the state treasury, and established a modern regulatory system for commercial banking. In the same year he was reelected central banker. At the end of 1999, Yushchenko became the prime minister of Ukraine. He was the first and only PM under Kuchma not to belong to any regional clan, and was not associated with oligarchs. Kuchma appointed Yushchenko for two reasons (Matsuzato 2005, 53): First, parliament had rejected the candidacy of his loyalist from the Dnipropetrovsk clan—Pustovoitenko. Second, Ukraine had accrued a large amount of foreign debt that needed to be restructured and Yushchenko was the perfect candidate to win foreign creditors’ trust. Next to Lazarenko and Yanukovych, Yushchenko had a certain level of independence from the president. Matsuzato describes him as an “outstanding” prime minister (Matsuzato 2005, 53). With about 240 deputies covering eleven right-wing and centrist parties, Yushchenko had broad support in parliament, which resulted in a latent cohabitation. Thus, he was allowed to select several ministers independently. These positions were mostly managerial, the best example of which was the Minister of Energy, Yuliya Tymoshenko. With strong parliamentary backing (at the beginning of his premiership) and public support, Yushchenko was the only PM able to challenge Kuchma and resolve the formal constitutional conflict between the president and parliament in favor of the latter (Carrier 2012; Matsuzato 2005). However, he remained fully loyal to Kuchma even after the tape scandal and during the “Ukraine

192 CORRUPTION AND ANTI-CORRUPTION POLICIES without Kuchma” public protests (Carrier 2012, 94; Matsuzato 2005, 53). Moreover, together with Kuchma and the Speaker of the Parliament, Pliushch, Yushchenko signed a public statement against the “Ukraine without Kuchma” protest movement (Leshchenko 2011). This statement was published on the day of Yuliya Tymoshenko’s politically motivated arrest, which gave a double back-up to Kuchma (Leshchenko 2011). In the comparative analysis of Yushchenko’s and Yanukovych’s premierships, Pleines (2008) supports the assumption that Yushchenko was a part of a pro-Kuchma political elite “and not a white knight, as he was depicted by many in the Orange Revolution” (Pleines 2008, 1196). Pleines shows that the relationship between political and business elites was not simply hegemonial but based on bargaining: During his premiership Yushchenko lacked the support of influential business interests and regional networks. Accordingly, he favored foreign investors, who at the time were mostly Russian. Yanukovych, on the other hand, promoted the interest of the Donetsk-based oligarchs and therefore discriminated against Russian business interests. This picture is the complete opposite of the stereotypes of a pro-Russian Yanukovych and a pro-Western Yushchenko created during the Orange Revolution. (Pleines 2008, 1196)

For the sale of loss-making companies to foreign bidders at prices higher than those at which Yanukovych sold profitable enterprises to Ukrainian bidders (Pleines 2008, 1192), parliament passed a vote of no confidence in Yushchenko in April 2001. In 2000, after the presidential elections, clientelistic parties in parliament managed to “convert” numerous MPs and create a pro-presidential majority in return for economic favors to their regional businesses. Yushchenko disregarded this tendency and became persona non-grata. In early 2001, when foreign debt was restructured, and foreign creditors were satisfied, Kuchma faced serious domestic accusations after the tape scandal. Under these conditions he needed the “gray” and obedient prime minister and therefore “sacrificed” Yushchenko to the communists and clientelistic parties, who were losing from Yushchenko’s reforms (Matsuzato 2005, 54; Pleines 2008, 1195). In return, Kuchma received political support from the Communist Party and the oligarchic parties, who didn’t join the

CASE STUDY OF VIKTOR YUSHCHENKO 193 social movement demanding Kuchma’s resignation. After that, Yushchenko formed an opposition bloc, “Our Ukraine,” that received 23 % in the elections of 2002. The Orange coalition was formed on the principle of “the enemy of my enemy is my friend.” As political crisis enveloped Kuchma in early 2001, the Prosecutor General opened a case and launched an investigation into the Minister of Energy, Yuliya Tymoshenko. She was dismissed from the government and taken into custody. After her release, despite several ongoing investigations, she became leader of an opposition bloc which bore her name. Her own party “Batkivshyna” (Fatherland) was founded in 1999 based on “Hromada”—the political party of the former PM and her patron Lazarenko. Tymoshenko allied with Yushchenko, providing access to the resources of the Dnipropetrovsk regional clan and gas business. However, this was the beginning of a major structural change in informal politics in Ukraine, which saw the logic of regional clans as political forces replaced by that of individual oligarchs. Renewal or rotation of political elites? Both Yushchenko and Tymoshenko’s backgrounds show that they were not new to the game, but part of the old political elite. The question remains, however, whether broader political and bureaucratic elites had been renewed. Matsiyevsky uses quantitative analysis to show that the Orange Revolution was more a rotation than a deep change of elites (Matsiyevsky 2016, 249). The changes were most visible in the Cabinet of Ministers, dominated by the Orange coalition, the NSDC, and the SBU. The heads of regional administrations were fully renewed. Yushchenko renewed 40–45 % of the former AP and renamed it “Secretariat of the President” to whitewash the negative image Kuchma’s AP had gained. Among public servants, a serious revamp did not occur; in 2005, 19 % of public servants resigned, with 70 % of that number coming from the two lowest categories of public service. Among the higher executive authorities, between 18 % and 20 % were

194 CORRUPTION AND ANTI-CORRUPTION POLICIES replaced. The network analysis of political elites conducted by Kostiuchenko suggests similar findings: The replacement of the elites, as a result of the ‘Orange Revolution’ in 2004 or after the parliamentary elections in 2006, was only partial because a particular group of elite members of the Kuchma period remained in power. (Kostiuchenko 2012, 24)

Importantly, elites from the Kuchma period remained in influential positions. Kostiuchenko shows that the group of “survivors since 2002” was better connected than “newcomers,” and the old political elites remained “central players within the whole network” (Kostiuchenko 2012, 24). 7.1.2.

Fragmentation of power: Institutional and political competition

Constitutional Reform: from a semi-presidential to a parliamentarypresidential system The constitutional reform from a semi-presidential to a parliamentary-presidential political system in 2004 re-shaped structural power relations and the constellation of actors in the political system considerably: 105 First, the authority of the president was reduced in favor of parliament. Second, the prime minister became the key political figure between the president and parliament. Third, only factions as opposed to single MPs were able to create a coalition in parliament. In line with the shift to the party-list voting system, this elevated the role of political parties. At first glance, after the authoritarian tendencies under Kuchma, such constitutional change appears necessary for the country’s democratic develop105 For a closer overview of Constitutional amendments, see Zimmer 2008, 274 The most important amendments included: 1) The legislative period of the Verkhovna Rada was extended from four to five years; 2) The parliamentary majority chooses the government, and approves and dismisses the prime minister; 3) Members of parliament lose their mandate if they leave the parliamentary group of the party on whose list they were initially elected; 4) The speaker of the Verkhovna Rada, and no longer the prime minister, takes over the official duties of the president in the event of impeachment; 5) The 18 judges of the Constitutional Court are appointed in equal shares by parliament and the president.

CASE STUDY OF VIKTOR YUSHCHENKO 195 ment. However, the constitutional reform of 2004 was an informal agreement to reach the private goals of weakening power holders. Kuchma and Yanukovych were losing presidential prospects and shifted their focus to securing parliamentary control. The draft law “On Constitutional amendments” was adopted by parliament on 8 December 2004. This was a necessary precondition for Kuchma and Yanukovych to agree on going to the second round of presidential elections and peacefully resolve the Orange Revolution. On the one hand, this agreement allowed the Orange Revolution to end peacefully and usher in a change of political leadership in the country. On the other hand, the old leadership maintained its control over parliament. Constellation president vs. parliament According to the new Constitution, the president lost considerable authority. The main platform for political bargaining shifted from the president’s administration to parliament. Practically, this meant that all political conflicts were resolved depending on the constellation of political groups in parliament. Several characteristics were crucial for the fourth parliament between 2002 and 2006: First, parliamentarian coalitions were extremely unstable and fragmented. Between 2002 and 2006 there were 41 registered unions, 28 factions, and 13 groups of MPs. The reason was that until 2006, the rules of procedures of parliament allowed “political tourism” (Matsiyevsky 2016, 166), i.e. moving from one faction to another. Matsiyevsky shows that since the moment of the initial faction until the end of the parliamentary convocation, 941 inter-factional crossovers of single MPs had been registered (Matsiyevsky 2016, 167). Second, the inter-factional crossovers (Ukr. tushkuvannia) were commercially and opportunistically motivated. Quantitative analysis of the crossovers shows that deputies rapidly joined the propresidential factions and rapidly left them in the event of political power shifts (Matsiyevsky 2016, 166). Third, for the parliamentary elections in 2002, oligarchs enhanced their influence on political parties. Besides, most of them personally assumed political office as members of parliament.

196 CORRUPTION AND ANTI-CORRUPTION POLICIES Oligarchs acted opportunistically and formed pro-presidential coalitions. This fact had influence on the legislative process and shaped the constellation of powers in parliament. Table 8 shows that oligarchs changed their political factions depending on who held power. Table 8:

Political affiliation of oligarchs in Parliament

President Kuchma Yushchenko Year 2004 2005 2007 Blue 13 7 4 Orange 2 8 6 Independent 0 0 0 Total

15

15

10

Yanukovych 2011 2012 8 11 3 0 0 2 11

13

Source: Pleines 2016, 121. For individual information on oligarchs, see column 6 of the table: http://www.forschungsstelle.uni-bremen.de/UserFiles/file/table-oligarchs-overview.xls, last accessed 30 August 2018. Note: The Blue camp stands for political forces close to the Party of Regions (Kuchma, Yanukovych). The Orange camp refers to the forces supported by the Orange Revolution (Yushchenko, Tymoshenko, Poroshenko).

The oligarchs in parliament had two goals: First, to support the propresidential majority and, second, to support draft legislation in favor of their narrow business interests (Pleines 2016, 120). They were able to manipulate the decision-making process, often by means of buying votes (Pleines 2005, 91; Protsyk and Wilson 2003; Razumkov Centre 2010). Political bribery became widespread in encouraging faction changes. As a result, MPs became commercialized. Fragmentation of oligarchic networks: from regional clans to individual actors These three peculiarities of the parliamentary proceedings, in combination with the Orange Revolution and change of political leadership, created a new constellation of actors and influenced the “logic of the political game.” Many oligarchs and MPs shifted their support from Kuchma to the Orange coalition. Since there was no prosecution of oligarchs

CASE STUDY OF VIKTOR YUSHCHENKO 197 after the Orange Revolution, the composition of the group of oligarchs remained the same, with only their configuration changing (Pleines 2016, 117). Pleines’ analysis of oligarchic networks reveals: Of the three regional networks between oligarchs and political elites, which had dominated under president Kuchma, two fell apart after the Orange Revolution. The Donetsk informal network revolving around Yanukovych, his Party of Regions and Akhmetov as oligarch thus established itself as an independent political power. However, at the beginning of the Yushchenko presidency they found themselves in the opposition. As a result, many oligarchs defected to the Orange camp. The increasing uncertainty about the distribution of power, with the Orange camp split between President Yushchenko and Prime Minister Tymoshenko and with the Party of Regions partly returning to power with the formation of a government coalition, caused many oligarchs to hedge their bets. As a result, affiliations were looser and individual rivalries increased. (Pleines 2016, 117–118)

In the course of such a re-constellation, communication between the oligarchs and politicians shifted from regional networks to individual connections between particular oligarchs and representatives from the executive branch, responsible for their areas of commercial interest. On the one hand, this re-constellation gave enough space for the new oligarchs to enter the arena: A glaring example of this is the rise of Firtash after the Orange Revolution. His seizure of a monopoly position in Ukrainian natural gas imports was accepted by Yanukovych as well as Yushchenko. Both also supported the extremely opaque formation of the respective business connections and for a long time protected Firtash’s anonymity as the majority shareholder of the RosUkrEnergo import company. (Pleines 2016, 117)

On the other hand, individual oligarchs were no longer dedicated to support only one political force. Hale describes this phenomenon as the result of multiple informal pyramids of power, supported by the formal provisions for two constitutional centers of the executive—the president and the PM. Such conditions were favorable to opportunistic changing of sides if elites were dissatisfied with the center. Hale offers the example of major business groupings: Ihor Kolomoisky and his Pryvat group, for example, went from being key Tymoshenko supporters to Yushchenko supporters over the course of 2005– 10, while Petro Poroshenko began as a fiercely anti-Tymoshenko backer of Yushchenko but by 2009 had joined the prime minister Tymoshenko.

198 CORRUPTION AND ANTI-CORRUPTION POLICIES Donetsk businessman Vitaly Haiduk had been Yanukovych’s deputy prime minister in 2002–3 and backed him for president in the 2004 election but switched to become Yushchenko’s national security and defense council secretary afterward, only to leave Yushchenko after a policy dispute and ultimately wind up supporting Tymoshenko’s 2010 presidential campaign. (Hale 2011, 603)

Role of political parties Political parties replaced the regional clan structures and became institutionalized as organizations representing the interests of big business in exchange for funding of the party (Kudelia 2016). In 2005, the oligarchs could choose between three blocs to invest in:106 The Party of Regions led by Yanukovych, “Our Ukraine” led by Yushchenko and the Bloc of Yuliya Tymoshenko. Kudelia continues: Rather than serving as temporary vehicles for quick enrichment, they political parties attracted long-term investments meant to offer their members a promise of continued political and financial rewards. They sought to divide the electoral market between themselves with Our Ukraine and Bat’kivshyna vying for the control of western and central Ukraine, while Party of Regions monopolized most of the Southeast. (Kudelia 2016, 71)

The Party of Regions managed to dominate all of the east and southeast of the country and secured the support of the wealthiest oligarch in Ukraine, Rinat Akhmetov. Another two blocs were united by several wealthy oligarchs, who often, like Kolomoisky, hedged their political support between parties. They also contested the west and central Ukraine regions, which prevented each from securing consistently high numbers of votes. Unlike Yushchenko, Tymoshenko built her political bloc in a very hierarchical and leader-centered manner with decision-making firmly in her hands (Melnykovska 2015, 6), which was helpful to maintain a certain independence from her funders. Yushchenko never reached this position in his party and, during the political crises, his party only partly supported him and his decisions.

106 A comparative analysis of all three political parties, their role in political system, the way how party governance and decision-making were conducted, is provided by Kudelia and Kuzio (Kudelia 2016; Kudelia and Kuzio 2015)

CASE STUDY OF VIKTOR YUSHCHENKO 199 Given this constellation among political leaders, Kudelia and Kuzio point out that: Although business elites were the least numerous group in Yushchenko’s parliamentary faction, they had a greater influence on him than other groups from minor parties. (Kudelia and Kuzio 2015, 266)

Yushchenko was heavily dependent on his wealthy donors for funding, indicating non-hierarchical clientelism. In exchange, his supporters expected expensive rewards. Eleven of his financial donors were appointed to high-level government positions and were actively involved in formal and informal decision-making. In summary, a renewal of elites did not happen and political pluralism did not change the “limited access order” to an “open access” one (North et al. 2007). Instead, political and economic elites reorganized themselves and adapted their strategies, but the central rule of the uneven playing field—competition for resource prevalence—remained the same. 7.1.3.

Synthesis

On the macro-level of the analysis, Ukraine did not democratize, but remained a hybrid regime after the Orange Revolution. Creating an uneven playing field remained the central rule of the political game. However, a new constellation of actors, and the fragmentation of elites and resources, changed the centralized system of corruption under Kuchma to a decentralized one under Yushchenko. The increasing competition of several pyramids for redistribution of resources prevented the emergence of one center, which gave the impression that the regime possessed a democratic trajectory. The following section shows that political leadership followed the strategy of prevalence of resources.

7.2.

Corrupt practices as tactics for political domination

Contrary to the political image of a dedicated democrat and the rhetoric about the rule of law during elections, Yushchenko actively bypassed formal rules in order to maintain his status as a key

200 CORRUPTION AND ANTI-CORRUPTION POLICIES political player. There are several examples where the president was not playing by the rules, but violating formal procedures to widen his power resources in the same way as Kuchma or Yanukovych did. In this section, based on process tracing the three political crises, an analysis of the functions of corruption as a political tactic toward ends of one-sided prevalence of resources will be conducted. The analysis shows that corruption was used for two purposes: First, to increase influence beyond formal power resources and, second, to create coalitions and outmaneuver opponents. Since the Orange Revolution, the perpetual competition of several pyramids of power for prevailing resources resulted in three political crises: In 2005, the governmental crisis between the president and the PM (Tymoshenko) that ended in the dissolution of the government and break-up of the Orange coalition (“Our Ukraine,” Tymoshenko Bloc [BYuT] and the Socialist Party); in 2007, the crisis between the president, PM (Yanukovych) and parliament that ended with the dissolution of parliament; and in 2008, the governmental crisis between the president and the PM (Tymoshenko) that ended with the break up of the coalition between the bloc “Our Ukraine”-Self-Defense and BYuT. The focus will be, however, on the first two conflicts, since publicly both were built around the topic of corruption, and mutual accusations of corruption and dissolutions were framed as anti-corruption measures. The public dimension of these conflicts and the role of corruption rhetoric in it is analyzed in Chapter 7.3 on corruption framing. In this section, the focus will be on the president’s strategies for gaining prevalence over power resources in the context of high uncertainty and conflict between three dominant pyramids of power. The main assumption is that Yushchenko tried to arrange “cartel-like deals”; however, due to the lack of resources and trust, he remained locked in the “war of all against all” scenario. 7.2.1.

Shifting towards a gray zone of governance

On 4 February 2005, according to the formal agreement of the Orange coalition, Yuliya Tymoshenko was appointed prime minister. Practically speaking, constitutional reform meant that the PM

CASE STUDY OF VIKTOR YUSHCHENKO 201 would become the key political figure as of 1 January 2006. As constitutional reform approached, and the president was about to lose considerable powers, personal tension between Yushchenko and Tymoshenko grew. In 2005, President Yushchenko possessed the following formal power resources (Figure 16): The Presidential Secretariat (formerly AP) and State Management of Affairs were fully subordinated to the president. Traditionally, the president appointed the head of the NSDC and nominated the Ministers of Defense, Internal Affairs, Information, Energy and Foreign Affairs, as well as the head of the SBU, and several “economically attractive bodies,” such as the State Property Fund (Melnykovska 2015, 5).

Figure 16: The governmental system of Ukraine

202 CORRUPTION AND ANTI-CORRUPTION POLICIES

*between 2006 and 2010: nine judges are elected by Parliament and appointed by President

Source: The chart is recreated based on Zimmer 2008, 273. This chart reflects the Constitution of Ukraine, adopted on 28 June 1996 including major changes enacted on 1 January 2006 and reversed in 2010.

CASE STUDY OF VIKTOR YUSHCHENKO 203 Melnykovska points out: Following the tradition of Kuchma, Yushchenko sought to counterbalance the Cabinet of Ministers through the Presidential Secretariat and the National Security and Defence Council of Ukraine. (Melnykovska 2015, 5)

In the first month of his presidency, Yushchenko increased the authority of the Secretary of the NSDC considerably, a position held at the time by Petro Poroshenko. Initially the Law “On the Security and Defense Council” gave the Secretary only technical functions. Yushchenko’s decree,107 however, overrode this law and included authority to prepare legislative drafts for the president to participate in the meetings of the Cabinet of Ministers, influence appointments in the military and police as well as in the judiciary branch of power. In this way Yushchenko communicated his determination to consolidate power beyond formal rules. He initiated a counterbalance to Tymoshenko by strengthening his own team. Another attempt to secure prevalence of power resources was the appointment of the heads of regional administrations. After the Orange Revolution, despite active rhetoric about administrative reform, Zimmer analyzes the situation as follows: The governors continued to be subordinated to the presidential administration and dismissal policy still seems to be determined by political loyalty to the President. These structural preconditions for the continuation of machine politics and the application of administrative resources offer a tempting instrument for the application of power politics. (Zimmer 2008, 306)

According to the Constitution, Yushchenko was supposed to appoint the heads of regional administration in line with recommendations from the PM. However, Yushchenko excluded Tymoshenko from this decision-making process and negotiated appointments with his closest circle of partners.108 In 2005, such a step not only diminished the authority of the PM, but also publicly 107 Decree No. 208/2005 of 8 February 2005: http://zakon2.rada.gov.ua/laws/ show/208/2005, last accessed 30 August 2018. 108 In the press, the closest circle of Yushchenko’s partners became known as “dear friends” (Ukr. “liubi druzi”). E.g. Balyta 2012; Chyvokunia and Nikolaienko 2006; Myseliuk 2016.

204 CORRUPTION AND ANTI-CORRUPTION POLICIES demonstrated that the president held central power (Matsiyevsky 2016, 300). Yushchenko’s appointments show that he was unable to impose his people exclusively; rather, the appointments were the result of a bargain between the president and his “clients.” 109 Journalists’ investigations and research of clientelistic networks reveal the following quotas in the appointments of heads of regional administrations: 9 representatives of Yushchenko, 5 representatives of Poroshenko; 2 each of Moroz (leader of the socialist faction), Kinakh A. (First Vice Prime Minister), Lytvyn V. (Speaker of the Parliament); 1 each of Zinchenko O. (State Secretary), Tymoshenko Y. (Prime Minister), Tretiakov O. (First aide to the President), Tarasiuk B. (Minister of Foreign Affairs) (Hotsuienko 2005; Matsiyevsky 2016; Mozol’ 2010). Evidence for Poroshenko’s quota is supported by the fact that, when he was dismissed after accusations of corruption in the first conflict between the president and the government in September 2005, three of five of his heads were replaced without any particular reason (Matsiyevsky 2016, 301; Mozol’ 2010). On the one hand, the appointments indicate a quota principle, common in the executive branch in all democracies. Although this procedure signals a potential conflict of interest for public servants, it cannot be substantiated as full-on corruption. The real conflict of interest110 appeared when 11 of 24 regional administration heads became members of the “Our Ukraine” party council—the presidential party, and ten of them were heads in Yushchenko’s election quarters (Matsiyevsky 2016, 302). Such a position undermines the political impartiality of public servants and creates an opportunity for the potential misuse of administrative resources to influence elections regionally. 109 This tendency shows what Varraich conceptualizes as “new clientelism,” where the power shifts “from a vertical dyadic relationship to one which is horizontal; with the client in a much stronger position than before. A fitting case is that of Italy—where clients with higher incomes and living standards, effectively no longer tied by the burden of ‘loyalty,’ are able to shop for patrons; weighing what politician offers better stakes” (Varraich 2014, 9). 110 Ukrainian legislation differentiates between potential and real conflict of interest: While the former does not indicate any violation of the law or trust, the latter signifies that the conflict of interest must be resolved, otherwise it represents a legal violation.

CASE STUDY OF VIKTOR YUSHCHENKO 205 First political crisis The tendencies which Yushchenko demonstrated regarding his formal authorities were unacceptable for his coalition partner, Tymoshenko. The governmental crisis became public when on 5 September 2005 the Secretary of State from Tymoshenko’s team—Zinchenko—ostentatiously resigned from his position as a sign of protest against corruption in the president’s environment. He accused the Secretary of the NSDC, Poroshenko, the first aide to the president, Tretiakov, and the leader of the parliamentary faction “Our Ukraine,” Martynenko, of corruption. No further facts or proof of corruption were given. Yushchenko used this conflict as an occasion to dismiss the government on 8 September 2005, at a time that he was formally empowered to do so. But the real reason was an attempt to prevent the shift of power in favor of Tymoshenko with imminent constitutional change in 2006 (Matsiyevsky 2016, 289). Dissolving the government created a legal collision. Due to the constitutional amendments, the new government was supposed to be formed by the parliamentary coalition, created after parliamentary elections on 26 March 2006 (Matsiyevsky 2016, 289). Thus, Yushchenko needed parliamentary support to put an intermediate government in place. On 22 September 2005 parliamentary factions, with the exception of BYuT, signed the “Memorandum of Understanding with the Opposition.”111 This document marked the end of the first political crisis and was meant as a basis for the future coalition agreement between “Our Ukraine” and the Party of Regions. In other words, Yushchenko initiated “political barter” with Yanukovych (Razumkov Centre 2009, 20) and on the same day received support from 289 MPs, including the entire Party of Regions, for the president’s candidate Yekhanurov as interim prime minister (Matsiyevsky 2016, 291). However, already in January 2006, Tymoshenko and Yanukovych united against Yushchenko and

111 The memorandum was elaborated on the basis of the “Declaration of unity and collaboration for the future of Ukraine” of 13 September 2005: http://zakon2. rada.gov.ua/laws/show/n0001100-05, last accessed 30 August 2018. More information on the content is available in Ukrainska Pravda News 2005.

206 CORRUPTION AND ANTI-CORRUPTION POLICIES Yekhanurov’s government received a vote of no confidence from the Rada after the gas war with Russia (Zimmer 2008, 286). The tactical move of Yushchenko to unite with the opposition minimized the administrative resources of Tymoshenko and weakened her position in the parliamentary elections in March 2006. However, this action brought Yanukovych back into politics and resulted in victory for the Party of Regions in the parliamentary elections, gaining 32 % of the vote (Kuzio 2006, 479). In contrast, the Tymoshenko Bloc won 22.3 % and Yushchenko’s “Our Ukraine” only 14 %. Thus, after the parliamentary elections on 26 March 2006, Yushchenko had two rivals instead of one—Tymoshenko and Yanukovych.112 Compounding this, Yushchenko’s popular support was shrinking.113 Publicly, “Our Ukraine” ran elections in 2006 together with the Tymoshenko Bloc in the former constellation of the Orange coalition (“Our Ukraine,” Tymoshenko Bloc, and Socialist Party). The votes they received were sufficient to revive the Orange coalition; however, Yushchenko did not want to accept a diminished role and continued negotiating in both directions, considering coalition with Tymoshenko and Yanukovych and ignoring the will of the voters. After months of negotiations, the partners agreed on the Orange coalition. At the last moment, Moroz, the leader of the Socialist Party switched sides and entered into coalition with the Party of Regions, when it became clear that Poroshenko would take Moroz’s place as speaker of the parliament. Several authors have described the political crisis and bargaining process in detail (e.g. Kuzio 2006; Matsiyevsky 2016; Pleines 2006). As a result, Yanukovych became prime minister and appointed a new government. Although “Our Ukraine” publicly 112 Kuzio assesses the “[r]emoval of the Yulia Tymoshenko government in September 2005, dividing the Orange coalition only seven months before the elections” and “[s]igning a memorandum with defeated presidential candidate Viktor Yanukovych that included proposals such as amnesty for election fraud committed during the 2004 elections” as the major strategic mistake of Yushchenko. (Kuzio 2006, 478) 113 While in February 2005 almost 47 % fully supported the president, in May 2006 this number decreased to 17 %. http://old.razumkov.org.ua/ukr/poll.php?po ll_id=67, last accessed 30 August 2018.

CASE STUDY OF VIKTOR YUSHCHENKO 207 distanced themselves from the new coalition, many of its MPs voted for Yanukovych. Alongside the regular quota of the president, who nominated the Defense and Foreign Ministers, five other members of government were given to “Our Ukraine” (Neumann and Pleines 2006). Second political crisis The second political crisis occurred owing to the confrontation between Yushchenko and Yanukovych, who pushed for a law on the Council of Ministers that would have significantly increased the PM’s power at the expense of the president (Hale 2011, 600). In order to prevent the shift of power, this time toward Yanukovych, Yushchenko allied with Tymoshenko, exceeding his authority to confront parliament. On 2 April 2007 Yushchenko signed Decree No. 264/2007 “On the dissolution of parliament.” The decree was non-constitutional and substantially exceeded his authority. As Hale indicates: This decree was not simply “obeyed” but was enforced through the extensive coordination of informal networks around the president. The defense minister, who by Ukraine’s divided-executive constitution was appointed by the president, quickly made clear that should Yanukovych attempt to resist by using force, “the army will only carry out orders from the commander in chief” (Yushchenko). (Hale 2011, 601)

Importantly, Yushchenko took the decision to dissolve parliament despite negative attitudes to new elections among the populace: the polls show that 23 % of respondents supported dissolution of the parliament, while 53 % opposed it.114 Both parliament and the government took some steps to prevent the financing of elections from the state budget and threatened Yushchenko with impeachment. The final decision about the dissolution of parliament lay with the Constitutional Court. At this time, Yushchenko replaced three judges, who had been appointed by Kuchma (Trochev 2010). 114 Survey conducted by the sociological service of the Razumkov Centre from 12– 18 July 2008 in all regions of Ukraine, 2012 respondents were questioned in 122 municipalities, available online: http://old.razumkov.org.ua/ukr/poll.php?p oll_id=253, last accessed 30 August 2018.

208 CORRUPTION AND ANTI-CORRUPTION POLICIES The confrontation was ended by another informal agreement between Yushchenko and Yanukovych about new parliamentary elections. New elections were to be held on 30 September 2007. Tymoshenko and her bloc profited most from the elections, gaining an additional 8.5 % (31 MPs in total); the Party of Regions (Yanukovych) received 34.3 % and “Our Ukraine” (Yushchenko) 14.2 %. Accordingly, Yushchenko formed a coalition with Tymoshenko and she became PM on 18 December 2007. However, confrontation persisted and Yushchenko repeatedly attempted to extend his powers. He initiated the dissolution of parliament on 9 October 2008, when the BYuT voted with the Party of Regions for laws restricting the power of the president. Yushchenko tried to impose his decision by using the courts; however, he was outplayed by the PM (Hale 2011, 602; Trochev 2010). Since there was no political consensus in parliament on the new elections in 2008, “the judiciary became a hostage and a tool in order to force or shut out the possibility of early elections,” according to Freedom House (2009). In 2009, Freedom House reported unprecedented amounts judiciary misuse for political purposes: Unprecedented manipulation of the courts to force early parliamentary elections fully reflects the compromised state of Ukraine’s judicial system: it exposes the gap between political rhetoric and practical steps taken by high Ukrainian officials to secure an independent judiciary; it shows the fragile status of judges under pressure by the state; it demonstrates that top political players in Ukraine will misuse the judiciary in the service of political interests; and it highlights the high level of legal nihilism among political leaders, which spreads among wider social circles … As the Ukrainian judiciary dangerously evolves from a separate branch of power into a subordinate instrument of the total political fight, it becomes clear that effective enforcement of judicial decisions is questionable and very much dependent on personalities rather than the rule of law. (Freedom House 2009)

In his analysis, Hale lists the “political machine tactics” that Yushchenko and his team exploited in order to maintain their dominant position and prevent the government from prevalence. Among these tactics were: undermining government decisions by means of “bogus constitutional challenges” (Yatsenko 2008), presidential decrees and NSDC regulations; pressuring certain TV outlets to influence political content (Naiem and Leshchenko 2008); initiating

CASE STUDY OF VIKTOR YUSHCHENKO 209 prosecutions against his prominent opponents—the Minister of the Interior Yuriy Lutsenko and businessman Davyd Zhvania (Korduban 2008); and using the SBU to open a treason case against Tymoshenko (Hale 2011, 601 ff.). 7.2.2.

Favoritism under Yushchenko: Bargaining in patronclient networks

When bargaining in a highly contingent environment, the resources available are decisive for the success of the endeavor and the ability to keep a dominant position. In the first year of his presidency, three sources were open for Yushchenko to maintain his leading position: After the revolution, he enjoyed relatively high popular support— in fact, the highest among politicians—and his formal powers remained the same as under Kuchma for a year until the constitutional amendments entered into force; and, finally, he controlled clientelistic networks. The president’s actions in the first crisis demonstrated that Yushchenko prioritized the last facet by disregarding popular opinion and demolishing the Orange coalition, bypassing formal rules in the same manner his predecessor had. Patronage and Clientelism Yushchenko provided multiple representatives of business groups with lucrative political offices.115 They were able to actively participate in the bargaining for political positions in exchange for financial and political support. Yushchenko’s clients became known to the public as “dear friends” (Ukr. “liubi druzi”) (Balyta 2012; Chyvokunia and Nikolaienko 2006; Myseliuk 2016). The most prominent and contentious figure in Yushchenko’s team was Poroshenko, owner of Ukrprominvest Holding. Matsiyevsky highlights that the conflict between the Tymoshenko team and Poroshenko in September 2005, based on public accusations of corruption, was a proxy for the hidden conflict between 115 For an extensive overview of all oligarchs and their political positions under different Presidents see (Pleines 2009, 2016) and the overview on the website of Forschungsstelle Osteuropa, Bremen: http://www.forschungsstelle.uni-bremen.de/UserFiles/file/table-oligarchs-overview.xls, last accessed 31 August 2018.

210 CORRUPTION AND ANTI-CORRUPTION POLICIES competing business groups around the Nikopol Ferroalloy Plant (Matsiyevsky 2016, 303). This conflict of private interests between Tymoshenko and Poroshenko was a significant stumbling block for the functioning of the Orange coalition in 2005, as well as its renewal in 2006, which substantially undermined the electoral will and brought Yanukovych to power as PM. Another oligarch who gained influence under Yushchenko was Dmytro Firtash and his RosUkrEnergo (RUE) 116 business group. With the support of Yushchenko, RUE gained a monopoly to import Russian gas to Ukraine. Melnykovska points out: Valeriy Khoroshkovskyi, a member of the RUE group, was nominated by Yushchenko to be NSDC deputy secretary in 2005; he was also the head of the National Customs Service from 2007 to January 2009, and from January 2009 to March 2010 the first deputy chief of the Security Service of Ukraine (SBU). (Melnykovska 2015, 6)

The NSDC was one of the few institutions where the president had full control over appointments, so this became a venue for trading favors. Raisa Bogatyreva, connected to the System Capital Management (SCM) group, became the connecting link between the president and the Donetsk oligarch Akhmetov. She was nominated NSDC secretary in 2007 (Melnykovska 2015, 6). Ihor Kolomiyskyi and his “Privat bank” group did not formalize relations with the president; instead they “preserved informal ties” with both Tymoshenko and Yushchenko (Melnykovska 2015, 6). Another central person in Yushchenko’s team was Yekhanurov, who was appointed PM after the conflict with Tymoshenko. Kuzio points out that Yekhanurov “supported a cooperative relationship with the oligarchs” (Kuzio 2006, 478). Material Favors Similar to the NSDC as the venue for awarding influential positions, the State Management of Affairs (Derzhavne Upravlinnia Spravamy, DUS) became the market for the use of material public 116 For more information on competition in the gas and energy sector of Ukraine, see Balmaceda 2013; Pirani 2007. For background information on RUE, see Kusznir 2006.

CASE STUDY OF VIKTOR YUSHCHENKO 211 resources, such as appropriations of state-owned land. In an interview, the former head of the Presidential Secretariat Oleh Rybachuk substantiates the argument that DUS was a large source of corruption.117 Yushchenko appointed Ihor Tarasiuk, a successful businessman, head of the DUS. The DUS, its operations, and structure were non-transparent, even to the head of the Presidential Secretariat. After 2014 it became public118 that the symbol of corruption under Yanukovych—his Mezhyhiria residence was initially state property—had been misappropriated with the help of Tarasiuk and with Yushchenko’s knowledge. The misappropriation took place during the second political crisis in 2007, when Yushchenko announced dissolution of parliament but faced resistance from the PM (Yanukovych) whose government refused to finance early parliamentary elections (Leshchenko 2014, 91–95; Oryshchuk 2017). On 24 April 2007, Tarasiuk excluded Mezhyhiria from the list of state properties and on Yanukovych’s birthday, 9 July 2007, Yushchenko issued a decree, providing the house in Mezhyhiria to Yanukovych for lifetime use (Leshchenko 2014, 94). Cronyism (‘kumivstvo’) In addition to the favoritism underlying political appointments, private ties through godfather relationships help to explain some questionable formal appointments. For instance, Yushchenko was godfather of Poroshenko’s twin daughters. Although Yushchenko criticized his predecessor Kuchma for kumivstvo—cronyism or godfather relationships in politics—Yushchenko raised this phenomenon to a new level. Investigative journalists, comparing the godfather relationships of all three presidents, revealed that Yushchenko and his wife were connected to 17 leading personalities (another source indicates 16) from business and politics through godfather relationships, while Kuchma was connected to one person and Yanukovych to two (Rudenko 2017; Zakharova and Stulen’ 2012). 117 Interview with the author, 16 September 2017, Kyiv. See also a published interview (Rybachuk 2010). 118 After the Maidan Revolution, investigative journalists gained access to the documents. Serhiy Leshchenko published his investigation, including copies of the documents, in a book (Leshchenko 2014). See also Oryshchuk 2017.

212 CORRUPTION AND ANTI-CORRUPTION POLICIES 7.2.3.

Synthesis

There are several characteristics that are specific to Yushchenko’s particularism and corrupt practices. First, he applied clientelism and misuse of material state resources in an inclusive way, attempting to build partnerships and co-opt strategic partners by providing favored access to state resources. For instance, his main political financiers were given lucrative offices and his rival Yanukovych received state property for private use during the intensive bargaining period in the political crisis of 2007. At first glance, these tactics are reminiscent of those of Kuchma. However, while Kuchma used clientelism to co-opt all potential competitors and reward them in a controlled manner, ensuring that no one became too powerful, Yushchenko applied clientelism to build informal coalitions with the purpose of confronting his most powerful rivals at that moment. His actions indicate a perpetual bargaining process with all possible parties and opportunistic ad hoc decisions. The ultimate goal was however, winning the confrontation instead of co-opting the opponent and, thus, political tactics aimed at conflict instead of collaboration. Second, Yushchenko’s access to public resources declined with the loss of his formal authority and dwindling government and state agency quotas in 2006 (Neumann and Pleines 2006, 11 ff.). For instance, when Yanukovych became PM in 2006, the Party of Regions held the portfolios of all resourceful ministries, including Coal, Economy, Finance, Infrastructure, and Justice. The president appointed the Foreign and Defense Ministers from his party, while “Our Ukraine” took the portfolios for the less resourceful ministries, namely, Culture, Emergency Situations, Healthcare, Social Affairs, and Tourism. This meant that, after the constitutional reform, the president had limited access to state resources and could not offer much to his clients. Under these conditions, the NSDC became the marketplace for the positions that strengthened Yushchenko’s ties to oligarchs and secured the political financing of his party. The DUS, in turn, became the marketplace for material favors to allies eager to collude.

CASE STUDY OF VIKTOR YUSHCHENKO 213 Third, clientelistic networks in the decentralized system of corruption under Yushchenko were non-hierarchical, meaning that high competition between the pyramids allowed the “clients” to select their patrons (Piattoni 2001; Rothstein and Varraich 2017, 75). In comparison to his rivals—Yanukovych and Tymoshenko— Yushchenko’s pyramid was the weakest. He was more dependent on his clients than his competitors were. While Yanukovych was able to rely on a strong Party of Regions with solid funding from the richest man in Ukraine—Akhmetov—and Tymoshenko’s political bloc was centered on her individuality and her personal decisions, Yushchenko’s political funders were far less resourceful than Yanukovych’s, and his personal position in the party not nearly as central as that of Tymoshenko (Kudelia and Kuzio 2015, 265; Kudelia 2016, 70). Under these conditions, Yushchenko massively underestimated the role of legitimacy in the political game and neglected popular support. He sought to continue Kuchma’s informal game but lacked the one-sided prevalence of resources. Similar to Kuchma, Yushchenko tried to extend his authority by disregarding the formal rules; however, when Kuchma was bargaining for his prevalence of power in competition with parliament, he had the population on his side and his wild card was the threat to call a referendum. When Yushchenko bargained for his prevalence of power in competition with the PM, he lacked such an instrument. The failed clientelism under Yushchenko shows that co-optation alone is not sufficient. Popular support and legitimacy are important pillars in hybrid regimes.

7.3.

Corruption framing as a tactic for political domination

In this section Yushchenko’s framing of corruption as a problem on the high political level is argued as representing a distinct shift compared to Kuchma’s approach. Where the conceptualization of a corrupt system as a problem on the high political level offered a successful tool to construct social identities in the opposition, the same framing became a trap once Yushchenko came to power. As he

214 CORRUPTION AND ANTI-CORRUPTION POLICIES became a victim of his own discourse, in which corruption is immanent to the high levels of politics, following the first crisis of his term, Yushchenko adapted his framing tactics. He exploited the framing of corruption to legitimize the exclusion and subordination of his opponents in political conflicts. The opponents in this case were not oppositional political parties, but the prime minister and parliament. 7.3.1.

Antagonism of democracy and authoritarianism

In 2002, Viktor Yushchenko moved from PM under Kuchma to the leader of the opposition and a promising candidate for the presidential elections in November 2004. In his opposition discourse, Yushchenko used the “logic of equivalence and difference” (Nabers 2015, 111 ff.) to develop an inclusive Self by linking together a plurality of unfulfilled demands in society and excluding the Kuchma regime as the Other. Yushchenko drew a line between the lawless president (Kuchma) and himself together with society as victims of the regime. Only a few months before the presidential elections, and symbolically on Independence Day, 24 August 2004, Yushchenko published an article in The Wall Street Journal Europe titled “Ukraine’s Choice.” This article lays bare the main structure of Yushchenko’s opposition discourse, consisting of three pillars: First, the country’s democratic development; second, integration into the international community and adoption of Western values; and third, building trust in political institutions. Kuchma’s regime is represented as the opposite to all these positive aspirations. We thought then 1991 that our national aspirations for freedom had been realized and that democracy would replace totalitarianism. We believed our people would prosper from the combined rich natural resources and our penchant for hard work. We entrusted our elected leaders with a mandate to govern and integrate Ukraine into the international community. … Today, an overwhelming majority of my fellow citizens—77 %—believe Ukraine is heading in the wrong direction. Millions live in poverty. Corruption pervades every social institution, from education to medicine to government. Journalists and others who speak the truth are constantly harassed and persecuted. Illegal searches and seizures are common. The average

CASE STUDY OF VIKTOR YUSHCHENKO 215 Ukrainian can rely neither on protection from law enforcement officials nor an open and fair trial in the courts. … Today the regime of President Leonid Kuchma has reverted to complete lawlessness. Surveillance organized by state officials recently against my family and me is a feature of totalitarianism. In democracies, this would be scandalous, but in Ukraine, the government called it common practice. (Yushchenko 2004)

The central nodal point here is devoted to the democratic development of Ukraine as a nation. In the article, Yushchenko refers to Independence Day in 1991 as a starting point for positive aspirations and freedom. He associates democratization with “prosperity” and the “rule of law.” The opposite of these are “poverty,” “lawlessness,” “harassment of the press”—all synonymous with “corruption” as a pervasive problem that is common to all social institutions. Further, Yushchenko’s second nodal point, integration into the international community, meshes with his narrative of democracy and the rule of law, as well as with “European values.” Thus, “prosperity” and “rule of law” are not limited to Ukraine but include all members of the international community with Western values. The narrative excludes Kuchma’s regime as a “current autocracy” with a “corrupt government”: The choice facing voters this fall is very clear. On the one hand, my vision for Ukraine proposes a system founded on democratic European values, which will enable each citizen to realize their socio-economic potential in a country governed by the rule of law. On the other hand, those from the ruling regime propose preserving the current autocracy, which rules over competing financial-industrial groups. Their corrupt government bureaucrats implement unpopular policies with no respect for individual liberties and basic human rights. There can be no doubt today Ukrainians want change—peacefully and democratically—just as they did 13 years ago. They want an end to government corruption, decent jobs at honest wages, and a president whom they trust. Ukrainians share European values and yearn for democracy. (Yushchenko 2004)

Finally, Yushchenko emphasized the role of trust. In his book Nongovernmental Secrets (Ukr. “Nederzhavni taiemnytsi”), he frequently explains his decisions as PM and later as president as relating to trust-building (Yushchenko 2014, 188–231.) His main argument is that society’s trust in political institutions is an important economic

216 CORRUPTION AND ANTI-CORRUPTION POLICIES factor, causing stability, development and sustainable collective action (Yushchenko 2014, 225). As the entire transition process from Soviet regime to independent state was extremely non-transparent, society lost any trust it had in political institutions. Therefore, Yushcheko’s priority in his early political career was to rebuild trust in political institutions through transparency and communication. According to Yushchenko, widespread corruption was the reason for the low level of popular trust in the government.119 In summary, Yushchenko’s opposition discourse became a powerful medium that created an inclusive social identity. The nodal points of democracy, European values, and trust created an “illusion of universality” and united different identities. Yushchenko’s main rival in the presidential campaign—Viktor Yanukovych—was associated with Kuchma’s regime and, thus, excluded as the Other in the chain of equivalences that included such terms as “corrupt,” “authoritarian,” “lawless,” “poverty causing.” Such a powerful dichotomy of identities became the central narrative of the Orange Revolution, helping it to accumulate support not only among the Ukrainian population but also internationally, from Western countries. 7.3.2.

Framing of corruption as a system

“Corruption” was a crucial empty signifier that Yushchenko used in his hegemonic struggle. Compared to Kuchma, Yushchenko framed corruption in a new way, not only as problem of bureaucrats and public servants, but also as an issue on the high political level. He coined the terms “system of corruption” and, later on, “political corruption.” In his inauguration speech on 23 January 2005 at Independence Square, the newly elected president exclaimed:

119 During his campaign Yushchenko said: “One of the main problems of the current Ukraine is corruption. Corruption is like erosion, corroding the state, creating a threat to the national security. Because of the high level of corruption, people do not trust the government. Almost 90 % of Ukrainians consider the current government corrupt and indifferent to the interests of ordinary people. Such a situation has to the changed, the government has to work for the people, and it has to be held accountable to and controlled by society” (UNIAN 2004, Ukr. tranl. by the author).

CASE STUDY OF VIKTOR YUSHCHENKO 217 We will destroy the system of corruption in Ukraine, bring economy out of the shadows, taxes will be reduced, but everyone will pay them. Business will be separated from government, the state budget will not be the breadwinner for anyone. (Interfax Information Services 2005, Ukr. tranl. by the author)

In this speech, Yushchenko introduced a new understanding of corruption as a system. Also, in November 2005, when announcing judiciary reform, Yushchenko indicated that in recent years (meaning the Kuchma presidency) “a stable corrupt system was established in Ukraine” (UNIAN 2005e). He proclaimed his central goal to be bringing corruption to an end. Further, content analysis of Yushchenko’s speeches shows that when he spoke about concrete corrupt spheres of society, he made corruption in high political institutions, such as the government, parliament, judiciary, and law enforcement agencies more salient than corruption among individual bureaucrats and public servants. When Yushchenko referred to corruption cases, he mostly addressed corruption schemes, instead of single, occasional instances of corruption. A corruption scheme implies that multiple actors are involved, and the process of either procurement or decision-making is deliberately constructed in a way that enables corruption. Political actors build informal interconnections not only by monetary, but also by social forms of corruption, such as clientelism, patronage and nepotism. Yushchenko uses the term cronyism120—kumivstvo—to describe such connections. This term is important, since it is used later on, to accuse Yushchenko himself of corruption (Sidorenko 2009). Sociological surveys show that Yushchenko was very successful in developing the opposition discourse. In 2004, almost 40 % of respondents voted Yushchenko politician of the year 121 and, in early 2005, popular support for his activities reached almost 75 %,

120 “Yushchenko, who appears to hold a slight lead in the polls, has promised to steer Ukraine toward a more open and democratic society, ending what he calls the cronyism and corruption of Kuchma’s 10 years in power” (Myers 2004). 121 Survey conducted by the Ilko Kucheriv Democratic Initiatives Foundation and the sociological service of the Razumkov Centre, available online: http://old. razumkov.org.ua/ukr/poll.php?poll_id=180, last accessed 30 August 2018.

218 CORRUPTION AND ANTI-CORRUPTION POLICIES a record high. However, the situation already changed by the end of 2005: Yushchenko’s popularity rapidly decreased and reached a low of 17 % in 2008.122 In the following section, this work argues that Yushchenko became a victim of his own corruption discourse. While he was able to exclude himself from Kuchma’s regime as a leader of the opposition, he did not succeed in maintaining his image as a “different” and “clean” politician when he became a part of the system of corruption during his presidency. 7.3.3.

Crisis and change: Framing shift toward the concept of “political corruption”

According to the Razumkov Centre, after the Orange Revolution accusations of political corruption became a tool of political struggle and public rhetoric of politicians (Razumkov Centre 2009, 2).

Thus, two major political crises under Yushchenko evolved around mutual accusations of corruption. Framing political opponents as corrupt became a widespread tactic to legitimize the exclusion of opponents from access to political resources (Nova Ternopil’s’ka hazeta 2005). Already at the beginning of his presidency, Yushchenko faced accusations of corruption regarding his family123 and his team. On 1 September 2005, Mykhailo Brodskyi, the advisor of Prime Minister Tymoschenko, accused members of Yushchenko’s family (his brother and son) and his political team of corruption. In particular, he accused Petro Poroshenko, head of the NSDC, Oleksandr Tretiakov, head of the Cabinet of the President of Ukraine, and Mykhailo Doroshenko, advisor to the President, of misuse of their offices for private interest and of lobbyism for oligarchs (Ukrainska Pravda 2005; UNIAN 2005b). On the next day, Brodskyi resigned from his position as advisor. Several days later, on 5 September, the Secretary of State, Oleksandr Zinchenko, resigned in protest against 122 Survey conducted by the sociological service of the Razumkov Centre, available online: http://old.razumkov.org.ua/eng/poll.php?poll_id=89, last accessed 31 August 2018. 123 In July 2005, journalists questioned the posh lifestyle of Yushchenko’s son Andrii (Nova Ternopil’s’ka hazeta 2005).

CASE STUDY OF VIKTOR YUSHCHENKO 219 corruption in the team of the president. On 6 September, the president of Russia, Vladimir Putin, warned Europe that Yushchenko’s government is corrupt (Interfax: Monitoring 2005). Two days later, the situation was discussed in The Telegraph (UK): President Viktor Yushchenko of Ukraine was yesterday fighting to defend the credibility of the country’s pro-western Orange Revolution in his worst crisis since sweeping to power last year. Simmering disagreements in his shaky coalition have exploded since his powerful chief of staff quit, accusing senior officials of corruption. (Blomfield 2005)

It is important to highlight that Yushchenko personally was not accused of corruption. Further, the accusations were supported by very little evidence, so the strongest statements were the dual resignations of Brodskyi and Zinchenko. Ukrainian and international experts were united in their views that such a situation resulted from internal political intrigues and a conflict arising from the Poroshenko clan intervening in Tymoshenko’s sphere of influence (Interfax 2005). In reaction to the criticism, the accused politicians resigned from their political positions, although Yushchenko persisted in defending them (UNIAN 2005d). In his argumentation, Yushchenko focused on the lack of evidence and appointed a special commission for the investigation of corruption in his team to save his credibility (UNIAN 2005c). Even so, Yushchenko’s political popularity was irreversibly damaged.124 Yushchenko exploited corruption framing to legitimize this and future conflicts. Over the course of the governmental conflict, Yushchenko dissolved PM Tymoshenko’s government. He accused her of reverse corruption (Myers 2005) substantiating his decision by pointing out that … she acted in the interest of certain business circles [and …] her behaviour in the government and the circle of her partners were formed based on private interests. (BBC Ukraine 2005)

124 According to the Razumkov Centre sociological polls in February 2005, 46.7 % of respondents indicated that they “fully support” the actions of the president, while in October 2005 this number decreased to 18.1 %. Available online: http://old.razumkov.org.ua/ukr/poll.php?poll_id=67, last accessed 31 August 2018.

220 CORRUPTION AND ANTI-CORRUPTION POLICIES Yushchenko referred to the re-privatization of the Nikopol Ferroalloy Plant.125 Mutual accusations of corruption resulted in the first political crisis since the Orange Revolution, less than a year after it happened. Both politicians undermined each other’s image at the cost of breaking the Orange coalition, which brought Yanukovych back into the game. Popular disappointment with politics and politicians rapidly increased. By November 2005, 20.6 % of respondents indicated that the government acted contrary to their demands during the revolution, while 37.5 % indicated that the demands of the revolution were not met at all.126 Salience of the concept of “political corruption” The topic of “corruption” also remained useful in 2006, owing to the governmental crisis and the defeat of Yushchenko’s party in the parliamentary elections in 2006. As a result, Yushchenko coined the term “political corruption,” shifting the focus primarily to corruption in parliament. The second political crisis was marked by the confrontation between Yushchenko and Yanukovych, with the latter pushing for legislation that would have significantly increased the authority of the PM at the president’s expense (Hale 2011, 600). This move resulted in a “growing stream of elites (especially parliamentary deputies) to defect from Yushchenko and join Yanukovych’s coalition” (Hale 2011, 600). In order to stem defection, this time to Yanukovych, Yushchenko allied with Tymoshenko. He exceeded his office again to confront parliament. On 2 April 2007 Yushchenko signed Decree No. 264/2007 “On the dissolution of parliament.” The reason for this decision was identified in the decree as follows: Recently the situation has arisen wherein a majority in the Verkhovna Rada of Ukraine ignores constitutional requirements for the formation of the 125 For the analysis of the privatisation before and after the Orange Revolution and corruption schemes in the redistribution of state property, see (Paskhaver and Verkhovodova 2007) 126 Survey conducted by the sociological service of the Razumkov Centre from 03– 13 November 2005 in all regions of Ukraine; 1993 respondents were questioned, available online: http://old.razumkov.org.ua/ukr/poll.php?poll_id=211, last accessed 31 August 2018.

CASE STUDY OF VIKTOR YUSHCHENKO 221 coalition of deputy factions. Instead of single examples of individual deputies being included in the coalition of some deputy factions during the formation of the Anti-Crisis coalition in July 2006, there now occurs the practice of mass faction switching individually or in groups. This practice is a massive violation of Article 83 of the Constitution of Ukraine, which foresees the creation of a coalition of deputy factions in the Verkhovna Rada of Ukraine according to the results of elections and based on the agreement of political positions only by factions of deputies.127

In other words, Yushchenko condemned political bribery in parliament, although no particular evidence was provided. This presented a rather dubious basis for dissolution, since the Constitution did not foresee dissolution of parliament on grounds of political corruption.128 To legitimize his confrontation with parliament and Yanukovych’s government, Yushchenko prominently brought up the term “political corruption” during a pressconference in April 2007 when referring to parliament elected in 2006: Migration of MPs from one faction to another, in fact, negates elections in one or another random territory. So, if we speak about the origins of the political crisis in Ukraine, it is based on the parliamentary crisis, it is based on the illegitimate processes that are becoming a norm, a kind of a tradition in the Rada. It involves not just technical migration—but political corruption. Democratic prospects of a nation cannot be built on political corruption … Political corruption has become a problem for the nation. Corruption, beginning within the walls of Parliament, namely political corruption, reaches every village council, every person, it touches your interests. (Cited in: Razumkov Centre 2009, 3)

As a means to exacerbate matters, Yushchenko framed political corruption in parliament as the source of other types of corruption in society. Political journalist Sergei Sidorenko stated his perceptions of this press conference as follows: The phrase “political corruption” was used very often during the Yushchenko’s speech. At some point he even started explaining this term to journalists. This explanation lasted at least five minutes and apparently it was 127 Decree No. 264/2007 of 2 April 2007 “About the dissolution of the Parliament”, http://zakon2.rada.gov.ua/laws/show/264/2007, last accessed 31 August 2018. Ukr. translated by the author. 128 Dissolution is regulated Art. 90 of the Constitution: http://zakon2.rada.gov.ua /laws/show/254к/96-вр/paran4529#n4529, last accessed 31 August 2018.

222 CORRUPTION AND ANTI-CORRUPTION POLICIES meant to create an impression that political corruption is the root of all evil in Ukraine—from the low level of prosperity to the bad investment climate of the country. (Sidorenko 2007 Ukr. tranl. by the author)

One year later, on 15 April 2008, Yushchenko gave a speech at the council meeting on the fight against corruption. Political journalist Elena Geda commented upon the statements dedicated to the new anti-corruption strategy made at the meeting: Despite addressing corruption in all fields, his Yushchenko’s attention was mainly on political corruption. This form of corruption in particular Yushchenko singled out as the basis for corruption in all other fields: “Only the lazy one does not tell anecdotes about the prize of the spot on the election list. Afterwards, the politician who made it onto the list will use corrupt schemes himself and involve you too into corruption”—the president gave an ambiguous look at the representatives of the law enforcement institutions. (Geda 2008, Ukr. tranl. by the author)

Thus, Yushchenko referred primarily to political corruption in parliament, especially in such forms as migration between factions (Ukr. tushkuvannia), selling spots on the election lists, and voting as a parliamentary commodity. He mentioned the parliamentary dissolution in 2007 as based in political corruption too, but maintained that the situation had worsened since. 7.3.4.

Suggested remedies

The broad, anti-corruption strategy that Yushchenko developed and published in the Concept for the Overcoming of Corruption, “On the way toward integrity,” on 3 September 2007 reflected the framing of corruption as a systemic and political problem.129 As a remedy, Yushchenko pledged to abolish parliamentary immunity (Ukrainska Pravda 2008), as well as widespread personnel overhauls (lustration) in the law enforcement and bureaucratic structures (Ukr. liustratsiia) (UNIAN 2005a). Finally, he included regulations for politicians to publicly declare their incomes in order to provide more transparency and control mechanisms for civil society as part of his anti-corruption

129 For more details on the anti-corruption initiatives, see Chapter 7.4. For an overview of 10 presidential initiatives to overcome corruption in Ukraine, see Kommersant Ukraina 2007.

CASE STUDY OF VIKTOR YUSHCHENKO 223 strategy. Despite the vivid rhetoric of Yushchenko’s anti-corruption strategy, the package of anti-corruption laws, adopted under Yushchenko, never entered into force. 7.3.5.

Popular attitudes

In the zeitgeist of the freedom of the press and critical post-revolutionary society, the use of accusations of corruption in the campaigns for parliamentary elections in 2006 and 2007, as well as the increasing number of media investigations of corruption in politics, enhanced the perception of corruption as a widespread problem closely connected to politics in Ukraine. The experts of the Razumkov Centre indicated: Exactly at that time [2006–2009], society learned a lot about the politically corrupt behavior of the top officials, institutes [sic] of governance, political parties and their parliamentary factions. Accusations of political corruption became a[sic] usual method of public squabbling among politicians. This politicized the very term of ‘political corruption’ and expanded, sometimes unreasonably, the context of its use. (Razumkov Centre 2009, 3)

At the same time, while politicians, regardless of whether they were in the government or in opposition, were all tainted as “corrupt,” the identity of the non-corrupt agency remained contested. The chain of equivalences around “corruption” had not changed since the revolutionary discourse of 2004, but the possibility of non-corrupt politicians was exhausted. By the end of Yushchenko’s presidency, almost 50 % of survey respondents were convinced that Ukrainian politicians break the law in their competitions with political opponents; another 37 % indicated such a possibility as very high, while only 1 % believed that politicians play by the rules.130 Between 2006 and 2008 the perception of law violation among public servants increased more than twofold 131 (see Figure 17).

130 Survey conducted by the survey service of the Razumkov Centre, available online under: http://old.razumkov.org.ua/ukr/poll.php?poll_id=449, last accessed 31 August 2018. 131 Survey conducted by the survey service of the Razumkov Centre, available online under: http://old.razumkov.org.ua/ukr/poll.php?poll_id=185, last accessed 31 August 2018.

224 CORRUPTION AND ANTI-CORRUPTION POLICIES While in December 2006, 27 % of respondents claimed that obedience to the law had worsened, and 53 % claimed that there was no change, just two years later 70 % claimed that obedience to the law had worsened and only 20 % believed that nothing had changed. Again, 1 % indicated improvement in the dynamic. Such perceptions reflect the theoretical assumptions that in a decentralized system of corruption the lack of one control center can lead to an increase in corruption vis-a-vis centralized systems. Figure 17: Survey on the perceptions of the obedience to the law of public servants 2006–2008 How did the law obedience of public servants changed during the past year? (dynamic, 2006-2008) 80 70 60 50 40 30 20 10 0 Jan.06

Jan.07 Improved

Worsened

Did not change

Jan.08 Difficult to answer

In 2009, over 80 % of respondents indicated that the entire political sphere was corrupt.132 At the same time, 58 % of respondents indicated that they did not trust information about political corruption133 and 63 % answered that they never gave a gift to an official.134 Interestingly, when asked what the main obstacle in fighting political corruption in Ukraine was, two prominent answers (each

132 Survey conducted by the survey service of the Razumkov Centre, 20–28 July 2009, 2006 respondents, available online under: http://old.razumkov.org.ua/ eng/poll.php?poll_id=516, last accessed 31 August 2018. 133 Survey conducted by the survey service of the Razumkov Centre, last survey wave on 20–28 July 2009, 2006 respondents, available online under: http:// old.razumkov.org.ua/ukr/poll.php?poll_id=526, last accessed 31 August 2018. 134 Survey conducted by the survey service of the Razumkov Centre, 20–28 July 2009, 2006 respondents, available online under: http://old.razumkov.org.ua/ ukr/poll.php?poll_id=522, last accessed 31 August 2018.

CASE STUDY OF VIKTOR YUSHCHENKO 225 40 %) were provided in 2009: its high level, and the immunity of MPs. Both answers indicate that Yushchenko’s framing had been adopted by the public. Negative tendencies are traceable in the surveys regarding support of Yushchenko. In 2004, almost 40 % of respondents voted Yushchenko politician of the year.135 While in April 2005 he could rely on nearly 75 % of popular support, that support started rapidly decreasing by the end of the year and reached a low of 17 % in 2008136 (see Figure 18). Figure 18: Survey of support for Viktor Yushchenko, 2005–2009 Do you support the activity of President Yushchenko?

Support certain actions

Do not support

Difficult to answer

Aug.09

Feb.09

Fully support

Mai.09

Nov.08

Mai.08

Aug.08

Feb.08

Nov.07

Mai.07

Aug.07

Feb.07

Nov.06

Aug.06

Feb.06

Mai.06

Nov.05

Aug.05

Feb.05

Mai.05

80 70 60 50 40 30 20 10 0

Source: Sociological Service of the Razumkov Centre, recurrent survey 2000–2015, http://old.razumkov.org.ua/eng/poll.php?poll_id=67, last accessed 31 August 2018.

135 Survey conducted by the Ilko Kucheriv Democratic Initiatives Foundation and the sociological service of the Razumkov Centre, available online: http://old. razumkov.org.ua/ukr/poll.php?poll_id=180, last accessed 31 August 2018. 136 Survey conducted by the sociological service of the Razumkov Centre, available online: http://old.razumkov.org.ua/eng/poll.php?poll_id=89, last accessed 31 August 2018.

226 CORRUPTION AND ANTI-CORRUPTION POLICIES The expectations of the population regarding anti-corruption reforms were only partly met, and unfortunately in a negative way. In the survey of 24–28 February 2005,137 almost every third person believed that the incumbent president and the government would fight against corruption and succeed. Another third was more skeptical, and indicated that the fight against corruption would be carried on but, ultimately, not succeed. 15 % of the respondents believed that the president and the government only made declarations, without plans for action, while 11.6 % said, “Under the mask of countering corruption, the fight against political opponents will be carried out.” In 2008 and in 2009, when citizens were asked about the tendency of corruption in the following three years, the share of optimists had decreased massively: around 15 % indicated that corruption would decrease, while nearly 60 % indicated that corruption would either increase (25 % in 2008 and 29 % in 2009) or remain the same (35 % in 2008 and 31 % in 2009).138 7.3.6.

Synthesis

The growing public dissatisfaction with the president indicates that Yushchenko had lost the hegemonic struggle. The perception of corruption as equivalent to high-level politics was anchored in the population, and the president did not succeed in distancing himself from corrupt identities. In a sense, he became a victim of his own discourse. “Corruption” became the main empty signifier for the creation of positive and negative identities in the political struggle. Accusations of corruption were made to legitimize the dissolution of the government in 2005, of parliament in 2007, and another attempt to do so in 2008. No other fact or serious investigations substantiated the rhetoric. The dissolutions took place, however, in obvious

137 Survey conducted by the sociological service of the Razumkov Centre, 23–28 February 2005. 2012 respondents. http://old.razumkov.org.ua/eng/poll.php? poll_id=237, last accessed 31 August 2018. 138 Survey conducted by the sociological service of the Razumkov Centre, last survey wave on 20–28 July 2009, 2006 respondents, available online under: http:// old.razumkov.org.ua/ukr/poll.php?poll_id=521, last accessed 31 August 2018.

CASE STUDY OF VIKTOR YUSHCHENKO 227 violations of the formal rules by the president. Apart from that, he and his team became the subject of accusations of corruption. Tactics of conflict and political struggles took place in the discourse that was built during the Orange Revolution. Two antagonistic chains of equivalences were established: corruption, authoritarianism, and law violation on the one side; and rule of law, democracy, and prosperity on the other side. When politics became the equivalent for corruption after the revolution, this had negative repercussions for the perception of democracy. This negative tendency paved the way for the comeback of Yanukovych as president in 2010. He built his election campaign on the new chain of equivalences: “democracy—chaos—corruption” and argued that the country needed a strong leader who would bring order.

7.4.

Assessment of the anti-corruption policies

The Orange Revolution broke out at the end of 2004 due to electoral fraud in the presidential elections, which sensitized a broad swath of the population to the negative effects of political corruption. Besides, the framing analysis in the previous section (Chapter 7.3) showed that “corruption” was an important theme in Yushchenko’s campaign and helped him to create an inclusive discourse of himself as a democratic leader, excluding his rival as the corrupt Other. Thus, when Yushchenko became president in 2005, the popular and international expectations that democratic reforms would reduce corruption were very high. 7.4.1.

Constellation of actors and control of corruption

While in the 1990s, the institutionalization of anti-corruption policy was driven by two political actors—the president and parliament—the constellation of actors became much more complex in 2005. In addition to the variety of political actors (the contestation involved not only the president and parliament, but also the government), international organizations and civil society became important players with regard to anti-corruption in the course of the issue salience on the global arena. This section elaborates the constellation of actors with regard to anticorruption policy under the presidency of Yushchenko.

228 CORRUPTION AND ANTI-CORRUPTION POLICIES International community When researching perceptions of anti-corruption policy after the Orange Revolution among elites in Ukraine, Grødeland came to the following result: Ukrainian anti-corruption efforts have to quite an extent borrowed best practices from the international anti-corruption industry … (Grødeland 2009, 98)

Indeed, after the events of 2004 in Ukraine, the international community played a crucial role in pushing for anti-corruption reforms and shaping anti-corruption policies by means of conditionality. Two factors were central for the increasing role of the international community: First, it was not before 2005 that Ukraine clearly formulated its foreign policy toward the West (Havrylyshyn 2017, 281 ff.). While Kuchma advocated a multi-vector foreign policy, Yushchenko communicated aspirations for EU accession. The rhetoric was substantiated with action: Yushchenko appointed a deputy PM on European Integration (Oleh Rybachuk) and a parliamentary committee was tasked with ensuring domestic laws were in concert with the requirements of accession (Havrylyshyn 2017, 282). These decisions reflected the high priority of European integration in the domestic political agenda. Second, in the early 2000s, anti-corruption became a prominent topic on the agendas of international organizations. Several international conventions and anti-corruption review mechanisms139 evolved. In 2003, the UN adopted a Convention against Corruption (UNCAC) that provided guidance for global anti-corruption initiatives, in addition to regional ones. In 1999, the Council of Europe adopted criminal and civil law conventions on corruption and established the Group of States against Corruption (GRECO) to monitor states’ compliance with the organization’s anti-corruption standards.140 In 1998, the Organization for Economic Cooperation and Development (OECD) established the Anti-Corruption 139 For a comparative overview of anti-corruption conventions’ review mechanisms, see Chene and Dell 2008. 140 Council of Europe website, About GRECO: https://www.coe.int/en/web/gr eco/about-greco, last accessed 31 August 2018.

CASE STUDY OF VIKTOR YUSHCHENKO 229 Network (ACN) for Eastern Europe and Central Asia and launched a regional peer-review program for anti-corruption reforms—the Istanbul Anti-Corruption Action Plan—in 2003. The peer review supports anti-corruption reforms through country reviews and continuous monitoring of implementation of recommendations, which promote the UNCAC and other international standards and best practice.141 The first monitoring round took place in 2004 and Ukraine received the first set of recommendations by the end of that year (OECD 2004a). In the context of the internationalization of anti-corruption and of aspirations to integrate into the Western international community, in September 2005 Ukraine ratified the Council of Europe’s Civil Law Convention on Corruption that entered into force on 1 January 2006. In January 2006, Ukraine became a member of the Group of States against Corruption and joined the peer-monitoring mechanism of GRECO. By this time, the first monitoring round of the ACN for Eastern Europe and Central Asia had been completed and Ukraine received a set of recommendations to follow (OECD 2004a). In support of integration into international anti-corruption regimes and in response to the recommendations, on 20 January 2006 Yushchenko issued a Decree “On an Action Plan for the implementation of responsibilities and obligations of Ukraine.”142 The action plan consisted of two parts: First, measures that ensure democracy and the rule of law in state institutions and, second, measures that secure human rights and freedoms. The prevention of corruption and money laundering were among ten other democratization activities in the first group. These activities included reducing the political dependency of the mass media and judiciary, reforming the institution of the prosecutor general, law enforcement agencies and

141 OECD Anti-Corruption Network, Istanbul Action Plan: https://www.oecd. org/corruption/acn/istanbulactionplan/, last accessed 31 August 2018. 142 Decree of the President of Ukraine No. 39/2006 of 20 January 2006, “Pro plan zakhodiv iz vakonannia oboviazkiv na zoboviazan’ Ukrainy, shcho vyplyvaiut’ z ii chlenstva v Radi Ievropy,” Ukr., available online: http://zakon2.rada.gov.ua/ laws/show/39/2006/ed20060120, last accessed 31 August 2018.

230 CORRUPTION AND ANTI-CORRUPTION POLICIES the SBU into democratic institutions that comply with the rule of law. In this document, the president communicated his will to integrate into international regimes, follow international standards, and comply with them. Recommendations of the Council of Europe included a requirement that the president has to elaborate a national strategy for the prevention of and fight against corruption as well as an action plan for its implementation. Additionally, the action plan should aim at preparing legislation, including amendments to the Law “On the fight against corruption,” introducing criminal liability for legal entities, and the ratification of the Council of Europe Criminal Law and United Nations Convention against Corruption. The Ministry of Justice was entrusted with preparing a code of conduct for public officials. Thus, the upcoming anti-corruption activities of the president were announced as a response to the expectations of external, international actors. Political actors in a contested space While the president was the driving force to initiate another national anti-corruption strategy, the government was responsible for translating the strategy into action plans, and parliament was decisive in adjusting the anti-corruption legislation. The interplay of all three was necessary, but not present. Traditionally, the president relied on the anti-corruption activities of the Ministry of the Interior, the Prosecutor General, the SBU and the NSDC. However, over the course of political bargaining, Yushchenko lost his mandate for appointing the Interior Minister. In December 2006, Yuriy Lutsenko was appointed to this position from the Socialist Party’s mandate (Neumann and Pleines 2006). Soon, jointly with Tymoshenko, Lutsenko was in opposition to the president and became the subject of selective corruption prosecutions himself. The conflict was exacerbated during the third governmental crisis in 2008. The PGO suspected Lutsenko of arranging holidays for his family at taxpayers’ expense (Korduban 2008). In 2008, the president created an interdepartmental working group on anti-corruption, co-headed by the Prosecutor General and the head of the SBU (Freedom House 2009, 14). The working group

CASE STUDY OF VIKTOR YUSHCHENKO 231 became a subsidiary body under the president to impose his topdown anti-corruption activities. The group held a number of meetings in 2008; however, it did not expedite anti-corruption activities. The success and probability of implementation of the presidential anti-corruption strategy depended much more on the government and the availability of the special body responsible for anti-corruption in the government (IAHR 2012a, 14) and not so much on the president’s will to combat corruption. A special agency on anti-corruption in the government—the Commissioner for Anti-Corruption Policy—was created only in 2009. The process of implementation of the national anti-corruption strategy reflects the fragmentation of power and limited agency of the president in pursuit of anti-corruption. In comparison to the previous president administration, the high number of presidential decrees aimed at hastening either implementation of anti-corruption measures by the government or legislation by parliament is striking. Thus, in almost one year, between 2007 and 2008, Yushchenko issued five decrees related to anti-corruption policy, while Kuchma issued only six in the ten years of his presidency (see Annex 4). The appointment of the deputy head in the fight against corruption and organized crime in the SBU in September 2008 was demonstrative of the conflict between the president and the Parliamentary Committee on the Fight against Organized Crime and Corruption. Yushchenko appointed Tiberii Durdynets as deputy head without agreement of parliament. As a consequence, four members of the Committee on the Fight against Corruption and Organized Crime from the Communist Party, “Our Ukraine”-Self Defense (NUNS), BYuT and the Party of Regions contested this decision in court (UNIAN 2008). The court condemned the decision of the president and he was forced to remove Durdynets from his position (Kommersant Ukraina 2009). In the midst of court proceedings, in November 2007, the interim head of the SBU, Nalyvaichenko, made public a list of MPs involved in corruption. Among them were members of the Committee on the Fight against Organized Crime and Corruption, including Gennadii Moskal’, a member of NUNS, who contested Yushchenko’s appointment in court (Geda 2008).

232 CORRUPTION AND ANTI-CORRUPTION POLICIES Thus, in anti-corruption politics, the traditional reliance of the president on the SBU and PGO was insufficient to impose topdown decisions like Yushchenko’s predecessor did, as contestation from parliament and the government was too strong. Civil Society Despite some slight and gradual improvements, there was very little change in civil society following the Orange Revolution (D’Anieri 2010, 2; Hale 2011, 606; Stewart 2009, 191). According to Stewart: The entrance of certain prominent civil society activists into the political sphere did not bring positive consequences for the dialogue between NGOs and state structures to the degree hoped for. (Stewart 2009, 192)

Civil society did not have a noticeable influence on anti-corruption policy at this stage of history. The agency of civil society was limited to journalists’ investigations of corruption and the freedom to publish revealing facts about corruption in politics. The engagement of civil society in policy making remained a matter of political rhetoric, imposed by the requirements of the West. 7.4.2.

Conceptualization of corruption in legislation

Yushchenko changed the concept of corruption already in his first corruption-related document—Decree No. 1615/2005 of 18 November 2005 “On priority measures for tackling the shadow economy and counteracting corruption.”143 In this short document, he managed to raise all the critical issues relating to corruption that the previous regime intentionally omitted. These issues included: shifting the focus from administrative corruption to grand corruption and recognizing high-level corruption among politicians and judges as a problem, raising the issue of political immunity and impunity, and involving civil society into law- and decision-making in the course of evolving anti-corruption policy. These issues reflected the positions of the international anti-corruption regimes, 143 Decree of the President of Ukraine No. 1615/2005 from 18 November 2005 Ukr. “Pro pershocherhovi zakhody shchodo detinizatsii ekonomiky ta protydii koruptsii”, available under: http://zakon3.rada.gov.ua/laws/show/1615/2005, last accessed 31 August 2018. translated by the author.

CASE STUDY OF VIKTOR YUSHCHENKO 233 but they also cemented Yushchenko’s framing of corruption as a political problem of the system. Further, two years of parliamentary elections under Yushchenko turned out to be rich in anti-corruption legislation initiatives. Key political actors drafted anti-corruption legislation to campaign hard in the elections of 2006 and 2007, which took place under the conditions of an escalating conflict between the president, the prime minister and parliament. In 2006, an “anti-corruption package” of draft laws was tabled in parliament. The draft law package consisted of the Law “On the Grounds of Corruption Prevention and Counteraction,” the Law “To amend certain legislative acts of Ukraine on liability for corruption offenses,”, the Law “On the liability of legal entities for corruption-related offenses” and three laws on the ratification of Council of Europe and UN’s corruption conventions. Parliament adopted the anti-corruption law package only in June 2009, but it never entered into force. This raises the question of what aspects of the law might prevent legislators from adopting it and why the majority of parliament tried by all means to prevent it entering into force? Here, the argument is presented that, in line with Yushchenko’s framing, the legislation targeted political corruption on the highest level, which increased the resistance of the MPs. The Law “On Grounds of Corruption Prevention and Counteraction” The Law “On Grounds of Corruption Prevention and Counteraction” of 2006 repealed the 1995 Law “On the fight against corruption.” The main change was the shift from a narrow concept of corruption as an economic problem widespread among bureaucrats to the broad concept of corruption as a political problem of high-level representatives and judges. A much broader circle of political offices on the high political level became liable for corruption (see Art. 2).144

144 Law of Ukraine “On Grounds of Corruption Prevention and Counteraction,” Engl. Version, available online at: https://zakon.rada.gov.ua/laws/anot/en/ 1506-17, last accessed 31 August 2018.

234 CORRUPTION AND ANTI-CORRUPTION POLICIES Further, the law addressed the issue of political funding that was a source of illegitimate, oligarchic influence in politics. Part 2 of Art. 4 of the law prohibited natural persons and legal entities from financing bodies of state power or bodies of local self-government, “which includes rendering material and/or non-material assistance, performing works and rendering services free of charge, transferring funds and other property …” In addition, the law forbade public servants and politicians from accepting gifts exceeding the amount of one tax social privilege. The same restrictions were extended to high-level officials up to two years after their retirement from political office (Article 7). One entire chapter (III) was dedicated to citizen participation in anti-corruption measures. This chapter paved the way for active citizens and NGOs to reveal and publish cases of corruption, obtain relevant information on anti-corruption activities from authorities, conduct public anti-corruption expertise of normative acts, participate in open parliamentary hearings on anti-corruption, introduce recommendations to the legal acts, inform the population on anticorruption measures, and conduct public monitoring of the implementation of anti-corruption laws. The executive anti-corruption authorities and special anti-corruption representative of the government were obliged to annually inform citizens about the measures of corruption counteraction, including judiciary and investigation statistics. Article 17 provided the basis for whistleblower protection. Another essential change was Article 18 of the law that introduced criminal liability for corruption in addition to administrative, civil, or disciplinary liability. Information on persons prosecuted for corruption-related offenses were included in the US Register of Persons Prosecuted for Corruption, which caused additional damage to the image of a corrupt official. Additionally, in line with the Article 20 of the law, the damage incurred by the state as a result of a corruption-related offense was subject to compensation. Complementary to the Parliamentary Committee on the Fight against Organized Crime and Corruption and the Prosecutor General’s Office, the general public obtained the right to control implementation of the anti-corruption laws.

CASE STUDY OF VIKTOR YUSHCHENKO 235 Parliament adopted the anti-corruption law package only in June 2009. The final provisions of the law stated that it would enter into force on 1 January 2010. At the end of December 2009, this date was changed to April 2010 and then moved back to January 2011. However, despite support from civil society and the international anti-corruption community for the anti-corruption legislation of 2009, on 21 December 2010, Yanukovych signed Law No. 2808-17 that repealed the law “On Grounds of Corruption Prevention and Counteraction,” the law “On the liability of legal entities for corruption-related offenses,”145 and also reversed the changes to the criminal code, which abolished criminal liability for corruption.146 As a consequence, Ukraine did not have a general law on corruption and could not enforce any administrative liability for corruption offenses from 5 January 2011 until the new 2011 anti-corruption laws came into force on 1 July 2011 (IAHR 2012b, 117). The National Anti-Corruption Strategy: “On the way to integrity” On 11 September 2006, Yushchenko signed Decree No. 742/2006 “On the Concept of overcoming corruption in Ukraine: ‘On the way to integrity’.” 147 A comparative content analysis with Kuchma’s anti-corruption strategy reveals that different conceptualizations of corruption had implications for anti-corruption measures. The content of the new Concept differed greatly in comparison with its predecessor. First, the Concept identified different preconditions of corruption. While Kuchma’s strategy identified corruption as an economic problem, in Yushchenko’s Concept the focus shifted to the socio-psychological and political causes of 145 Law of Ukraine No. 2808-17 from 21 December 2010 Ukr. “Pro vyznannia takymy, shcho vtratyly channist’, deiakykh zakoniv Ukrainy shchodo zapobihannia ta protydii koruptsii” http://zakon0.rada.gov.ua/laws/show/2808-17, last accessed 31 August 2018. 146 Law of Ukraine No. 1508-17 from 11 June 2009 Ukr. “Pro vnesennia zmin do deiakykh zakonodavchykh aktiv Ukrainy shchodo vidpovidal’nosti za koruptsiini pravoporushennia” http://zakon0.rada.gov.ua/laws/show/1508-17, last accessed 31 August 2018. 147 Decree of the President of Ukraine No. 742/2006 from 11 September 2006 Ukr. “Pro kontseptsiiu podolannia koruptsii v Ukraini ‘Na shliakhu do dobrochesnosti’” http://zakon0.rada.gov.ua/laws/show/742/2006/ed20060911?lang=en, last accessed 31 August 2018.

236 CORRUPTION AND ANTI-CORRUPTION POLICIES corruption (IAHR 2012a, 14). Indirectly, corruption was conceptualized as a collective action problem in Ukraine: The tolerance toward corruption in society becomes a stereotype; the mass of the public demonstrates its readiness to get involved in corruption for problem solving despite its recognition of the social damages of corruption, which lead to the inability of the citizens to actively participate in anti-corruption measures.148

Second, with regard to anti-corruption measures, the new focus was on ensuring integrity and strengthening the role of citizens and the mass media in anti-corruption. Finally, for the first time on the level of a legislative act, the widespread, systemic, and functional character of corruption, including corruption in political institutions and the judiciary, was recognized. Three groups of actors susceptible to corruption were targeted: executive authorities, people’s deputies, and the judiciary. With regard to the first group, the executive branch was not limited to the low- and mid-level bureaucrats, unlike in the previous concept. Accordingly, anti-corruption measures were conceptualized more broadly than only increasing control over the bureaucracy. Additional measures included, for instance, provisions for public control of the executive, and the request to adopt a law on access to public information. Another group that was identified as susceptible to corruption was the people’s deputies: The level and the scope of corruption, and effectively of counteraction, depend on the integrity of officials in elected positions, on the level of democracy of the political system in general and of the electoral process in particular. Integrity is only possible under conditions of free and fair elections based on democratic principles and of clear rules and restrictions for the work of the above-mentioned authorities. (Ibid.)

In this regard, risks contributing to corruption were identified as the following: the instability of the electoral process, legislative 148 Decree of the President of Ukraine No. 742/2006 from 11 September 2006 “Pro kontseptsiiu podolannia koruptsii v Ukraini ‘Na shliakhu do dobrochesnosti’,” Ukr. transl. by the author, http://zakon0.rada.gov.ua/laws/show/742/2006/ed20 060911?lang=en, last accessed 31 August 2018.

CASE STUDY OF VIKTOR YUSHCHENKO 237 gaps concerning the funding of political parties, the restriction of legal sources of political funding, a lack of control over the finances and work of political parties, etc. Thus, the Concept explicitly addressed corruption as a problem on the input side of the political system. Anti-corruption measures included: conducting anti-corruption analysis of electoral legislation, implementation of effective control of the funds for electoral campaigns and statutory work of political parties, regulation of the legal norms for lobbyism, elaboration of ethical standards, codes of conduct and conflict of interest regulations for elected officials, enabling public control and public consultation in the legislation process. Corruption risks in the judiciary were identified as the following: ineffective selection process, a lack of ethical standards and regulation of conflict of interest, practical dependence of judges on their superiors, non-transparent judicial process, the use of administrative resources to influence judges, legal gaps in regulations on the immunity of judges, and low salaries. The anti-corruption measures included: introducing a proper selection process with a test of qualification, giving citizens the opportunity to influence decisions about judiciary candidates, increasing salaries, regulating procedures of liability for judges in cases of corruption and restricting judicial immunity, introducing asset declarations for judges, providing public access to judicial statistics and judicial decisions. One entire part of the Concept was dedicated to increasing the role of civil society and the mass media in the prevention of corruption. The Concept emphasized that if the media makes instances of corruption public this has a preventive character, on condition that the information is objective. Therefore, access to public information about the work of civil servants must be recognized as an important anti-corruption tool. Thus, measures suggested focused on introducing transparency surrounding the work of public authorities and increasing media objectivity and editorial independence from their owners. Finally, the Concept also addressed the problem of impunity and provided suggestions for legal regulations regarding the

238 CORRUPTION AND ANTI-CORRUPTION POLICIES punishment of corruption and increasing the efficacy of law enforcement authorities in the investigation of corruption. In summary, there were essential differences with Kuchma’s Anti-Corruption Concept. Where, before 2006, the elaboration of anti-corruption policy was closed to the public, from 2006 on civil society organizations, independent experts, and international organizations were involved in the elaboration of anti-corruption legislation, this involvement also being reflected in its content. The Concept “On the way to integrity” broadened the concept of corruption: The assessment of the causes and characteristics of corruption in Ukraine included socio-psychological and political aspects, where the previous strategy had focused on economic and historic aspects. In addition to public servants, the strategy acknowledged that corruption is systemic, prevailing in all branches of power: the judiciary, the legislative, and the executive. For each one branch, different anti-corruption measures were proposed. With regard to anti-corruption, the Concept frequently emphasized the role of civil society and included measures to empower active citizens, NGOs, and the media to control public authorities, to reveal and to prevent corruption. Overall, the Concept contained many more concrete suggestions in comparison to the previous one. Implementation of the anti-corruption strategy Although the presidents of Ukraine are initiators of national anticorruption strategies, these strategies are implemented by the government and therefore must be approved by a specific action plan. Under the conditions of power fragmentation, the best political strategy can experience disruption despite the political will of the president. Thus, analysts call the 2006 strategy “the most problematic to implement” in comparison to others (IAHR 2012a, 31). Where Kuchma’s Concept for 1998–2005 was implemented by annual action plans, in whose preparation the Coordination Committee under the president played an important role, the situation under Yushchenko was very different. Until 2008, there was no coordination committee that he was able to rely on and only in 2009 was the institution of the government’s Commissioner for AntiCorruption Policy created.

CASE STUDY OF VIKTOR YUSHCHENKO 239 It took the government almost a year to approve Yushchenko’s Concept from the 15 August 2007 action plan.149 Since the Concept was implemented by one single action plan, the plan was amended several times. The first version of this action plan was significantly inconsistent with the structure and measures suggested in Yushchenko’s Concept, with some content missing, and some new additions. In part, the actions suggested were broader and less concrete than the measures recommended in the Concept. Under the new government’s Commissioner for Anti-Corruption Policy in 2009, the action plan was adopted in its new form.150 Its volume was reduced from 55 partly very broad measures, to 24 more concrete measures. The IAHR analysis shows that, although the action plan did not correspond to the president’s strategy, it included measures recommended for implementation by GRECO and ACN OECD. The authors state: In fact, the new action plan reflected not so much the content of the concept, but diverse measures that were initiated and started earlier by diverse agencies. This gives the impression that the newly created office of the Government’s Commissioner for Anti-Corruption Policy rewrote the action plan for its own functions and tasks, with reference to some previous success stories in the field of anti-corruption. (IAHR 2012a, 22).

The IAHR indicates that the main reason for the unsuccessful implementation of the anti-corruption policy was the political conflict between the president and the Cabinet of Ministers due to the constitutional reform of 2006. The president had partially lost his influence on the government as well as over the executive.

149 Executive order of the Cabinet of Ministers of Ukraine No. 657-2007-p from 15 August 2007 “Pro zatverdzhennia planu zakhodiv shchodo realizatsii Kontseptsii podolannia koruptsii v Ukraini ‘Na shliakhu do dobrochesnosti’ na period do 2010 roku,” Ukr., http://zakon0.rada.gov.ua/laws/show/657-2007-р/ed20070815, last accessed 31 August 2018. 150 Executive order of the Cabinet of Ministers of Ukraine No. 657-2007-p from 15 August 2007 with revision from 26 August 2009 Ukr. “Pro zatverdzhennia planu zakhodiv shchodo realizatsii Kontseptsii podolannia koruptsii v Ukraini ‘Na shliakhu do dobrochesnosti’ ta derzhavnoi antykoruptsiinoi polityky na period do 2011 roku”, available at: http://zakon0.rada.gov.ua/laws/show/657-2007-р/ed20090826, last accessed 31 August 2018.

240 CORRUPTION AND ANTI-CORRUPTION POLICIES The most active anti-corruption year with regard to implementation was 2009. The newly created office of the government’s Commissioner for Anti-Corruption Policy in combination with public pressure from the upcoming presidential elections in 2010, encouraged different political forces to demonstrate their active dedication to anti-corruption policy. 7.4.3.

Synthesis

Over the course of the Orange Revolution and Constitutional changes from a presidential-parliamentary to a parliamentary-presidential republic, a decentralized system of corruption arose. With regard to anti-corruption, the decentralized system means that there is no leader powerful enough to counteract corruption. Instead of a principal-agent conceptualization of corruption, corruption is conceptualized much more broadly as a high-level political problem. Corruption is not limited to low- or mid-level public servants of the, but it is recognized that high-level politicians are involved in the same manner as ordinary people, and there is no honest principal to control corrupt agents. The task of anti-corruption policy based on such a broad conceptualization is: First, to create a secondorder principal-agent relationship, where society is the principal and politicians are agents. In other words, the empowerment of civil society to control politicians is a central task following such an anticorruption policy. Second, the control function of civil society means that political transparency and access to information, for instance in the form of asset declarations and revealing sources of political funding, is to be granted to the public and not only to executive authorities. Third, to enable punishment of high-level politicians, for instance through the abolishment of political immunity. The main empirical finding is that if the system of corruption remains consistent, despite democratic tendencies, an anti-corruption policy that conceptualizes corruption as a system and as a problem of high-level politicians cannot be adopted, and this for two reasons: First, weak political leadership that is interested in the relevant anti-corruption policy and, second, the self-protecting mechanisms of the system of corruption.

CASE STUDY OF VIKTOR YUSHCHENKO 241 Although Yushchenko rhetorically followed the conceptualization of corruption as a high-level political problem and suggested a respective counteraction strategy, the government did not implement it and ignored its responsibility to issue action plans for the implementation of the strategy. Parliament permanently postponed adopting the corresponding legislation.

7.5.

Conclusion

This chapter analyzed how President Yushchenko applied corrupt practices and framing as tactics for political domination. Process tracing of the corruption-related political crises indicates ongoing political competition and a conflictual relation toward opponents. Corrupt practices in this competition reveal that Yushchenko aimed at the prevalence of power resources scenario and used extra-legal means to reach political domination. Yushchenko’s tactics were not successful, since he remained in the same scenario throughout his presidency. He did not adapt his conflictual tactics when his power resources decreased in 2006 following constitutional reform. Use of the same unsuccessful tactics maintained the decentralized system of corruption and prevented both the consolidation of democracy and the rise of one strong political center. The main function of corrupt practices and framing under Yushchenko was to increase power resources and exclude opponents as the corrupt Other in order to maintain political domination in the ongoing conflict. The starting point for Yushchenko was a decentralized system of corruption where several pyramids were competing for the redistribution of resources. Yushchenko had one year in 2005 as a formally dominant president, until the constitutional amendments limited his power in 2006. Yushchenko’s actions in 2005 allow assessing his strategy as follows: he undertook several attempts to secure his presidential power at the cost of violating constitutional provisions. In line with the logic of hybrid regimes, he attempted to gain political dominance through increasing presidential influence. Thus, the general strategy was to move from the scenario of an “even distribution of resources,” and decentralized system of corruption, to the scenario of “one-sided prevalence

242 CORRUPTION AND ANTI-CORRUPTION POLICIES of resources” and re-create a centralized system of corruption. The ad hoc cooperation with different potential partners independently of personal ties indicates that there was no attempt to monopolize the system for a very close group, but rather to follow Kuchma’s earlier tactics and manage different groups of interest by rewards and non-coercive punishment through playing different groups against each other. But Yushchenko lacked the necessary popular support and formal authority for this scenario. Prevalence of resources and coalition building Yushchenko extensively applied such forms of favoritism as clientelism and patronage, as well as material favors, such as the unlawful privatization of state property, with the aim of rewarding his political and financial supporters. In exchange for political financing and votes against his rivals, Yushchenko’s “dear friends” received lucrative positions in the NSDC, the SBU, and filled the president’s mandates in the government and received shares in the bargaining over vertical executive appointments (e.g. appointments of the heads of regional administrations). Yushchenko used corruption functionally, i.e. not for private enrichment, but rather to remain in the game and to create ad hoc winning coalitions. He followed the rules of the system of corruption. However, contested access to state resources limited Yushchenko’s opportunities to use state funds and governmental positions in exchange for loyalty and support. Although Yushchenko instrumentalized corruption like Kuchma, their tactics differed substantially. While Kuchma exploited inclusive tactics, Yushchenko was driven by conflict, and used exclusionary tactics against his opponents. Kuchma allowed access to public resources to all the main regional clans in the belief that they would naturally prevent each other from reaching a prevalent position. In this way he co-opted strategic economic actors, who in exchange for political favors granted broad support to the president in parliament and in the regions, securing his re-election. Through such an inclusive tactic, the main economic elites were dependent on Kuchma remaining in office. An inclusive use of corruption became an informal institution that granted predictability in the

CASE STUDY OF VIKTOR YUSHCHENKO 243 political game. The prevalence of resources was clearly on Kuchma’s side; however, the fact that he shared access to resources maintained the situation of the “cartel-like deal.” This allowed Kuchma to move from the position of institutional insecurity to dominance, where he managed to formally strengthen the position of the president and interpret formal constitutional gaps in his favor. Yushchenko drifted in the opposite direction, from a position of formal domination to one of increasing institutional insecurity. The informal deals that Yushchenko settled aimed at excluding his opponents from access to resources. Opportunistic bargaining was central to the political strategies of Yushchenko. For instance, he engaged in two informal pacts with Yanukovych, in 2005 and in 2006, in order to exclude Tymoshenko from the political race. When Yanukovych became too powerful as PM, Yushchenko switched sides and united with Tymoshenko, in order to exclude Yanukvoych. Thus, Yushchenko’s coalitions were destructive in their nature, since they involved dissolution of the government and of parliament. These exclusionary or conflict-centered tactics depleted trust and predictability among political and economic actors. Moreover, former regional clans organized by the synergy of local economics and politics went through structural changes. Big business atomized, and individual oligarchs played for themselves politically. Thus, the pyramids were not organized around regional leaders, but around individual politicians, who managed to advance individually-centered political parties. Kudelia describes this shift as the evolution from “patronal corruption” under Kuchma to “party-cartel corruption” (Kudelia 2016). Under conditions of high fragmentation and uncertainty, individual oligarchs supported several political forces at the same time. Practically, it meant that the actors, whom Yushchenko brought into the arena as his supporters, e.g. Firtash, easily changed sides when Yushchenko’s political power decreased. Exclusion The framing of corruption and the use of anti-corruption demonstrate the exclusionary conflict strategies even better. The empirical analysis shows that anti-corruption rhetoric is used to build hegemonic relations among actors. Exclusion of an actor as corrupt

244 CORRUPTION AND ANTI-CORRUPTION POLICIES constitutes the inside and outside logic in the construction of social group identities. In line with the theory, the fact of exclusion is not neutral, but means subversion and indicates a hierarchical process. From this perspective, anti-corruption rhetoric used to justify exclusion is an instrument of hegemonic process meant to substantiate power relations between the in- and out-group. In the presidential campaign, Yushchenko built an inclusive oppositional discourse, based on a chain of equivalences such as democracy, trust, welfare, rule of law and integration into the West—which was helpful to unite broad societal groups. At the same time, this discourse excluded the old regime as corrupt and authoritarian. The new framing of corruption as a problem of highlevel politicians and not of low-level bureaucrats, as Kuchma had suggested, was useful to build the opposition discourse. However, when Yushchenko became president and represented the high-level politicians himself, he became a victim of his own discourse. Freedom of the press and fragmented political groups made investigations and public accusations of corruption possible and widespread. First, the journalists criticized the posh and inappropriate lifestyle of the president’s son and then rivals from Tymoshenko’s team accused Yushchenko of lobbyism and corruption. Corruption became the omnipresent topic in the ongoing political crises, and also the central argument used to substantiate the decision to break coalitions. Corruption was the main argument for dissolving the government of Tymoshenko in 2005 and joining forces with Yanukovych. When Yanukovych grew strong in his position as PM and the Party of Regions increased its influence in parliament, Yushchenko united with Tymoshenko and substantiated his decision to dissolve parliament in 2007 by appealing to political corruption. The framing analysis allows tracing the change in the conceptualization of corruption and increasing the focus on corruption in parliament from 2007 onward. Implications The fragmentary appearance of democracy was a side effect of the decentralized system of corruption. The system of corruption remained operational with some structural peculiarities: no renewal

CASE STUDY OF VIKTOR YUSHCHENKO 245 of political elites took place; political pluralism was only the restructuring of economic elites and their new strategies of influence on politics. Unlike in democracy, political leadership, including the president, repeatedly violated formal rules to consolidate political power. The anti-corruption policy became a contested space for different state actors competing for hegemony. Under Yushchenko, the influence of Western anti-corruption agencies on Ukraine increased substantially. Their suggestions connected to the conditionality for further integration and financial loans were content-wise reflected in the new anti-corruption legislation and in the national anti-corruption strategy “On the way to integrity.” The new discursive framing of corruption as a systemic problem on the high political level was manifested in the content of the new legislation. However, fragmented power resources and the operating system of corruption prevented the new anti-corruption legislation from being adopted and the anti-corruption strategy from being implemented.

8.

Case study of the political domination of Viktor Yanukovych: Functions and implications of the monopolized system of corruption

This chapter will examine the regime trajectory toward authoritarianism during the Yanukovych presidency. Unlike Kuchma and Yushchenko, who were permanently competing for power resources with other political institutions, Yanukovych fully subordinated the entire political system to his rule within 6 months of taking office. Under these conditions of consolidated presidential power, Yanukovych succeeded in monopolizing the system of corruption. His strategy was oriented to the “winner-takes-all” scenario (Table 9). Super-presidentialism on the macro-level provided favorable conditions for the use of corruption as a crucial instrument to build a narrow circle of entrusted personalities, known as a “Family,” and to exclude opponents, including oligarchs. The framing of corruption as a principal-agent problem repeated patterns evidenced in Kuchma’s tactics. This framing was institutionalized in an anti-corruption policy fully subordinated to the president. Such a policy had a legitimizing function for the selective coercion and increase of presidential authority.

247

248 CORRUPTION AND ANTI-CORRUPTION POLICIES Table 9:

Regime trajectory and tactics under presidency of V. Yanukovych

Interaction tactics reg. opponents and partners

Balance of resources Even distribution of resources

One-sided prevalence of resources

8.1.

Conflict tactics:

Cooperation tactics:

coercion or exclusion

agreement of rules or co-optation

Outset: “War of all against all” Decentralized system of corruption

“Struggle according to the rules” System of checks and balances

Goal and Result: “Winner-takes-all” Monopolized system of corruption

“Cartel-like deal” Centralized system of corruption

Outset: Regime trajectory, power resources and constellation of actors

Several months after his inauguration, experts on Ukraine assessed Yanukovych’s first political decisions as “paving the way toward an authoritarian regime” (Luchterhandt 2010). Several facts confirm this development. 8.1.1.

Subordination of state institutions

Subordinating Parliament and the Government President Yanukovych (leader of the Party of Regions) won the presidential elections of 2010 in the second round with nearly 49 % of the vote, defeating his main rival Yuliya Tymoshenko (leader of BYuT), who was the incumbent PM. It became his primary task to dismiss the old government. The former government consisted not only of a simple majority of MPs, but also factions of parties with enough MPs on their list to create such a majority. This rule was introduced into the parliamentary procedure in 2004 during the political compromise which resolved the Orange Revolution and prevented the retail purchasing of single MPs from other factions (Matsiyevsky 2016, 343; Riabchuk 2012, 11). However, Yanukovych sought to abolish this rule at the very beginning of his term.

CASE STUDY OF VIKTOR YANUKOVYCH 249 Changing the rules of procedure in parliament allowed individual MPs, and not just party groups, to create coalitions. As a result, individual MPs acted independently of the parties they were elected from. Ultimately, more than 50 MPs from the opposition violated their party discipline and joined the pro-presidential coalition (Sushko and Prystayko 2011). Together with the Communist Party, the Lytvyn Bloc, and the Party of Regions, this group of MPs was decisive in providing the new government with a majority (Sushko and Prystayko 2011). Parliament passed a no confidence motion to dismiss Tymoshenko’s cabinet, and as early as March 2010 a new government under the leadership of Yanukovych loyalist Mykola Azarov was installed (Sushko and Prystayko 2011). Consequently, for the first time since independence, the Rada did not counterbalance the executive power of the president. Thus, control over the separation of powers was left to the judiciary alone (Luchterhandt 2010, 6). Subordinating the Judiciary After securing the support of parliament, Yanukovych’s next step is described in a Freedom House report as … reducing the independence and integrity of the law enforcement and judicial systems … in an aggressive, sweeping, and methodological way. (Sushko and Prystayko 2011)

The judiciary was subordinated in two steps. First, the owner of the largest media holding firm in Ukraine, Valeriy Khoroshkovsky, was simultaneously appointed head of the SBU and member of the High Council of Justice. According to the report of the Parliamentary Assembly of the Council of Europe (PACE), if this was not corruption it was at least a potential conflict of interest (Reps and Wohlwend 2010). Second, between March and July 2010 a judicial reform was initiated and implemented. The analysis of this reform by the Venice Commission, revealed a … drastically reduced role of the Supreme Court and increased role of the High Council of Justice in judges’ appointment, discipline and dismissal. (Gass et al. 2010)

250 CORRUPTION AND ANTI-CORRUPTION POLICIES As a result, in September 2010 judges “generally considered sympathetic to Yanukovych” replaced four judges of the Constitutional Court (Reps and Wohlwend 2010). One of the former judges admitted that he was put under pressure to resign (Reps and Wohlwend 2010) By the end of the implementation of the judicial reform and the initiation of the reform in criminal justice, there were more than 50 resignation requests from judges at different levels (Sushko and Prystayko 2011). Constitutional reform Under these conditions, the appeal made by 252 MPs from the ruling coalition to the Constitutional Court to review the adoption of the 2004 constitutional amendments, which basically limited presidential authority, met with little opposition. The Constitutional Court proclaimed the procedure for the adoption of the new amendments as unconstitutional and ordered parliament to bring the legislation in line with the Constitution of 1996 (Constitutional Court of Ukraine, No. 1-45/2010). Even though there was a great deal of discussion of the issue and several experts questioned the legitimacy of the constitutional reforms of 2004, the procedure by which they were changed in 2010 was widely recognized as primarily “politically driven” (Dörrenbächer and Oliinyk 2011, 3). According to the restored Constitution of 1996, the president regained authority to unilaterally appoint cabinet ministers and rely on ad hoc majorities to approve his chosen prime minister (Sushko and Prystayko 2011). Almost independently of parliamentary support, Yanukovych appointed the heads of the SBU, the State Property Fund, the Anti-Monopoly Committee, as well as the head of the State Committee for Television and Radio Broadcasting (with parliamentary consent), and the Prosecutor General (Khomenko 2010; Naiem 2010). In contrast to 2004, the 1996 and 2010 Constitutions weakened parliamentary opposition, since they did not assign it an institutional role (Sushko and Prystayko 2011). Using his new rights, President Yanukovych appointed Viktor Pshonka from Donetsk as Prosecutor General, which was, according to the report of Freedom House:

CASE STUDY OF VIKTOR YANUKOVYCH 251 … a major step toward centralised political control over law enforcement. (Sushko and Prystayko 2011)

The longstanding ties between them included professional connections in Donetsk, and were strengthened by the fact that Yanukovych was godfather to Pshonka’s son (Chyvokunya 2010). Selective coercion Selective coercion was possible due to the full, formal and informal, subordination of the law enforcement agencies to Yanukovych. “Even the decision-making system in the courts was structured vertically and functioned in the ‘manual regime’,”—the leading anticorruption activist Vitaliy Shabunin says. 151 Besides the fact that the SBU—traditionally a coercion instrument of Ukrainian presidents—initiated multiple “non-transparent investigations” into public activists (Sushko and Prystayko 2011), there were several cases of investigations begun into the opposition. Already in the first year of Yanukovych’s presidency, five incumbents of the former government, including Lutsenko, the Minister of the Interior, were imprisoned. The former Economics Minister fled to the Czech Republic under political asylum, and a criminal case was initiated against Tymoshenko, the leader of the opposition on allegations of misuse of political office (Dörrenbächer and Oliinyk 2011, 2). At the same time, the allies of the government remained untouched, which underpins the argument that the “fight against corruption” under Yanukovych was used in a selective and politically motivated manner (Kuzio 2011, 93; Zakharov 2011). 8.1.2.

Synthesis

In summary, such facts as the forced resignation of the government due to the formation of the new parliamentary coalition, judiciary reform that was harmful to the courts, restoring the old Constitution, and monopolizing presidential power, as well as selective application of justice against the opposition and regime critics, shows the clear development of the regime toward “super-presidentialism” 151 Vitaliy Shabunin, interview with the author, Kyiv, 23 April 2014, Ukr. translated by the author.

252 CORRUPTION AND ANTI-CORRUPTION POLICIES with increasingly authoritarian elements of rule (Luchterhandt 2010, 6). The NiT index shows a continuous worsening of Ukraine’s democracy score from 2010 to 2014 (Figure 19). All indicators, except for civil society, shifted toward authoritarian rule. However, the consolidation of authoritarianism under Yanukovych was ultimately prevented by the Revolution of 2013–2014. Figure 19: Freedom House Nations in Transit democracy score 2010–2014 Nations in Transit Democracy Score 2010-2014 7,00 6,00 5,00 4,00 3,00 2,00 1,00 0,00 2010

2011

2012

2013

Local Democratic Governance

National Democratic Governance

Electoral Process

Civil Society

Independent Media

Judicial Framework and Independence

Corruption

Democracy Score

2014

Source: Nations in Transit, Freedom House assessment from 2010 to 2014. Author’s depiction. https://freedomhouse.org/report/nations-transit/2017/ukraine, last accessed 30 August 2018.

The swift consolidation of power under Yanukovych was possible not because of the formal institutions, since initially Yanukovych’s constitutional authorities were the same as those of Yushchenko. Rather, he fully exploited the informal rules and the potential of the system of corruption, in particular, the clientelist logic of parliament and patronage in the judiciary, in order to attain a prevalence of power resources and subordinate other political institutions.

CASE STUDY OF VIKTOR YANUKOVYCH 253

8.2.

Corrupt practices as tactics for political domination

The swift turn within 6 months of assuming office from the decentralized system of corruption under Yushchenko toward a centralized one was not the scenario that Yanukovych ultimately desired. According to the theory, every president in a hybrid regime strives to reach the “winner-takes-all” scenario. Blatant corrupt practices became Yanukovych’s central instrument to monopolize the system of corruption and exclude all possible opponents, even those who were strategic allies at the outset of his presidency. 8.2.1.

Particularism under Yanukovych

The particularistic logic of governance, institutionalized by Kuchma, and tolerated by Yushchenko, remained in place under Yanukovych. However, there were crucial differences in the tactics and structures on the line between the formal and informal rule of Yanukovych. While Kuchma co-opted the main regional clans and played them off against each other, and Yushchenko failed to coopt anyone, but was controlled by his “clients,” Yanukovych succeeded in creating a steep vertical of executive power. Patronage: Combination of leader-centered rule and powerful party machine Yanukovych relied on the strong “coalition-led” Party of Regions. 152 The term “coalition-led party” is used by Kudelia and Kuzio (2015) as an alternative to the “personality-led” parties, such as the BYuT. While in coalition-led parties “decision-makers have to be mutually dependent in order to maintain their cooperative relationship, the success of single-headed parties depends crucially on the ability of their patrons to make credible commitments to their key supporters” (Kudelia and Kuzio 2015, 253). Thus, Yanukovych had the luxury to rely on the permanent and stable financial support of the wealthiest oligarch in Ukraine, Rinat Akhmetov. In contrast to the personality-led parties, coalition-led parties are able

152 For an analysis of the Party of Regions, its historic development, and political finance record, see Kuzio 2012; Kudelia and Kuzio 2015, 255–265.

254 CORRUPTION AND ANTI-CORRUPTION POLICIES to survive a major defeat of their leader and remain resilient even in opposition (Kudelia and Kuzio 2015, 254) The Party of Regions proved able to survive and remain resilient in opposition, which allowed Yanukovych to stay in the game and even take the position of PM with substantial party support in parliament, even after the Orange Revolution. Even though many oligarchs switched to the Orange camp in 2005, the uncertainty of power distribution there forced oligarchs to redistribute their resources, shed their affiliations, and become more flexible (Pleines 2016, 118). Matsiyevsky points out that under the presidency of Yanukovych, the Party of Regions gained 400,000 members, ultimately reaching 1.4 million members, mostly by means of administrative pressure and blackmail (Matsiyevsky 2016, 361). In comparison to the 2.7 million members of “Yedinaya Rossia,” in proportion to the population, this represents twice as many members per capita (Matsiyevsky 2016, 361). Yanukovych’s dominant position in the executive branch of power was not restricted to the formation of the government. The same principle of loyalty present in the Party of Regions and the president’s entourage was applied to appointments down the executive vertical on the regional (oblast’) and district (raion) level. Thus, under Yanukovych, 19 of the 24 heads of state regional administrations (governors) were members of the Party of Regions and chairs of its local branches. In 2013, all 24 Governors were members of the Party of Regions, some of them recruited after their appointment, but most heads of the Yanukovych’s regional electoral headquarters in the presidential elections or influential members of the Party of Regions (Matsiyevsky 2016, 372). In this constellation, the party “served as the structural framework for presidential patronage” (Melnykovska 2015, 7). This form of patronage created an even more powerful administrative resource than Kuchma was able to create by his individual rule. Once the local executive branch merged with the political representation of the Party of Regions, it was easy to also secure political domination in local councils. In preparation for local elections in October 2010, parliament adopted the Law on local elections 153 and 153 Law No. 2487-VI “On elections of the members of the Supreme Council of the Autonomous Republic of Crimea, city and village councils and their chairs.”

CASE STUDY OF VIKTOR YANUKOVYCH 255 revived the mixed electoral system that favored pro-government, majoritarian candidates. Thus, the Party of Regions won the majority of the local councils in 10 regions; however, they formed the majority in a further 12 regions, based on the victory of majoritarian candidates. Matsiyevsky describes this phenomenon as “playing the rules” instead of “playing by the rules” (Matsiyevsky 2016, 360). Clientelism Although the Party of Regions became the political center in parliament, it was only due to oligarchic support that Yanukovych gained an absolute majority, allowing him to change the Constitution, judiciary system, and government. In 2011, 8 of 11 oligarchs in parliament represented the “blue” camp; in 2012, all oligarchs in parliament—13 by then—supported Yanukovych (Pleines 2016, 121) (see also Table 8). The oligarchs funded the Party of Regions, but also provided finances for MP votes and defections (Ukr. tushkuvannia). In exchange, the oligarchs received direct influence over lucrative departments in the government. Yanukovych had all appointments in the executive branch of power, from the national to the local level, under his personal control. The “clients” of the president traditionally received lucrative positions in the SBU, the Prosecutor General’s Office, the AP, and in the ministries. The quota principle for the distribution of portfolios in the Cabinet of Ministers remained in place. However, the spots were distributed not among pro-presidential political blocs in parliament, but among influential groupings within the Party of Regions (Matsiyevsky 2016, 368). Azarov’s first government in 2010 had representatives of six different groups (Matsiyevsky 2016, 369); however, two of these were the most dominant, with portfolios of the most influential ministries and controlling the most profitable sectors of the economy: Firtash’s RosUkrEnergo and Akhmetov’s SCM group. In 2012, the increasing centralization of power under Yanukovych became noticeable. In the second Azarov government, following parliamentary elections in 2012, the government consisted of only

Available in Ukr. at: http://zakon3.rada.gov.ua/laws/show/2487-17/ed20100 710, last accessed 31 August 2018.

256 CORRUPTION AND ANTI-CORRUPTION POLICIES two main groups—the “Family” and Akhmetov’s group, while all others had either been excluded or marginalized (Leshchenko 2012). Nepotism Nepotism became central among the types of informal rule under Yanukovych, not only for him personally, but for the entire environment. Based on journalistic investigations, Matsiyevky conducted a network analysis and showed that around 40 persons in Yanukovych’s executive team had relatives in key positions in other state agencies (Matsiyevsky 2016, 381–384). For instance, five members of the AP had relatives in parliament, the SBU, and the Central Electoral Commission, etc. In Azarov’s first government, 14 of 29 ministers had relatives in other state agencies. In the seventh parliament, it was possible to trace seven family clans, with 55 MPs having family ties to each other. The comparison of the networks in 2010 and 2012 (after the parliamentary elections and in the second Azarov government) reveals that with the increasing influence of the Yanukovych “Family,” the influence of other families decreased (Matsiyevsky 2016, 382–383). 8.2.2.

Monetary corruption: An instrument of exclusion and monopolization of power

Yanukovych succeed in restructuring the elites and monopolizing power with the help of monetary corruption. He enabled private enrichment of the “Family” through extensive grand corruption. In this section, the manner in which monetary corruption was instrumentalized to monopolize power of the “Family” and exclude other actors is examined. On 24 April 2014, at a Conference on Asset Recovery in Kyiv, the former Deputy Prosecutor General of Ukraine, Mykola Holomsha, stated that already during the first month of PGO’s work in 2014, violations due to corrupt activities under the Yanukovych’s presidency were estimated at up to US$ 37 billion. This amount is slightly higher than the annual budget of Ukraine for 2013. In cooperation with the State Service of Financial Monitoring, the prosecution discovered different schemes in 14 banking institutions that were used to launder around US$ 12.3 billion. The prosecution

CASE STUDY OF VIKTOR YANUKOVYCH 257 revealed corrupt, network-like schemes in almost every ministry and state agency, aimed at enriching the “Family.” Moreover, the Prosecutor General of Ukraine, Oleh Makhnitsky, asserted at another conference on Asset Recovery, this one in London, that between 2010 and Yanukovych’s fall in 2014 “the loss to Ukraine was up to US$ 100 billion” (Faulconbridge et al. 2014), which corresponds to approximately two-thirds of Ukraine’s nominal 2013 GDP. Even though the officials of the new government in 2014 may have overestimated the amount stolen under Yanukovych’s presidency through public corruption, the actual loss to Ukraine may indeed be that high if we consider the fact that Yanukovych’s “Family” also stole from private businesses. By controlling the judiciary and all legal forces, they were able to steal from the private sector by forcing business owners to sell their enterprises at very low prices (Ukr. vidzhymannja biznesu—“corporate raiding”), for example. Corruption in the public procurement sector In chapter 5, while conceptualizing the system of corruption in Ukraine, three forms of grand corruption on the output side of the political system—tax fraud, corruption in the use of natural resources, and corruption in public procurement—were identified. Here, the third method of enrichment, based on embezzling money directly from the state budget—corruption in public procurement—will be explored. According to Stewart, public procurement is a specific area of politics, … since significant financing is made available by the state, it is an area in which political and economic actors and their respective interests interact. The nature of this interaction can be indicative of defining regime features which have an impact on political decision-making processes. (Stewart 2013, 197–198)

According to investigative journalists, at least 30 % of the annual state procurement budget of Ukraine was systematically embezzled. 154 Embezzling budget funds during public procurement transactions occurs in the form of kickbacks, defined as the difference

154 This is an average amount, calculated by “Nashi Hroshi” from cases they were dealing with during Yanukovych’s Presidency. Oleksiy Shalaysky, interviewed by the author, Kyiv, 29 April 2014.

258 CORRUPTION AND ANTI-CORRUPTION POLICIES between the paid price for the product or service and the market price of the same product or service, independently of who profits from the inflated price. Law on Public Procurement: shifting the institutional framework In her analysis of public procurement reform in Ukraine, Stewart shows that public procurement state policy evolved in waves. Under pressure from foreign actors, such as the EU, the IMF, and the World Bank, decision-makers in Ukraine adopted effective laws (the first, in 2000), but when tenders grew too transparent and competitive, decision-makers introduced problematic amendments, allowing the law to be bypassed (Stewart 2013). According to Stewart, both, Kuchma and Yushchenko tolerated non-transparent procedures in public procurement when, in late 2004 and 2005, amendments were introduced, significantly undermining established international standards (Stewart 2013, 201). Thus, patterns such as … manipulating procurement regulations to give preference to one’s political supporters, appear to have been in place long before the Yanukovych presidency began. (Stewart 2013, 203)

The most problematic invention was Tender Chamber, created in 2005 as an NGO. Formally, Tender Chamber was established to promote transparency and efficiency of procurement, but informally, it provided a framework to manage particularistic interests of business groups in public procurement. The national Tender Chamber oversaw state procurement until 2008. This institution consisted of up to 10 public organizations, including all political forces—the Party of Regions, BYuT and “Our Ukraine”—which were in charge of all public procurement issues. According to the World Bank, … the Chamber was given undue influence on the question of allocating bids without being subject to the control and supervision that official public administration bodies would have had to undergo. In fact, between 2005 and 2008 Ukraine was one of the countries with the greatest increase in bribes in the areas of public procurement. (World Bank 2011 cited in: Stewart 2013, 202).

Decision-makers were aware of high corruption in the Tender Chamber and, according to Oleksiy Shalaysky, 155 an expert on 155 Oleksiy Shalaysky, interviewed by the author, Kyiv, 29 April 2014.

CASE STUDY OF VIKTOR YANUKOVYCH 259 public procurement and editor-in-chief of the investigative website “Nashi Hroshi”: “everyone was annoyed” that this group, which was apparently under the control of MP Anton Yatsenko, was blatantly stealing. “They would stop any tender, if the client wouldn’t pay 5–7 %.” However, they were “annoyed” not because of the corruption going on in the field, but because the process of corruption was in the hands of only one group. Under the pressure of the EU and in collaboration with the World Bank,156 the new Law on public procurement No. 2289-VI of 1 June 2010 was adopted:157 This was a good law, which showed democratic development—Shalaysky assesses—Mainly, it was prepared under the presidency of Yushchenko, even though parliament did not adopt it until Yanukovych took office. (Oleksiy Shalaysky, interviewed by the author, Kyiv, 29 April 2014, Ukr. transl. by the author)

According to the new law, the state was obliged to publish tenders and make this information available to every potential participant who wanted to compete. This gave an opportunity for investigative journalists and representatives of civil society to track both the participants and the prices paid by the state. Also, international organizations gave a positive assessment of this legislation (Stewart 2013, 204). The ruling elite realized quickly, however, that it was impossible to “do business” under these conditions, so within three months the law received its first amendment.158 The initial law of 2010 contained two exceptional articles: The first defined cases where public procurement was allowed with a single participant; the second defined cases where tender was unnecessary. As legal expert Prof. Mykola Khavronyuk explains, 159 between 2010 and 2013 around 20 amendments to this law were made, basically focused on widening these two exceptional articles.

156 Detailed analysis of the public procurement reform under Yanukovych and external actors’ influence on it is provided by Stewart (2013). 157 Ukr. Zakon Ukrainy “Pro zdiisnenniy derzhavnykh zakupivel’,” No. 2289-VI, 01.06.2010, http://zakon2.rada.gov.ua/laws/show/2289-17/ed20120610, last accessed 31 August 2018. 158 Oleksiy Shalaysky, interviewed by the author, Kyiv, 29 April 2014. 159 Prof. Mykola Khavronyuk, interviewed by the author, Kyiv, 14 April 2014.

260 CORRUPTION AND ANTI-CORRUPTION POLICIES Thus, according to the amendment of July 2012, state-controlled companies were excluded from the process of public tenders. In other words, companies with a state share of 50 %+1 received the green light for spending around US$ 30 billion annually without making it public. The risk of corruption increased in step with this amount, since no one could track transactions. International organizations strongly criticized this development. 160 Experts assessed this law as “the most corrupt law in the history of Ukraine”. 161 Oleksiy Shalaysky speaks of “legalisation of corruption by law,” which allowed the integration of corrupt components by law into the formal institutional framework.162 The first strategy was to hide as many tenders from the public as possible. The second strategy was to develop schemes for stealing from the remaining open tenders. Even if there was a corrupt element in this or that public procurement procedure, and a tender was won by a “certain” company, nevertheless everything proceeded according to the existing laws. Oleksiy Shalaysky explains how this was possible as follows: 160 In 2012, Freedom House assessed public procurement reform under Yanukovych as follows: “The largest embezzlements in the country are associated with state procurement contracts. A law on procurement endorsed by international and European institutions was adopted in August 2010, but on May 17, 2011, the parliament amended it despite strong objections from the opposition and NGOs. The World Bank and European Commission appealed to the president and cabinet to veto the new measure. Ukrainian NGOs especially criticized a provision stipulating that purchases by state enterprises would be regulated not by the law, but by cabinet decrees. The amendments also allowed procurements without tenders if the contract is going to a state enterprise or a publicprivate partnership with a state share of more than 50 percent, effectively exempting the lion’s share of state procurements. Although the president vetoed the legislation in June, a new version passed by the parliament in early July, with amendments proposed by the president, retained most of the criticized provisions and also excluded procurements by the Agrarian Fund from the law’s restrictions. Yanukovych signed the measure on July 28. By the end of the year, the Accounts Chamber of Ukraine declared that state procurement had withdrawn into the shadows. Experts said the new situation amounted to a ‘return to the jungle.’” (Sushko and Prystayko 2012, 586 ff.) 161 Anti-Corruption Action Centre, available online at: http://2207.antac.org.ua, last accessed 17.10.2014. 162 Beside the public procurement sector, similar laws legalizing corruption were passed on subvention of mining plants, distribution of natural resources following auction, estimation schemes of real estate prices, etc. (Oleksiy Shalaysky, interview with the author, Kyiv, 29 April 2014, transl. by the author).

CASE STUDY OF VIKTOR YANUKOVYCH 261 The state-owned enterprise publishes a tender. Two parties are participating: One with a high price and the other with a very high price. The remaining companies would be prohibited to participate either by a preventive phone call, saying “this competition will be won by Mr. X, do not dare participate,” or if someone wouldn’t listen and tries to participate, there existed many bureaucratic ways to hinder them from doing so. For example, a certificate that the participating firm is not bankrupt is valid only for 5 days. Thus, if the undesirable participant shows up, they would just postpone the tender for 5 days. If the firm was prepared and had another certificate, they would postpone it again. We had experience once of a tender which was postponed 6 times until only the “right” competitors remained. (Oleksiy Shalaysky, interviewed by the author, Kyiv, 29 April 2014, Ukr. transl. by the author)

Under these conditions it is very difficult to prove that there is a corrupt element involved. Even if investigative journalists and activists are carefully monitoring and can show that the price the state is paying for the product is many times higher than the market price, it is impossible to suspend the tender since all the procedures were done legally. Monopolization of tenders as a tendency in public procurement Playing with the rules in public procurement resulted in hegemonic tendencies, deserving of closer attention. According to the official newsletter of public procurement in Ukraine as well as the state statistics service, between 2008 and 2012 the amount of budgetary money spent for public procurement increased from 17 % of GDP to 38 % of GDP,163 with the European average 16 % (Bondarenko 2012). Based on statistical information, data analysts studied the participants in public procurement tenders, and found that in 2008 1 % of tender winners received 37 % of the total budget for public procurement, while in 2011 1 % of winners received 80 % of the total budget, and 80 % of participants received only 4 % of the total budget (Bondarenko 2012). This means that the monopolization of finances spent by the state for public procurement increased substantially.

163 Statistical information on public procurement is available on the website of the state statistical service archive 2007–2012: http://www.ukrstat.gov.ua/operat iv/operativ2012/fin/zakup/zakup_u/zak112_u.htm, last accessed 31 August 2018. With support of the International Renaissance Foundation, an online interface connected to this statistical data was created, available at: http://z.texty.org.ua, last accessed 31 August 2018.

262 CORRUPTION AND ANTI-CORRUPTION POLICIES According to the Forbes Ukraine analysis of the “tender champions,” whose companies won most of the public procurement processes in 2012 and 2013, Yanukovych’s son took second place behind the richest oligarch in Ukraine, Rinat Akhmetov (see Figure 20). Figure 20: Forbes ranking of tender champions 2011–2013 R. Akhmetov O. Yanukovych D. Firtash Y. Ivaniushenko O. Tyslenko Y. Boyko O. Yefremov S. Ivakhiv S. Lagur V. Pinchuk

Source: Forbes Ukraine.164 10 private winners of tenders organized by the state or by state-owned companies won 63.7 % of all public procurement tenders by the end of 2013.

8.2.3.

Raising the “Family”

President Yanukovych, who from the beginning of his term increased his influence in the political system of the country, simultaneously entrusted his son Oleksandr with the responsibility to 164 Forbes Ukraine, rating of tender champions. Available online at: http:// forbes.ua/ratings/people, last accessed 08.04.2018. In the project “Ranking of tender champions,” analysts of the think tank “Texty” systematized the data of the “Public Procurement” state portal for Forbes Ukraine (Bondarenko, Rieznikov, and Akymenko 2013). The analysis takes the results of the tenders organized by the state or by state-owned companies and won by private companies into account.

CASE STUDY OF VIKTOR YANUKOVYCH 263 create spheres of influence in the country’s economic system. As a result, most of the profitable enterprises involved in public procurement ended up under the control of the president’s son. The role of Yanukovych the younger Relying on the longstanding work of investigative journalists and anti-corruption NGO activists, it is possible to trace the main schemes which made it possible for Oleksandr Yanukovych, initially a dentist by profession, to increase his assets by more than 7000 % during his father’s presidency between 2010 and 2014.165 In 2013 his assets ballooned from US$ 187 million in April to US$ 510 million in November, which placed him on the list of the wealthiest people in Ukraine and made him the second richest man in the Donetsk region.166 Three main business structures are considered as the basis of the Yanukovych business empire: Mako Holding, Donbass Rozrakhunkovo Finansovyi Centr (DRFC) as well as the Ukrainian Bank of Development (UBD) (Figure 21).

165 The main source for the Oleksandr Yanukovych business analysis is the information provided on the Anti-Corruption Action Centre’s website. This NGO closely cooperated on stolen asset recovery with Ukrainian and international law enforcement institutions after the regime change. Yanukovich.info, Oleksandr Yanukovych, available online at: http://yanukovich.info/oleksan dr-yanukovych-assets/, last accessed 31 August 2018. 166 Forbes Ukraine, “Assets of Yanukovych the younger increased 3 times,” 1 November 2013, available online at: http://forbes.ua/news/1360500-kapital-yan ukovicha-mladshego-vyros-vtroe, last accessed 17 October 2014.

264 CORRUPTION AND ANTI-CORRUPTION POLICIES Figure 21: Oleksandr Yanukovych assets

Source: Yanukovych.info, available at http://yanukovich.info/oleksandr-yanukovych-assets/, last accessed 31 August 2018. © copyright 2020 by NGO Anti-Corruption Action Center

Prior to Yanukovych’s presidency in 2010, his son’s business interests were limited to the Management Assets Corporation, LLC registered in 2006. In February 2011 Yanukovych the younger established the successor of this company, CJSC Mako Holding. Mako Holding expanded significantly between 2011 and 2013 and became a parent company to 20 other very successful energy, coal, and construction companies in Ukraine, the Netherlands, and Switzerland. The success of the company is shown by the fact that less than one year after its registration the company showed an official net profit of approx. US$ 20 million and issued an additional 450,000 shares with a total value of around US$ 23 million, which Oleksandr Yanukovych purchased in January 2012 with cash. Since April 2012, Mako Trading (a Mako Holding coal export subsidiary) became a guarantor of export operations conducted by another highly profitable company in the coal-processing sector,

CASE STUDY OF VIKTOR YANUKOVYCH 265 DRFC LLC. DRFC belongs to a company registered in the British Virgin Islands, where the identity of the beneficiary owner of the company is hidden. The connection between Mako Trading and DRFC corroborates several investigations by journalists providing evidence of Oleksandr Yanukovych’s control of DRFC since 2010. In 2011, DFRC won public procurement contracts totalling up to US$ 100 million. 167 Moreover, in summer 2012, DFRC privatized five highly profitable state companies (“Uzlovskaya,” “Chervona Zirka,” “Komsomolskaya,” “Ukraine,” and “Russia”) (Kapliuk 2012), which were the leading tender winners in the coal-processing sector. Interestingly, this happened in March 2012 immediately following President Yanukovych’s initiation of legislative changes to introduce “improvements” in the management of state-owned enterprises, 168 making it possible to issue more than 50 % of stateowned factories’ shares to a private company. Another important source of income for Oleksandr Yanukovych was his business in the banking sector. The CJSC Ukrainian Bank of Development (UBD), founded in April 2009 by Donsnabtara LLC, deserves special attention. The head of Donsnabtara since its foundation in 1995 was Valentyna Arbuzova. Even though journalists argue that the bank was under the control of Oleksandr Yanukovych by 2010, in January 2011 he acquired 100 % of the shares of the UBD and became its official owner. Arbuzova remained head of the Executive Board of the UBD. Interestingly, Yanukovych acquired the bank just a few weeks after his close friend and Arbuzova’s son, Sergey Arbuzov, was appointed head of the National Bank of Ukraine. Moreover, in December 2012, Sergey Arbuzov became the First Vice PM of Ukraine. Compared to its initial statutory capital of around US$ 8.5 million in 2009, the capital of the UBD doubled by the end of 2013 (Figure 22).

167 Pubic Procurement statistics, available online at: http://z.texty.org.ua/seller/ 2478, last accessed 17 October 2014. 168 Verkhovna Rada Ukrainy, Zakonotvorchist’: Propozytsii Prezydenta do zakonu “Pro vnesennia zmin do deiakykh zakoniv Ukrainy shodo vdoskonalennia upravlinnia obiektamy derzhavnoi vlasnosti,” available online at http:// w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=41699, last accessed 17 October 2014.

266 CORRUPTION AND ANTI-CORRUPTION POLICIES Figure 22: The chronology of the Ukrainian Bank of Development’s capital increase

Source: Yanukovych.info, available at http://yanukovich.info/oleksandr-yanu kovych-assets/, last accessed 31 August 2018. © copyright 2020 by NGO Anti-Corruption Action Center

The two following examples will show how the UBD enjoyed so much success thanks to the public procurement of financial services through state institutions. The first important source of growth involved “salary projects” offered by the bank to state institutions and their employees. In December 2011, the UBD offered to take over the State Tax Service’s system for paying all of its employees (1200–1300). At this time, another close friend of Oleksandr Yanukovych and Sergey Arbuzov, Oleksandr Klimenko, was acting head of the State Tax Service. Moreover, Valentyna Arbuzova, who chaired the UBD, was also head of the Tax Payers’ Association of Ukraine. According to journalist investigations, this organization was created to “intimidate decision making” of the State Tax Service (Liamets 2012). The existence of these personal connections increased the risk of corruption and undermined the objectivity of decision-making in the procurement of services by state institutions.

CASE STUDY OF VIKTOR YANUKOVYCH 267 The Ministry of Finance authorizes banking services for state enterprises according to the decision of the tendering committee. Since 2010 the list of banks was essentially changed: the banks of previous president trustees—as, for example, the bank “Basis” of the former governor of Kharkiv, Arsen Avakov—were excluded from the list. Instead, as a result of a tender held by the Ministry of Finance, the UBD was allowed to offer payroll transfer services to state institutions. Previously, Tax Service employees were taken care of by the state-owned UkrEximBank, the second largest bank in Ukraine, with the highest international reliability rating (Liamets 2012). In 2012, they were “strongly persuaded” to agree to contract conditions between their employer and a private, much smaller bank with no international rating, the UBD. By similar schemes, the UBD won tenders for even more profitable “salary projects,” including for civil servants of the largest Ukrainian ministry, the Ministry of the Interior, as well as for servants of the court administrations in Kyiv and Donetsk. One might think that employees have a right to decide where to keep their savings and which bank to use; however, some anonymous complaints testify that affected civil servants were “strongly urged” to sign certain forms. These statements are supported by the comments of the President of the Association of Ukrainian Banks, Aleksandr Sugoniako, who said in an interview: The workers of budget organizations are made dependent. It is hard to find a job and people are afraid to say anything against their supervisors … There are not so many people ready to resist because they will have problems. (Dolgareva 2013a)

To have state institutions with around 3.5 million employees as customers is a very lucrative business opportunity for banks. There is the profit from fees for crediting money to the salary cards of the budgetary employees, which is 0.5–1 % of payroll, and the profit from fees for banking card services (Dolgareva 2013b). However, the main advantage is the opportunity to use the outstanding balance of so many accounts. Having large reserves of cash on hand is very important for the activity of any bank (Khamlets 2011).

268 CORRUPTION AND ANTI-CORRUPTION POLICIES The second important source of income for the UBD was public procurement contracts for providing credit to state-owned enterprises. According to the Anti-Corruption Action Centre, during 2013, the UBD won tenders totalling up to US$ 120 million. For example, in November 2013, the Odessa and Donetsk Railways received credits of approximately US$ 7 million each. In the first case, the UBD won the tender procedure offering 10.3 % interest against the state-owned bank Ukrhazbank (10.5 %) and the bank of Rinat Akhmetov, the First Ukrainian International Bank (PUMB) (11 %) (Nashi Hroshi 2013). This was not the first time that Yanukovych’s company competed against Akhmetov’s: In March 2013, “Donbas Oil” won a tender for around US$ 25 million to sell 153,500 tons of coal to stateowned “DonUgleRestructurizaciya” (Holovnev 2013). The suggested coal price was at least three times higher than its regular market price. Two other companies, which belonged to Akhmetov, participated in the competition. Even though they offered a much lower price for the same contract (around US$ 10 million), they were excluded from the tender for formal reasons: They showed the total price instead of the price per ton of coal. Although the identity of the beneficiary owner of “Donbas Oil” is hidden, journalist investigations suggest the owner is closely connected to the owner of Mako Holding, so it is very likely that the company is under the control of Yanukovych. Competition in public procurement often reflects the political influence of the bank or company owners. The reason for this is the widespread use of “admin resources” to receive the contract. Experts as well as management members of some banking institutions pointed out several obvious examples (Khamlets 2011): If governors of a certain region, for example Rivne and Kherson, are under the influence of Firtash, one of the main oligarchs in Ukraine, all banking services for the local state institutions, like schools, universities, hospitals, police, are provided by his bank “Nadra.” In cases where Akhmetov has influence over the regional governor, the PUMB would provide banking services (Kramariv and MokryiVoronovskyi 2012). The extremely fast growth of Yanukovych’s

CASE STUDY OF VIKTOR YANUKOVYCH 269 UBD resulted from the very rapid and active distribution of its services countrywide (Dolgareva 2013a, 2013b). Between 2010 and 2013, the banking sector that provided services for the public sector came very close to monopolization (Kramariv 2013). In the mid-2000s, after the Orange Revolution, there was a redistribution of customers in the banking sector too; nevertheless, small regional institutions had access to those services. During the presidency of Yanukovych, these services were distributed exclusively between his son Oleksandr (the UBD) and such close partners as Kurchenko (Real Bank, Bank Pershyi), Akhmetov (PUMB) and Firtash (Bank Nadra) (Leshchenko 2012). The “big six” in the government: impact of the “Family” on politics After the parliamentary elections in October 2012, a new government was formed. The new appointments reflected a dynamic in spheres of influence already visible in the economic sector. The analysis by the investigative journalist of Ukrainska Pravda, Serhiy Leshchenko, reveals that the “Family” of President Yanukovych and Akhmetov became partners in the formation of the government.169 They left only a ceremonial role to PM Azarov, who had co-influenced Ukrainian taxation and financial policies since Kuchma’s presidency (Leshchenko 2012). Since Yanukovych reintroduced the position of the Minister of the Cabinet of Ministers, naming Olena Lukash to the post, Azarov lost his influence on the formation of the cabinet’s agenda. According to some legislative changes, Lukash was accountable to the President of Ukraine and under his direct orders. Ministers loyal to Azarov from his first government, such as Yaroshenko, Semiynozhenko, Mytnyk, and Tolstoukhov were replaced. In their place, the “big six” took over the main departments in government. These were mostly young politicians, known as “druzi Sashka” (“friends of little Sasha”), who had proven connections, mainly through business, either to Oleksandr Yanukovych or his father. Serhiy Arbuzov, known as the “family’s banker” from previous 169 In the following assessment of the sphere of influence, the analysis by the investigative journalist and author Serhiy Leshchenko (2012) is heavily relied on.

270 CORRUPTION AND ANTI-CORRUPTION POLICIES sections of this work, became the First Vice PM, leaving his leading role in the National Bank to his trusted first deputy, Ihor Sorokin. The “Family” took control of the Ministry of Finance through appointment of Yuriy Kolobov, who held the post of minister from 2012 to 2014. Further, in the new government a “super-ministry” (Leshchenko 2012) was created, combining jurisdiction in both taxation and customs services, bringing customs authorities under the control of the “Family” too. The head of the State Tax Service, the person possibly involved in the “salary project” of the UBD, Oleksandr Klimenko, became Minister of Revenues and Duties. Under Yanukovych the Ministry of Internal Affairs remained under his trusted Minister Vitaliy Zakharchenko170 and the Ministry of Agrarian Policy and Food remained under Mykoly Prysyazhnyuk, whose son is believed to be the godson of President Yanukovych.171 While the former influence of the “Family” in the ministries was reshuffled and strengthened, an important new achievement for Yanukovych was control over the Ministry of Fuel and Energy under Minister Eduard Stavytsky. Stavytsky was actively involved in the corrupt scheme leading to privatization of “Mezyhirya”—the luxury home of President Yanukovych (Leshchenko 2009). At the same time, Stavytsky replaced a very influential person in Ukrainian energy policy, Yuriy Boyko. Boyko became a Vice PM with rather ceremonial functions and lost his influence over a very profitable sector in terms of enrichment opportunities.172 Another change came for Kostyantyn Hryshenko, who went from the post of Minister of Foreign Affairs to the same formal function as a Vice PM. Both of these realignments show Firtash’s declining influence. According to the investigative journalist Serhiy Leshchenko (2012), the incorporation of the “big six” into the government shows 170 On ministerial mining business activities, see Laburynt Zakharchenka, 27.01.2014, Nashi Hroshi, available online at: http://nashigroshi.org/2014/ 01/27/labirynt-zaharchenka/, last accessed 20 October 2014. 171 Rus. Kto Yanukovychu kum v ukrainskoy politike, 16.08.2010, Dosje, available online at: http://dosye.com.ua/articles/2010-08-16/kto-janukovichu-kum-vukrainskoi-politike-shema-/82/, last accessed 20 October 2014. 172 Boyko is closely connected to the corrupt scheme of procurement of drilling rigs. For details, see http://antikor.com.ua/articles/518-vishki_bojka_novi_po drobitsi_staroji_aferi, last accessed 20 October 2014.

CASE STUDY OF VIKTOR YANUKOVYCH 271 that Yanukovych did not trust any external partners and only ventured cooperation with people who had proven their loyalty in the past. Another group of ministers in the government that increased its activity acted under the influence of Yanukovych’s longstanding business partner from Donetsk, Rinat Akhmetov (Leshchenko and Shcherbyna 2012). But even some members of this group are characterized by intensive connections with the business of the “Family” (Leshchenko 2012). For example, the Minister of Economic Development and Trade, Ihor Prasolov, who was executive director of Akhmetov’s SCM Holdings, became head of the National Bank Council in 2012 under chairman Arbuzov of the National Bank. Similar connections to the “Family” are apparent in the cases of the Minister of Health, Raisa Bohatyryova, as well as the Minister of Infrastructure, Volodymyr Kozak (ibid.). In summary, from the beginning of the Yanukovych presidency in 2010 three main groups influenced the formation of politics in Ukraine, belonging to Firtash, Akhmetov, and Yanukovych’s son. Although the first two competed, the influence of the “Family” group was perpetually growing in both business and politics. Viktor Yanukovych entrusted his son to take over the most profitable economic sectors, while ensuring security of the business politically. Within three years, the young man became one of the richest people in Ukraine and his companies became tender champions in many sectors of the economy. 8.2.4.

Synthesis

The process tracing of the regime trajectory toward authoritarianism under Yanukovych, with special focus on the function of corruption, reveals the following tactics: Yanukovych fully exploited the malfunctions of the system of corruption in order to consolidate his power and acquire the prevalence of resources. The combination of social and monetary forms of corruption was crucial. Clientelism and political corruption in parliament led to its full subordination. Yanukovych had a constitutional majority that allowed him to appoint his own government and change the Constitution to increase presidential authority. The government of the opposition

272 CORRUPTION AND ANTI-CORRUPTION POLICIES leader Tymoshenko was dismissed and key figures were prosecuted. In addition, Yanukovych relied on the Party of Regions, which provided the framework for patronage and the creation of a strong political machine. The shift from patronage and clientelism to the extensive use of nepotism reveals the centripetal tendency underlying his tactics for political domination. On the one hand, the aim was to surround himself with personally proven and reliable people in all spheres, and, on the other hand, to exclude potential opponents from access to public resources. With a renewed expression of support for the informal clientelistic and patronage networks, monetary forms of corruption were used to monopolize access to resources. In order to do so, corruption was formalized and even legalized. In the field of public procurement, legislation was changed 18 times within two years, each time creating even bigger loopholes for corrupt activities. As a result, it became possible to extort large sums of money from the state budget without breaking any law. At the same time, it was necessary to politically control resourceful ministries to secure the most profitable tenders. In a very short time, Yanukovych’s son’s companies took over the most profitable economic sectors, while enjoying political support. The distribution of key ministries in the second government under Yanukovych reflected these tendencies and the growing influence of the “Family” in economy and politics. The monopolization of political corruption proceeded along with the authoritarian trajectory of the Yanukovych regime, impeding any possibility for democratic development.

8.3.

Corruption framing as a tactic for political domination

In this section the following empirical questions are analyzed: How did Yanukovych frame corruption during his presidential campaign and during his presidency? This study argues that he returned to the patterns of corruption framing under Kuchma. He defined corruption as a principal-agent problem and shaped his political identity as that of a powerful principal accordingly.

CASE STUDY OF VIKTOR YANUKOVYCH 273 8.3.1.

Antagonism of chaos and order

Presidential elections in 2010 took place in a context where the term “corruption” was strongly politicized and inflated. While originally the Orange coalition gained broad support with its narrative of democratization, at the end of the term its members disqualified themselves through mutual accusations of corruption. Yanukovych used this situation to construct a narrative of chaos and complete disorder under the Orange coalition. He deeply integrated the term “corruption” into this narrative of disorder and introduced “anticorruption” and “absolute observation of the law” as necessary tools for creating order. In the election campaign, and at the beginning of his presidency, Yanukovych referred to corruption as an urgent problem173 that he highly prioritized and aimed to resolve by bringing order to the chaos created by the Orange coalition. For instance, during a pre-election speech in January 2010 in Mariupol, Yanukovych said: Democracy is when all laws work, when all are equal under the law, when human rights are protected. Everything that we have seen in the past five years is not democracy; it is chaos and disorder created by the Orange coalition in the country. (UNIAN 2010a, Ukr. transl. by the author)

Following this statement, Yanukovych promised to bring order and to create the conditions for the absolute rule of law. The presidential candidate continued: We certainly will introduce the reform of the judiciary, we certainly will create an effective system to fight corruption. Ukraine will develop as a truly democratic state. I am absolutely confident about it. (UNIAN 2010a, Ukr. transl. by the author)

An interesting finding of the comparative analysis between Yushchenko and Yanukovych is that the latter abstained from direct accusations of corruption, while Yushchenko created in- and outgroups based on the normative antagonisms of good and bad, of 173 “I will put the fight against corruption on the list of priority issues that require urgent measures”—Yanukovych assured during an interview on the TV channel Inter, just before the second round of elections (UNIAN 2010b, Ukr. transl. by the author).

274 CORRUPTION AND ANTI-CORRUPTION POLICIES corrupt and non-corrupt. Instead, Yanukovych constructed antagonisms along the line of weak and strong leadership, chaos and order. This means that he excluded the leadership of the Orange camp as an “out-group” not owing to corruption, but primarily because of their inability to bring about order. For example, in his first speech to the nation on 5 June 2010, Yanukovych presents the “status quo” of the socio-political situation in the country: Ineffective state, detached from the people, turned into a bureaucratic machine that takes care only of the interests of public officials. Conflicts and dualism of the executive branch of power, weak self-governance, corrupt and dishonest courts, underdeveloped political parties—these are only a few aspects of the problem. We have lost five years talking about political reform. As a result, we presently have a critically low level of trust among people in the state. (Holos Ukrainy 2010, Ukr. transl. by the author)174

In this way, Yanukovych killed two birds with one stone: First, he circumvented the conceptualization of corruption as a problem of the political leadership and reduced it to the indefinite mass of greedy civil servants, which allowed him to position himself as a president above the problem. Second, he introduced the narrative of strong leadership necessary to overcome chaos. Such an antagonism provided the perfect foundation to construct Yanukovych’s identity as a strong principal, willing and able to control corruption. 8.3.2.

Functions of the empty meaning of “corruption”

In comparison to the previous two presidents, Yanukovych did not make much effort to elaborate on the term “corruption” or to explain his view of problem. Instead, he embedded corruption in a chain of emotional metaphors. For instance, at the meeting of the Committee for Economic Reforms on 9 September 2011, Yanukovych uses the cancer metaphor:

174 Similarly, in the first meeting of the working group on judicial reform, Yanukovych criticized the status quo in the judiciary and stated that the previous president had paved the way for corruption in the judiciary: “Our system of justice has no concept, it is divided. Society is unhappy, our partners in the world are unhappy. Everyone criticizes this system. Is this justified? … Yes, it is. And in the last five years the system became even more corrupt” (Sidorenko 2010, Ukr. transl. by the author).

CASE STUDY OF VIKTOR YANUKOVYCH 275 Although we substantially increased anti-corruption legislation, this cancer continues to live, and we have to remember that without governmental initiatives this cancer will not disappear. This is the only remedy. (UNIAN 2011k, Ukr. transl. by the author)

Another example is the use of war rhetoric in the fight against corruption: The level of corruption in the current government remains critically high … I declared war against corruption and want to stress that it is not only rhetoric, in this country there will be no us and them, and who has not understood this until now, will experience it personally (Rus. na svoei shkure), very soon.”—he said during the speech on the 20th Independence Day (UNIAN 2011j, Ukr. transl. by the author).

There are many other examples of populist-like speeches by Yanukovych, full of metaphors, but void of any concrete and meaningful analysis or suggestions. For instance: We are beginning the systematic fight against corruption in Ukraine. Corruption is an enemy of the Ukrainian people, it’s an enemy of business, it is a system that nourishes those few on its chain: providing or denying allowances, as it sees fit. And all must pay bribes. It is necessary to stop this system, uproot corruption with a hot iron (Rus. kalionym zhelezom). No one in the state will do business with the government’s budget. And we will cut the pockets that they sew down to their feet. (Rus. I karmany, kotoryie oni poshili do piat, my chiknem). (UNIAN 2010e, Rus. transl. by the author)

Such emotional and empty use of the term “corruption” was convenient for several reasons. If the problem is not defined concretely but perpetually mentioned as an ultimate evil, it makes the phenomenon impossible to capture. In the second and third years of his presidency, this amorphous reference to corruption provided a convenient excuse for lack of improvement despite reforms. For example, in April 2011 Yanukovych referred to corruption as the reason for the inefficiency of the state and for the failure of his widespread reforms in his annual state of the union address in parliament: Where is this inefficiency coming from? First of all, the year 2010 witnessed both government and society unprepared to accept the recommended changes. The state bureaucracy machine that survived under every government uses inertia to save its usual mechanisms of administrative resources and corrupt schemes of shadow income. (Uriadovyi kurier 2011, Ukr. transl. by the author)

276 CORRUPTION AND ANTI-CORRUPTION POLICIES He made a similar argument in the same address one year later, in July 2012. After announcing his steps toward modernization, Yanukovych admitted: Already during their early stages, the reforms in Ukraine faced strong challenges that created serious obstacles to the process of deep changes in all spheres of societal life and devalued the results we have achieved. The main challenge is the inertia and resistance of the corrupt bureaucracy. Clashes between the intentions of the political leadership of the state and the interests of bureaucratic groups, created according to the principles of the regional and corporate sector division, are increasingly growing into conflict. These clashes became a fertile soil for the ideological positions of political parties and movements that are opposed to our reforms. (Uriadovyi kurier 2012, Ukr. transl. by the author)

Yaunkovych also referred to corrupt bureaucracy to explain inefficient reforms to Western partners. In the Parliamentary Assembly of the Council of Europe, he said that bureaucracy, which was “living off the system,” uses different instruments of pressure against the government’s reforms: “It took years and decades to organize this corrupt business and now they (bureaucrats) do not want to let it go,” he said in Strasbourg (UNIAN 2011h, Ukr. transl. by the author). Therefore, the fight against corruption will take a long time. Moreover, Yanukovych accused corrupt bureaucrats of making democratic statements to escape criminal sentences. For example, in an interview with BBC World, he was confronted with allegations that he uses the fight against corruption selectively against his opponents. He responded: Corrupt officials and bureaucrats cover themselves with these words, looking for opportunities to protect themselves, including under the cover of democratic slogans. (UNIAN 2011c, Ukr. transl. by the author)

Thus, when Yanukovych was accused of harassing the opposition, based on 30 criminal investigations against Tymoshenko and her government, 175 he referred to them as “real anti-corruption.”

175 The Procecutor General’s Office initiated over 30 criminal investigations with allegations of misuse of the budget by the former government of Tymoshenko. During the first press conference for the regional and central media, President

CASE STUDY OF VIKTOR YANUKOVYCH 277 Mostly, he embedded these references in his public speeches abroad. For example, during his visit to the Economic Forum in Warsaw in February 2011, Yanukovych stressed that over the past 20 years in Ukraine, the basis “for global corruption” was created, and that the present government sought its destruction: When such a strong and crushing hit on the bureaucratic system is made, there is the same strong counteraction. Therefore, we see today how bureaucracy and corruption in Ukraine is obscured with democratic slogans … They are blatantly lying, distorting facts, hiring staff from Europe and the USA, and paying them stolen money to misinform the entire world and Ukrainian society. (UNIAN 2011b, Ukr. transl. by the author)176

Using this perspective, Yanukovych removed the antagonistic line between democracy and corruption, and claimed that in some cases references to democracy were related to corruption. Such rhetoric had confusion as its function and was aimed at blurring the line between “true” and “false.” Rhetorical relativity in his treatment of the facts through counter-accusations of corruption became a useful and favorite tactic of Yanukovych in response to accusations. For instance, when asked a critical question, Yanukovych retorted by accusing the journalists of corruption. When on the TV show “Talk with the country” the journalist asked when the anti-corruption law project would be adopted, Yanukovych stressed that corrupt individuals hinder the process and journalists experience pressure as well: I believe, you [the journalists] experience it as well. Yes or no? Say it honestly. I do not believe that no one tried to bribe you to produce or “instructed” the kind of content to criticize the current government, to look for weak spots in the government. And this all hinders speaking truthfully. (UNIAN 2011d, Ukr. transl. by the author) Yanukovych made few statements, accusing the former government of widespread corruption (Delo 2010). 176 A similar statement was given a few months later in Strasburg, stressing his political will to fight corruption: “This is an intensifying process, hundreds of criminal cases against the representatives of the former and current government are open. At the same time, by covering themselves with the status of opposition, former high-level officials try to avoid sentences for corrupt action, which has nothing in common with political activity … We are ready to have an active dialogue and give objective information about the situation in our state, however, the court should give the final answer.” (UNIAN 2011g, Ukr. transl. by the author)

278 CORRUPTION AND ANTI-CORRUPTION POLICIES In fact, Yanukovych suggested that the press critical of him and his regime was corrupt. Such rhetorical tactics relativized his personal involvement in corruption by shifting focus from personal failures to corruption as an omnipresent phenomenon involving all. In summary, Yanukovych consciously left the empty signifier of “corruption” empty and played only with the normative and universal cover of the term—as a negative phenomenon and the root of all state failures, but difficult to capture. Such tactics were useful to relativize the accusations against him and blur the line between “true” and “false.” 8.3.3.

Framing corruption as a principal-agent problem

Despite giving very little explanation of what corruption is, the quotes above allow us to trace the principal-agent approach to the inherent problem of corruption, especially regarding its source. In comparison to Yushchenko, who framed corruption as a problem on the high political level, Yanukovych’s framing is striking: He diagnosed corruption as a problem of civil servants and the bureaucracy. For instance, in his annual state of the union address in parliament in April 2011, Yanukovych linked the phenomenon of systemic corruption to the interaction between citizens and bureaucrats:177 Corruption in Ukraine is a systemic phenomenon. Corruption destroys the state and humiliates every citizen, who is forced to protect their own interests by means of shady relations with bureaucrats. (Uriadovyi kurier 2011, Ukr. transl. by the author)

Similarly, Yanukovych addressed corruption in the second year of his presidency at the National Anti-Corruption Committee meeting in June 2011, as a problem that is closely linked to the bureaucratic apparatus: We are all very well aware that corruption in Ukraine became the medium for the existence of the bureaucratic apparatus and the reason for the widespread shadow economy, it is a threat to the security of our country. Stealing 177 A few months earlier Yanukovych stated that his government would not be able to undertake any reforms if the level of corruption remained so high. On 18 March 2010 he said: “Many civil servants turned the state budget into a business, their pockets are bottomless. It is unacceptable” (UNIAN 2010d, Ukr. transl. by the author).

CASE STUDY OF VIKTOR YANUKOVYCH 279 from the strategic assets and resources of Ukraine, the land and natural resources became constant topics on the news in our state. (UNIAN 2011f, Ukr. transl. by the author)

Framing corruption as an economic crime 178 mostly in monetary (excluding social) form, such as bribery, is also a part of the principal-agent approach and shows similarities with Kuchma’s conceptualization of corruption. In summary, Yanukovych distanced himself from the problem of corruption as a principal, while presenting the “agent”—civil servants and the bureaucracy—as its main source. Similar to Kuchma’s case, the principal-agent framing of corruption allowed Yanukovych to use the topic as legitimation for the doubtful reforms and political decisions that bordered on being authoritarian, as the section below will demonstrate. 8.3.4.

Suggested remedies

Since his election, Yanukovych elevated the problem of corruption to the top of his priorities. He actively communicated a strong determination to fight corruption. Inflationary, but non-concrete and empty uses of the term “corruption” as the source of all problems made it a perfect tool to substantiate and legitimize many doubtful political decisions, imprisonment of opposition members for corruption, and major reforms, such as judiciary reform, constitutional reform and the reform of the public procurement sector. All these reforms and actions led to the consolidation of power and the monopolization of corruption rather than its counteraction.179 Direct anti-corruption measures In line with the principal-agent approach, Yanukovych’s direct anti-corruption recommendations included increasing the material and moral costs to corrupt “agents” by applying administrative and criminal sentences for corruption, as well as by improving the 178 For instance, in Yanukovych’s first speech to the nation in June 2010, he named corruption as a “satellite” of the shadow economy that reaches 50 % of the GDP in Ukraine (Holos Ukrainy 2010, Ukr. transl. by the author). 179 For detailed assessments of the reforms under Yanukovych see (Åslund 2015, 79 ff.; Havrylyshyn 2017, 141 ff.).

280 CORRUPTION AND ANTI-CORRUPTION POLICIES asymmetry of information between principals and agents for greater control. Among others, his recommendations included: creating an open register of corrupt officials and their cases (Delo.ua 2011) (strategy of “naming and shaming”), introducing fines for corruption (UNIAN 2011f), and opening criminal investigations against corrupt officials (UNIAN 2011a). Further, Yanukovych communicated his support for all kinds of monitoring and surveillance initiatives that allowed the exposure of corruption (UNIAN 2011e). He highlighted his possession of information about corrupt schemes and the officials involved. For instance, during a meeting with the economic reforms committee in Lviv on 12 April 2011, he stated: The surnames of those who steal from the state budget are very well known. My aim is not to put someone in jail. If they return the money—there will be one conversation, if not—the conversation will be very different. (Savchenko 2011, Ukr. transl. by the author)

Such tactics to demonstrate the availability of information about corruption were extensively applied by Kuchma to sustain his blackmail machine. Yanukovych’s rhetoric in these terms was not nearly as extensive as Kuchma’s. Fighting bureaucratization Additional direct anti-corruption measures will be analyzed in the next chapter, since Yanukovych succeeded in immediately implementing several promises in terms of anti-corruption policy, unlike his predecessor. Thus, in terms of the use of anti-corruption rhetoric, it is much more interesting to analyze the indirect anti-corruption remedies suggested by the president. The primary indirect and broad remedy against corruption was “fighting bureaucratization.” During the Council of Regions meeting in December 2010 Yanukovych announced widespread administrative reform that he would personally control: The fight against bureaucracy, reducing the level of corruption and increasing the efficiency of state governance—these are my priorities for 2011. … Bureaucracy, with its conservatism, corruptibility and predatory attitude to the people is now subject to change. Civil servants are only focused on the creation of new oversight authorities. The number of bureaucrats and the

CASE STUDY OF VIKTOR YANUKOVYCH 281 cost of sustaining them are increasing, while the level of their competence decreases. (UNIAN 2010f, Ukr. transl. by the author)

At the same time, Yanukovych appointed seven Deputy PMs in Azrov’s first cabinet. According to expert assessment, this speaks to the high level of political corruption (UNIAN 2010c). Besides, the record number of deputy ministers and the size of the cabinet (29 Ministers) contradict claims of administrative reform to reduce the state apparatus, since each ministry required staff and budget. Additionally, during the business forum in Kyiv on 29 June 2011, Yanukovych addressed the process of deregulation in his speech. He noted that the goal of economic deregulation is to remove hampering restrictions on business, like, for instance, the 12,000 eliminated firms that offered administrative services embedded in corruption schemes, “developed by public servants of different ranks” (UNIAN 2011i, Ukr. transl. by the author). Beyond rhetoric, however, the extensive program of economic reforms resulted in the new tax code and fiscal reform that favored big business and increased the burden on SMEs (Havrylyshyn 2017, 147). Reform of the judiciary Further, in early 2010 Yanukovych initiated substantial reform of the judiciary. In his address to the nation in 2010, Yanukovych said: I initiated the judicial reform in order to provide rule of law. The goal of this reform is to provide real independent courts, judges and lawsuits, to protect citizens, to fight corruption in all spheres of society and at all levels of government, to restore societal trust in the judicial system. The judicial reform is based on our experience, suggestions of the Venice Commission, and the requirements of international organizations with regard to justice. (Holos Ukrainy 2010, Ukr. transl. by the author)

This reform was a high priority for Yanukovych, since at the beginning of his presidency he created a unique position, Deputy Head of the Presidential Administration. However, as was stated in the analysis of regime trajectory under Yanukovych, this reform made the judiciary fully dependent on the president and paved the way for a change of the Constitution favoring presidential power. In summary, Yanukovych presented himself as a committed reformer and rhetorically substantiated all major reforms with

282 CORRUPTION AND ANTI-CORRUPTION POLICIES reference to the problem of corruption. Swift consolidation of power and an absolute majority in parliament allowed him to selectively implement the reforms. However, they only benefited the very few members of the “Family” and allowed Yanukovych to maintain his consolidation of power (Åslund 2015, 83; Havrylyshyn 2017, 149). 8.3.5.

Popular attitudes

The focus on creating order was well received among the populace during the electoral campaign and early stages of his presidency. Polls show that citizens welcomed Yanukovych’s drastic and decisive measures, despite their authoritarian dynamic. As Figure 23 demonstrates, in the first months of his presidency (March–April 2010), nearly 30 % supported certain actions of the president and over 40 % of respondents fully supported him. Figure 23: Survey about support for Viktor Yanukovych, 2010– 2013 Do you support the activity of President Yanukovych? 70 60 50 40 30 20 10

0 Ju n. 10 A ug .10 O ct . 10 D ec .1 0 Fe b. 11 A pr .1 1 Ju n. 11 A ug .11 O ct . 11 D ec .1 1 Fe b. 12 A pr .1 2 Ju n. 12 A ug .12 O ct . 12 D ec .1 2 Fe b. 13

pr .1

A

Fe

b. 10

0

Fully support

Support certain actions

Do not support

Difficult to answer

Source: Sociological Service of the Razumkov Centre, recurrent survey 2000–2015, http://old.razumkov.org.ua/eng/poll.php?poll_id=67, last accessed 31 August 2018.

The positive tendency rapidly changed for three reasons: First, in October 2010, the full subordination of all branches of power was

CASE STUDY OF VIKTOR YANUKOVYCH 283 completed and its authoritarian tendency was obvious and incontrovertible. Second, from 2010–2011 multiple legislative loopholes were deliberately introduced that increased the risk of corruption and massively undermined all positive developments in anti-corruption policy in early 2010. The real facts undermined the narrative of bringing order to chaos. Third, the anti-corruption CSOs professionalized and were able to exploit a brief window of opportunity that enabled transparency during public procurement in 2010–2011. Investigative journalists (esp. the website “Nashi Hroshi”) began publishing evidence of corruption in the “Family” of President Yanukovych. 8.3.6.

Synthesis

Already during the presidential campaign, Yanukovych demonstrated differences from the antagonism that Yushchenko used to become president in 2004. Yushchenko succeeded in building social group identities through the inclusive non-corrupt and democratic, pro-Western “Self” and excluded his rivals as authoritarian and corrupt “Others.” Given the decreasing support for democracy among the population in 2009, Yanukovych shifted focus away from “noncorrupt” democracy vs. “corrupt” authoritarian politicians toward the antagonism of chaos and order. He excluded the Orange camp as weak and unable to impose order on chaos. He positioned himself as a decisive and strong politician, willing and able to create order. Compared to Yushchenko, who framed corruption as a problem on the high political level in his conflicts with the government and parliament, Yanukovych’s framing allowed a more flexible dynamic of inclusion and exclusion in the construction of identities. Yanukovych left the term “corruption” without explicit meaning. So instead of framing concrete actors or personalities as corrupt, he assigned the problem of corruption to an abstract collective actor— the bureaucracy. Such amorphous reference to the problem allowed selective coercion, not only against opposition members, but also his own team. According to the theory, the trajectory toward authoritarianism suggests framing corruption in line with the principal-agent

284 CORRUPTION AND ANTI-CORRUPTION POLICIES logic. Indeed, Yanukovych demonstrated clear parallels to Kuchma and framed corruption as a principal-agent problem. The central difference from the collective action approach is the focus on the middle and lower level civil service as the main group responsible for corruption, instead of examining high-level politicians as the main source of corruption. This framing prepared a solid basis for a centralized anti-corruption policy and the creation of anti-corruption institutions, subordinated directly to the president. Thus, in such a discursive context, Yanukovych positioned himself as a strong president—the principal, willing and able to control corrupt bureaucrats—the agent. At the same time, the “agent” was left abstract and indefinite, which enabled selective prosecution. In addition, the framing of corruption as a principal-agent problem allowed using the problem for the legitimization of reforms that increased presidential powers and drifted toward authoritarianism. Thus, judiciary, administrative, taxation, and public procurement reforms were framed as anti-corruption measures. In reality, they were used to formalize the monopoly on power and strengthen the position of the “Family” by selective access to state resources and receiving undue profit.

8.4.

Assessment of the anti-corruption policies

Yanukovych faced intense pressure to develop and implement anticorruption policy when entering office. He used the topic of corruption centrally during his election campaign, accompanied by promises to introduce anti-corruption measures as a priority issue and create “order from chaos.” Besides, the conditionality of the international organizations was a crucial tool to impose pressure on the government to implement anti-corruption policy. Unlike Kuchma, who met resistance from parliament during his first term, and Yushchenko, who could not count on support from the government, Yanukovych was able to quickly introduce new anti-corruption legislation. This section analyzes how political domination was used to play down previous anti-corruption policy. It is argued that in line with the principal-agent conceptualization of corruption, Yanukovych was able

CASE STUDY OF VIKTOR YANUKOVYCH 285 to dominate the content and structures of anti-corruption institutions. His dominant role in the political system allowed Yanukovych to abolish previous, effective anti-corruption legislation and introduce a new, non-effective one. The new façade of anti-corruption became a necessary formality to satisfy Western donors. 8.4.1.

Constellation of actors and control of corruption

International community At the beginning of his presidency, Yanukovych maintained a proWestern foreign policy, an important factor that influenced the government’s anti-corruption activities. International organizations and Western partners could exert influence in three ways: First, by conditionality to receive loans from the IMF and foreign funding development projects; second, the EU’s association conditionality; and third, grants for particular projects related to anti-corruption. Under Yanukovych, IMF loans were an important source to financially stabilize the country after the economic crisis of 2008. Historically, Ukraine had annual agreements with the IMF between 1994–1998 and in 2004, 2008, and 2010. Most loans in the first decade were small, under a billion dollars, which radically changed after the global financial crisis in 2008, according to the PONARS Eurasia analysis (Barnes 2015). Accordingly, in October 2008, the IMF granted Ukraine a US$ 16.4 billion loan, and paid out US$ 10.6 billion of the entire amount only in May 2010—when Yanukovych was already in office (Choursina and Rastello 2010). In July 2010, the government arranged a new deal with the IMF concerning a loan of US$ 15 billion over the next two years. Thus, foreign assistance and monetary loans under Yanukovych substantially increased and exceeded the previous arrangements many times over. This financial dependency also increased the influence of Western partners and the pressure to introduce anti-corruption reforms that are an immanent part of the arrangements. In addition, between 2010 and 2014, foreign funding substantially increased in comparison to previous years, reaching a peak of 188 projects in 2013, as the data on the official state website “Open Aid Ukraine” demonstrates (see Figure 23). For instance, between

286 CORRUPTION AND ANTI-CORRUPTION POLICIES 2010 and 2013, the European Bank for Reconstruction and Development (EBRD) provided the government with more than EUR 2.5 billion in loans for diverse infrastructure projects.180 Figure 20: Foreign funding-based development projects in Ukraine, 1994–2016

Source: Ministry of Economic Development and Trade, Open Aid Ukraine, available online at: http://openaid.gov.ua/en/analytical_reports, last accessed 11 June 2018.

Another source of pressure was the EU’s conditionality. The EU is listed as the main donor in Ukraine with around 500 large projects.181 The anti-corruption commitments were incorporated into the EU’s Action Plan on Visa Liberalization, as a requirement to boost Ukraine’s relations with the EU (Council of the EU 2010; European Commission 2013; EU-Ukraine Cooperation Council 2013; IRF 2013). The OECD Round 3 Monitoring of the Istanbul Anti-Corruption Action Plan “Anti-Corruption Reforms in Ukraine” indicates the EU’s requirements as the “major incentive and boost for relevant legislative reforms” (ACN OECD 2015, 18). At the same time, experts relativize the effectiveness of the anti-corruption policy, stating that the anti-corruption legislation amendments … did not provide for comprehensive vision of the reform, but rather gradual adjustments to receive EU endorsement. (ACN OECD 2015, 18)

180 Open Aid Ukraine, Official portal for international assistance coordination, Ministry of Economic Development and Trade: http://openaid.gov.ua/en/, last accessed 31 August 2018. 181 Open Aid Ukraine, Ministry of Economic Development and Trade: http://open aid.gov.ua/en/dashboards/1-analitychni-pokaznyky-po-donoram-analyticalindicators-by-donors, last accessed 31 August 2018.

CASE STUDY OF VIKTOR YANUKOVYCH 287 Finally, the grants for capacity building and technical development assistance provided a further incentive for anti-corruption activities. In 2011, the Ukrainian Helsinki Human Rights Union (UHHRU) released the numbers of foreign grants that Western donors provided in 2010 to support the rule of law, human rights and democratic governance (Ukrainian Helsinki Human Rights Union 2011). The UHHRU estimates that Ukraine received around US$ 60.4 million from 15 main donor organizations. Eight of them provided assistance of over US$ 1 million: USAID (US$ 21 million), the European Union (US$ 15 million), Canada (US$ 6.5 million), UNDP (US$ 4.3 million), Sweden (US$ 3 million), the National Endowment for Democracy (US$ 2.2 million), the International Renaissance Foundation (US$ 1.3 million) and SIDA (US$ 1.3 million). Most of the grants were received by the government. In summary, the flood of foreign funding into Ukraine in line with the attached conditionality suggests there were no intrinsic anti-corruption aspirations under Yanukovych, but rather the façade to satisfy the minimum requirements of the foreign donors. Political actors: National Anti-Corruption Committee On his second day in office, 26 February 2010, President Yanukovych issued presidential Decree No. 275/2010 that created the National Anti-Corruption Committee (NAC). The main function of the NAC was to provide a consulting platform for relevant anticorruption agencies with the aim: … to radically improve the situation in the field of anti-corruption in Ukraine, to provide coordinated action for law enforcement agencies in this field, to undertake real steps for increasing citizen trust in the government, to noticeably improve the investment climate, strengthen relations with the international community, to protect human rights and freedoms, to establish the rule of law in line with the Law “On the foundation of Ukrainian National Security” (964-15) that indicates widespread corruption, bribery in the government, the interconnection of business and politics, and organized crime as the main threats to the national security and stability of Ukraine.182.

182 Decree of the President of Ukraine No. 275/2010 from 26.02.2010 Ukr. “Pro Utvorennia Natsionalnoho Antykoruptsiinoho Komitetu”, http://zakon2.rada. gov.ua/laws/show/275/2010, last accessed 31 August 2018, Ukr. transl. by the author.

288 CORRUPTION AND ANTI-CORRUPTION POLICIES The first meeting of the NAC took place on 22 April 2010. There, two primary goals for the NAC were agreed: First, to develop a strategy for its general work and, second, to develop a national anticorruption strategy (Khavroniuk 2013a). Accordingly, the primary tasks and functions of the NAC encompassed development of anticorruption legislation and harmonization of the available anti-corruption laws, including elimination of the existing contradictions and inconsistencies. 183 Khavroniuk notes that between 2011 and 2013 the committee [NAC?] did not introduce any legal project on anti-corruption to the parliament (Khavroniuk 2013a). Practically, however, the NAC was designed to support the president in executing his authority in the field of anti-corruption. Already in the early stage of the NAC, critics voiced skepticism about the committee: The creation of the NAC witnesses Yanukovych’s return to the practice initiated by Leonid Kravchuk and continued by Leonid Kuchma. (Geda 2010b, Ukr. transl. by the author)184

The main source of skepticism was the committee’s structure. It was directly subordinated to the president (Yanukovych), hampering political independence and impartiality. The NAC consisted of the heads of law enforcement agencies, representatives of the related parliamentary committees and of civil society organizations. The NAC’s structure was highly problematic, since most of its political

183 An extensive comparative table on the two functions and responsibilities of the NAC defined in Decree No. 890/2011 and amendments in Decree No. 598/2012 is available in Khavroniuk 2013a. The amendments to Decree No. 890/2011 from 1 September 2011 entrenched the main tasks and functions of the NAC. See: Ukr. Ukaz Prezydenta Ukrainy “Pytannia Natsionalnoho antykoruptsinoho komitetu”, 01.09.2011, No. 890/2011, vtrata chynnosti 16.10.2014, Ukr., http:// zakon2.rada.gov.ua/laws/show/890/2011, last accessed 31 August 2018. 184 In her commentary, Geda (2010b) also indicates that similarly to the NAC, in 1993 Kravchuk created the Coordination Committee against Corruption and Organized Crime. The aim of this institution was to elaborate recommendations for the development of anti-corruption strategy, to brief the president on the results of anti-corruption measures, as well as to inform the populace about anti-corruption measures adopted by the president. This Committee was abolished by decree by President Yushchenko in 2005.

CASE STUDY OF VIKTOR YANUKOVYCH 289 members were highly dependent on the president, making impartiality of policy impossible. Initially, the executive secretary of the NAC was the Minister of Justice. But when in early 2012 the NSDC became subordinated to the AP and lost its status of impartial advisory body to the president (Havrysh 2012); on 12 October 2012 (Decree No. 598/2012) the role of executive secretary was given to the Secretary of the NSDC, which meant direct subordination to the AP. Other members of the NAC were the PM, the heads of the SBU, the AP, the Higher Council of Justice, the Chair of the Rada, the Prosecutor General, the Chairmen of the Supreme Court, and the Accounting Chamber. Although the new decree of 2012 prescribed that a minimum of one fifth of the committee members should be representatives of civil society organizations, this rule was never obeyed (Khavroniuk 2013a). According to the rules, CSO representatives were included in the committee on the suggestion of the civic council and after approval of the executive secretary. Khavroniuk comments: Interestingly, according to the regulation, the Civic Council operates in the form of a working group. The executive secretary defines the individuals included in the working group. Thus, there is no way that any representative of civil society will be included in the Committee without agreement of the Committee’s executive secretary. (Khavroniuk 2013a, Ukr. transl. by the author)

Thus, due to increasing political manipulations as well as a lack of effective influence on the committee, two influential NGOs, Transparency International and New Citizen Partnership, dropped out of the NAC (Sushko and Prystayko 2013, 589). The main indicator of the negative public assessment of the NAC was the fact that the same coalition which had voted for the establishment of the institution voted against bringing the package of anti-corruption laws adopted in June 2009 into force. The main innovation of this 2009 package was a powerful mechanism of financial control of all state authorities and each public servant (Butusov 2010). Butusov indicates that a conflict of interest was present from the moment the institution was conceptualized: The conceptual prototype for the NAC was the Office of the Inspector

290 CORRUPTION AND ANTI-CORRUPTION POLICIES General (OIG) of the U.S. Department of Justice.185 The author explains that the only reason the U.S. inspectors are successful is not because they are all honest, but because the U.S. has an effective system of financially controlling incomes and expenses. Collaboration between tax authorities that control public servants and the OIG radically reduces the possibility of embezzlement among American public officials. The anti-corruption package of laws adopted in 2009 in Ukraine introduced obligations for public officials, judges, and prosecutors to publish their asset declarations. Therefore, the implementation of the 2009 law package was prevented: If implemented, the decision makers would have to carefully control that their expenses match their legal income; otherwise any mistake in declaration means resignation. What we have now instead are meaningless criminal investigations that are usually closed sooner or later, depending on the financial sustainability of the “client.” (Butusov 2010, Rus. transl. by the author)

In summary, the NAC under Yanukovych was a highly political institution, organized to control all anti-corruption activities and prevent their impartial, effective utilization against high-level political officials. Civil Society It is impossible to understand the political dynamic in Ukraine without considering the development of civil society (Solonenko 2015, 251). In the first decade of the new century, the number of NGOs was constantly growing. Although immediately after the Orange Revolution civil society was highly fragmented and not

185 “The Committee is an organization that coordinates the work of all law enforcement agencies, special and fiscal control agencies. Employees of the committee with very broad authorities join the institution of the executive branch of power. His or her main task is the operational audit of decision-making, it means not only financial expenditures, which is the task of the Accounting Chamber in Ukraine, but of all decisions. For instance, if some state agency sells its property for a very low price and some chief of a governmental agency, in this case the anti-corruption authorities, is obliged to assess such decisions, involve responsible agencies, and, if necessary, initiate an investigation” (Butusov 2010, Rus. transl. by the author).

CASE STUDY OF VIKTOR YANUKOVYCH 291 sustainable, the situation began to change in the early years of Yanukovych’s presidency: numerous formal and informal civil society initiatives began consolidating, creating networks, professionalizing their watchdog role and control functions in politics (ibid.). Freedom of the press and freedom of assembly between 2005 and 2010 gave an important impetus to the evolving activities of civil society. However, decreasing democracy under Yanukovych, censorship, and surveillance in society were the main factors that encouraged consolidation of advocacy coalitions and networks in civil society (Solonenko 2015, 257). Several examples are worth mentioning:186 For instance, the first coalition—“New citizen” (Ukr. Novyi hromadianyn)—consisted of approx. 50 NGOs and was created before presidential elections in 2010 with aim of analyzing the programs of the candidates and monitor the fulfillment of their promises. The journalist network “Stop Censorship” (Ukr. Stop Zensuri) consisted of 130 activists who advocated freedom of the press under conditions of increasing censorship. Finally, the movement “Honest” (Ukr. Chesno) involved 150 organizations for monitoring parliamentary elections in 2011 and counteracting corruption in parliament. For the development of Ukrainian anti-corruption NGOs, 2011 was a crucial year, as Andriy Marusov, then the chair of the board of Transparency International Ukraine, stated during a meeting with the representatives of the anti-corruption CSOs in March 2018. A special spark in the anti-corruption movement came from the website “Nashi Hroshi” (“Our Money”)187 that specialized in investigations of corruption in the public procurement sector. According to Marusov, this website became a role model for further similar public investigation initiatives. According to the founder of “Nashi Hroshi” and its editor-inchief Oleksa Shalaiskyi, in 2011 anti-corruption legislation allowed transparency in public procurement—the sector that is most prone to corruption. Although the legislation was operative for a very

186 For detailed description of the examples, see Solonenko 2015, 257-258. 187 Website “Nashi Hroshi” for journalists’ investigations of corruption in public procurement: http://nashigroshi.org, last accessed 31 August 2018.

292 CORRUPTION AND ANTI-CORRUPTION POLICIES short time (several amendments eliminated very quickly the possibility of public control; see Chapter 8.2.2), this gave a window of opportunity to access information about public procurement that was decisive for the investigations. New, active CSOs were operational only with support from foreign donor organizations (Solonenko 2015, 263 ff.) and experienced many challenges from the state. Considerable financial assistance has been provided by the EU and its member states, the European Council, the UNDP, and the United States, as well as by the private foundation of George Soros—the Open Society Foundation (ibid.). Even more important, however, was the direct dialogue between international organizations and Ukrainian civil society institutionalized since 2011 as an initiative of the EU (ibid.). For instance, in the course of meetings between representatives of International Organizations and Ukrainian civil society, external donor organizations received an additional source of information with regard to the implementation of conditionality, connected to loans and technical assistance to the state. In addition, critical voices of the watchdog organizations influenced new requirements for the next tranche. This constellation created a “sandwich-effect” when the Ukrainian government experienced pressure with regard to anti-corruption legislation and its implementation and was forced to react. 8.4.2.

Conceptualization of corruption in the legislation

Under high pressure from international organizations, in June 2009 the Rada adopted a package of anti-corruption laws, elaborated in a long consultation process with international anti-corruption agencies under president Yushchenko. This package included the Laws “On the Principles for Preventing and Counteracting Corruption,” “On the Liability of Legal Persons for Corruption Offenses,” and “On Amendments to Certain Legislative Acts of Ukraine regarding the Liability for Corruption Offenses.” This package of anti-corruption laws was meant to come into force on 1 January 2010; however, Yanukovych postponed this date twice, arguing that he wanted to create a special anti-corruption bureau first, as

CASE STUDY OF VIKTOR YANUKOVYCH 293 otherwise the laws would have no chance to be effective.188 Finally, all three laws were revoked in December 2010. The NAC subordinated to Yanukovych was entrusted to harmonize existing anti-corruption legislation and elaborate the project of the Anti-Corruption Bureau. During the opening meeting of the NAC on 23 April 2011, Yanukovych said: For a long time, the problem of corruption has created a headache on a national scale. Today we have to take the decision about the creation of a state agency that is going to work in this [anti-corruption] direction. (Geda 2010a, Ukr. transl. by the author)

Despite this rhetoric, on that same day the NAC decided not to rush the creation of the Special Anti-Corruption Bureau and to focus on the elaboration of new anti-corruption laws instead (UNIAN 2010). The Law “On the Grounds of Corruption Prevention and Counteraction” Yanukovych submitted a draft anti-corruption law No. 3206-VI, presented by the NAC to parliament, and which went into force on 1 July 2011. In comparison to the previous anti-corruption legislation that parliament had revoked, the new law was “toothless.” The Freedom House NiT report of 2012 comments on this action as follows: In December 2010, the parliament cancelled three 2009 anticorruption laws that had been drafted with assistance from the Council of Europe’s Group of States against Corruption (GRECO). To replace them, the parliament enacted a new law, submitted by the president, on March 15, 2011, without incorporating amendments proposed by the opposition. The legislation took effect on July 1. It was criticized both at home and abroad, partly because it failed to include obligatory declarations of expenditures by public officials or obligatory declarations of property, incomes, and expenses by their relatives. (Sushko and Prystayko 2012, 586)

188 In an interview on the TV channel Inter Yanukovych said: “An Anti-Corruption Bureau has to start the systematic fight against corruption. This is the experience of many countries in the world. […] An anti-corruption package of laws (adopted in 2009) will enter into force in late 2010; however, the Bureau will be created in the first half of 2010” (UNIAN 2010, Ukr. transl. by the author).

294 CORRUPTION AND ANTI-CORRUPTION POLICIES Mykola Khavroniuk conducted an in-depth analysis of the law “On the Grounds of Corruption Prevention and Counteraction” No. 3206-VI (Khavroniuk 2011a). He used the official methodology for the assessment of legal anti-corruption norms 189 adopted by the Ministry of Justice of Ukraine (Khavroniuk 2012). This methodology foresees an assessment of the risk of corruption in the law due to the three following factors: Definitions, administrative procedures, and normative collisions. The first and most significant criticism that Khavroniuk makes is a vague definition of “corruption” (Ukr. koruptsiia) and “corrupt infringements” (Ukr. koruptsiine pravoporushennia) (Khavroniuk 2011b). These definitions contain “artificially entrenched paradoxes,”190 which exclude many relevant forms of corruption from responsibility, since it is impossible to identify them as corrupt infringement. Furthermore, the law widens the circle of subjects of legal liability. The problematic definition groups public officials, bureaucrats, and other public servants like teachers, doctors, social workers, etc. together. Khavroniuk makes the criticism that it is inappropriate to investigate corruption among politicians and bureaucrats by the same legal means as corruption among public servants, like teachers and doctors, who provide very convenient “statistical cases” to justify anti-corruption measures in line with Art. 19 of the Law (2011b, 2013c). Second, the law does not clearly define administrative procedures with regard to the coordination of anti-corruption work and

189 Official methodology for the assessment of legal anti-corruption norms, adopted by the ministry of Justice of Ukraine 1380/5 of 23 June 2010 (with amendments of 30 September 2011). 190 “Corruption infringement” occurs if the action is: 1) intentional; 2) contains characteristics of corruption; 3) conducted by the subjects defined in Art. 4 of the Law “On the Grounds of Corruption Prevention and Counteraction”; 4) has prescribed criminal, administrative or disciplinary responsibility. According to this definition, the term “corrupt infringements” is defined through the term “corruption” (Khavroniuk 2011 b, 2012, Ukr. transl. by the author). During the investigation, the law enforcement agencies must rely on the list of corruption infringements indicated in the criminal code of Ukraine, which, according to expert legal opinion, excludes many forms of corruption such as “commercial bribery,” non-monetary forms of granting of undue advantage, and infringements due to deliberate non-action (e.g. not reporting a conflict of interest).

CASE STUDY OF VIKTOR YANUKOVYCH 295 the responsibilities of governmental institutions. For instance, Khavroniuk considers it unreasonable from the perspective of public administration theory to task the Prosecutor General’s Office with 1) corruption prevention and counteraction in general; 2) decisions about opening and closing corruption investigations; 3) coordination of all law enforcement agencies on corruption issues; 4) control of law enforcement with regard to the prevention and counteraction of corruption (Khavroniuk 2012). As a result of imprecise definitions and missing administrative procedures, the law failed to include mandatory declarations of expenditures by public officials or mandatory declarations of property, income, and expenses by their relatives, which received criticism not only among Ukrainian experts but also international organizations. Finally, the law contains several considerable contradictions with the Constitution of Ukraine and other laws 191 (Udartsova 2012). Some of these restrict citizens’ rights to publish information about corruption (e.g. Art. 18 of the Law contradicts part 2, Art. 19 of the Constitution) and others (e.g. Art. 8) allow prosecutors to avoid legal liability for corruption (Khavroniuk 2012). Following a methodological assessment of the law, Khavroniuk came to the following conclusion: The law “On the Grounds of Corruption Prevention and Counteraction” contains a large number of regulations that can (and probably already do) promote corruption infringements. It is typical for corruption to reproduce itself and perpetually find new avenues for opportunity. The reaction of society and the state should be adequate and urgent. […] More than 6 months after the law entered into force, the assessment of corruption risks in the law has not been considered. Cui prodest? [For whose benefit?]. (Khavroniuk 2012, Ukr. transl. by the author)

191 For instance, Udartsova’s assessment of the law indicates the following contradiction: “The law provides that the president of Ukraine must approve the orders for the aforementioned investigations of individuals under Article 11(3). The Central Election Commission must determine the procedure for conducting a background checks on candidates for Ukraine’s presidency, for its deputies, for the deputy of the Verkhovna Rada of Crimea, and for positions in local councils in villages and townships. This is inconsistent with Article 106 of the Constitution of Ukraine, which does not give the president the right to approve special checks on people who apply for positions related to state and local governments” (Udartsova 2012, Rus. transl. by the author).

296 CORRUPTION AND ANTI-CORRUPTION POLICIES In summary, imprecise definitions, vague administrative responsibilities, and legal contradictions are present not by chance or poor quality of deliberation, but because they allow maintaining the façade of anti-corruption activities, while preserving the total impunity of politicians and public officials from accusations of corruption (Khavroniuk 2011a). In 2013, two draft laws suggesting amendments with the aim to clarify the subjects of legal liability (No. 2657 of 29 March 2013) and to clarify definitions (No. 2802 of 15 April 2013) were put forth. According to expert legal assessment, the first draft law clearly had a “declaratory character” (Khavroniuk 2013b), while the second draft law resolved some contradictions, but created new ones (Khavroniuk 2013c). National anti-corruption strategy for 2011–2015 In October 2011, Yanukovych issued the National Anti-Corruption Strategy for 2011–2015.192 Regarding its content, a similar critique as above applies to this National strategy: First, it addressed a very broad range of topics from prevention to criminalization, without clear priorities for action (ACN OECD 2015, 21; European Commission and EEAS 2012, 17). Second, the procedure of elaboration of the strategy was very vague, with a lack of expert and public consultations. International organizations highlighted that no meaningful consultations were organized with stakeholders during this process. According to NGOs, civil society and experts had opportunity to examine the State Programme only after its approval, despite the claim of the Ministry of Justice that it was subject to “intensive consultations” with the civil society organisations. (ACN OECD 2015, 20–21)

Also, no proper analytics were conducted. The criteria were not clear as to why certain broad actions were suggested and others, such as the specialization of law-enforcement actions, were omitted. The lack of clear criteria referred not only to the direction, but also to the monitoring and evaluation mechanisms. No official

192 Decree of the President of Ukraine No.1001/2011 from 21 October 2011 Ukr. “Pro Natsional’nu antykoruptsiynu stratehiyu na 2011–2015 roky”, Ukr., http://za kon3.rada.gov.ua/laws/show/1001/2011, last accessed 31 August 2018.

CASE STUDY OF VIKTOR YANUKOVYCH 297 monitoring of the implementation of the strategy was organized. The ACN OECD report states: The results of the research project “Corruption in Ukraine: Perception and Reality” commissioned by the Ministry of Justice and carried out by the Kharkiv Institute of Applied Humanitarian Studies was the only analytical basis used for the development of the Programme. However, as the full results of the research have never been made public, it is difficult to assess how it was used in preparation of the policy document. (ACN OECD 2015, 21)

Third, implementation documents were poorly articulated and put into practice. The Cabinet of Ministers of Ukraine was the authority responsible for the implementation of the strategy. On 28 November 2011, the government adopted the “State Program for Corruption Prevention and Counteraction for 2011–2015” 193 —an implementation strategy elaborated by the Ministry of Justice. In addition, between 2012 and 2013, other state institutions and regional councils elaborated their own implementation programs. Due to the lack of coordination and control, most of these programs were superficial and did not address real corruption risks (ACN OECD 2015, 22). Finally, the coordination and monitoring functions were chaotically assigned to several institutions with overlapping mandates that failed to deliver proper coordination. Initially, the Ministry of Justice was temporarily responsible for implementation and coordination of different agencies involved in the implementation. The NAC was tasked with monitoring and evaluating the strategy’s implementation, together with civil society. In July 2013, the position of the Government Agent on Anti-Corruption Policy was created to direct and coordinate the executive authorities in their anti-corruption work. As the ACN OECD report states, … several institutions were involved in the co-ordination, with overlapping mandates and roles. None of them proved to be a functioning institution capable of ensuring proper co-ordination of the anti-corruption policy. (ACN OECD 2015, 22)

193 Regulation of the Cabinet of Ministers of Ukraine No.1240-2011-n from 28 November 2011 Ukr. “Pro zatverdzhennia Derzhavnoyi prohramy shchodo zapobihannia I protydiyi koruptsii na 2011–2015 roky”, http://zakon3.rada.gov.ua/laws/sh ow/1240-2011-п, last accessed 31 August 2018.

298 CORRUPTION AND ANTI-CORRUPTION POLICIES In addition to the lack of coordination and monitoring, no financial resources were earmarked for implementation of the strategy, with funding instead provided within the general expenditures of state and local budgets. The ACN OECD assessment of the later amendments of the anti-corruption legislation in Ukraine states: Incorporation of the anti-corruption commitments in the requirements for development of Ukraine’s relations with the EU served as a major incentive and boost for relevant legislative reforms. At the same time these amendments, while directed towards aligning Ukrainian law with the anti-corruption standards, were incremental and did not provide for comprehensive vision of the reform, but rather gradual adjustments to receive EU endorsement. (ACN OECD 2015, 18)

In summary, the general character of the strategy’s content, poor implementation aspirations, and no specific criteria for monitoring indicate that the National Anti-Corruption Strategy for 2011–2015 was a superficial façade that did not intend to provide any deliverables. Rather, this was a response to international requirements. 8.4.3.

Synthesis

As Yanukovych consolidated his authority very early and subordinated all branches of power by blatantly playing the rules of the system of corruption, the function of anti-corruption for political domination became dispensable. While Kuchma exploited anti-corruption policy to legitimize his increasing authority during his first term, and Yushchenko legitimized his conflict-based tactics against political opponents in the name of anti-corruption, Yanukovych’s only incentive for anti-corruption was to fulfill the formal requirements of Western donors. IMF loans, grants for development, and technical assistance were higher than ever before. The association negotiations with the EU provided additional pressure for implementation of the anti-corruption policy. Under these conditions, Yanukovych assigned an amorphous meaning to the term “corruption,” resulting in very blurred anti-corruption legislation. While the aim of the anti-corruption policy was not to effectively reduce corruption, it was important to dominate this policy field in order to prevent institutionalization of the competitive

CASE STUDY OF VIKTOR YANUKOVYCH 299 frames, such as corruption as a problem on the high political level. Some elements of the principal-agent concept in the framing of corruption legitimized the structural subordination of the primary anti-corruption institution—the NAC—to the president. Full control over anti-corruption policy resulted in the repeal of existing anti-corruption legislation based on the concept of corruption as a problem on the high political level. Instead, vague legislation was adopted and implemented.

8.5.

Conclusion

This chapter analyzed corrupt practices and their framing under Yanukovych as tactics for political domination. The analysis reveals that Yanukovych’s strategy aimed at the “winner-takes-all” scenario. This scenario was reached by the monopolization of the system of corruption. Both Kuchma and Yanukovych aimed at the “winner-takesall” outcome by means of particularism. However, only Yanukovych came very close to this goal, while Kuchma changed his tactics. At the beginning of his term, Yanukovych used the support of several oligarchs, but his aim was to narrow his coalition to the “Family.” Thus, political tactics indicate the centripetal tendency: From the use of broad networks of patronage and clientelism to the narrow neo-patrimonial logic and appointments of loyalists, close to the “Family.” The centripetal tendencies in creating coalitions under Yanukovych explain why nepotism was such a widespread form of corruption. Nepotism only favors a very close circle of intimates based on familial ties. Thus, instead of investing in trustbuilding with other actors, Yanukovych invested in strengthening his “Family” and coercing others. Given his quick consolidation of power, corruption framing was necessary only as a response to the conditionality and pressure of Western donors. Thus, there is barely any recognizable systematic framing. Nevertheless, the elements of the principal-agent conceptualization of corruption were institutionalized in the hierarchical anti-corruption policy, subordinated to the president.

300 CORRUPTION AND ANTI-CORRUPTION POLICIES Prevalence of resources The use of patronage and clientelism during the early stage of the presidency was useful to subordinate all branches of power and change the Constitution in favor of the president. Patronage was a special tool under Yanukovych due to the crucial role of the Party of Regions. While previous presidents relied on informal agreements in order to build their “machine,” the Party of Regions formalized this process and provided a structural framework for patronage. This secured more effective and efficient redistribution of corrupt resources not only on the national, but also on the local level of governance. Clientelism and political bribery were key tools to co-opt parliament. This gave Yanukovych an exclusive position from which he could influence legislation at his discretion. Thus, full control of the legislative, executive and judiciary branches by means of social forms of corruption created fertile soil for blatant monetary corruption. For instance, in the field of public procurement, multiple legislative amendments favored businesses from the very narrow circle of new oligarchs united around the son of the president. This small group of people, known as the “Family,” embezzled state resources through diverse corruption schemes in the field of public procurement, privatization, and natural resources. The framing of corruption with elements of the principalagent concept was useful to legitimize anti-corruption policy, fully subordinated to the president. Although anti-corruption policy was developed as a façade to fulfill the formal requirements of Western donors, the president maintained ownership and decisive influence over the formation of anti-corruption policy. Exclusion of opponents With regard to opponents, Yanukovych avoided conflict and preferred exclusion. He coerced political opposition from the outset of his presidency. But his tactics in the interaction with strategic partners—individual oligarchs, who could potentially become opponents—were exclusionary. This tactic allowed avoiding unnecessary political conflict. Instead, prevalent access to public resources

CASE STUDY OF VIKTOR YANUKOVYCH 301 of his very narrow circle—the “Family”—gradually excluded potential opponents in the economic elite. Similarly, corruption framing as a problem of public servants and bureaucrats left the opponents abstract, without naming actors or institutions. Antagonistic identities were created around the narrative of chaos represented by democracy under the Orange coalition and the strong leadership of Yanukovych. Swift introduction of anti-corruption policy, creation of the NAC, and corruption-related prosecution of members of the previous government demonstrated this strength. But vague frames and definitions of corruption left room for interpretation of the corrupt Other. Implications Political corruption in the Yanukovych regime was extremely centralized. Based on this fact, the concept of the monopolized corruption system was introduced. This type of corruption system differs in its characteristics from the centralized one. In the monopolized system, the entrusted power and state resources were misused not only for elimination of political opposition, but also for development of supremacy among oligarchs with the aim to prevent any competition. In other words, political corruption and opportunities for enrichment from the state budget were used to raise a new influential player, the president’s son. The hybrid regime rapidly developed toward authoritarianism. The Revolution in Ukraine in 2014 forced Yanukovych to flee to Russia. The Revolution is known inter alia as the “Revolution of Dignity,” targeting systemic political corruption and oligarchic influence in the country. It testified that this monopolized type of system lacks stability and is reluctant to fail. Increasing authoritarian pressure, in combination with the fact that the state is unable to provide vital services to its citizens, eventually leads to non-acceptance of the regime by the populace. Therefore, even if petty corruption is tolerated, resistance against the monopolized system of corruption undermines the stability of such a system.

9.

Conclusion

9.1.

Synopsis

At the confluence of corruption research and transformation studies, the aim of this project was to close the research gap existing between the functions of corrupt practices and their framing in hybrid regimes. While many authors have addressed corruption as a key element of hybrid regimes, systematic research on the interdependencies between hybrid regimes, their trajectories, and corruption has hitherto been non-existent. Thus, in order to answer the theoretical question about the functions of political corruption in hybrid regimes, the following empirical questions were posed: Why do presidents in Ukraine use different political strategies and discursive framing for dealing with corruption? How do they practice corruption as a tactic to maintain political domination in hybrid regimes? This study contributes to the debate about corruption as a result of structural malfunctions on the input side of the system, based on the open and limited access order concept (North et al. 2007). This debate is very close to those in transformation studies and allows analysis of corruption as an intervening variable for the explanation of hybrid regime oscillations. While authors like Johnston (2014a) or Mungiu-Pippidi (2015) have analyzed the transition from a limited to an open access order as a linear process from one stage of improvement to another, this study shows that in hybrid regimes relapses from the competitive mechanisms of distribution of resources to the particularistic and centralized ones are more natural than the reverse. This means that in the system of corruption, the logical development is rather toward a limited access order than an open one. Thus, the confluence with transformation studies enriches corruption research by shifting the focus from gradual change toward a corruption-free society to the more natural logic of oscillation.

303

304 CORRUPTION AND ANTI-CORRUPTION POLICIES The uniqueness of this study is the combination of the two different research approaches: Empirical-analytical and social constructivist. This combination is carefully elaborated in the theoretical part of the study. In the first part, core characteristics that allow differentiation of corruption from other forms of particularism were defined. It was demonstrated that in societies where corruption is the norm, the analysis of multiple corruption clusters is more appropriate than analysis of its solitary form. The concept of the system of corruption was elaborated to systematically show the interdependencies of different forms and mechanisms of corruption. Studying the system of corruption is an important shift from the focus on quantitative assessment of the levels of corruption to the qualitative assessment of the dynamic, mechanisms, and implications of the system of corruption. Analytical differentiation between centralized and decentralized systems of corruption (Hale 2015; Stefes 2006) provides necessary explanations for the different implications of corruption and anti-corruption in various contexts, although the quantitative assessment may show the same high level of corruption. This study enriches the typology of centralized and decentralized systems of corruption and elaborates a third form— the monopolized system of corruption. Although empirical analysis of the practice of corruption is important, it has reached its explanatory limits. It is unable to explain, for instance, why the anti-corruption industry flourishes in hybrid regimes, including the involvement of government, but permanently fails to hit the core of the problem; or why the topic of corruption is often a very popular and even central theme in the electoral campaigns of political forces that are in practice deeply involved in corruption. Therefore, in the second part, in addition to the empirical-analytical perspective, the social constructivist perspective was applied to the analysis of corruption, in order to fully explore the role of corruption and anti-corruption in sustaining hybrid regimes. According to the constructivist perspective, the main focus lies on the meaning assigned to the empty signifier of “corruption.” Thus, in addition to the analysis of institutions, actors, and decision-making that influence the persistence of corruption,

CONCLUSION 305 the focus shifted to analysis of the different meanings assigned to the term “corruption” itself and how they shape political reality. Hybrid regime conceptualization and the specific focus on the uneven playing field as a core characteristic of the regime’s hybridity reveal that political domination is a central goal for a political leader, since it is the only way to stay in the game due to the logic of the uneven playing field. Thus, to attain political domination, the political actor aims at a one-sided prevalence of power and material resources, even by extra-legal means. Moreover, the constellation of actors is important. Thus, a political leader builds his strategy and tactics on the interaction with four points of reference, relevant for the hybrid regime: Strategic partners and opponents, as well as citizens and Western donors. Accordingly, the functions of corrupt practices and framing are analyzed with regard to the prevalence of resources and these four points of reference. The main empirical findings are summarized in the comparative analysis below.

9.2.

Comparative analysis

9.2.1.

Assessment of the strategies

The comparison of political strategy and tactics of the three Ukrainian presidents (see summary in Table 11) represents the most similar cases design. The point of departure for the all three presidents was the decentralized system of corruption; however, they ended in three different scenarios. The characteristics of the point of departure with regard to the distribution of public resources and the constellation of actors are the following: First, both power and economic resources are highly fragmented and distributed between several “pyramids of power.” This includes the distribution of formal authorities between different political actors. Access to economic resources was highly contested between regional clans or individual oligarchs, who fought over the redistribution of resources. Second, the relation to opponents was one of conflict, meaning that the actors were not looking for formal rules to regulate the conflict of power and make political competition fair, but rather followed the principles of the system of corruption and aimed for

306 CORRUPTION AND ANTI-CORRUPTION POLICIES domination of the uneven playing field even by illegitimate means. To reach this aim, it was necessary to either coerce or exclude the opponent from competition. Leonid Kuchma assumed office when parliament was the strongest institution and the country lacked a Constitution that formally regulated the constellation of legislative and executive branches of power, as well as the role of the president. Kuchma was in conflict with the politically left-dominated parliament, competing to enshrine maximum presidential authority in the Constitution. Concurrently, political competition between the left, right, and liberal political forces was high. Economic resources were divided between regional clans. The source of fragmentation for Viktor Yushchenko’s presidency stemmed from his political victory as a member of a coalition and not alone. His strong partner, Tymoshenko, became his opponent after she assumed the premiership and was strong enough to initiate conflict. Constitutional reform that strengthened parliament was another factor that undermined Yushchenko’s power resources. Although this reform was implemented only in 2006, the expectations of the economic elites were shaped by anticipation of future fragmentation of power. The oligarchs adapted their tactics and preferred maintaining several options among different political patrons. Individual oligarchs began flexibly shifting material support from one politician to another or even to several political leaders simultaneously in order to keep all options open. Viktor Yanukovych assumed office when his main competitor in the presidential elections—Yuliya Tymoshenko—was PM and wielding considerable authority. The 2006 Constitution reduced the authority of the president and shifted the center of power to parliament and the PM. Economic resources remained fragmented, although Yanukovych’s Party of Regions was financially backed by the richest oligarch in Ukraine, Rinat Akhmetov. At the beginning of their presidencies, all three candidates received similar popular support: Kuchma won the election in 1994 with 52 %, Yushchenko in 2004 with 51 % and Yanukovych in 2010 with 49 %. However, this support usually held only for a few months.

CONCLUSION 307 The analysis of corrupt practices at the early stages of the presidencies indicates that all three presidents aimed at reaching a onesided prevalence of resources. Their primary goal was to broaden their formal authority as well as spheres of influence among the lucrative departments of the state governance. They also competed for political funding. Despite these similar points of departure, each president ultimately reached a different scenario (see Table 10). Corruption—its framing and practice as a political tactic—is considered here as an intervening variable that influences the success of political strategy. Empirical case studies revealed that the presidents applied different corruption-related tactics to achieve political domination, influencing not only the success of the political leader’s strategy but also the regime’s trajectory. Table 10: Scenarios at the end of the presidency Interaction tactics reg. opponents and partners Balance of resources

Conflict tactics: coercion or exclusion

Cooperation tactics: agreement of rules or cooptation

Even distribution of resources

Yushchenko: Decentralized system of corruption

One-sided prevalence of resources

Yanukovych: Monopolized system of corruption

Consolidated democracy: System of checks and balances Kuchma: Centralized system of corruption

Source: Adapted and modified from Gel’man 2008, 162.

9.2.2.

Comparison of political tactics

The external interaction of the political leader represents the only accessible information for the empirical analysis of strategies and tactics. In the case studies, four main points of reference for the external interaction of the president were analyzed: Opponents and strategic partners as well as citizens and Western partners. While the functions of the corrupt practices were primarily at the center for analyzing the interaction with the first two groups, corruption framing and anti-corruption policy were mostly relevant for the second two groups.

308 CORRUPTION AND ANTI-CORRUPTION POLICIES Corrupt practices in interaction with opponents and strategic partners The line between opponents and strategic partners is blurry. There are no objective attributes of these groups, since many different factors—such as the constellation of political actors and the position of the leader in the network, as well as the level of his access to resources—shape the perspective on the environment. Practically, this means that some opponents can be engaged as partners on an ad hoc basis, in order, when necessary, to exclude another, stronger opponent—the tactic exploited by Yushchenko. Moreover, in a political system focused on individual political leadership instead of political ideology, the opponent is not necessarily political opposition. In most cases, competing personalities in strong political positions made the corresponding political institution—e.g. parliament or the PM—into opponents of the president. Other groups of actors, who financially support political leaders and parties, include regional economic clans, FIGs, and individual oligarchs. All three presidents exploited the same forms of corruption, but in a different order and with varying intensity. This difference is decisive for the type of system of corruption in place and for the trajectory of the regime. Process tracing reveals different patterns of interaction with opponents and partners by means of corruption. While Kuchma applied neo-patrimonial logic and mostly appointed people from his Dnipropetrovsk clan to key political positions, he changed his tactics when the PM, Pavlo Lazarenko, also from the Dnipropetrovsk clan, became powerful enough to challenge Kuchma. As an alternative tactic, Kuchma turned his potential opponents from other powerful regional clans, like the Donetsk and Kyiv ones, into strategic partners. By means of clientelism and patronage, Kuchma co-opted regional oligarchs and FIGs. As a reward for their loyalty and political support, economic elites received privileged access to public resources. At the same time, a central overview of corrupt practices shows that non-coercive control by means of corruption-based kompromat and blackmail was prevalent. In the centralized system of corruption, built by means of co-optation, neo-patrimonial family or friendship ties became less important. The system functions not

CONCLUSION 309 on the basis of personal trust, but on the rational choice of all involved actors between corrupt rewards and selective punishment. The case of Yanukovych reveals the opposite, centripetal dynamic, shifting from the use of a party machine and the involvement of a broad circle of clients to neo-patrimonial logic and the use of nepotism. The networks of governance were narrowed to the circle of partners comprising the “Family.” While the use of clientelism in parliament and the patronage of the Party of Regions were tools to subordinate the former, in addition to the entire vertical of executive power, immense monetary corruption was exploited to exclude other oligarchs from profiting off the system of corruption. These different tendencies—broadening the network under Kuchma and narrowing it under Yanukovych—indicate the tactics of cooperation of the former and of conflict of the latter. These tendencies allow assigning two different scenarios of elite interaction to the presidents: The “cartel-like deal” to Kuchma and the “winnertakes-all” to Yanukovych. Accordingly, Kuchma and Yanukovych attained different types of political domination. While Kuchma actively managed informal networks, Yanukovych established the domination of a select few and gradually excluded strategic partners in order to prevent their transformation into opponents. In contrast to his predecessor, and successor, Yushchenko’s tactics do not indicate any dynamic. He was in perpetual conflict with two strong centres of power—Tymoshenko and Yanukovych. Yushchenko cooperated with each on an ad hoc basis, with the aim to exclude the then stronger competitor from the position of PM. Yushchenko’s weak position in the informal network and diminishing formal authority prevented him from consolidating presidential power beyond his formal authority. Yushchenko mainly relied on clientelism to reward his political financiers. The clientelism was, however, non-hierarchical, since Yushchenko depended much more on his clients than his competitors. This undermined the functionality of the patronage, since executive positions were distributed between Yushchenko’s clients as a reward. Very few influence spheres remained under his dispensation or control. In a manner similar to Kuchma, Yushchenko instrumentalized the system of corruption to use corrupt practices as tools of reward

310 CORRUPTION AND ANTI-CORRUPTION POLICIES and punishment. Although direct involvement in blatant, monetary corruption was not a priority for either, they tolerated the corrupt behavior of their clients. Access to public resources and “permission” to misuse them for private interest was the reward for political support. Yanukvych, however, focused on his personal enrichment and the concentration of assets in his family. Empirical analysis reveals different functions of corrupt practices for political domination in hybrid regimes: The function of patronage is to outweigh other competitors in high political positions. For instance, Kuchma secured his influence in crucial spheres of state governance before his authority was formalized through particularistic, executive appointments. Patronage appointments from the national to the local level were broadly exploited to secure elections—known as misuse of administrative resource. The function of clientelism is mainly to co-opt strategic economic partners. Clientelism was a central tool which Kuchma used to create a propresidential majority in parliament, as the majority left-wing parliament had initially been Kuchma’s main opponent. Nepotism and cronyism were tools to concentrate access to considerable public resources in the hands of a few, especially under the presidency of Yanukovych. The network built on private family ties functioned without expensive control tools. Also, other economic actors were not coerced, but naturally excluded from competition for and access to the state’s natural and material resources, public procurement, etc. As coercion and control require substantial resources, nepotism allowed domination to be achieved more efficiently. Corruption framing in interaction with citizens and Western partners Framing and anti-corruption policy analysis answers the question as to why and how the presidents in a hybrid regime utilize rhetoric condemning corruption in their public discourse, although they tolerated and encouraged, or even themselves engaged, in corrupt practices. The analysis shows that the term “corruption”—an empty signifier in the hegemonic struggle for discourse domination—fulfills several functions: Depending on the conceptualization tactics preferred, the framing of “corruption” can legitimize increasing presidential power, even by extra-legal means; deleg-

CONCLUSION 311 itimizing opponents as corrupt; and providing an excuse for the ineffectiveness of reforms. Anti-corruption policy, imposed presidentially, institutionalizes the corresponding frames of corruption. The following functions of anti-corruption policy contributed to political domination in a hybrid regime: Anti-corruption created hierarchies, legitimized surveillance and selective prosecution; and created the façade of good governance to fulfill the minimum conditions of Western donors. These functions located anti-corruption policy in the contested space where different political actors competed for dominance. Regarding the framing of corruption and the corresponding anti-corruption policy, empirical cases show different tactics of framing and anti-corruption among the three presidents. The overarching pattern indicates, that for the scenario with one-sided prevalence of resources and a regime trajectory towards authoritarianism, corruption framing as a principal-agent problem was applied. This pattern was common to Kuchma and Yanukovych’s tenures. If the president frames corruption from a position of conflict (e.g. opposition) and in the context of resource fragmentation between several pyramids of power, he uses its framing as a problem on the high political level (e.g. “system of corruption,” “political corruption”) and names the opponents he is willing to delegitimize. Yushchenko followed this tactic and framed corruption as a way to exclude the PM and parliament as corrupt actors. Both framing patterns became the basis for the corresponding anti-corruption policies. Kuchma managed to build the most coherent corruption frames from the beginning of his presidency. His conceptualization of corruption as a principal-agent problem allowed him to take a central position in the executive control apparatus. The abstract enemy—organized crime and bureaucracy—offered a convenient frame for the flexible co-optation of opponents. Kuchma also flexibly reacted to the political crisis in the early 2000s that undermined his discourse of power. He adapted his framing of corruption and shifted to cultural explanations of the problem. While Kuchma’s tactics were inclusive (naming only an abstract enemy), Yushchenko’s were perpetually exclusive and conflict-driven. Corruption framing as a political problem was applied

312 CORRUPTION AND ANTI-CORRUPTION POLICIES to legitimize the dismissal of the PM in 2005, the dissolution of parliament in 2007, and the break-up of the Orange coalition. Despite three political crises, Yushchenko did not adapt his tactics. Unlike the other two presidents, Yanukovych assigned very little importance to the empty signifier of “corruption.” The prime motivation for public discussion of the topic under Yanukovych was the conditionality of the Western donors. Thus, external pressure was higher than ever before. Anti-corruption policies were designed accordingly: the principal-agent approach allowed two presidents to become the center of the institutional design for the development and implementation of anti-corruption policy. In other words, they had full control over the content of anti-corruption policy, as well as over law enforcement and surveillance. Anti-corruption became a legal instrument for selective political prosecutions. Bureaucratic and administrative corruption became the main target of anti-corruption policy, excluding the high political elite. Thus, there were no difficulties for either parliament or the government in adopting and implementing the legislation. Yushchenko encountered a very different situation, whose anti-corruption policy was based on the framing of corruption as a problem on the high political level. Correspondingly, broad anti-corruption measures that targeted MPs, judges, and high-level politicians were not implemented, and the legislation was not even enacted. An interesting result of the analysis is that none of the presidents adapted their tactics in response to decreasing popular support. All three presidents enjoyed relatively high popular support at the outset of their presidencies. But no action in terms of tactical change was undertaken to secure popular support later. Only Kuchma adapted his framing tactics after the tape scandal and movement “Ukraine without Kuchma,” but this reaction came too late. Thus, the prioritized points of reference were strategic partners, opponents, and Western donors, but not the populace. Since the oligarchs do not decide who holds power in a hybrid regime, but rather react and adapt to developments (Pleines 2016), this study suggests that the presidents underestimated or even ignored the importance of voters for political domination.

Decentralized system of corruption Shift from “war of all against all” to “winner-takes-all” Partly successful: reached “cartellike deal” Shift from decentralized to centralized

Success based on: initially high popular support, increasing formal authority by informal means, implementing control mechanisms (kompromat and blackmail) => rule with sticks and carrots by means of corruption and anti-corruption Limitations of the strategy: Divided formal powers and permanent counterbalance of parliament, fragmented elites and increasing independence of regional clans, decreasing popular support and loss of discursive power

Explanation of the dynamics and different outcomes

Leonid Kuchma (1994–2005)

Initial point Goal in the strategy for political domination Success evaluation of strategy’s implementation Outcome: Dynamic of the system of corruption

Assessment of the strategy Decentralized system of corruption Shift from “war of all against all” to “winner-takes-all” Successful: reached “winner-takesall” scenario Shift from decentralized to monopolized Success: initial popular support, support from powerful political party, preliminary access to state resources in the PM position under the former president, full subordination of all branches of power, increasing formal authority through change of the Constitution Limitations of the strategy: Decreasing popular support and loss of discursive power despite high level of initial support (factor of miscalculation), loss of formal authority through constitutional change, increasing fragmentation of strategic elites that reorganized from regional clan structures to individual oligarchs

Viktor Yanukovych (2010–2014)

313

Decentralized system of corruption Shift from “war of all against all” to “cartel-like deal” Not successful: remained in “war of all against all” No shift, remained decentralized

Viktor Yushchenko (2005–2010)

Table 11: Comparative summary of the empirical case studies

CONCLUSION

Field of abuse of entrusted power

Functions of corruption practice

Tactics for interaction opponents and strategic partners: Corruption practice analysis Applied forms of corruption

Executive vertical: misuse of administrative resources, especially law enforcement and regional administrations for winning elections; clientelism in distribution of public goods (natural resources, state property, state subsidies)

Neo-patrimonial particularism, patronage, clientelism, material corruption as a means of reward, encouragement of administrative corruption for kompromat and blackmail purposes Exchange of favors and positions for political support/loyalty => opening corrupt access to public resources to other actors, especially regional clans

Patronage (especially political party machine), nepotism, personal material enrichment

Elevating the “Family” and narrowing circle of partners by means of monetary corruption => excluding other actors from corrupt access to public resources

Political bribery in parliament, abuse of state budget, especially through corrupt schemes in public procurement

Exchange of favors and positions for political support and political finance => opening corrupt access to public resources to other actors, especially individual oligarchs Executive vertical: misuse of administrative resources; clientelism in distribution of public goods, especially natural resources

Private/“Family” enrichment

Patronage, clientelism, cronyism, material corruption as a means of reward

Instrumentalization of corruption as Ad hoc opportunistic actions a “carrot” to co-opt strategic elites

314 CORRUPTION AND ANTI-CORRUPTION POLICIES

Deviant action of rational individuals, information asymmetry between principal and agent, low level of control, low probability of being caught Monetary, administrative corruption

Systemic problem, collective action problem

AC Institutions under control of the principal, increasing punishment through new rules and restrictions

Bureaucrats, former political leadership, journalists

Before crisis: Kuchma’s regime, government; After crisis: government, MPs, high-level politicians, bureaucrats

Before crisis: Organized crime as abstract “fifth power,” regional political and economic elites, low- and mid-level individual bureaucrats (agents) After crisis: society because of historical legacy, media Deviant action of rational individuals, information asymmetry between principal and agent, low level of control, low probability of being caught Monetary, administrative corruption, focus on corruption cases Social tools of corruption, such as cronyism, political corruption in parliament; focus on corruption schemes Broad, indirect anti-corruption tools, tackling corruption in parliament and the government, independent anti-corruption agencies, involvement of civil society

Principal-agent problem

System of corruption, political corruption

Principal-agent problem

Suggested remedies and rec- Anti-corruption (AC) Institutions ommendations under control of the principal, increasing punishment through new rules and restrictions

Forms of corruption addressed

Causal interpretation of the problem of corruption

Tactics for interaction with citizens and Western partners: Corruption framing analysis Identifying opponents as external point of reference, before and after political crises

CONCLUSION 315

Based on tactics of systematic coercion—creating mechanisms of surveillance and selective punishment Concept on Fight against Corruption 1998–2005

Abstract opponents

PM Pavlo Lazarenko, Yuliya Tymoshenko

Selectively implemented

Targeted actors

Political cases of corruptionbased prosecution

Implementation of the strategy

Source: Author’s depiction

Under control of the president, excluding civil society

Structure of the AC Institutions

Role of external actors in AC Low influence initiatives Main approach Introducing surveillance mechanisms, increasing control and punishment mechanisms through new rules and restrictions

Tactics for interaction with citizens and Western partners: AC policyanalysis Availability of the national AC strategy, initiated by the president

316 CORRUPTION AND ANTI-CORRUPTION POLICIES

Very high influence

National AC strategy for 2011–2015

The government, parliament, the judiciary Minister of Interior Yuriy Lutsenko, businessman Davyd Zhvania Not implemented

Partly implemented

PM Tymoshenko, Minister of Interior Yuriy Lutsenko

Abstract opponents

Encompassing, partly indirect AC Selectively increasing control and tools punishment on the one hand and widening legal loopholes for corruption on the other (e.g. public procurement legislation) Independent, involvement of civil Under control of the president, forsociety mal involvement of civil society

High influence

Concept of overcoming corruption in Ukraine: “On the way to integrity” of 2006

Encompassing change of the rules Based on tactics of selective coerof the political game cion

CONCLUSION

9.3.

317

Key findings and implications for counteracting corruption

The persistent cycle of corruption is key to understanding Ukrainian politics. The system of corruption shapes the logic of the political system and sustains the regime’s hybridity. At four stages of the political process—building political parties; elections; the separation of powers according to a system of checks and balances; and policy implementation—considerable legal inconsistencies and gaps exist, which not only allow corrupt activities to go unpunished, but also encourage corruption as the only way to operate politically. An analysis of political corruption as a closed system reveals that these legal inconsistencies and gaps were introduced deliberately in the hybrid regime. Corruption is a tool to sustain political power and stability, to create new institutions, and to shape the system in a manner that would make corrupt activities possible indefinitely. It is virtually impossible to enter Ukrainian politics without engaging in corrupt activities because considerable investments are needed to build a political party or to win elections. Once those investments are made, they have to be returned with profit. Although in many democratic countries corruption is considered a violation of the rules of the game in politics, corruption in Ukrainian politics became a game in itself. Such a functional approach to the understanding of corruption encouraged revision of anti-corruption policy. The analysis reveals three main results. First, corruption and anti-corruption in the hybrid regime were two sides of the same coin. In line with the logic of the system of corruption, governmental anti-corruption policy, like any other policy, is exploited to reach one-sided political domination. If the strategy of the political leader aims at one-sided prevalence and the regime assumes an authoritarian trajectory, anti-corruption policy provides the tool for legitimate surveillance and selective prosecution of the opposition. As a rule, this kind of anticorruption policy goes hand in hand with the principal-agent framing of corruption, as the cases of Kuchma and Yanukovych demonstrate. Accordingly, any assessment of anti-corruption policy must

318 CORRUPTION AND ANTI-CORRUPTION POLICIES contain the (non-)intended impact analysis. The focus of the assessment must not be limited to the measurement of the level of corruption but include the potentially harmful functions of anti-corruption policy that support authoritarian regime trajectory. Second, anti-corruption policy is a contested space that different political forces aim to dominate. The term “corruption,” as an empty signifier, creates political identities. The exclusion of an actor as a “corrupt Other” entails the act of subordination, while the actor who shapes the identity through framing is naturally presented as “non-corrupt Self.” Thus, the individual or collective actor who sets the frames of corruption is hegemonic. Third, as the case of Yushchenko demonstrates, no meaningful anti-corruption attempts can be expected from inside the system of corruption. Anti-corruption measures that target high-level politicians mean the self-destruction of the system. Therefore, such measures will be blocked due to the high resistance of the political elite. If external pressure due to conditionality is correspondingly high, anti-corruption legislation will be adopted; however, it will be toothless or not implemented. Any external funds that are invested into the state budget for anti-corruption will only stabilize the hybridity of the regime. Anti-corruption policy is the output of the system of corruption that is used in the uneven playing field by the dominant coalition. Recommendations If the system of corruption corresponds to a limited access order, then focusing on open access to public resources is the alternative to hopeless anti-corruption policy. External pressure and material resources can sustain positive developments on the input side of the system. This includes several measures: First, channelling external pressure to reform the electoral system, including open party lists and abolition of political advertising. The high costs of elections, opaque party lists, and non-democratic political appointments create a black market for political positions. Entry to this market is very expensive; therefore, the representatives of the democratic bottom-up movement are unable to participate in the competition.

CONCLUSION 319 Second, supporting institutionalization of grassroots movements that have the potential to become an alternative to the parties funded by the FIGs. The strong focus of civil society on the protest against corrupt politics resulted in an aversion to political parties and a deeply negative perception of politicians. Such a perception is demotivating for the creation of new political forces. In addition, the focus on control and punishment of politicians undermined the know-how needed to build and institutionalize the sustainable communication of interests between society and the state that is indispensable for democratic consolidation. Third, the same destructive approach to business influence on the state resulted in the idea of de-oligarchization. However, deoligarchization is not a reasonable goal, but rather a natural result of “deep democratization” (Johnston 2014b). Small and medium enterprises have the potential to gradually fill the role of oligarchs, if they learn how to consolidate and organize in associations in order to influence politics in a transparent and regulated way. Finally, a public discourse in which politics and business are synonymous with corruption prevents any alternatives. This discourse can be disrupted in a purposeful manner by positive examples of islands of integrity in politics and business. Excluding the topic of corruption and anti-corruption from the next election campaign might be a first step. An alternative is the focus on institutions promoting an open access order (e.g. citizen participation) beyond traditional anti-corruption activities. Instead of attempts to win a rigged game on an uneven playing field on the output side, the focus should shift to creation of a new game on the input side. The central question in the public discussion should be how to channel collective action toward a sustainable institutional design that will replace the functions of corruption in the country. This question shifts the perspective from destruction (the “fight” against corruption, de-oligarchization, punishment and control) to construction (institutional design, generation and communication of interests, elevating bottom-up social movements and political parties, creating an open access order). They can open new discussions, generate new ideas, and disrupt the hopeless discourse of political corruption in Ukraine.

320 CORRUPTION AND ANTI-CORRUPTION POLICIES

9.4.

Prospects for further research

The combination of corruption research and transformation studies allows a better understanding of regime oscillations and their trajectories in hybrid regimes. The analysis of corrupt practices and framing has shown the strategies of the decision-makers and allowed early assessment of their regime trajectory. However, as a single case study, this study has limited external validity. In order to produce more generalizable results, the theoretical and analytical framework must be applied to the analysis of the hybrid regimes in the post-Soviet space, or in other regions. The qualitative comparative analysis (QCA) might be a suitable method for such research. Further research can provide more insights about corrupt practices and anti-corruption policies in hybrid regimes. The typology of the system of corruption can provide new perspectives on the analysis of corrupt norms in society (Kubbe and Engelbert 2018). In the following section, the preliminary research framework for such a study will be presented. The post-structuralist perspective on corruption and framing analysis can provide new critical insights for anti-corruption assessment. Research of corrupt practices: Interaction of the system with its environment While the focus of this study on the system of corruption revealed that top-down anti-corruption activities in hybrid regimes have no reasonable chance for success, further research is needed to explore the question: Under what conditions is sustainable bottom-up resistance against a system of corruption possible, if corruption is a societal norm? This question also will resolve the “chicken or egg dilemma”: Whether corrupt structures influence agency and cause corrupt equilibrium, or whether the corrupt societal norm leads to collective action and creates the system of corruption. The analysis of the different modes of interaction between three types of the system of corruption and its environment can provide answers to these questions. The core underlying assumption is that even though the quantity of corruption is permanently high in some countries, the manners in which corruption is systemically organized vary.

CONCLUSION 321 Different characteristics of the system of corruption influence the way the system interacts with its environment (society, external actors). The attitudes, perceptions, and practices of corruption in society represent an environment in which the system of corruption operates. Since different types of corruption systems imply different regime trajectories, the assumption that there is a certain interaction between the system of corruption and how the norm of corrupt action in society is experienced is logical. An analytical framework for this research is provided by the conceptualization of four modes of interaction between system of corruption and the norm of societal corruption, depending on the type of the system:194 Mode 1: Parallel co-existence via a centralized system. Corruption in the USSR is an example of the parallel coexistence of such a system and the societal norm of corruption: The system of corruption was highly centralized under the communist nomenklatura. Administrative corruption was strictly prohibited; however, the state was not able to meet its citizens’ basic needs. Therefore, blat was institutionalized in its function as a personal network in order to get things done, bypassing strict formal procedures. The parallel coexistence of the system and the societal norm of corruption created an equilibrium which fostered stability. On the one hand, strong control of the security apparatus, tax and revenue services enables the political leadership to provide citizens with basic services. On the other hand, informal networks help citizens to meet their needs. The use of personal informal networks under conditions of a centralized system is not strictly prohibited and this encourages corrupt activities and increases tolerance toward corruption. Mode 2: Destructive top-down reinforcement of corruption by a monopolized system. This kind of system has devastating implications for both the economy and polity. The monopolization of corruption results in increased prices for all corrupt transactions, which hampers small- and medium-sized enterprises, but also 194 This analytical framework was elaborated in the conference paper presented at the 2016 ECPR General Conference in Prague (Huss 2016b).

322 CORRUPTION AND ANTI-CORRUPTION POLICIES public servants. Monopolized corruption affects citizens directly. At some point, the state is unable to provide vital services to its citizens, since essential amounts of money are removed from circulation in the national market. Under these conditions, citizens maintain their tolerance toward petty corruption, but their intolerance toward the system of corruption increases. Once a critical level of dissatisfaction with the system is reached, anti-corruption activities can result in a protest movement against the system. However, the precondition for successful resistance is basic security and a measure of liberty in society (Johnston 2014a, 46). The centralized and monopolized systems of corruption often occur under authoritarian rule: The fusion of political and economic power stabilizes political regimes but also prevents the development of a genuine democracy and a potent opposition, as illicit gains can be used to distort political processes to such a degree that governments become unaccountable to their citizens. They will oppose any form of resistance. Mode 3: Mutual reinforcement by a decentralized system: In sharp contrast to the first two types, a decentralized system of corruption can serve as an initial point for democratic development and offer opportunities for resistance. The partial development of democratic institutions, civil society, and a free media does not yet mean that corruption is necessarily perceived as a problem. This work argues that the concept of path dependency is helpful in explaining different modes of interaction between the system of corruption and the norm of corruption in society, once a decentralized system follows on the abrupt collapse of a centralized or monopolized one. If widespread norms of corruption and a system of corruption exist in parallel to each other, decentralization of the system increases the level of corruption since a decentralized system of corruption and the corruptibility of society can reinforce each other. On the one hand, oversight to control corruption from above is absent: there is no political will to eradicate grand corruption and there is not enough influence to tackle administrative corruption. On the other hand, a culture of corruption creates high tolerance and a flourishing “knowhow” in corrupt activities among the populace. It helps

CONCLUSION 323 citizens to survive and is accepted as a norm, therefore there is no reason to resist it. Mode 4: Bottom-up resistance by a decentralized system: As stated in the argument above, the straight vertical of the monopolized system of corruption can cause intolerance toward the system of corruption among the populace. Citizens as well as affected groups of interest must defend themselves from abuses. If a decentralized system succeeds a monopolized one, they have favorable conditions to act against the system and an anti-corruption agenda becomes an important tool of this protest. Under these conditions, in contrast to the previous equilibrium, where corruption is a collective action problem (Persson, Rothstein, and Teorell 2013, 9), society becomes the principal and develops the will and tools to control the agent (the ruling political elite). Research of corruption framing and a critical approach to anti-corruption The findings on anti-corruption as a tool for political domination encourage more critical analysis of anti-corruption policy; in particular, when the incentives for the creation of “good governance façades” (Moene and Søreide 2015) in hybrid regimes are high, it is difficult to perceive what is behind the façade. As this study shows, analysis of corruption framing that shapes anti-corruption policy, its content and institutions, can be a useful analytical tool to recognize the positive or negative tendencies already at an early stage. The basic assumption for such an analysis is that anti-corruption policy is a contested place for different political actors, who compete over domination of the uneven playing field. Use of “corruption” as an empty signifier is a powerful political tool to exclude opponents and legitimize the one-sided prevalence of power resources. The post-structuralist perspective on corruption is fatally under-researched. As an empty signifier, the term “corruption” is politicized and can be filled with multiple different meanings. Recent public discussions on the successes and failures of the anti-corruption reforms in Ukraine on the eve of the presidential elections of 2019 (Kaleniuk 2018; Karatnycky and Motyl 2018), summarized by Stephenson, show that the arguments in favor of either view are

324 CORRUPTION AND ANTI-CORRUPTION POLICIES very politicized, while objective reality is absent (Stephenson 2018). More understanding is needed regarding the perceptions of different concepts of societal corruption, and the implications of various communication tactics relating to the term. While attempts to build anti-corruption measures on the empirical measurements of corruption showed little success, the research of corruption as a discursive problem might bear innovative solutions.

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Primary sources for the framing analysis (online sources last accessed 29 September 2018) BBC Ukraine. 2005. “Yushchenko: Tymoshenko zlovzhyvala posadoiu,” September 13, 2005. Butusov, Yuriy. 2010. “Sredi Mnogikh Reformatorskikh Initsiativ i Blagikh Namerenii Novoi Vlasti Borbu s Korruptsiiei Khoziain Mezhigoria Schitaiet Naibolee Znachimoi.” Zerkalo Nedeli. March 13, 2010. Delo. 2010. “Ex-ministry Timoshenko zaviazli v Genprokurature,” April 23, 2010. Delo.ua. 2011. “Miniust Vnosit v Reiestr Tolko 40 % Korruptsionerov— Genprokuratura,” April 8, 2011. Geda, Elena. 2008. “Viktor Yushchenko skhlesnulsia s korruptsiei.” Kommersant Ukraina, April 16, 2008. Holos Ukrainy. 1994. “Vystup Prezydenta Ukrainy Leonida Kuchmy 05.08.1994: ‘My Maiemo Ostannii Shans Zupynyty Mafionizatsiiu Ukrainskoho Suspilstva,’” August 10, 1994. Holos Ukrainy. 2010. “Poslannia Presydenta Ukrainy Viktora Yanukovycha Do Ukrainskoho Narodu.” June 5, 2010. Interfax Information Services. 2005. “Yushchenko nazyvaiet sebia prezidentom vsei Ukrainy i obeshaet narodu izmenit’ zhizn’,” January 23, 2005. Interfax International DAINB. 2000. “President Kuchma Ne Vidit Osnovanii Govorit Ob Osobennom Rasmakhe Koruptcii Na Ukraine,” October 26, 2000. Interfax: Monitoring. 2005. “Putin iskliuchaet svoio vydvizhenie na tretii srok,” September 7, 2005. Interfax. 2005. “Zapadnaia pressa schitaet glavnymi prichinami krizisa na Ukraine peredel sobstvennosti I peregrupirovku sil pered parlamentskimi vyborami,” September 14, 2005. Kommersant Ukraina. 2007. “Kak prezident nameren pobedit’ korruptsiiu,” September 3, 2007. Lytvyn, V.M., and V.A. Smoliy, eds. 2000. Viriu v Ukrains’kyi Narod: Vybrani Statti, Vystupy: 1994–2000/L.D. Kuchma. I believe in Ukrainian nation: Selected articles and speeches: 1994–2000 by L. D. Kuchma. Kyiv: Vydavnychyi dim Al’ternatyvy. Myers, Steven Lee. 2004. “Farce and Drama Mix as Election Day Nears in Fierce Ukraine Race.” The New York Times, October 11, 2004, sec. World. https://www.nytimes.com/2004/10/11/news/farce-anddrama-mix-as-election-day-nears-in-fierce-ukraine-race.html.

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352 CORRUPTION AND ANTI-CORRUPTION POLICIES Myers, Steven Lee. 2005. “Deal for Ukraine Company Renews Charges of Abuse.” The New York Times, September 15, 2005, sec. Europe. https: //www.nytimes.com/2005/09/15/world/europe/deal-for-ukrain e-company-renews-charges-of-abuse.html. Nova Ternopil’s’ka hazeta. 2005. “Viktor Yushchenko pro skandal z synom,” July 27, 2005. Prezydents’kyi visnyk. 2000. “Vystup Prezydenta Ukrainy Leonida Kuchmy Na Zasidanni Koordynatsiinoho Komitetu Po Borot’bi z Koruptsieiu i Orhanizovanoiu Zlochynnistiu, 9.10.2000: ‘Iz Zlochynnistiu Treba Borotysia Neshadno i Systemno,’” October 20, 2000. Savchenko, Veronika. 2011. “Nel’zia tak bezbozhno krast’.” Kommersant Ukraina, April 12, 2011. Sidorenko, Sergei. 2007. “Viktor Yushchenko podal izbiratelnyi golos.” Kommersant Ukraina, April 13, 2007. Sidorenko, Sergei. 2009. “Prezident pomenial Viktora Balogu na Veru Uliachenko”, Kommersant Ukraina, May 20, 2009. Sidorenko, Sergei. 2010. “Sudebnoi sisteme vynesli prigovor.” Kommersant, March 26, 2010. Ukrainska Pravda. 2005. “Radnyk Tymoshenko zaiavliaie pro koruptsiiu v otochenni Iushchenka,” September 1, 2005. Ukrainska Pravda. 2008. “Yushchenko bachyt’, iak koruptsiia tsvite u parlamenti i poza nym,” April 15, 2008. UNIAN. 2004. “Posle Izbraniia Prezidentom Ukrainy Yushchenko Podpishet Ukraz o Sozdanii Komiteta Narodnoho Kontrolia s Otdeleniiami v Oblastiakh,” October 14, 2004. UNIAN. 2005a. “Yushchenko podcherkivaet neobkhodimost’ polnoi zameny starykh kadrov v rukovodstve MVD,” July 18, 2005. UNIAN. 2005b. “Brodskii Zaiavliaet o Koruptsii v Okruzhenii Yushchenko,” September 1, 2005. UNIAN. 2005c. “Yushchenko zaiavliaet, chto obvinenie v korruptsii koekoho iz eho okruzhenia, bylo sdelano dlia razrushenia osnovy komandy,” September 8, 2005. UNIAN. 2005d. “Yushchenko podcherkivaet, chto vse obvineniia eho okruzhenia v koruptsii nosily iskliuchitelno politicheskii kharakter,” November 10, 2005. UNIAN. 2005e. “Sleduiushim Etapom Posle Sudebnoi Reform Stanet Reorganizaciia SBU, Prokuratury, Drugikh Silovykh Struktur,” November 29, 2005. UNIAN. 2010a. “Yanukovich obeshchaiet provesti reformu i sozdat’ effektivnuiu sistemu borby s korruptsiiei,” January 11, 2010.

REFERENCES 353 UNIAN. 2010b. “Yanukovich obeshchaiet v pervom polugodii 2010 goda sozdat’ Antikorruptsionnoie biuro,” February 5, 2010. UNIAN. 2010c. “Fesenko schitaiet, chto naznacheie bol’shoho kolichestva vitse-priemierov svidetel’stvuiet o politicheskoi korruptsii,” March 12, 2010. UNIAN. 2010d. “V blizhaisheie vremia budet sozdana struktura s shyrokimi gosudarstvennymi polnomichiami v bor’be s korruptsiiei— Yanukovich,” March 18, 2010. UNIAN. 2010e. “Yanukovich v ocherednoi raz zaiavliaiet o svoiei reshitel’nosti preodolet’ korruptsiiu v gosudarstve, v chasnosti, v sfere zdravookhraneniia,” October 22, 2010. UNIAN. 2010f. “Na vtorom etape adminreformy proiziodet optimizatsiia vlasti na mestakh—Yanukovich,” December 13, 2010. UNIAN. 2011a. “Yanukovich nazyvaiet ugolovnoie presledovaniie korruptsionerov, nesmotria na dolzhnosti, neobkhodimym usloviiem modernizatsii Ukrainy,” February 2, 2011. UNIAN. 2011b. “Yanukovich nazval zaiavlenia o narusheniakh demokratii v Ukraine popytkoi ‘korruptsionerov I biurokratov’ zashitit’ sebia,” February 4, 2011. UNIAN. 2011c. “Korruptsionery i biurokraty v Ukraine prikryvaiutsia demokraticheskimi lozungami—Yanukovich,” February 11, 2011. UNIAN. 2011d. “Yanukovich schitaet, chto korruptsionery pytaiutsia vliiat’ na zhurnalistov,” February 25, 2011. UNIAN. 2011e. “Yanukovich trebuiet priniatiia antikorruptsionnykh zakonov,” April 7, 2011. UNIAN. 2011f. “V sledstvii korruptsii obshestvo iezhegodno teriaiet 20 mlrd. Hrn—Yanukovich,” June 8, 2011. UNIAN. 2011g. “Nekotoryie Politiki Pytaiutsia Izbezhat’ Otvetstvennosti Za Korruptsiiu, Prikryvaias’ Politicheskimi Presledovaniiami— Yanukovich,” June 21, 2011. UNIAN. 2011h. “Yanukovich Zaiavliaet, Chto Bor’ba s Korruptsiiei v Ukraine Imeet Sistemnyi Kharakter I Budet Prodolzhat’sia Eshe Mnogo Vremeni,” June 21, 2011. UNIAN. 2011i. “Yanukovich schitaiet, chto dereguliatsiia ekonomiki budet sposobstvovat’ vnedreniiu v Ukraine ievropeiskikh standartov vedeniia biznesa,” June 29, 2011. UNIAN. 2011j. “Yanukovich preduprezhdaiet, chto u tekh, kto khochet podmenit’ pravosudie politikoi, nicheho ne vyidet,” August 23, 2011. UNIAN. 2011k. “Yanukovych: Nazrela neobkhodimost’ sozdaniia sovremennykh servisnykh tsentrov …,” September 6, 2011.

354 CORRUPTION AND ANTI-CORRUPTION POLICIES Uriadovyi kurier. 1994. “Vystup Prezydenta Ukrainy Na Urochystykh Zborakh, Prysviachenykh Dniu Militsii ‘Vidpovidalna Misiia Vartovykh Poriadku,’” December 24, 1994. Uriadovyi kurier. 1999. “Vystup Prezydenta Ukrainy Leonida Kuchmy Na Rozshyrenomu Zasidanni Koordynatsiinoho Komitetu Po Borot’bi z Koruptsieiu i Orhanizovanoiu Zlochynnistiu, 14.12.1999: ‘Derzhava Ne Bude Donorom Korumpovanykh Hapuh,’” December 16, 1999. Uriadovyi kurier. 2004. “Vystup Prezydenta Ukrainy Leonida Kuchmy Na Vseukrainsii Naradi z Problem Borot’by z Orhanizovanoiu Zlochynnistiu i Koruptsieiu Ta Zakhystu Prav Liudyny: ‘Borot’ba z Koruptsieiu—Zhyttievo Neobkhidna Sprava,’” January 31, 2004. Uriadovyi kurier. 2011. “Nastav chas proiavyty kharakter, dovesty I sobi, I svitovi, shcho Ukraina—tse kraina-lider,” April 8, 2011. Uriadovyi kurier. 2012. “Reformy potrebuiut’ pryskorennia,” July 4, 2012. Vasylenko, Volodymyr. 2011. “‘Kasetnyi skandal’: heopolitychnyi i natsionalnyi vymir”, Day.kyiv.ua, September 2, 2011. Yushchenko, Viktor. 2004. “Ukraine’s Choice.” Wall Street Journal, August 24, 2004, sec. Opinion. http://www.wsj.com/articles/SB109329771 672198865. Yushchenko, Viktor. 2014. Nederzhavni Taiemnytsi: Notatky Na Berehakh Pamiati. Edited by Oleksandr Zinchenko. Kharkiv: Folio.

International Organizations: Documents, reports, assessments (online sources last accessed 29 September 2018) Council of the European Union. 2010. “EU-Ukraine Visa Dialogue: Action Plan on Visa Liberalization.” Brussels, 14 December 2010. http://regi ster.consilium.europa.eu/doc/srv?l=EN&f=ST%2017883%202010% 20INIT. EU-Ukraine Cooperation Council. 2013. “EU-Ukraine Association Agenda to Prepare and Facilitate the Implementation of the Association Agreement.” Luxembourg, 24 June 2013. European Commission, and EEAS. 2012. “Second Progress Report on the Implementation by Ukraine of the Action Plan on Visa Liberalisation.” SWD (2012) 10 final. Joint Staff Working Document. Brussels: European Commission and European External Action Service. https: //ec.europa.eu/home-affairs/sites/homeaffairs/files/news/intro/ docs/20120209/ua_2nd_pr_vlap_swd_2012_10_final.pdf. European Commission. 2013. “Third Report on the Implementation by Ukraine of the Action Plan on Visa Liberalisation.” Brussels, 15 November 2013. https://ec.europa.eu/home-affairs/sites/homeaffairs /files/what-is-new/news/news/docs/20131115_3rd_progress_rep ort_on_the_implementation_by_ukraine_of_the_apvl_en.pdf. Freedom House. 2006. “Freedom House Report, Nations in Transit 2006, Ukraine.” Nations in Transit. Freedom House. https://freedomhous e.org/report/nations-transit/2006/ukraine. Freedom House. 2007. “Freedom House Report, Nations in Transit 2007, Ukraine.” Nations in Transit. Freedom House. https://fraeedomhou se.org/report/nations-transit/2007/ukraine. Freedom House. 2009. “Freedom House Report, Nations in Transit 2009, Ukraine.” Nations in Transit. Freedom House. https://freedomhou se.org/report/nations-transit/2009/ukraine. Gass, Stephan, James Hamilton, Paul Lemmens, and Hanna Suchocha. 2010. “Joint Opinion on the Law on the Judicial System and the Status of Judges of Ukraine.” Opinion No. 588/2010 CDL-AD(2010)026. Strasburg: European Commission for Democracy through Law (Venice Commission). http://www.venice.coe.int/webforms/document s/default.aspx?pdffile=CDL-AD(2010)026-e. International Renaissance Foundation. 2013. “Association with the EU: How Does Ukraine Fulfil the Benchmarks for Signing the Agreement? Independent Monitoring Report.” IRF. http://www.irf.ua/fil es/ukr/programs/euro/report_eng.pdf.

355

356 CORRUPTION AND ANTI-CORRUPTION POLICIES OECD. 2004. “Istanbul Anti-Corruption Action Plan for Armenia, Azerbaijan, Georgia, the Kyrgyz Republic, the Russian Federation, Tajikistan and Ukraine: Ukraine Monitoring Report.” Paris: OECD Anti-Corruption Network for Transition Economies. OECD. 2004. “Ukraine: Summary of assessment and recommendations.” Regional Anti-Corruption Action Plan for Armenia, Azerbaijan, Georgia, the Kyrgyz Republic, the Russian Federation, Tajikistan and Ukraine. Paris: OECD Anti-Corruption Network for Eastern Europe and Central Asia. https://www.oecd.org/countries/ukraine/43846543.pdf. OECD. 2015. “Anti-Corruption Reforms in Ukraine: Round 3 Monitoring of the Istanbul Anti-Corruption Action Plan.” Paris: OECD Anti-Corruption Network for Eastern Europe and Central Asia. OSCE/ODIHR. 1998. “Republic of Ukraine, Parliamentary Elections, 29 March 1998.” Warsaw: Organization for Security and Co-operation in Europe/Office for Democratic Institutions and Human Rights. https://www.osce.org/odihr/elections/ukraine/15030. OSCE/ODIHR. 1999. “Ukraine Presidential Elections, 31 October and 14 November 1999.” Warsaw: Organization for Security and Co-operation in Europe/Office for Democratic Institutions and Human Rights. https://www.osce.org/odihr/elections/ukraine/115679. OSCE/ODIHR. 2002. “Ukraine, Parliamentary Elections, 31 March 2002: Final Report.” Warsaw: Organization for Security and Co-operation in Europe/Office for Democratic Institutions and Human Rights. https://www.osce.org/odihr/elections/ukraine/115682. Sushko, Oleksandr, and Olena Prystayko. 2011. “Freedom House Report, Nations in Transit 2011, Ukraine.” Nations in Transit. Freedom House. https://freedomhouse.org/report/nations-transit/2011/ukraine. Sushko, Oleksandr, and Olena Prystayko. 2012. “Freedom House Report, Nations in Transit 2012, Ukraine.” Nations in Transit. Freedom House. https://freedomhouse.org/report/nations-transit/2012/ukraine. Sushko, Oleksandr, and Olena Prystayko. 2013. “Freedom House Report, Nations in Transit 2013, Ukraine.” Nations in Transit. Freedom House. https://freedomhouse.org/report/nations-transit/2013/ukraine. United Nations. 2003. “United Nations Convention against Corruption.” United Nations Office on Drugs and Crime. http://www.unodc.org/ documents/treaties/UNCAC/Publications/Convention/08-50026_E.pdf. World Bank. 2001. “Investigating Corruption in Ukraine: A Case Study of Internet Journalist Georgy Gongadze.” Washington, D.C: World Bank Institute. http://documents.worldbank.org/curated/en/9825 01468760201780/Investigating-corruption-in-Ukraine-a-case-studyof-Internet-journalist-Georgy-Gongadze. World Bank. 2011. Trends in Corruption and Regulatory Burden in Eastern Europe and Central Asia. The World Bank.

Investigative journalist Academia/think tank

CSO

Parliament

Former politician (executive branch), current CSO

Think tank

CSO CSO/investigative journalist International Organization

1.

2. 3.

4.

5.

6.

7.

8. 9.

Walecki Marcin

Shabunin Vitaliy Shalaiskyi Oleksiy

Semiletko Tetiana

Rybachuk Oleh

Presniakov Ivan

Poliakov Yegor

Khavroniuk Mykola Leshchenko Serhiy Nanivska Vira

Name

Position

28.10.2015

24.04.2014 16.04.2014

14.04.2014

Date0

Head of Democratization department, Office for Democratic Institutions and Human Rights (OSCE/ODIHR), former expert for political finance and political parties in Ukraine

Director of the Anti-Corruption Action Centre Editor in chief of the website “Nashi Hroshi”

Kyiv Kyiv Vilnius

09.07.2014

Kyiv

Kyiv

Kyiv

Kyiv

Kyiv Kyiv

Kyiv

Place

23.04.2014 29.04.2014

Aid to the Chair of the Committee of the Parliament on fight against corruption 15.04.2014 and organized crime 16.09.2017 Chief of Staff to the President of Ukraine (07.09.2005–16.09.2006), Deputy Prime Minister of Ukraine on European Integration (04.02.2005–07.09. 2005); since 2009 Chairman and co-founder of the NGO “Centre UA”, co-initiator of the Civil movement “Chesno”, the coalition of civil society organizations “Reanimation Package of Reforms” Lawyer of the Media Law Institute (currently Centre for Democracy and Rule of 28.10.2015 Law, CEDEM)

Law Professor at the Taras Shevchenko University, research director of the Centre of Policy and Legal Reform Investigative journalist President of the International Centre for Policy Studies, expert for public administration Analyst at civil movement “Chesno”

357

Note: The positions are listed as of the date when the interviews were conducted. Some former positions are indicated in case of their relevance for the research topic.

10.

Sample group

Academia/think tank

No.

Annex 1: Overview of the expert interview partners

358 CORRUPTION AND ANTI-CORRUPTION POLICIES

Annex 2: List of online media for the search inquiry Source

Timeframe covered in a database

Korrespondent.Net (Киев, Украина)

01.09.2005–25.09.2016

24.ua (Украина)

09.07.2007–25.09.2016

5 канал (5.ua)

22.01.2009–29.09.2016

Business Information Network (Украина)

16.01.2001–23.09.2016

Day-Weekly Digest (Kiev)

10.02.1998–22.06.2004

E-news: Новости Украины и мира (Украина)

06.11.2006–29.06.2007

Finance.ua

11.05.2005–29.09.2016

Ukraine Daily (Украина)

05.09.2005–31.07.2014

UNIAN (Ukrainian Independent News Agency). News (Украина) UNIAN. Day (Украина)

28.11.2000–14.01.2008 30.11.2004–06.03.2009

UNIAN. Military-industrial complex—Ukraine.

01.03.1997–10.11.2008

Власть и политика (Киев)

04.06.2004–25.02.2005

Газета.ua (gazeta.ua)

09.09.2005–25.09.2016

Голос Украины (Киев, Украина)

01.07.2004–24.09.2016

Голос Украины (укр.) (Киев) (PDF-версия)

18.05.2005–09.08.2006

Дело (Киев, Украина)

22.11.2007–31.10.2011

Деловая неделя (Киев)

01.02.2002–31.05.2008

Деловая Украина (Киев)

04.10.1995–21.12.2001

День (Киев) (day.kiev.ua)

01.08.1998–25.09.2016

Завтра (Киев)

23.02.2001–25.09.2016

Зеркало недели (Киев, Украина)

15.04.2004–24.09.2016

Зеркало недели (Киев) (zn.ua)

15.11.1995–25.09.2016

Зеркало недели (Киев) (укр.)

30.04.2004–15.10.2005

ИА УНИАН (Украина)

21.11.2000–26.09.2016

ANNEX 359 Кiевскiй телеграфЪ (Украина)

29.02.2000–20.01.2011

Киевские ведомости (kv.com.ua)

04.01.2002–25.09.2016

Коммерсантъ-Украина (kommersant.ua)

18.07.2005–12.03.2014

Комсомольская правда—01.09.2005–30.12.2008 (Киев) (PDF-версия) (09.2005–н.в.) Комсомольская правда—Украина (Киев)

01.09.2005–30.12.2008 01.12.2004–26.09.2016

Подробности (Украина) (2001–08.2005)

20.08.2001–31.08.2005

Сегодня (Киев, Украина)

16.12.1997–26.09.2016

Столичные новости (Киев) (cn.com.ua)

22.01.2001–28.06.2011

Украина молода (Киев, Украина) (umoloda.kiev.ua) Украина сегодня (обзор телеэфира)—Україна сьогодні (огляд телеефіру) Украинская правда (pravda.com.ua) (Киев, Украина) УНИАН. Новости (укр. яз.)

03.10.2003–02.06.2016

УНИАН. Новости On-line (укр. яз.)

26.07.2005–12.01.2015

Урядовий кур’єр (ukurier.gov.ua)

08.06.2010–24.09.2016

20.12.2004–23.03.2006 11.07.2000–29.09.2016 07.07.2005–12.01.2015

360 CORRUPTION AND ANTI-CORRUPTION POLICIES

Annex 3: MaxQDA code book Corruption: Forms and Types          

bribery extortion kick backs political corruption system of corruption kumivstvo (cronyism) kruhova poruka (vicious circle) tushkuvannia (changing factions in the Parliament for money) electoral fraud corruption schemes

Corruption Causes           

(corrupt) bureaucracy, administration individuals, moral problem, corrupt thinking/consciousness society, culture, history previous regime Soviet past transition (shadow) economy missing responsibility/organizational capacity failures of institutions and laws system impunity

Corrupt Spheres & Institutions       

public procurement political parties, elections parliament government regions, local public authorities judiciary, (constitutional) courts law enforcement, militia

ANNEX 361              

street police (higher) education health care army and defense media custom services state finance, state property state enterprises entrepreneurship, private business taxes, VAT banking privatization natural resources energy and coal sector

Corruption Consequences      

limiting foreign investments, entrepreneurship shadow economy social problems declining democracy delegitimizing, decreasing trust demoralization

Corruption: Description of the Problem             

economic—market—foreign investment—problem corruption as a problem on high political level political, state problem perpetual, stable, systemic problem widespread problem urgent problem national security problem society problem connection to human rights comparison with other countries pressure from outside internal Ukraine’s problem, needs own way of solving corruption among other problems

362 CORRUPTION AND ANTI-CORRUPTION POLICIES Corruption as a Topic in Confrontations   

President vs. opposition President vs. Parliament President vs. Government

Anti-Corruption Rhetoric        

war or cancer rhetoric communicating determination to counteract corruption references to the “will”/needs of people anti-corruption statistics negative balance positive balance needs time international image—speeches abroad

Anti-corruption Activities           

AC package of laws special anti-corruption institutions/agency/commission strengthening the state increasing executive control increasing control of security services increasing wages for the officials administrative reform administrative responsibility, raising fines criminal responsibility, investigations, imprisonments reform of judiciary and law enforcement abolish parliamentary and judiciary impunity

Anti-corruption Activities (cont.) 

  

lustration, purge o dismiss personalities in leading positions o new appointments o publicly “shaming and blaming” transparency bottom-up, society, awareness raising systemic, complex measures

ANNEX 363 

economic measures o deregulation, de-centralization o separating business and politics, de-oligarchisation o reducing shadow economy o audit and controlling o introducing state monopoly o reform of the tax/VAT system o tax liberalization o privatization

Assigning Responsibilities for Anti-Corruption              

President Parliament Judiciary Government and separate Ministries Law enforcement agencies, militia Prosecutor General Security Service & NSDC local public authorities international AC agencies special anti-corruption institution/agency/commission other executive institutions media (international) business collective responsibility

English Translation

Regulation of the Parliament No. 3207-XII “On urgent measures for fighting organized crime and corruption” 26.11.1993 Decree of the President No. 561/93 “On Coordination Committee under the President of Ukraine for Combating Corruption and Organized Crime” 28.08.1994 Decree of the President No. 484/94 “On increasing the fight against corruption and other economic crimes” 10.02.1995 Regulation of the President of Ukraine No. 35/95-рп “On activities to intensify the fight against corruption and organized crime” 05.10.1995; Law No. 356/95 “On the fight against corwent into ruption” force on 16.11.1995 10.04.1997 Decree of the President No. 319/97 “On the National program for the fight against corruption”

07.05.1993

Date

http://zakon.rada.gov.ua/laws/show/356/95вр/ed19951005; English abstract: http://zakon. rada.gov.ua/laws/anot/en/356/95-вр http://zakon.rada.gov.ua/laws/show/319/97

Указ Президента України N 319/97 “Про Національну програму боротьби з корупцією”

http://zakon.rada.gov.ua/laws/show/35/95-рп

http://zakon.rada.gov.ua/laws/show/484/94

Закон України N 356/95-ВР “Про боротьбу з корупцією”

Указ Президента України N 484/94 “Питання посилення боротьби з корупцією та іншими злочинами в сфері економіки” Розпорядження Президента України N 35/95рп “Про заходи щодо активізації боротьби з корупцією і організованою злочинністю”

http://zakon.rada.gov.ua/laws/show/3207-12

Постанова Верховної Ради України N 3207-XII “Про невідкладні заходи щодо боротьби з організованою злочинністю і корупцією” Указ Президента України N 561/93 “Про Координаційний комітет по боротьбі з корупцією і організованою злочинністю”

http://zakon.rada.gov.ua/laws/show/561/93/ ed19931126

Online Source

Original Title

(online sources last accessed 29 September 2018)

Annex 4: Anti-corruption legislation

364 CORRUPTION AND ANTI-CORRUPTION POLICIES

20.03.1998

14.07.1997

28.06.1997

24.04.1997

Regulation of the Cabinet of Ministers of Ukraine No. 388-97-n “On the action plan for implementational of the National program for the fight against corruption” Regulation of the Cabinet of Ministers of Ukraine No. 616-97-n “On rules and procedures for executive authorities reporting about compliance with the Law of Ukraine “On the fight against corruption” and National program on the fight against corruption” Regulation of the Cabinet of Ministers of Ukraine No. 763-97-n “On assessment of implementation of laws, decisions of the President and Cabinet of Ministers of Ukraine on the fight against corruption and crime and reports of the heads of central executive authorities on implementation of the Laws of Ukraine “On public service” and “On the fight against corruption”” Regulation of the Cabinet of Ministers of Ukraine No. 345-98-n “On assessment of the central and local executive authorities’ implementation of the Law “On the fight against corruption” and the National program on the fight against corruption”

http://zakon2.rada.gov.ua/laws/show/763-97-п

http://zakon3.rada.gov.ua/laws/show/345-98-п

Постанова Кабінету Міністрів України від 20 березня 1998 р. N 345 “Про стан виконання центральними і місцевими органами виконавчої влади Закону України “Про боротьбу з корупцією” та Національної програми боротьби з корупцією

http://zakon.rada.gov.ua/laws/show/ru/616-97п

http://zakon.rada.gov.ua/laws/show/388-97-п

Постанова Кабінету Міністрів України N 76397-n “Про хід виконання законів України, рішень Президента України та Кабінету Міністрів України з питань боротьби з корупцією і злочинністю та звіти керівників центральних органів виконавчої влади щодо виконання Законів України “Про державну службу” та “Про боротьбу з корупцією”

Постанова Кабінету Міністрів України N 388-97n “Про затвердження плану заходів організаційного забезпечення реалізації Національної програми боротьби з корупцією” Постанова Кабінету Міністрів України N 61697-n “Про порядок звітування органів виконавчої влади про дотримання вимог Закону України “Про боротьбу з корупцією”

ANNEX 365

Decree of the President of Ukraine No. 367/98 “On the Concept on the Fight against Corruption 1998-2005” Regulation of the Cabinet of Ministers of Ukraine No. 1220-98-п “On assessment of the central and local executive authorities’ implementation of the legislation on public service and fight against corruption” Program for the urgent measures in fight against corruption for the implementation in 1998, adopted by the Regulation of the Cabinet of Ministers No. 1220-98-п “On assessment of the central and local executive authorities’ implementation of the legislation on public service and fight against corruption” Постанова Кабінету Міністрів України N 799Regulation of the Cabinet of Ministers of 99-п “Про план заходів, спрямованих на Ukraine No.799-99-п “On the action plan боротьбу з корупцією, на 1999 рік” for the fight against corruption in 1999”

24.04.1998

10.05.1999

03.08.1998

03.08.1998

Action plan for central and local executive authorities for 1998 on fight against corruption, adopted by the Regulation of the Cabinet of Ministers No. 345-98-n, “On assessment of the central and local executive authorities’ implementation of the Law “On the fight against corruption” and the National program on the fight against corruption”

20.03.1998

План дій центральних і місцевих органів виконавчої влади на 1998 рік, спрямованих на боротьбу з корупцією, затверджений Постановою Кабінету Міністрів України N 345 “Про стан виконання центральними і місцевими органами виконавчої влади Закону України “Про боротьбу з корупцією” та Національної програми боротьби з корупцією” Указ Президента України N 367/98 “Про Концепцію боротьби з корупцією на 1998-2005 роки” Постанова Кабінету Міністрів України N 122098-п “Про стан виконання центральними і місцевими органами виконавчої влади актів законодавства про державну службу та боротьбу з корупцією” Програма невідкладних заходів, які спрямовані на боротьбу з корупцією і підлягають здійсненню в 1998 році, затверджена Постановою Кабінету Міністрів України від 3 серпня 1998 р. N 1220-98-п

366 CORRUPTION AND ANTI-CORRUPTION POLICIES

http://zakon2.rada.gov.ua/laws/show/799-99-п

http://zakon2.rada.gov.ua/laws/show/1220-98п/conv?lang=uk

http://zakon2.rada.gov.ua/laws/show/1220-98п/conv?lang=uk

http://zakon2.rada.gov.ua/laws/show/367/98

http://zakon3.rada.gov.ua/laws/show/345-98-п

06.02.2003

18.03.2002

18.03.2002

06.05.2001

16.11.2000

03.07.2000

Regulation of the Cabinet of Ministers of Ukraine No.1050-2000-n “On the action plan for the fight against corruption in 2000” Decree of the President of Ukraine No. 1242/2000 “On additional measures to intensify fight against corruption, other illegal actions in social and economic spheres and securing efficient state expenditures” Executive order of the Cabinet of Ministers of Ukraine No. N 179-р “On the action plan for the fight against corruption in 2001” Regulation of the Cabinet of Ministers of Ukraine No. 346-2002-п “On assessment of the implementation of the Law “On fight against corruption in Ukraine” and “On public service”” Action plan on fight against corruption for 2002, adopted by the Regulation of the Cabinet of Ministers No. 346-2002-п “On assessment of the implementation of the Law “On fight against corruption in Ukraine” and “On public service”” Decree of the President of Ukraine No. 84/2003 “On urgent additional measures to increase fight against organized crime and corruption”

http://zakon.rada.gov.ua/laws/show/346-2002-п

http://zakon.rada.gov.ua/laws/show/84/2003

Указ Президента України N 84/2003 “Про невідкладні додаткові заходи посилення боротьби з організованою злочинністю і корупцією”

http://zakon.rada.gov.ua/laws/show/346-2002-п

http://zakon.rada.gov.ua/laws/show/179-2001-р

http://zakon.rada.gov.ua/laws/show/1242/2000

http://zakon2.rada.gov.ua/laws/show/1050-2000-п

План заходів, спрямованих на боротьбу з корупцією, на 2002 рік, затверджений Постановою Кабінету Міністрів України від 18 березня 2002 р. N 346-2002-п

Постанова Кабінету Міністрів України N 10502000-n “Про план заходів, спрямованих на боротьбу з корупцією, на 2000 рік” Указ Президента України N 1242/2000 “Про додаткові заходи щодо посилення боротьби з корупцією, іншими протиправними діями в соціально-економічній сфері та забезпечення економного витрачання державних коштів” Розпорядження Кабінету Міністрів України N 179-р “Про затвердження плану заходів, спрямованих на боротьбу з корупцією, на 2001 рік” Постанова Кабінету Міністрів України від N 346-2002-п “Про стан виконання Законів України “Про боротьбу з корупцією” та “Про державну службу”

ANNEX 367

11.09.2006

20.01.2006

18.11.2005

09.02.2004

02.06.2003

15.05.2003

Executive order of the Cabinet of Ministers of Ukraine No. 270-2003-р “On adoption of the action plan to increase fight against organized crime and corruption in 2003” Executive order of the Cabinet of Ministers of Ukraine No. 323-2003-р “On adoption of the action plan for creation and functioning of the system of financial state controle over the declations and expeditures of persons, who apply for the position of public servant, and persons, who are empowered with the functions of state, as well as increasing fight against hidden income and corruption” Decree of the President of Ukraine No. 175/2004 “On systemic measures to eliminate the causes and conditions that foster crime and corruption” Decree of the President of Ukraine No. 1615/2005 “On priority measures for tackling the shadow economy and counteracting corruption” Decree of the President of Ukraine No. 39/2006 “On an Action Plan for the implementation of responsibilities and obligations of Ukraine” Decree of the President of Ukraine No. 742 /2006 “On the Concept of overcoming corruption in Ukraine: ‘On the way to integrity’” Указ Президента України N 39/2006 “Про План заходів із виконання обов’язків та зобов’язань України, що випливають з її членства в Раді Європи” Указ Президента України N 742/2006 “Про Концепцію подолання корупції в Україні “На шляху до доброчесності”

http://zakon.rada.gov.ua/laws/show/323-2003-р

Розпорядження Кабінету Міністрів України N 323-2003-р “Про затвердження плану заходів щодо створення та забезпечення функціонування системи державного фінансового контролю за декларуванням та витрачанням доходів особами, які претендують на зайняття посад державних службовців, та особами, уповноваженими на виконання функцій держави, посилення боротьби з прихованням доходів від оподаткування та корупцією” Указ Президента України N 175/2004 “Про систему заходів щодо усунення причин та умов, які сприяють злочинним проявам і корупції” Указ Президента України N 1615/2005 “Про першочергові заходи щодо детінізації економіки та протидії корупції”

http://zakon0.rada.gov.ua/laws/show/742/2006 /ed20060911?lang=en

http://zakon2.rada.gov.ua/laws/show/39/2006/ ed20060120

http://zakon.rada.gov.ua/laws/show/1615/2005

http://zakon.rada.gov.ua/laws/show/175/2004

http://zakon.rada.gov.ua/laws/show/270-2003р/conv

Розпорядження Кабінету Міністрів України N 270-р “Про затвердження плану заходів щодо посилення боротьби з організованою злочинністю і корупцією на 2003 рік”

368 CORRUPTION AND ANTI-CORRUPTION POLICIES

11.04.2008

01.02.2008

20.09.2007

15.08.2007

29.11.2006

Regulation of the Cabinet of Ministers of Ukraine No. 1673-2006-n “On the state of fiscal discipline, measures to intensify the fight against corruption and control over the use of state property and financial resources” Executive order of the Cabinet of Ministers of Ukraine No. 657-2007-p “On Approval of the Action Plan for the Implementation of the Concept for the Fighting of Corruption in Ukraine “On the Way to Integrity” and the State Anti-Corruption Policy for the Period till 2011” Decree of the President of Ukraine No. 900/2007 “On measures to reform the civil service in Ukraine and to ensure the protection of the constitutional rights of civil servants” Decree of the President of Ukraine No. 80/2008 “On some measures to improve the formation and implementation of state anti-corruption policy” Decree of the President of Ukraine No. 328/2008 “On some measures to prevent corruption in courts and law enforcement agencies”

http://zakon.rada.gov.ua/laws/show/900/2007

http://zakon.rada.gov.ua/laws/show/657-2007%D1%80

http://zakon.rada.gov.ua/laws/show/1673-2006%D0%BF

Указ Президента України N 80/2008 “Про http://zakon.rada.gov.ua/laws/show/80/2008 деякі заходи щодо вдосконалення формування та реалізації державної антикорупційної політики” http://zakon.rada.gov.ua/laws/show/328/2008 Указ Президента України N 328/2008 “Про деякі заходи щодо запобігання корупції в судах та правоохоронних органах”

Указ Президента України N 900 “Про заходи щодо реформування державної служби в Україні та забезпечення захисту конституційних прав державних службовців”

Постанова Кабінету Міністрів України N 1673 “Про стан фінансово-бюджетної дисципліни, заходи щодо посилення боротьби з корупцією та контролю за використанням державного майна і фінансових ресурсів” Розпорядження Кабінету Міністрів України N 657-р “Про затвердження плану заходів щодо реалізації Концепції подолання корупції в Україні “На шляху до доброчесності” на період до 2010 року”

ANNEX 369

Decree of the President of Ukraine No. 414/2008 “On the decision of the National Security and Defence Council of Ukraine from 21 April 2008 “On measures to implement national anti-corruption strategy and institutional provisions for the integral anti-corruption policy”” 27.11.2008 Deacree of the President of Ukraine No. 1101/2008 “On the decision of the National Security and Defence Council of Ukraine from 31 October 2008 “On the state of fight against corruption in Ukraine” 08.04.2009 Executive order of the Cabinet of Ministers of Ukraine No. 535-2009-p “On Approval of the complex Action Plan for the land reform, deregulation and corruption counteraction in this field for 2009” 11.06.2009; Law No. 1506-VI “On Grounds of Corruption Prevention and Counteraction” implementation was postponed, and the new anticorruption law repealed current law

05.05.2008

http://zakon.rada.gov.ua/laws/show/1101/2008

http://zakon.rada.gov.ua/laws/show/ru/535-20 09-р?lang=uk

Указ Президента України No 1101/2008 Про рішення Ради національної безпеки і оборони України від 31 жовтня 2008 року “Про стан протидії корупції в Україні”

Розпорядження Кабінету Міністрів України N 535-2009-p “Про затвердження комплексного плану заходів щодо реформування земельних відносин, дерегуляції та подолання корупції у цій сфері на 2009 рік” Закон України 1506-VI “Про засади запобігання і протидії корупції”

http://zakon.rada.gov.ua/laws/show/1506-17/ ed20090611; English abstract: http://zakon.rada. gov.ua/laws/anot/en/1506-17

http://zakon.rada.gov.ua/laws/show/414/2008

Указ Президента України N 414/2008 “Про рішення Ради національної безпеки і оборони України від 21 квітня 2008 року “Про заходи щодо реалізації національної антикорупційної стратегії та інституційного забезпечення цілісної антикорупційної політики”

370 CORRUPTION AND ANTI-CORRUPTION POLICIES

Action Plan on the implementation of the Concept for the fighting of corruption in Ukraine “On the Way to Integrity” and the State Anti-Corruption Policy for the Period till 2011 as adopted by the Executive Order of the Cabinet of Ministers No. 1013-2009-p Executive order of the Cabinet of Ministers of Ukraine No. 1688-2009-p “On approvement of the Anti-Corrption policy” Decree of the President of Ukraine No. 275/2010 “On establishing of the National Anti-corruption Committee” Law No. 3206-VI “On Grounds of Corruption Prevention and Counteraction”

07.04.11; went into force on 01.06.2011; Additional provisions went into force on 01.01.2012. 21.10.2011 Decree of the President of Ukraine No. 1001/2011 “On the National anti-corruption strategy for 2011–2015” 28.11.2011 Regulation of the Cabinet of Ministers of Ukraine No.1240-2011-n “On approval of the State Program for Corruption Prevention and Counteraction for 2011–2015”

26.02.2010

08.12.2009

26.08.2009

Указ Президента України No 1001/2011 “Про Національну антикорупційну стратегію на 2011–2015 роки” Постанова Кабінету Міністрів України від 28 листопада 2011 р. N 1240 “Про затвердження Державної програми щодо запобігання і протидії корупції на 2011–2015 роки”

Розпорядження Кабінету Міністрів України N 1688-2009-p “Про схвалення Засад антикорупційної політики” Указ Президента України N 275/2010 “Про утворення Національного антикорупційного комітету” Закон України 3206-VI “Про засади запобігання і протидії корупції”

http://zakon3.rada.gov.ua/laws/show/1240-20 11-п

http://zakon3.rada.gov.ua/laws/show/1001/20 11

http://zakon.rada.gov.ua/laws/show/3206-17/ ed20110407; English abstract: http://zakon.rada. gov.ua/laws/anot/en/3206-17

http://zakon.rada.gov.ua/laws/show/275/2010

http://zakon.rada.gov.ua/laws/show/1688-2009р?lang=uk

http://zakon.rada.gov.ua/laws/show/657-2007План заходів щодо реалізації Концепції р/ed20090826 подолання корупції в Україні “На шляху до доброчесності” та державної антикорупційної політики на період до 2011 року в редакції розпорядження Кабінету Міністрів України від 26 серпня 2009 р. No 1013-2009-p

ANNEX 371

..

SOVIET AND POST-SOVIET POLITICS AND SOCIETY

.

Edited by Dr. Andreas Umland |ISSN 1614-3515 1

Андреас Умланд (ред.) | Воплощение Европейской конвенции по правам человека в России. Философские, юридические и эмпирические исследования | ISBN 3-89821-387-0

2

Christian Wipperfürth | Russland – ein vertrauenswürdiger Partner? Grundlagen, Hintergründe und Praxis gegenwärtiger russischer Außenpolitik | Mit einem Vorwort von Heinz Timmermann | ISBN 3-89821-401-X

3

Manja Hussner | Die Übernahme internationalen Rechts in die russische und deutsche Rechtsordnung. Eine vergleichende Analyse zur Völkerrechtsfreundlichkeit der Verfassungen der Russländischen Föderation und der Bundesrepublik Deutschland | Mit einem Vorwort von Rainer Arnold | ISBN 3-89821-438-9

4 5

Matthew Tejada | Bulgaria's Democratic Consolidation and the Kozloduy Nuclear Power Plant (KNPP). The Unattainability of Closure | With a foreword by Richard J. Crampton | ISBN 3-89821-439-7 Марк Григорьевич Меерович | Квадратные метры, определяющие сознание. Государственная жилищная политика в СССР. 1921 – 1941 гг | ISBN 3-89821-474-5

6

Andrei P. Tsygankov, Pavel A.Tsygankov (Eds.) | New Directions in Russian International Studies | ISBN 3-89821-422-2

7

Марк Григорьевич Меерович | Как власть народ к труду приучала. Жилище в СССР – средство управления людьми. 1917 – 1941 гг. | С предисловием Елены Осокиной | ISBN 3-89821-495-8

8

David J. Galbreath | Nation-Building and Minority Politics in Post-Socialist States. Interests, Influence and Identities in Estonia and Latvia | With a foreword by David J. Smith | ISBN 3-89821-467-2

9

Алексей Юрьевич Безугольный | Народы Кавказа в Вооруженных силах СССР в годы Великой Отечественной войны 1941-1945 гг. | С предисловием Николая Бугая | ISBN 3-89821-475-3

10 Вячеслав Лихачев и Владимир Прибыловский (ред.) | Русское Национальное Единство, 1990-2000. В 2-х томах | ISBN 3-89821-523-7 11 Николай Бугай (ред.) | Народы стран Балтии в условиях сталинизма (1940-е – 1950-e годы). Документированная история | ISBN 3-89821-525-3 12 Ingmar Bredies (Hrsg.) | Zur Anatomie der Orange Revolution in der Ukraine. Wechsel des Elitenregimes oder Triumph des Parlamentarismus? | ISBN 3-89821-524-5

13 Anastasia V. Mitrofanova | The Politicization of Russian Orthodoxy. Actors and Ideas | With a foreword by William C. Gay | ISBN 3-89821-481-8

14 Nathan D. Larson | Alexander Solzhenitsyn and the Russo-Jewish Question | ISBN 3-89821-483-4 15 Guido Houben | Kulturpolitik und Ethnizität. Staatliche Kunstförderung im Russland der neunziger Jahre | Mit einem Vorwort von Gert Weisskirchen | ISBN 3-89821-542-3

16 Leonid Luks | Der russische „Sonderweg“? Aufsätze zur neuesten Geschichte Russlands im europäischen Kontext | ISBN 3-89821-496-6

17 Евгений Мороз | История «Мёртвой воды» – от страшной сказки к большой политике. Политическое неоязычество в постсоветской России | ISBN 3-89821-551-2

18 Александр Верховский и Галина Кожевникова (peд.) | Этническая и религиозная интолерантность в российских СМИ. Результаты мониторинга 2001-2004 гг. | ISBN 3-89821-569-5 19 Christian Ganzer | Sowjetisches Erbe und ukrainische Nation. Das Museum der Geschichte des Zaporoger Kosakentums auf der Insel Chortycja | Mit einem Vorwort von Frank Golczewski | ISBN 3-89821-504-0

20 Эльза-Баир Гучинова | Помнить нельзя забыть. Антропология депортационной травмы калмыков | С предисловием Кэролайн Хамфри | ISBN 3-89821-506-7

21 Юлия Лидерман | Мотивы «проверки» и «испытания» в постсоветской культуре. Советское прошлое в российском кинематографе 1990-х годов | С предисловием Евгения Марголита | ISBN 3-89821-511-3

22 Tanya Lokshina, Ray Thomas, Mary Mayer (Eds.) | The Imposition of a Fake Political Settlement in the Northern Caucasus. The 2003 Chechen Presidential Election | ISBN 3-89821-436-2 23 Timothy McCajor Hall, Rosie Read (Eds.) | Changes in the Heart of Europe. Recent Ethnographies of Czechs, Slovaks, Roma, and Sorbs | With an afterword by Zdeněk Salzmann | ISBN 3-89821-606-3

24 Christian Autengruber | Die politischen Parteien in Bulgarien und Rumänien. Eine vergleichende Analyse seit Beginn der 90er Jahre | Mit einem Vorwort von Dorothée de Nève | ISBN 3-89821-476-1

25 Annette Freyberg-Inan with Radu Cristescu | The Ghosts in Our Classrooms, or: John Dewey Meets Ceauşescu. The Promise and the Failures of Civic Education in Romania | ISBN 3-89821-416-8 26 John B. Dunlop | The 2002 Dubrovka and 2004 Beslan Hostage Crises. A Critique of Russian CounterTerrorism | With a foreword by Donald N. Jensen | ISBN 3-89821-608-X

27 Peter Koller | Das touristische Potenzial von Kam’’janec’–Podil’s’kyj. Eine fremdenverkehrsgeographische Untersuchung der Zukunftsperspektiven und Maßnahmenplanung zur Destinationsentwicklung des „ukrainischen Rothenburg“ | Mit einem Vorwort von Kristiane Klemm | ISBN 3-89821-640-3

28 Françoise Daucé, Elisabeth Sieca-Kozlowski (Eds.) | Dedovshchina in the Post-Soviet Military. Hazing of Russian Army Conscripts in a Comparative Perspective | With a foreword by Dale Herspring | ISBN 3-89821-616-0

29 Florian Strasser | Zivilgesellschaftliche Einflüsse auf die Orange Revolution. Die gewaltlose Massenbewegung und die ukrainische Wahlkrise 2004 | Mit einem Vorwort von Egbert Jahn | ISBN 3-89821-648-9

30 Rebecca S. Katz | The Georgian Regime Crisis of 2003-2004. A Case Study in Post-Soviet Media Representation of Politics, Crime and Corruption | ISBN 3-89821-413-3

31 Vladimir Kantor | Willkür oder Freiheit. Beiträge zur russischen Geschichtsphilosophie | Ediert von Dagmar Herrmann sowie mit einem Vorwort versehen von Leonid Luks | ISBN 3-89821-589-X

32 Laura A. Victoir | The Russian Land Estate Today. A Case Study of Cultural Politics in Post-Soviet Russia | With a foreword by Priscilla Roosevelt | ISBN 3-89821-426-5

33 Ivan Katchanovski | Cleft Countries. Regional Political Divisions and Cultures in Post-Soviet Ukraine and Moldova| With a foreword by Francis Fukuyama | ISBN 3-89821-558-X

34 Florian Mühlfried | Postsowjetische Feiern. Das Georgische Bankett im Wandel | Mit einem Vorwort von Kevin Tuite | ISBN 3-89821-601-2

35 Roger Griffin, Werner Loh, Andreas Umland (Eds.) | Fascism Past and Present, West and East. An International Debate on Concepts and Cases in the Comparative Study of the Extreme Right | With an afterword by Walter Laqueur | ISBN 3-89821-674-8

36 Sebastian Schlegel | Der „Weiße Archipel“. Sowjetische Atomstädte 1945-1991 | Mit einem Geleitwort von Thomas Bohn | ISBN 3-89821-679-9

37 Vyacheslav Likhachev | Political Anti-Semitism in Post-Soviet Russia. Actors and Ideas in 1991-2003 | Edited and translated from Russian by Eugene Veklerov | ISBN 3-89821-529-6

38 Josette Baer (Ed.) | Preparing Liberty in Central Europe. Political Texts from the Spring of Nations 1848 to the Spring of Prague 1968 | With a foreword by Zdeněk V. David | ISBN 3-89821-546-6

39 Михаил Лукьянов | Российский консерватизм и реформа, 1907-1914 | С предисловием Марка Д. Стейнберга | ISBN 3-89821-503-2

40 Nicola Melloni | Market Without Economy. The 1998 Russian Financial Crisis | With a foreword by Eiji Furukawa | ISBN 3-89821-407-9

41 Dmitrij Chmelnizki | Die Architektur Stalins | Bd. 1: Studien zu Ideologie und Stil | Bd. 2: Bilddokumentation | Mit einem Vorwort von Bruno Flierl | ISBN 3-89821-515-6

42 Katja Yafimava | Post-Soviet Russian-Belarussian Relationships. The Role of Gas Transit Pipelines | With a foreword by Jonathan P. Stern | ISBN 3-89821-655-1

43 Boris Chavkin | Verflechtungen der deutschen und russischen Zeitgeschichte. Aufsätze und Archiv-

funde zu den Beziehungen Deutschlands und der Sowjetunion von 1917 bis 1991 | Ediert von Markus Edlinger sowie mit einem Vorwort versehen von Leonid Luks | ISBN 3-89821-756-6

44 Anastasija Grynenko in Zusammenarbeit mit Claudia Dathe | Die Terminologie des Gerichtswesens der Ukraine und Deutschlands im Vergleich. Eine übersetzungswissenschaftliche Analyse juristischer Fachbegriffe im Deutschen, Ukrainischen und Russischen | Mit einem Vorwort von Ulrich Hartmann | ISBN 3-89821-691-8

45 Anton Burkov | The Impact of the European Convention on Human Rights on Russian Law. Legislation and Application in 1996-2006 | With a foreword by Françoise Hampson | ISBN 978-3-89821-639-5

46 Stina Torjesen, Indra Overland (Eds.) | International Election Observers in Post-Soviet Azerbaijan. Geopolitical Pawns or Agents of Change? | ISBN 978-3-89821-743-9 47 Taras Kuzio | Ukraine – Crimea – Russia. Triangle of Conflict | ISBN 978-3-89821-761-3 48 Claudia Šabić | „Ich erinnere mich nicht, aber L'viv!“ Zur Funktion kultureller Faktoren für die Institutionalisierung und Entwicklung einer ukrainischen Region | Mit einem Vorwort von Melanie Tatur | ISBN 978-3-89821-752-1

49 Marlies Bilz | Tatarstan in der Transformation. Nationaler Diskurs und Politische Praxis 1988-1994 | Mit einem Vorwort von Frank Golczewski | ISBN 978-3-89821-722-4

50 Марлен Ларюэль (ред.) | Современные интерпретации русского национализма | ISBN 978-3-89821-795-8

51 Sonja Schüler | Die ethnische Dimension der Armut. Roma im postsozialistischen Rumänien | Mit einem Vorwort von Anton Sterbling | ISBN 978-3-89821-776-7

52 Галина Кожевникова | Радикальный национализм в России и противодействие ему. Сборник докладов Центра «Сова» за 2004-2007 гг. | С предисловием Александра Верховского | ISBN 978-3-89821-721-7

53 Галина Кожевникова и Владимир Прибыловский | Российская власть в биографиях I. Высшие должностные лица РФ в 2004 г. | ISBN 978-3-89821-796-5

54 Галина Кожевникова и Владимир Прибыловский | Российская власть в биографиях II. Члены Правительства РФ в 2004 г. | ISBN 978-3-89821-797-2

55 Галина Кожевникова и Владимир Прибыловский | Российская власть в биографиях III. Руководители федеральных служб и агентств РФ в 2004 г.| ISBN 978-3-89821-798-9

56 Ileana Petroniu | Privatisierung in Transformationsökonomien. Determinanten der Restrukturierungs-Bereitschaft am Beispiel Polens, Rumäniens und der Ukraine | Mit einem Vorwort von Rainer W. Schäfer | ISBN 978-3-89821-790-3

57 Christian Wipperfürth | Russland und seine GUS-Nachbarn. Hintergründe, aktuelle Entwicklungen und Konflikte in einer ressourcenreichen Region| ISBN 978-3-89821-801-6

58 Togzhan Kassenova | From Antagonism to Partnership. The Uneasy Path of the U.S.-Russian Cooperative Threat Reduction | With a foreword by Christoph Bluth | ISBN 978-3-89821-707-1

59 Alexander Höllwerth | Das sakrale eurasische Imperium des Aleksandr Dugin. Eine Diskursanalyse zum postsowjetischen russischen Rechtsextremismus | Mit einem Vorwort von Dirk Uffelmann | ISBN 978-3-89821-813-9

60 Олег Рябов | «Россия-Матушка». Национализм, гендер и война в России XX века | С предисловием Елены Гощило | ISBN 978-3-89821-487-2

61 Ivan Maistrenko | Borot'bism. A Chapter in the History of the Ukrainian Revolution | With a new Introduction by Chris Ford | Translated by George S. N. Luckyj with the assistance of Ivan L. Rudnytsky | Second, Revised and Expanded Edition ISBN 978-3-8382-1107-7

62 Maryna Romanets | Anamorphosic Texts and Reconfigured Visions. Improvised Traditions in Contemporary Ukrainian and Irish Literature | ISBN 978-3-89821-576-3

63 Paul D'Anieri and Taras Kuzio (Eds.) | Aspects of the Orange Revolution I. Democratization and Elections in Post-Communist Ukraine | ISBN 978-3-89821-698-2

64 Bohdan Harasymiw in collaboration with Oleh S. Ilnytzkyj (Eds.) | Aspects of the Orange Revolution II. Information and Manipulation Strategies in the 2004 Ukrainian Presidential Elections | ISBN 978-3-89821-699-9 65 Ingmar Bredies, Andreas Umland and Valentin Yakushik (Eds.) | Aspects of the Orange Revolution III. The Context and Dynamics of the 2004 Ukrainian Presidential Elections | ISBN 978-3-89821-803-0 66 Ingmar Bredies, Andreas Umland and Valentin Yakushik (Eds.) | Aspects of the Orange Revolution IV. Foreign Assistance and Civic Action in the 2004 Ukrainian Presidential Elections | ISBN 978-3-89821-808-5 67 Ingmar Bredies, Andreas Umland and Valentin Yakushik (Eds.) | Aspects of the Orange Revolution V. Institutional Observation Reports on the 2004 Ukrainian Presidential Elections | ISBN 978-3-89821-809-2 68 Taras Kuzio (Ed.) | Aspects of the Orange Revolution VI. Post-Communist Democratic Revolutions in Comparative Perspective | ISBN 978-3-89821-820-7

69 Tim Bohse | Autoritarismus statt Selbstverwaltung. Die Transformation der kommunalen Politik in der Stadt Kaliningrad 1990-2005 | Mit einem Geleitwort von Stefan Troebst | ISBN 978-3-89821-782-8

70 David Rupp | Die Rußländische Föderation und die russischsprachige Minderheit in Lettland. Eine Fallstudie zur Anwaltspolitik Moskaus gegenüber den russophonen Minderheiten im „Nahen Ausland“ von 1991 bis 2002 | Mit einem Vorwort von Helmut Wagner | ISBN 978-3-89821-778-1

71 Taras Kuzio | Theoretical and Comparative Perspectives on Nationalism. New Directions in Cross-Cultural and Post-Communist Studies | With a foreword by Paul Robert Magocsi | ISBN 978-3-89821-815-3

72 Christine Teichmann | Die Hochschultransformation im heutigen Osteuropa. Kontinuität und Wandel bei der Entwicklung des postkommunistischen Universitätswesens | Mit einem Vorwort von Oskar Anweiler | ISBN 978-3-89821-842-9

73 Julia Kusznir | Der politische Einfluss von Wirtschaftseliten in russischen Regionen. Eine Analyse am Beispiel der Erdöl- und Erdgasindustrie, 1992-2005 | Mit einem Vorwort von Wolfgang Eichwede | ISBN 978-3-89821-821-4

74 Alena Vysotskaya | Russland, Belarus und die EU-Osterweiterung. Zur Minderheitenfrage und zum Problem der Freizügigkeit des Personenverkehrs | Mit einem Vorwort von Katlijn Malfliet | ISBN 978-3-89821-822-1

75 Heiko Pleines (Hrsg.) | Corporate Governance in post-sozialistischen Volkswirtschaften | ISBN 978-3-89821-766-8

76 Stefan Ihrig | Wer sind die Moldawier? Rumänismus versus Moldowanismus in Historiographie und Schulbüchern der Republik Moldova, 1991-2006 | Mit einem Vorwort von Holm Sundhaussen | ISBN 978-3-89821-466-7

77 Galina Kozhevnikova in collaboration with Alexander Verkhovsky and Eugene Veklerov | UltraNationalism and Hate Crimes in Contemporary Russia. The 2004-2006 Annual Reports of Moscow’s SOVA Center | With a foreword by Stephen D. Shenfield | ISBN 978-3-89821-868-9

78 Florian Küchler | The Role of the European Union in Moldova’s Transnistria Conflict | With a foreword by Christopher Hill | ISBN 978-3-89821-850-4

79 Bernd Rechel | The Long Way Back to Europe. Minority Protection in Bulgaria | With a foreword by Richard Crampton | ISBN 978-3-89821-863-4

80 Peter W. Rodgers | Nation, Region and History in Post-Communist Transitions. Identity Politics in Ukraine, 1991-2006 | With a foreword by Vera Tolz | ISBN 978-3-89821-903-7

81 Stephanie Solywoda | The Life and Work of Semen L. Frank. A Study of Russian Religious Philosophy | With a foreword by Philip Walters | ISBN 978-3-89821-457-5

82 Vera Sokolova | Cultural Politics of Ethnicity. Discourses on Roma in Communist Czechoslovakia | ISBN 978-3-89821-864-1

83 Natalya Shevchik Ketenci | Kazakhstani Enterprises in Transition. The Role of Historical Regional Development in Kazakhstan’s Post-Soviet Economic Transformation | ISBN 978-3-89821-831-3

84 Martin Malek, Anna Schor-Tschudnowskaja (Hgg.) | Europa im Tschetschenienkrieg. Zwischen politischer Ohnmacht und Gleichgültigkeit | Mit einem Vorwort von Lipchan Basajewa | ISBN 978-3-89821-676-0

85 Stefan Meister | Das postsowjetische Universitätswesen zwischen nationalem und internationalem Wandel. Die Entwicklung der regionalen Hochschule in Russland als Gradmesser der Systemtransformation | Mit einem Vorwort von Joan DeBardeleben | ISBN 978-3-89821-891-7

86 Konstantin Sheiko in collaboration with Stephen Brown | Nationalist Imaginings of the Russian Past. Anatolii Fomenko and the Rise of Alternative History in Post-Communist Russia | With a foreword by Donald Ostrowski | ISBN 978-3-89821-915-0

87 Sabine Jenni | Wie stark ist das „Einige Russland“? Zur Parteibindung der Eliten und zum Wahlerfolg der Machtpartei im Dezember 2007 | Mit einem Vorwort von Klaus Armingeon | ISBN 978-3-89821-961-7

88 Thomas Borén | Meeting-Places of Transformation. Urban Identity, Spatial Representations and Local Politics in Post-Soviet St Petersburg | ISBN 978-3-89821-739-2

89 Aygul Ashirova | Stalinismus und Stalin-Kult in Zentralasien. Turkmenistan 1924-1953 | Mit einem Vorwort von Leonid Luks | ISBN 978-3-89821-987-7

90 Leonid Luks | Freiheit oder imperiale Größe? Essays zu einem russischen Dilemma | ISBN 978-3-8382-0011-8 91 Christopher Gilley | The ‘Change of Signposts’ in the Ukrainian Emigration. A Contribution to the History of Sovietophilism in the 1920s | With a foreword by Frank Golczewski | ISBN 978-3-89821-965-5

92 Philipp Casula, Jeronim Perovic (Eds.) | Identities and Politics During the Putin Presidency. The Discursive Foundations of Russia's Stability | With a foreword by Heiko Haumann | ISBN 978-3-8382-0015-6

93 Marcel Viëtor | Europa und die Frage nach seinen Grenzen im Osten. Zur Konstruktion ‚europäischer Identität’ in Geschichte und Gegenwart | Mit einem Vorwort von Albrecht Lehmann | ISBN 978-3-8382-0045-3

94 Ben Hellman, Andrei Rogachevskii | Filming the Unfilmable. Casper Wrede's 'One Day in the Life of Ivan Denisovich' | Second, Revised and Expanded Edition | ISBN 978-3-8382-0044-6

95 Eva Fuchslocher | Vaterland, Sprache, Glaube. Orthodoxie und Nationenbildung am Beispiel Georgiens | Mit einem Vorwort von Christina von Braun | ISBN 978-3-89821-884-9

96 Vladimir Kantor | Das Westlertum und der Weg Russlands. Zur Entwicklung der russischen Literatur und Philosophie | Ediert von Dagmar Herrmann | Mit einem Beitrag von Nikolaus Lobkowicz | ISBN 978-3-8382-0102-3

97 Kamran Musayev | Die postsowjetische Transformation im Baltikum und Südkaukasus. Eine vergleichende Untersuchung der politischen Entwicklung Lettlands und Aserbaidschans 1985-2009 | Mit einem Vorwort von Leonid Luks | Ediert von Sandro Henschel | ISBN 978-3-8382-0103-0

98 Tatiana Zhurzhenko | Borderlands into Bordered Lands. Geopolitics of Identity in Post-Soviet Ukraine | With a foreword by Dieter Segert | ISBN 978-3-8382-0042-2

99 Кирилл Галушко, Лидия Смола (ред.) | Пределы падения – варианты украинского будущего. Аналитико-прогностические исследования | ISBN 978-3-8382-0148-1 100 Michael Minkenberg (Ed.) | Historical Legacies and the Radical Right in Post-Cold War Central and Eastern Europe | With an afterword by Sabrina P. Ramet | ISBN 978-3-8382-0124-5 101 David-Emil Wickström | Rocking St. Petersburg. Transcultural Flows and Identity Politics in the St. Petersburg Popular Music Scene | With a foreword by Yngvar B. Steinholt | Second, Revised and Expanded Edition | ISBN 978-3-8382-0100-9

102 Eva Zabka | Eine neue „Zeit der Wirren“? Der spät- und postsowjetische Systemwandel 1985-2000 im Spiegel russischer gesellschaftspolitischer Diskurse | Mit einem Vorwort von Margareta Mommsen | ISBN 978-3-8382-0161-0

103 Ulrike Ziemer | Ethnic Belonging, Gender and Cultural Practices. Youth Identitites in Contemporary Russia | With a foreword by Anoop Nayak | ISBN 978-3-8382-0152-8

104 Ksenia Chepikova | ‚Einiges Russland’ - eine zweite KPdSU? Aspekte der Identitätskonstruktion einer postsowjetischen „Partei der Macht“ | Mit einem Vorwort von Torsten Oppelland | ISBN 978-3-8382-0311-9

105 Леонид Люкс | Западничество или евразийство? Демократия или идеократия? Сборник статей об исторических дилеммах России | С предисловием Владимира Кантора | ISBN 978-3-8382-0211-2

106 Anna Dost | Das russische Verfassungsrecht auf dem Weg zum Föderalismus und zurück. Zum Konflikt von Rechtsnormen und -wirklichkeit in der Russländischen Föderation von 1991 bis 2009 | Mit einem Vorwort von Alexander Blankenagel | ISBN 978-3-8382-0292-1

107 Philipp Herzog | Sozialistische Völkerfreundschaft, nationaler Widerstand oder harmloser Zeitvertreib? Zur politischen Funktion der Volkskunst im sowjetischen Estland | Mit einem Vorwort von Andreas Kappeler | ISBN 978-3-8382-0216-7

108 Marlène Laruelle (Ed.) | Russian Nationalism, Foreign Policy, and Identity Debates in Putin's Russia. New Ideological Patterns after the Orange Revolution | ISBN 978-3-8382-0325-6 109 Michail Logvinov | Russlands Kampf gegen den internationalen Terrorismus. Eine kritische Bestandsaufnahme des Bekämpfungsansatzes | Mit einem Geleitwort von Hans-Henning Schröder und einem Vorwort von Eckhard Jesse | ISBN 978-3-8382-0329-4

110 John B. Dunlop | The Moscow Bombings of September 1999. Examinations of Russian Terrorist Attacks at the Onset of Vladimir Putin's Rule | Second, Revised and Expanded Edition | ISBN 978-3-8382-0388-1

111 Андрей А. Ковалёв | Свидетельство из-за кулис российской политики I. Можно ли делать добрo

из зла? (Воспоминания и размышления о последних советских и первых послесоветских годах) | With a foreword by Peter Reddaway | ISBN 978-3-8382-0302-7

112 Андрей А. Ковалёв | Свидетельство из-за кулис российской политики II. Угроза для себя и окружающих (Наблюдения и предостережения относительно происходящего после 2000 г.) | ISBN 978-3-8382-0303-4 113 Bernd Kappenberg | Zeichen setzen für Europa. Der Gebrauch europäischer lateinischer Sonderzeichen in der deutschen Öffentlichkeit | Mit einem Vorwort von Peter Schlobinski | ISBN 978-3-89821-749-1

114 Ivo Mijnssen | The Quest for an Ideal Youth in Putin’s Russia I. Back to Our Future! History, Modernity, and Patriotism according to Nashi, 2005-2013 | With a foreword by Jeronim Perović | Second, Revised and Expanded Edition | ISBN 978-3-8382-0368-3

115 Jussi Lassila | The Quest for an Ideal Youth in Putin’s Russia II. The Search for Distinctive Conformism in the Political Communication of Nashi, 2005-2009 | With a foreword by Kirill Postoutenko | Second, Revised and Expanded Edition | ISBN 978-3-8382-0415-4

116 Valerio Trabandt | Neue Nachbarn, gute Nachbarschaft? Die EU als internationaler Akteur am Beispiel ihrer Demokratieförderung in Belarus und der Ukraine 2004-2009 | Mit einem Vorwort von Jutta Joachim | ISBN 978-3-8382-0437-6

117 Fabian Pfeiffer | Estlands Außen- und Sicherheitspolitik I. Der estnische Atlantizismus nach der wiedererlangten Unabhängigkeit 1991-2004 | Mit einem Vorwort von Helmut Hubel | ISBN 978-3-8382-0127-6

118 Jana Podßuweit | Estlands Außen- und Sicherheitspolitik II. Handlungsoptionen eines Kleinstaates im Rahmen seiner EU-Mitgliedschaft (2004-2008) | Mit einem Vorwort von Helmut Hubel | ISBN 978-3-8382-0440-6

119 Karin Pointner | Estlands Außen- und Sicherheitspolitik III. Eine gedächtnispolitische Analyse estnischer Entwicklungskooperation 2006-2010 | Mit einem Vorwort von Karin Liebhart | ISBN 978-3-8382-0435-2

120 Ruslana Vovk | Die Offenheit der ukrainischen Verfassung für das Völkerrecht und die europäische Integration | Mit einem Vorwort von Alexander Blankenagel | ISBN 978-3-8382-0481-9

121 Mykhaylo Banakh | Die Relevanz der Zivilgesellschaft bei den postkommunistischen Transformationsprozessen in mittel- und osteuropäischen Ländern. Das Beispiel der spät- und postsowjetischen Ukraine 1986-2009 | Mit einem Vorwort von Gerhard Simon | ISBN 978-3-8382-0499-4

122 Michael Moser | Language Policy and the Discourse on Languages in Ukraine under President Viktor Yanukovych (25 February 2010–28 October 2012) | ISBN 978-3-8382-0497-0 (Paperback edition) | ISBN 978-3-8382-0507-6 (Hardcover edition)

123 Nicole Krome | Russischer Netzwerkkapitalismus Restrukturierungsprozesse in der Russischen Föderation am Beispiel des Luftfahrtunternehmens „Aviastar“ | Mit einem Vorwort von Petra Stykow | ISBN 978-3-8382-0534-2

124 David R. Marples | 'Our Glorious Past'. Lukashenka‘s Belarus and the Great Patriotic War | ISBN 978-3-8382-0574-8 (Paperback edition) | ISBN 978-3-8382-0675-2 (Hardcover edition)

125 Ulf Walther | Russlands „neuer Adel“. Die Macht des Geheimdienstes von Gorbatschow bis Putin | Mit einem Vorwort von Hans-Georg Wieck | ISBN 978-3-8382-0584-7

126 Simon Geissbühler (Hrsg.) | Kiew – Revolution 3.0. Der Euromaidan 2013/14 und die Zukunftsperspektiven der Ukraine | ISBN 978-3-8382-0581-6 (Paperback edition) | ISBN 978-3-8382-0681-3 (Hardcover edition)

127 Andrey Makarychev | Russia and the EU in a Multipolar World. Discourses, Identities, Norms | With a foreword by Klaus Segbers | ISBN 978-3-8382-0629-5

128 Roland Scharff | Kasachstan als postsowjetischer Wohlfahrtsstaat. Die Transformation des sozialen Schutzsystems | Mit einem Vorwort von Joachim Ahrens | ISBN 978-3-8382-0622-6

129 Katja Grupp | Bild Lücke Deutschland. Kaliningrader Studierende sprechen über Deutschland | Mit einem Vorwort von Martin Schulz | ISBN 978-3-8382-0552-6

130 Konstantin Sheiko, Stephen Brown | History as Therapy. Alternative History and Nationalist Imaginings in Russia, 1991-2014 | ISBN 978-3-8382-0665-3

131 Elisa Kriza | Alexander Solzhenitsyn: Cold War Icon, Gulag Author, Russian Nationalist? A Study of the Western Reception of his Literary Writings, Historical Interpretations, and Political Ideas | With a foreword by Andrei Rogatchevski | ISBN 978-3-8382-0589-2 (Paperback edition) | ISBN 978-3-8382-0690-5 (Hardcover edition)

132 Serghei Golunov | The Elephant in the Room. Corruption and Cheating in Russian Universities | ISBN 978-3-8382-0570-0

133 Manja Hussner, Rainer Arnold (Hgg.) | Verfassungsgerichtsbarkeit in Zentralasien I. Sammlung von Verfassungstexten | ISBN 978-3-8382-0595-3

134 Nikolay Mitrokhin | Die „Russische Partei“. Die Bewegung der russischen Nationalisten in der UdSSR 1953-1985 | Aus dem Russischen übertragen von einem Übersetzerteam unter der Leitung von Larisa Schippel | ISBN 978-3-8382-0024-8

135 Manja Hussner, Rainer Arnold (Hgg.) | Verfassungsgerichtsbarkeit in Zentralasien II. Sammlung von Verfassungstexten | ISBN 978-3-8382-0597-7

136 Manfred Zeller | Das sowjetische Fieber. Fußballfans im poststalinistischen Vielvölkerreich | Mit einem Vorwort von Nikolaus Katzer | ISBN 978-3-8382-0757-5

137 Kristin Schreiter | Stellung und Entwicklungspotential zivilgesellschaftlicher Gruppen in Russland. Menschenrechtsorganisationen im Vergleich | ISBN 978-3-8382-0673-8 138 David R. Marples, Frederick V. Mills (Eds.) | Ukraine’s Euromaidan. Analyses of a Civil Revolution | ISBN 978-3-8382-0660-8

139 Bernd Kappenberg | Setting Signs for Europe. Why Diacritics Matter for European Integration | With a foreword by Peter Schlobinski | ISBN 978-3-8382-0663-9

140 René Lenz | Internationalisierung, Kooperation und Transfer. Externe bildungspolitische Akteure in der Russischen Föderation | Mit einem Vorwort von Frank Ettrich | ISBN 978-3-8382-0751-3

141 Juri Plusnin, Yana Zausaeva, Natalia Zhidkevich, Artemy Pozanenko | Wandering Workers. Mores, Behavior, Way of Life, and Political Status of Domestic Russian Labor Migrants | Translated by Julia Kazantseva | ISBN 978-3-8382-0653-0

142 David J. Smith (Eds.) | Latvia – A Work in Progress? 100 Years of State- and Nation-Building | ISBN 978-3-8382-0648-6

143 Инна Чувычкина (ред.) | Экспортные нефте- и газопроводы на постсоветском пространстве. Aнализ трубопроводной политики в свете теории международных отношений | ISBN 978-3-8382-0822-0

144 Johann Zajaczkowski | Russland – eine pragmatische Großmacht? Eine rollentheoretische Untersuchung russischer Außenpolitik am Beispiel der Zusammenarbeit mit den USA nach 9/11 und des Georgienkrieges von 2008 | Mit einem Vorwort von Siegfried Schieder | ISBN 978-3-8382-0837-4

145 Boris Popivanov | Changing Images of the Left in Bulgaria. The Challenge of Post-Communism in the Early 21st Century | ISBN 978-3-8382-0667-7

146 Lenka Krátká | A History of the Czechoslovak Ocean Shipping Company 1948-1989. How a Small, Landlocked Country Ran Maritime Business During the Cold War | ISBN 978-3-8382-0666-0

147 Alexander Sergunin | Explaining Russian Foreign Policy Behavior. Theory and Practice | ISBN 978-3-8382-0752-0

148 Darya Malyutina | Migrant Friendships in a Super-Diverse City. Russian-Speakers and their Social Relationships in London in the 21st Century | With a foreword by Claire Dwyer | ISBN 978-3-8382-0652-3

149 Alexander Sergunin, Valery Konyshev | Russia in the Arctic. Hard or Soft Power? | ISBN 978-3-8382-0753-7 150 John J. Maresca | Helsinki Revisited. A Key U.S. Negotiator’s Memoirs on the Development of the CSCE into the OSCE | With a foreword by Hafiz Pashayev | ISBN 978-3-8382-0852-7

151 Jardar Østbø | The New Third Rome. Readings of a Russian Nationalist Myth | With a foreword by Pål Kolstø | ISBN 978-3-8382-0870-1

152 Simon Kordonsky | Socio-Economic Foundations of the Russian Post-Soviet Regime. The Resource-Based Economy and Estate-Based Social Structure of Contemporary Russia | With a foreword by Svetlana Barsukova | ISBN 978-3-8382-0775-9

153 Duncan Leitch | Assisting Reform in Post-Communist Ukraine 2000–2012. The Illusions of Donors and the Disillusion of Beneficiaries | With a foreword by Kataryna Wolczuk | ISBN 978-3-8382-0844-2

154 Abel Polese | Limits of a Post-Soviet State. How Informality Replaces, Renegotiates, and Reshapes Governance in Contemporary Ukraine | With a foreword by Colin Williams | ISBN 978-3-8382-0845-9

155 Mikhail Suslov (Ed.) | Digital Orthodoxy in the Post-Soviet World. The Russian Orthodox Church and Web 2.0 | With a foreword by Father Cyril Hovorun | ISBN 978-3-8382-0871-8

156 Leonid Luks | Zwei „Sonderwege“? Russisch-deutsche Parallelen und Kontraste (1917-2014). Vergleichende Essays | ISBN 978-3-8382-0823-7

157 Vladimir V. Karacharovskiy, Ovsey I. Shkaratan, Gordey A. Yastrebov | Towards a New Russian Work Culture. Can Western Companies and Expatriates Change Russian Society? | With a foreword by Elena N. Danilova | Translated by Julia Kazantseva | ISBN 978-3-8382-0902-9

158 Edmund Griffiths | Aleksandr Prokhanov and Post-Soviet Esotericism | ISBN 978-3-8382-0903-6 159 Timm Beichelt, Susann Worschech (Eds.) | Transnational Ukraine? Networks and Ties that Influence(d) Contemporary Ukraine | ISBN 978-3-8382-0944-9

160 Mieste Hotopp-Riecke | Die Tataren der Krim zwischen Assimilation und Selbstbehauptung. Der Aufbau des krimtatarischen Bildungswesens nach Deportation und Heimkehr (1990-2005) | Mit einem Vorwort von Swetlana Czerwonnaja | ISBN 978-3-89821-940-2

161 Olga Bertelsen (Ed.) | Revolution and War in Contemporary Ukraine. The Challenge of Change | ISBN 978-3-8382-1016-2

162 Natalya Ryabinska | Ukraine's Post-Communist Mass Media. Between Capture and Commercialization | With a foreword by Marta Dyczok | ISBN 978-3-8382-1011-7

163 Alexandra Cotofana, James M. Nyce (Eds.) | Religion and Magic in Socialist and Post-Socialist Contexts. Historic and Ethnographic Case Studies of Orthodoxy, Heterodoxy, and Alternative Spirituality | With a foreword by Patrick L. Michelson | ISBN 978-3-8382-0989-0

164 Nozima Akhrarkhodjaeva | The Instrumentalisation of Mass Media in Electoral Authoritarian Regimes. Evidence from Russia’s Presidential Election Campaigns of 2000 and 2008 | ISBN 978-3-8382-1013-1 165 Yulia Krasheninnikova | Informal Healthcare in Contemporary Russia. Sociographic Essays on the PostSoviet Infrastructure for Alternative Healing Practices | ISBN 978-3-8382-0970-8

166 Peter Kaiser | Das Schachbrett der Macht. Die Handlungsspielräume eines sowjetischen Funktionärs unter Stalin am Beispiel des Generalsekretärs des Komsomol Aleksandr Kosarev (1929-1938) | Mit einem Vorwort von Dietmar Neutatz | ISBN 978-3-8382-1052-0

167 Oksana Kim | The Effects and Implications of Kazakhstan’s Adoption of International Financial Reporting Standards. A Resource Dependence Perspective | With a foreword by Svetlana Vlady | ISBN 978-3-8382-0987-6

168 Anna Sanina | Patriotic Education in Contemporary Russia. Sociological Studies in the Making of the PostSoviet Citizen | With a foreword by Anna Oldfield | ISBN 978-3-8382-0993-7

169 Rudolf Wolters | Spezialist in Sibirien Faksimile der 1933 erschienenen ersten Ausgabe | Mit einem Vorwort von Dmitrij Chmelnizki | ISBN 978-3-8382-0515-1

170 Michal Vít, Magdalena M. Baran (Eds.) | Transregional versus National Perspectives on Contemporary Central European History. Studies on the Building of Nation-States and Their Cooperation in the 20th and 21st Century | With a foreword by Petr Vágner | ISBN 978-3-8382-1015-5

171 Philip Gamaghelyan | Conflict Resolution Beyond the International Relations Paradigm. Evolving Designs as a Transformative Practice in Nagorno-Karabakh and Syria | With a foreword by Susan Allen | ISBN 978-3-8382-1057-5

172 Maria Shagina | Joining a Prestigious Club. Cooperation with Europarties and Its Impact on Party Development in Georgia, Moldova, and Ukraine 2004–2015 | With a foreword by Kataryna Wolczuk | ISBN 978-3-8382-1084-1

173 Alexandra Cotofana, James M. Nyce (Eds.) | Religion and Magic in Socialist and Post-Socialist Contexts II. Baltic, Eastern European, and Post-USSR Case Studies | With a foreword by Anita Stasulane | ISBN 978-3-8382-0990-6

174 Barbara Kunz | Kind Words, Cruise Missiles, and Everything in Between. The Use of Power Resources in U.S. Policies towards Poland, Ukraine, and Belarus 1989–2008 | With a foreword by William Hill | ISBN 978-3-8382-1065-0

175 Eduard Klein | Bildungskorruption in Russland und der Ukraine. Eine komparative Analyse der Performanz staatlicher Antikorruptionsmaßnahmen im Hochschulsektor am Beispiel universitärer Aufnahmeprüfungen | Mit einem Vorwort von Heiko Pleines | ISBN 978-3-8382-0995-1

176 Markus Soldner | Politischer Kapitalismus im postsowjetischen Russland. Die politische, wirtschaftliche und mediale Transformation in den 1990er Jahren | Mit einem Vorwort von Wolfgang Ismayr | ISBN 978-3-8382-1222-7

177 Anton Oleinik | Building Ukraine from Within. A Sociological, Institutional, and Economic Analysis of a NationState in the Making | ISBN 978-3-8382-1150-3

178 Peter Rollberg, Marlene Laruelle (Eds.) | Mass Media in the Post-Soviet World. Market Forces, State Actors, and Political Manipulation in the Informational Environment after Communism | ISBN 978-3-8382-1116-9

179 Mikhail Minakov | Development and Dystopia. Studies in Post-Soviet Ukraine and Eastern Europe | With a foreword by Alexander Etkind | ISBN 978-3-8382-1112-1

180 Aijan Sharshenova | The European Union’s Democracy Promotion in Central Asia. A Study of Political Interests, Influence, and Development in Kazakhstan and Kyrgyzstan in 2007–2013 | With a foreword by Gordon Crawford | ISBN 978-3-8382-1151-0

181 Andrey Makarychev, Alexandra Yatsyk (Eds.) | Boris Nemtsov and Russian Politics. Power and Resistance | With a foreword by Zhanna Nemtsova | ISBN 978-3-8382-1122-0

182 Sophie Falsini | The Euromaidan’s Effect on Civil Society. Why and How Ukrainian Social Capital Increased after the Revolution of Dignity | With a foreword by Susann Worschech | ISBN 978-3-8382-1131-2

183 Valentyna Romanova, Andreas Umland (Eds.) | Ukraine’s Decentralization. Challenges and Implications of the Local Governance Reform after the Euromaidan Revolution | ISBN 978-3-8382-1162-6

184 Leonid Luks | A Fateful Triangle. Essays on Contemporary Russian, German and Polish History | ISBN 978-3-8382-1143-5

185 John B. Dunlop | The February 2015 Assassination of Boris Nemtsov and the Flawed Trial of his Alleged Killers. An Exploration of Russia’s “Crime of the 21st Century” | ISBN 978-3-8382-1188-6 186 Vasile Rotaru | Russia, the EU, and the Eastern Partnership. Building Bridges or Digging Trenches? | ISBN 978-3-8382-1134-3

187 Marina Lebedeva | Russian Studies of International Relations. From the Soviet Past to the Post-Cold-War Present | With a foreword by Andrei P. Tsygankov | ISBN 978-3-8382-0851-0

188 Tomasz Stępniewski, George Soroka (Eds.) | Ukraine after Maidan. Revisiting Domestic and Regional Security | ISBN 978-3-8382-1075-9

189 Petar Cholakov | Ethnic Entrepreneurs Unmasked. Political Institutions and Ethnic Conflicts in Contemporary Bulgaria | ISBN 978-3-8382-1189-3

190 A. Salem, G. Hazeldine, D. Morgan (Eds.) | Higher Education in Post-Communist States. Comparative and Sociological Perspectives | ISBN 978-3-8382-1183-1

191 Igor Torbakov | After Empire. Nationalist Imagination and Symbolic Politics in Russia and Eurasia in the Twentieth and Twenty-First Century | With a foreword by Serhii Plokhy | ISBN 978-3-8382-1217-3

192 Aleksandr Burakovskiy | Jewish-Ukrainian Relations in Late and Post-Soviet Ukraine. Articles, Lectures and Essays from 1986 to 2016 | ISBN 978-3-8382-1210-4

193 Natalia Shapovalova, Olga Burlyuk (Eds.) | Civil Society in Post-Euromaidan Ukraine. From Revolution to Consolidation | With a foreword by Richard Youngs | ISBN 978-3-8382-1216-6

194 Franz Preissler | Positionsverteidigung, Imperialismus oder Irredentismus? Russland und die „Russischsprachigen“, 1991–2015 | ISBN 978-3-8382-1262-3

195 Marian Madeła | Der Reformprozess in der Ukraine 2014-2017. Eine Fallstudie zur Reform der öffentlichen Verwaltung | Mit einem Vorwort von Martin Malek | ISBN 978-3-8382-1266-1

196 Anke Giesen | „Wie kann denn der Sieger ein Verbrecher sein?“ Eine diskursanalytische Untersuchung der russlandweiten Debatte über Konzept und Verstaatlichungsprozess der Lagergedenkstätte „Perm’-36“ im Ural | ISBN 978-3-8382-1284-5

197 Alla Leukavets | The Integration Policies of Belarus and Ukraine vis-à-vis the EU and Russia. A Comparative Case Study Through the Prism of a Two-Level Game Approach | ISBN 978-3-8382-1247-0

198 Oksana Kim | The Development and Challenges of Russian Corporate Governance I. The Roles and Functions of Boards of Directors | With a foreword by Sheila M. Puffer | ISBN 978-3-8382-1287-6

199 Thomas D. Grant | International Law and the Post-Soviet Space I. Essays on Chechnya and the Baltic States | With a foreword by Stephen M. Schwebel | ISBN 978-3-8382-1279-1

200 Thomas D. Grant | International Law and the Post-Soviet Space II. Essays on Ukraine, Intervention, and Non-Proliferation | ISBN 978-3-8382-1280-7

201 Slavomír Michálek, Michal Štefansky | The Age of Fear. The Cold War and Its Influence on Czechoslovakia 1945–1968 | ISBN 978-3-8382-1285-2

202 Iulia-Sabina Joja | Romania’s Strategic Culture 1990–2014. Continuity and Change in a Post-Communist Country’s Evolution of National Interests and Security Policies | With a foreword by Heiko Biehl | ISBN 978-3-8382-1286-9

203 Andrei Rogatchevski, Yngvar B. Steinholt, Arve Hansen, David-Emil Wickström | War of Songs. Popular Music and Recent Russia-Ukraine Relations | With a foreword by Artemy Troitsky | ISBN 978-3-8382-1173-2

204 Maria Lipman (Ed.) | Russian Voices on Post-Crimea Russia. An Almanac of Counterpoint Essays from 2015–2018 | ISBN 978-3-8382-1251-7

205 Ksenia Maksimovtsova | Language Conflicts in Contemporary Estonia, Latvia, and Ukraine. A Comparative Exploration of Discourses in Post-Soviet Russian-Language Digital Media | With a foreword by Ammon Cheskin | ISBN 978-3-8382-1282-1

206 Michal Vít | The EU’s Impact on Identity Formation in East-Central Europe between 2004 and 2013. Perceptions of the Nation and Europe in Political Parties of the Czech Republic, Poland, and Slovakia | With a foreword by Andrea Petö | ISBN 978-3-8382-1275-3

207 Per A. Rudling | Tarnished Heroes. The Organization of Ukrainian Nationalists in the Memory Politics of Post-Soviet Ukraine | ISBN 978-3-8382-0999-9

208 Kaja Gadowska, Peter Solomon (Eds.) | Legal Change in Post-Communist States. Progress, Reversions, Explanations | ISBN 978-3-8382-1312-5

209 Pawel Kowal, Georges Mink, Iwona Reichardt (Eds.) | Three Revolutions: Mobilization and Change in Contemporary Ukraine I. Theoretical Aspects and Analyses on Religion, Memory, and Identity | ISBN 9783-8382-1321-7

210 Pawel Kowal, Georges Mink, Adam Reichardt, Iwona Reichardt (Eds.) | Three Revolutions: Mobilization and Change in Contemporary Ukraine II. An Oral History of the Revolution on Granite, Orange Revolution, and Revolution of Dignity | ISBN 978-3-8382-1323-1

211 Li Bennich-Björkman, Sergiy Kurbatov (Eds.) | When the Future Came. The Collapse of the USSR and the Emergence of National Memory in Post-Soviet History Textbooks | ISBN 978-3-8382-1335-4

212 Olga R. Gulina | Migration as a (Geo-)Political Challenge in the Post-Soviet Space. Border Regimes, Policy Choices, Visa Agendas | With a foreword by Nils Muižnieks | ISBN 978-3-8382-1338-5

213 Sanna Turoma, Kaarina Aitamurto, Slobodanka Vladiv-Glover (Eds.) | Religion, Expression, and Patriotism in Russia. Essays on Post-Soviet Society and the State. ISBN 978-3-8382-1346-0 214 Vasif Huseynov | Geopolitical Rivalries in the “Common Neighborhood”. Russia's Conflict with the West, Soft Power, and Neoclassical Realism | With a foreword by Nicholas Ross Smith | ISBN 978-3-8382-1277-7

215 Mikhail Suslov | Russia’s Ideology of Authenticity. Varieties of Conservatism in Russian History from the Late 19th Century to the Present | With a foreword by Mark Bassin | ISBN 978-3-8382-1361-3

216 Alexander Etkind, Mikhail Minakov (Eds.) | Ideology after Union. Political Doctrines, Discourses, and Debates in Post-Soviet Societies | ISBN 978-3-8382-1388-0

217 Jakob Mischke, Oleksandr Zabirko (Hgg.) | Protestbewegungen im langen Schatten des Kreml. Aufbruch und Resignation in Russland und der Ukraine | ISBN 978-3-8382-0926-5

218 Oksana Huss | How Corruption and Anti-Corruption Policies Sustain Hybrid Regimes. Strategies of Political Domination under Ukraine’s Presidents in 1994-2014. With a foreword by Tobias Debiel and Andrea Gawrich | ISBN 978-3-8382-1430-6

219 Dmitry Travin, Vladimir Gel'man, Otar Marganiya | The Russian Path. Ideas, Interests, Institutions, Illusions. With a foreword by Vladimir Ryzhkov | ISBN 978-3-8382-1421-4

220 Gergana Dimova | Political Uncertainty. A Comparative Exploration. With a foreword by Todor Yalamov and Rumena Filipova | ISBN 978-3-8382-1385-9

221 Torben Waschke | Russland in Transition. Geopolitik zwischen Raum, Identität und Machtinteressen. Mit einem Vorwort von Andreas Dittmann | ISBN 978-3-8382-1480-1

222 Steven Jobbitt, Zsolt Bottlik, Marton Berki (Eds.) | Power and Identity in the Post-Soviet Realm. Geographies of Ethnicity and Nationality after 1991 | ISBN 978-3-8382-1399-6 223 Daria Buteiko | Erinnerungsort. Ort des Gedenkens, der Erholung oder der Einkehr? Kommunismus-Erinnerung am Beispiel der Gedenkstätte Berliner Mauer sowie des Soloveckij-Klosters und -Museumsparks | ISBN 978-3-8382-1367-5

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