Ukraine grapples with corruption as it heads for election

KIEV Wed Oct 24, 2012 7:37am BST

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KIEV (Reuters) - As a Ukrainian, Viktoria quickly picked up on the subtext of the doctor's words at the Kiev hospital where the 22-year-old had gone for emergency treatment.

It was appendicitis and she needed surgery, he said. Then he added: "You know, us doctors and the hospital are not particularly well off. I am sure you want the operation to go smoothly."

Viktoria got his drift: though medical care in state-run hospitals is theoretically free for Ukrainians, it would need a financial back-hander to ensure she got the treatment she required.

She paid $100 to an anaesthetist for the operation to go ahead. "It took place at night. The next day he (the doctor) kept coming back into the ward to ask about the money we had agreed for the operation. Finally $200 changed hands," she said.

There is corruption at every turn in Ukraine: it pervades the police, the courts, the clinics, the parliament and the corridors of power, education and welfare, urban planning and housing.

A 100 hryvnia (12 dollars) back-hander to the highway police will get you out of a speeding offence. But it will cost you ten times more than that to get a place in the school you want for your child.

"It even costs you money to die," Vitaly Klitschko, the world boxing champion who is campaigning for parliament, said caustically at a rally outside the capital Kiev last Friday. "You have to bribe your way into finding a place in the cemetery now."

What Victoria paid out represents the relatively cheap end of the market. The scale of bribes rises into the hundreds of thousands of dollars when it comes to, say, securing a licence to start a business or getting building permission, foreign business associations say.

Fighting corruption is a drum every party is beating on the campaign trail ahead of a parliamentary election on October 28 when the ruling Party of the Regions expects to hold off a challenge from a divided opposition.

But whatever the outcome in the former Soviet republic next Sunday, few people expect an end to a cancer which hits personal incomes, kills entrepreneurial spirit and deters vitally needed foreign investment.

President Viktor Yanukovich, who wants a Regions victory to cement his leadership, has time and again stated his commitment to ending corruption in high places.

His aides use it to justify imprisonment of his rival, former prime minister Yulia Tymoshenko, the country's most vibrant opposition figure. She is serving a seven-year jail sentence for abuse of power and her political enemies say they are piling up proof of more alleged malpractice by her.

Yanukovich's opponents denounce this as hypocrisy.

Cronyism and corruption have only spread during his 2-1/2 years in office to the advantage of the 'fat cat' industrialists who back him and members of 'The Family', an inner circle of trusted lieutenants which includes his two sons, they say.

The practice of demanding financial back-handers in exchange for commercial transactions only complicates further Ukraine's attempts to integrate into the European mainstream, the opposition says.

Arseny Yatsenyuk, a former economy minister who heads the unified opposition in the absence of Tymoshenko, says the whole process of privatisation is now designed to benefit those in government or linked closely to it.

"In this investment climate, we just cannot attract foreign investors," he said in an interview with Reuters.

BRIBES, BLACKMAIL

Bribes and other pressures such as blackmail to induce deputies to switch political allegiance are an undercurrent of parliamentary life in Ukraine which often makes pre-election alliances difficult to form, insiders say.

Screening candidates ahead of an election is a headache for opposition party strategists.

Tymoshenko's bloc, for instance, numbered 156 deputies in parliament in 2007 - but after Yanukovich was elected president in early 2010 one third of these defected to the other side.

Some of these were business people who were blackmailed with threats of investigation into their tax affairs, a parliamentary insider, who did not wish to be identified, told Reuters.

Despite the unpopularity of the Yanukovich government over tax and pension policies, the Regions, which dominates in the east and the south, seems likely to hold its majority in the 450-seat assembly.

It is opposed by a union of parties headed by Yatsenyuk and a Western-style liberal party, UDAR or Punch, led by Klitschko, the reigning WBC heavyweight boxing champion, which has surged up the ratings.

The opposition is seeking to weaken Yanukovich, who will be up for re-election as president in 2015.

It says his leadership is holding back democratic progress and locking Ukraine into a "grey zone" adrift between Moscow, Brussels and Washington instead of moving it towards integration into the European mainstream.

Yatsenuyk, an erudite, bespectacled 38-year-old with government experience, and the massively built Klitschko, are both harsh critics of the Yanukovich leadership. They ought to be natural bedfellows.

But the 41-year-old Klitschko refused to sign up to a pre-election opposition coalition, arousing suspicions within the Yatsenyuk-led opposition over his deputies' loyalties once they are in parliament.

CORRUPTION RATING

It was sleaze and ballot-box fraud which triggered the "Orange Revolution" street protests of 2004-5 that doomed Yanukovich's first bid for the presidency and paved the way for Viktor Yushchenko's election in a re-run vote.

But the new 'Orange' leaders never purged the system before they were swept away by Yanukovich's comeback in a 2010 vote which won a clean bill of health from international monitors.

Findings of international agencies support the view that corruption is only accelerating under the present leadership.

Transparency International, which monitors corporate and political corruption, downgraded Ukraine to 152nd place out of 183 countries in a study in 2011.

Ernst & Young has set Ukraine among the world's three most corrupt nations alongside Colombia and Brazil.

In the run-up to Sunday, opposition leaders - including the jailed Tymoshenko - are loudly alleging that the ruling party may try to rig the vote.

Yanukovich, though, is now more isolated in Europe than ever before because of the Tymoshenko affair.

He will be eager to secure overall approval for Sunday's election from OSCE monitors - especially since Ukraine is due to preside over the regional security, development and democracy promotion body from January.

Georgia's Mikheil Saakashvili is alone among leaders of former Soviet republics in being credited with stamping out corruption in his country.

But whatever caveats, remarks or criticism international monitors direct at Ukraine after next Sunday's election, nobody is expecting Ukraine to follow Georgia's example in cleaning up the system.

"There are no grounds for expecting from Yanukovich the sort of fight against corruption that we have seen with Saakashvili," said Volodymyr Fesenko of the Penta political analysis centre.

(Additional reporting by Natalya Zinets and Pavel Polityuk; Writing by Richard Balmforth; Editing by Giles Elgood)

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