RADA COMMITTEE WELCOMES ANTI-CORRUPTION LEGISLATION

UNCLAS KYIV 001071


STATE FOR INL, EUR/ACE
DOJ FOR CRIM DAAG BRUCE SWARTZ
DOJ FOR OPDAT NEWCOMBE AND ALEXANDRE
USAID FOR A/AA/EE KYAMASHITA, ABREWER, VCHIEN; USAID/ODP JLANGE

E.O. 12958: N/A
TAGS: PGOV UP
SUBJECT: RADA COMMITTEE WELCOMES ANTI-CORRUPTION LEGISLATION

REF: KYIV


SUMMARY


1. (U) ON JUNE 3, DRAFT BILLS ON PROFESSIONAL ETHICS AND FINANCIAL
DISCLOSURE BY PUBLIC SERVANTS DEVELOPED THROUGH THE DEPARTMENT OF
JUSTICE'S MILLENNIUM CHALLENGE CORPORATION (MCC) THRESHOLD COUNTRY
PROGRAM (TCP) FOR UKRAINE MET WITH AN OVERWHELMINGLY POSITIVE
RESPONSE IN A HEARING BEFORE THE RADA COMMITTEE ON COMBATING
ORGANIZED CRIME AND CORRUPTION. THE LEGISLATION, WHICH WAS
REGISTERED IN THE RADA BY A MULTI-PARTY COALITION OF RADA DEPUTIES
ON MAY 14, WAS PRAISED BY MPS AND EXPERTS, INCLUDING DRAGO KOS, THE
PRESIDENT OF THE GROUP OF STATES AGAINST CORRUPTION (GRECO) OF THE
COUNCIL OF EUROPE, AND WILLIAM TREANOR, AN ETHICS EXPERT AND DEAN OF
FORDHAM LAW SCHOOL. GRECO PRESIDENT KOS DESCRIBED THE DRAFT BILLS
AS "AMONG THE MOST ADVANCED LAWS HE'[D] EVER SEEN IN HIS LIFE."
EMBASSY HOPES THAT THIS HEARING WILL HELP THE LEGISLATION TO MOVE
FORWARD RAPIDLY TOWARD FINAL PASSAGE. END SUMMARY.


THE NEED FOR COMPREHENSIVE LEGISLATION


2. (U) UKRAINE'S MCC TCP HAS A SINGLE OBJECTIVE OF REDUCING
CORRUPTION IN THE PUBLIC SECTOR. THE $44.9 MILLION TCP WAS APPROVED
BY THE MCC IN JUNE 2006, AND PROGRAMS WERE LANCHED BEGINNING IN
DECEMBER 2006. THE PROGRAM IS CURRENTLY SCHEDULED TO END ON
SEPTEMBER 30, 2009. THE TCP FOCUSES ON FIVE PROGRAM AREAS:
STRENGTHENING CIVIL SOCIETY'S MONITORING AND EXPOSURE OF CORRUPTION,
INCREASING THE TRANSPARENCY AND EFFECTIVENESS OF JUDICIAL
INSTITUTIONS, INCREASED GOVERNMENT MONITORING AND ENFORCEMENT OF
ETHICAL AND FINANCIAL DISCLOSURE STANDARDS, STREAMLINING AND
ENFORCING GOVERNMENT REGULATIONS, AND COMBATING CORRUPTION IN HIGHER
EDUCATION ADMISSIONS. THE UKRAINE TCP IS ADMINISTERED BY THE USAID
REGIONAL MISSION IN UKRAINE.


3. (U) COMPONENT THREE OF THE MCC TCP FOR UKRAINE CALLS FOR THE
DEPARTMENT OF JUSTICE'S OFFICE OF OVERSEAS PROSECUTORIAL
DEVELOPMENT, ASSISTANCE AND TRAINING (DOJ/OPDAT) TO WORK WITH
COUNTERPARTS WITHIN THE GOVERNMENT OF UKRAINE TO ASSIST IN THE
DEVELOPMENT OF A COMPREHENSIVE CODE OF PROFESSIONAL ETHICS,
INCLUDING PROVISIONS DEALING WITH CONFLICTS OF INTEREST, AND THE
DEVELOPMENT OF A COMPREHENSIVE AND EFFECTIVE SYSTEM OF DISCLOSURE OF
FINANCIAL AND OUTSIDE INTERESTS BY PUBLIC SERVANTS, WHICH CAN BE
UTILIZED TO DISCOVER CONFLICTS OF INTEREST AND ILLICIT ENRICHMENT.
CURRENTLY, UKRAINE HAS NO SUCH COMPREHENSIVE CODE OF PROFESSIONAL
ETHICS, AND THE INDIVIDUAL CODES THAT EXIST IN INDIVIDUAL MINISTRIES
AND AGENCIES TEND TO BE LARGELY ASPIRATIONAL, AND LACK CLEAR
GUIDELINES FOR OFFICIALS' CONDUCT OR SANCTIONS FOR VIOLATION OF
SAME. SUCH CODES, AND UKRAINIAN LAW IN GENERAL, ESSENTIALLY LEAVE
UNADDRESSED CONFLICTS OF INTEREST BETWEEN THE PRIVATE INTERESTS OF
PUBLIC SERVANTS AND THEIR OFFICIAL DUTIES, EVEN THOUGH SUCH
CONFLICTS ARE WIDELY VIEWED TO BE ENDEMIC THROUGHOUT ALL LEVELS OF
UKRAINIAN GOVERNMENT.


4. (U) SIMILARLY, WHILE THERE IS CURRENTLY SOME LEGISLATION ON
FINANCIAL DISCLOSURES, IT IS WIDELY VIEWED TO BE INEFFECTIVE. THE
INFORMATION REQUIRED TO BE DISCLSOSED IS INSUFFICIENT, AND SUCH
DISCLOSURES ARE ROUTINELY FILED IN HUMAN RESOURCES OFFICES AND NOT
SUBJECT TO FURTHER REVIEW.


THE DEVELOPMENT OF THE DRAFTS NOW BEFORE THE RADA


5. (U) AS PART OF COMPONENT THREE OF THE MCC TCP, THREE DOJ/OPDAT
RESIDENT LEGAL ADVISORS (RLAS) HAVE BEEN WORKING SINCE 2007 WITH A
TEAM OF THREE UKRAINIAN LAWYERS ON BOTH PROFESSIONAL ETHICS AND
FINANCIAL DISCLSOURES BY PUBLIC SERVANTS. WORKING GROUPS ON EACH
SUBJECT WERE CREATED, COMPOSED OF REPRESENTATIVES OF VARIOUS
RELEVANT PARTS OF THE UKRAINIAN GOVERNMENT, AS WELL AS LOCAL
EXPERTS, NGOS AND CIVIL SOCIETY. THE RLAS ARRANGED FOR
INTERNATIONAL EXPERTS TO COME TO UKRAINE TO PARTICIPATE IN
ROUNDTABLE CONFERENCES AND LEGISLATIVE DRAFTING SESSIONS WITH THE
WORKING GROUPS, AND LED THE WORKING GROUPS ON STUDY TOURS TO OTHER
COUNTRIES IN EUROPE AND THE UNITED STATES TO LEARN HOW SUCH SYSTEMS
FUNCTION ELSEWHERE. AT TIMES, THE WORKING GROUPS WERE COMBINED TO
ADDRESS COMMON ISSUES. OUTREACH SESSIONS WERE ALSO CONDUCTED
THROUGHOUT UKRAINE, AT WHICH ADDITIONAL INPUT WAS GAINED FROM LOCAL
PUBLIC SERVANTS, ACADEMICS, NGOS AND THE MEDIA.


6. (SBU) AS A RESULT OF THESE EFFORTS, DRAFT LEGISLATION WAS
PREPARED ON BOTH PROFESSIONAL ETHICS AND THE DISCLOSURE OF FINANCIAL
AND OUTSIDE INTERESTS BY PUBLIC SERVANTS. IN THE CASE OF THE
LATTER, THERE WERE ADDITIONAL DETAILED DISCUSSIONS WITH
REPRESENTATIVES OF THE STATE TAX ADMINISTRATION, THE MINISTRY OF
FINANCE AND THE MINISTRY OF JUSTICE IN ORDER TO REVISE THE
LEGISLATION TO INCORPORATE THE IDEA THAT, PARTICUARLY UNDER CURRENT
FINANCIAL CIRCUMSTANCES, THE STATE TAX ADMINISTRATION WOULD HANDLE
THE INITIAL RECEIPT AND PROCESSING OF THE FINANCIAL DISCLOSURE FORMS
(WHICH IT ALSO APPARENTLY VIEWS AS AN INITIAL STEP TOWARD ITS
DESIRED GOAL OF UNIFORM TAX DECLARATIONS BY ALL UKRAINIANS).


7. (SBU) WHEN IT BECAME CLEAR THAT IT WOULD BE IMPOSSIBLE TO
PROCEED THROUGH THE CABINET OF MINISTERS PROCESS TO INTRODUCE THE
DRAFT LEGISLATION DURING THE LIFE OF THE MCC TCP, THE RLAS
COORDINATED WITH THE RADA, IN WHICH A COALITION OF MPS WAS FORMED
THAT REPRESENTED VARIOUS FACTIONS SO AS TO TRY TO AVOID
PARTISANSHIP. THIS COALITION REGISTERED BOTH DRAFTS ON MAY 14, AND
THEY WERE ASSIGNED TO THE COMMITTEE ON COMBATING ORGANIZED CRIME AND
CORRUPTION, FOR WHOM THE RLAS HAVE SERVED AS ADVISORS ON
ANTI-CORRUPTION LEGISLATION FOR SOME TIME.


THE JUNE 3 HEARING


8. (U) ON JUNE 3, THE DOJ/OPDAT MCC PROGRAM SPONSORED A HEARING ON
THE DRAFT LEGISLATION WITH THE RADA COMMITTEE ON COMBATING ORGANIZED
CRIME AND CORRUPTION. AT THE INVITATION OF THE DOJ/OPDAT MCC
PROGRAM, THE HEARING WAS CO-SPONSORED BY THE COUNCIL OF EUROPE'S
LOCAL ANTI-CORRUPTION PROJECT (UPAC) AND THE INDIANA UNIVERSITY
PARLIAMENTARY DEVELOPMENT PROJECT (IUPDP II). JOINED WITH THE TWO
BILLS DEVELOPED THROUGH THE MCC PROGRAM WAS A THIRD DRAFT, PREPARED
IN COORDINATION WITH THE STATE CIVIL SERVICE, THAT COMBINED SOME OF
THE CONFLICTS OF INTEREST PROVISIONS DEVELOPED THROUGH OUR WORKING
GROUP WITH LIMITED FINANCIAL DECLARATIONS PROVISIONS. THE HEARING
WAS VERY SUCCESSFUL, WITH THE DRAFT LEGISLATION DEVELOPED THROUGH
THE DOJ/OPDAT MCC PROGRAM RECEIVING A VERY POSITIVE RECEPTION.


9. (U) INTRODUCTORY REMARKS AT THE HEARING WERE MADE BY COMMITTEE
CHAIR MP IHOR KALETNIK, AMBASSADOR AKE PETERSON, THE REPRESENTATIVE
TO UKRAINE OF THE SECRETARY GENERAL OF THE COUNCIL OF EUROPE (COE),
AND THE USAID MISSION DIRECTOR FOR UKRAINE AND MOLDOVA. MP KALETNIK
SAID THAT THE ANTI-CORRUPTION EFFORT, OF WHICH THESE BILLS WERE A
PART, INVOLVED NOT JUST PROSECUTING CRIMES, BUT ALSO DETERRING
MISCONDUCT AND ESTABLISHING TRANSPARENCY AND PUBLIC CONFIDENCE IN
GOVERNMENT. HE SAID THAT THE RADA NEEDED TO ADOPT THESE LAWS, NOT
JUST TO IDENTIFY ILLICIT ENRICHMENT, BUT ALSO FINANCIAL CONFLICTS OF
INTEREST, WHICH HE DESCRIBED AS A NEW BUT IMPORTANT CONCEPT IN
URKAINE. THE REPRESENTATIVE OF THE COE SAID THAT IT SUPPORTS THE
DRAFTS AND USAID MISSION DIRECTOR DESCRIBED THEM AS "CRUCIAL"
LEGISLATION FOR UKRAINE.


10. (U) THE NEXT ADDRESSES WERE GIVEN BY THE MPS WHO INTRODUCED THE
CIVIL SERVICE DRAFT AND THE MCC-DEVELOPED LEGISLATION. MP
MIROSHNICHENKO, WHO HAD INTRODUCED THE DRAFT PREPARED BY THE
UKRAINIAN CIVIL SERVICE, NOTED THAT UKRAINE NOW HAD A BODY OF PEOPLE
WHO UNDERSTAND THESE ISSUES, SPECIFICALLY CITING A STUDY TOUR TO THE
UNITED STATES, WHICH HAD BEEN SPONSORED BY THE DOJ/OPDAT PROGRAM AND
IN WHICH HE HAD PARTICIPATED. HE ADVOCATED COMBINING THE DRAFTS AND
COOPERATING ON SAME. MP VLASENKO THEN SPOKE BRIEFLY ABOUT THE TWO
DRAFTS DEVELOPED THROUGH THE DOJ/OPDAT MCC PROGRAM, AND AGREED THAT
THE DRAFT INTRODUCED BY MP MIROSHNICHNENKO SHOULD BE COMBINED WITH
THEM (THOUGH HE OPINED, AND OTHERS AGREED, THAT THE PROFESSIONAL
ETHICS AND FINANCIAL DISCLOSURE PROVISIONS SHOULD REMAIN IN SEPARATE
LAWS). VLASENKO NOTED THAT UKRAINE HAD DROPPED FROM 117 TO 134 OUT
OF 180 COUNTRIES IN THE RECENT CORRUPTION PERCEPTIONS INDEX (WHERE
IT IS TIED WITH PAKISTAN AND NICARAGUA),AND THAT THESE LAWS WERE
NEEDED TO COMBAT BOTH CONFLICTS OF INTEREST AND ILLICIT ENRICHMENT.


11. (U) THE FLOOR WAS THEN TURNED OVER TO THE EXPERTS INVITED BY
THE DOJ/OPDAT PROGRAM TO DISCUSS THE DRAFTS PREPARED UNDER COMPONENT
THREE OF THE TCP. GRECO PRESIDENT KOS, WHOSE VIEWS ARE PARTICULARLY
INFLUENTIAL IN UKRAINE AS IT TRIES TO DEMONSTRATE ITS WILLINGNESS TO
MEET EURO-ATLANTIC STANDARDS, TESTIFIED THAT THE BILLS WERE "AMONG
THE MOST ADVANCED LAWS HE'S EVER SEEN IN HIS LIFE." IN ADDITION TO
FINDING THAT THEY COMPLY WITH ALL RELEVANT CONVENTIONS AND
INSTRUMENTS, HE SAID THAT SOME OF THEIR PROVISIONS ARE IN LINE WITH
THE MOST ADVANCED LEGAL ACTS IN THE WORLD, AND WOULD BE NEW, NOT
JUST FOR UKRAINE, BUT FOR SOME OLDER EU STATES. HE EXPLAINED THAT
UKRAINE "NEEDS PRINCIPLES SO THAT PUBLIC OFFICIALS KNOW HOW TO
BEHAVE," AND OPINED THAT, IF THE DRAFTS ARE ADOPTED, HE IS "SURE
THEY [GRECO] WILL CONSIDER LOTS OF THE GRECO RECOMMENDATIONS
ADOPTED." KOS SAID THAT THE DRAFTS DEVELOPED THROUGH THE DOJ MCC
PROGRAM ARE "EXCELLENT STARTING POINTS FOR THE FUTURE." HE
EXPRESSED HOPE FOR THE ANTI-CORRUPTION PACKAGE, WHICH THEREAFTER
PASSED ON SECOND READING ON JUNE 11 AND IS VIEWED BY THE MINISTRY OF
JUSTICE (MOJ) AND OTHERS AS AN INTIAL STEP OR FOUNDATION FOR THE
DEVELOPMENT OF FURTHER ANTI-CORRUPTION LEGISLATION, PROMINENTLY
INCLUDING THE TWO BILLS ON PROFESSIONAL ETHICS AND FINANCIAL
DISCLOSURE BY PUBLIC SERVANTS.


12. (U) DEAN TREANOR, FORMERLY DEPUTY ASSISTANT ATTORNEY GENERAL
AT THE OFFICE OF LEGAL COUNSEL OF THE DEPARTMENT OF JUSTICE, NEXT
TESTIFIED THAT THE DRAFTS DEVELOPED THROUGH THE DOJ/OPDAT MCC
PROGRAM ARE "ESSENTIAL LEGISLATION" FOR UKRAINE. HE OPINED THAT
THEY DO AN "EXTRAORDINARY JOB" OF MEETING THE CORE PRINCIPLES
NECESSARY TO REDUCE SYSTEMIC CORRUPTION TO EPISODIC CORRUPTION IN
UKRAINE, WHICH HE IDENTIFIED AS: (1) FINANCIAL DISCLOSURE, (2) A
COMPREHENSIVE CODE OF ETHICS, (3) AN EFFECTIVE ENTITY OR INDIVIDUALS
TO LOOK FOR CONFLICTS OF INTEREST, AND (4) SANCTIONS.


13. (SBU) FOLLOWING THE EXPERTS, SEVERAL REPRESENTATIVES OF
DIFFERENT PARTS OF THE UKRAINIAN GOVERNMENT SPOKE, ALL GENERALLY IN
FAVOR OF THE DRAFT LEGISLATION. TYMOFIY MOTRENKO, THE HEAD OF THE
MAIN DEPARTMENT OF THE UKRAINIAN CIVIL SERVICE, EXPRESSED HIS VIEW
THAT CRIMINAL LIABILITY FOR VIOLATIONS OF THESE DRAFTS WAS "TOO
RIGOROUS FOR UKRAINE," AS "PEOPLE MAKE ERRORS." (COMMENT: THE
PROPOSED CRIMINAL SANCTIONS WOULD ONLY APPLY FOR THE MOST EGREGIOUS
INTENTIONAL VIOLATIONS, NOT FOR ERRORS, AND MOST VIOLATIONS WOULD
CERTAINLY BE SANCTIONED THOUGH DISCIPLINARY MEANS. END COMMENT.)
COMMITTEE VICE-CHAIR MP RIABECKA SPOKE ABOUT THE NEED TO PASS THE
ANTI-CORRUPTION PACKAGE, AND SAID THAT THE DRAFTS CONSIDERED AT THE
HEARING WOULD BE "FURTHER PROGRESS" AFTER THE PACKAGE PASSES.
RIABECKA DID NOTE THAT THE DRAFTS WERE IN COMPLIANCE WITH THE
COUNCIL OF EUROPE'S GUIDING PRINCIPLES, AS WELL AS THOSE OF THE
UNITED NATIONS CONVENTION AGAINST CORRUPTION, AND RECOMMENDED THAT
THE DRAFTS BE SUBJECT TO REVIEW AND ANALYSIS BY THE RADA BEFORE
BEING FINALIZED, TAKING INTO ACCOUNT THE RECOMMENDATIONS OF THE
HEARING, THE DOJ/OPDAT MCC PROGRAM, UPAC AND THE ANTI-CORRUPTION
NETWORK OF THE ORGANIZATION FOR ECONOMIC COOPERATION AND
DEVELOPMENT, OF WHICH UKRAINE ALSO IS A MEMBER.


14. (U) SINCE THE HEARING, THE DOJ/OPDAT MCC PROGRAM HAS PREPARED
EXPERT ANALYSES COMPARING THE DRAFTS PREPARED THROUGH THE DOJ/OPDAT
MCC PROGRAM AND THE DRAFT ADVANCED BY THE UKRAINIAN CIVIL SERVICE
AND HAVE PROVIDED THESE COMMENTS TO THE COMMITTEE STAFF. DOJ/OPDAT
MCC PROJECT STAFF HAVE BEEN TOLD THAT, WHEN THE COMMITTEE HAS A
QUORUM, IT IS HOPED THAT THE COMMITTEE WILL VOTE ON THE
PROFESSIONAL ETHICS AND FINANCIAL DISCLOSURE DRAFTS IN THE NEAREST
FUTURE. ADDITIONALLY, DOJ/OPDAT MCC PROJECT STAFF WERE INFORMED ON
JUNE 10 THAT THE COMMITTEE INTENDED TO SEND A LETTER TO THE CABINET
OF MINISTERS ASKING FOR ITS SUPPORT FOR BOTH OF THE DRAFTS DEVELOPED
THROUGH THE DOJ MCC PROGRAM. IN A SUBSEQUENT MEETING ON JUNE 11,
THE GOVERNMENT ANTI-CORRUPTION AGENT WITHIN THE OFFICE OF THE PRIME
MINISTER ALSO EXPRESSED HIS INTENT TO SUPPORT THE DRAFTS.


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COMMENT
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15. (U) THE REGISTRATION AND POSITIVE RECEPTION RECEIVED IN THE RADA
BY THE DRAFTS ON PROFESSIONAL ETHICS AND FINANCIAL DISCLOSURE FOR
PUBLIC SERVANTS IS A SIGNIFICANT STEP FORWARD IN ACHIEVING THE AIMS
OF ASSISTING UKRAINE TO DEVELOP COMPREHENSIVE AND EFFECTIVE
LEGISLATION IN THESE AREAS CONSISTENT WITH EURO-ATLANTIC STANDARDS.
EMBASSY WILL CONTINUE TO ENGAGE WITH PARTNERS IN THE RADA AND
ELSEWHERE IN THE GOVERNMENT TO SUSTAIN THIS PROGRESS IN THE HOPE OF
SEEING THE DRAFTS MOVE FORWARD TOWARD FINAL PASSAGE AS SOON AS
POSSIBLE.