Firstly, this case is not exactly about the generators that most people imagine after reading the loud headline. Like upstairs or similar – “bribe for generators”, “case of the purchase of generators” – the media and social networks abounded, starting from the evening of January 21, when it became known about the detention of Vasily Lozinsky by NABU employees, writes Tizhden.
At that time, Lozinsky served as Deputy Minister for the Development of Communities, Territories and Infrastructure. This is a government giant, formed in early December after the merger of the Ministry of Infrastructure and the Ministry of Regional Development. The detained Lozinsky was the first person (acting minister) in the Ministry of Regional Development and formally the second (first deputy minister) in the new mega-ministry. Alexander Kubrakov, previously the head of the Ministry of Infrastructure, became the head of the department. Actually, it is not so much about the merger, but about the accession of an additional part to the institution under the leadership of Kubrakov. The official website of the supposedly new department is served by the old page of the Ministry of Infrastructure, where the functions of the once influential Ministry of Regional Development were not even added in the “About Us” section.
This broad digression about the structure of government is not directly related to the case, which was heard in the Supreme Anti-Corruption Court during January 23 and 24. But call it “journalistic flair” or something else – it suggests that an explanation about the ministry should be in this text.
So, generators – in the sense of gasoline or diesel boxes, similar to those standing under shops – this is only a small part of this story. The “generator case” began in July, when Prime Minister Denis Shmigal announced on the allocation of UAH 1.4 billion for the purchase of equipment for the heating season. At that time, Russia had not yet begun shelling the energy infrastructure of Ukraine, but the thesis that they would begin with the onset of cold weather had already been spread. Subsequently, the amount, which approximately coincides with the named one, will be spent due to the purchases of a research institute with a fancy name familiar to Ukraine: “Ukrndivodokanalproekt”. This institute was under the jurisdiction of the Ministry of Regional Development, where at the time of Shmyhal’s statement, Aleksey Chernyshev was still chairing (he resigned on November 2 to head Naftogaz).
“Ukrndivodokanalproekt” spent the funds by spending seven purchases. About UAH 94 million was spent on diesel generators. The lion’s share of the money was spent on mobile boilers (about UAH 800 million), water purification equipment (about UAH 226 million) and trucks for transporting this water (about UAH 243 million). Contracts with tender winners were concluded on November 10 (five), November 17 (one for the largest amount) and December 9 (another one for small UAH 28 million). The winners were: EGP LLC for mobile boiler houses, Techno Train LLC for water treatment plants, Stroydormash LLC for trucks, Difrano Union LLC for water filters and M.B. and LLC “Ultra-Maria” for diesel generators. Thus began the “Case of Generators”.
Lozinsky knew about the criminal case, but acted further?
For two days in the High Anti-Corruption Court, where they decided what measure to choose for the detainee Vasily Lozinsky (at the time of consideration, he was already an ex-deputy minister. The government promptly dismissed him on Sunday, January 22), a lot of interesting things were said. And it’s not even really a hearing.
In the release, which the NABU press service also published on Sunday morning, they wrote the following: firstly, Lozinsky was a member of an organized criminal group (operational criminal group), secondly, the overpayment under the contracts amounted to UAH 280 million (but, according to NABU, from the amount 1.68 billion UAH), thirdly, “more than 150 NABU employees” were involved in the operation to expose the organized crime group, fourthly, “preliminary legal qualification – part 4 of art. 368, part 5 of Art. 191 of the Criminal Code of Ukraine” – and this is a direct quote that will still be needed.
As explained by the SAPO prosecutor Oleksandr Omelchenko, the case was initiated on September 26 by three NABU detectives. Over time, the staff was expanded due to the need for investigative actions in different cities. Most of what the prosecutor stated in support of the suspicion is the data collected during the NSRD (covert investigative and search actions): listening, photo and video recording.
Very briefly, the position of the corollary can be stated as follows. Lozinsky conspired with a number of entrepreneurs to win tenders. “Kickback” or bribe should be 8% of earnings on budget money. The idea was great, but the then director of Ukrndivodokanalproekt Oleksandr Ogloblya balked and began to sabotage the agreement. Ogloblya considered the companies unreliable, and the prices were inflated by a quarter or a third. Lozinsky and so, and somehow persuaded Ogloblya, because it was he, as the immediate head, who had to give final consent to the purchases. Ogloblya did not give up, and in November he quit his job. The new director was his former deputy Vasily Dub. This head, according to investigators, was ready to make a deal. The change took place at the beginning of November, and in a few days the conclusion of the contracts was completed. Lozinsky received his reward at the end of January – already after the agreement had been fulfilled and the “Generator Case” had begun to spin.
The two-day process itself was filled with reading out printouts of tapped conversations of various persons involved in the case. And there are details that stand out against the background of a general set of remarks that are incomprehensible to an outside listener (perhaps also incomprehensible because the prosecutor read obscene language in the pass). Some of the details relate not only to the case, but also to everyday philosophical questions from the category “what came first, the chicken or the egg?” Here it can be formulated differently: in Ukraine, a bureaucrat controls the system, or is the system a bureaucrat?
The fact is that, according to the version of the investigation, Lozinsky knew about the criminal proceedings even before the completion of the purchases.
– Let’s all sit down. And everyone who … And our most important thing … – Lozinsky allegedly says in a conversation with Oak.
“I understand,” Oak allegedly replies.
“Our most important thing is implementation, but if we run, then we all run,” Lozinsky allegedly continues.
According to the prosecutor, the conversation is dated October 27. That is, even before the conclusion of contracts with companies. The prosecutor claims that Lozinsky knew about the investigation and was preparing to run away if something happened. The remaining question with the listener: is risking your status and position for an 8% kickback also in an obviously sensitive purchase that concerns energy during the war – is this the norm for the Ukrainian state system?
Elsewhere, it is clear that Lozinsky is allegedly worried not only because of NABU. The date of this conversation is not heard, but the content is important here:
— I’m speaking frankly, we will look for options on how to complete this project, — Dub says immediately after or shortly before being appointed head of the institute.
– We, too, cannot be “if we were not something.” Firstly, they will not understand politically, because they even … (from) the prime minister said that we have purchased. As soon as I heard, you know, I fell under the table, – says Lozinsky.
“And I heard it on TV,” adds Oak.
If this conversation really took place, it is also a good historical document for understanding the work of the Ukrainian authorities in the first months of a full-scale invasion. Probably, the prime minister either does not know that the planned equipment has not yet been purchased, or reassures that it is already there. The minister worries about political responsibility and wants a “result”, but (if the court agrees) he does not forget about his own pocket. What is more here – fear, responsibility, desire for profit or careerism – only the court on the merits will show. And that is why such processes should be observed, and not announced on social networks when everything is just beginning.
There are also interesting clues for the future. A precautionary measure these days was chosen not only by Lozinsky, but also by a number of other persons, participants in the same story. Basically, these are the heads of enterprises that won tenders, which were mentioned at the beginning. By the way, not all names were mentioned during the hearings on Lozinsky. The most frequently mentioned were EPG, Buddormash and Techno Train.
The prosecutor’s office is not required to present all evidence of a restraint hearing. Only those that are sufficient to substantiate suspicion and warning requirements. Therefore, perhaps other names will sound later. On the other hand, the prosecutor’s speech included names whose role in the case has not yet been fully understood: Vyacheslav Medyanik (people’s deputy of the Servant of the People), Rostislav Shurma (deputy head of the President’s Office), Denis Kudin (first deputy minister of economy). Sergei Krivoi met with everyone – a man whom the investigation considers the key person involved in the scheme. His court arrested even before Lozinsky.
“The Case of Generators”. Substantive questions and background information
As you know, the court did not listen to the arguments of the prosecutor and instead of arrest with a bail of UAH 50 million, Lozinsky was released under house arrest. Before that, the defense side stated a number of its arguments.
First, about the most likely bribe. According to investigators, Lozinsky received $400,000. But he did not hold this money in his hands. The funds were transferred through a conversion center to Lviv, allegedly to Lozinsky’s confidant Roman Kitner (he was arrested with an alternative bail of UAH 805,000). By the way, the Ukrainian conversion center, according to the prosecutor, is somewhat reminiscent of a medieval bank of the Templars. If you need to transfer unaccounted cash from Kyiv, say, to Lviv, then you should transfer the money to the representative of the institution in the capital. Another representative, but already in Lviv, will transfer a similar amount to a person who knows the code word. Therefore, it was Kitner who received the money laid out on the photos published by NABU, and Lozinsky was detained without cash.
Another question is about the qualification of the case. Lozinsky is suspected under Part 4 of Article 368 of the Criminal Code (Acceptance of an offer, promise or receipt of an unlawful benefit by an official on an especially large scale, or committed by an official in a particularly responsible position). Article 191, as it was in the NABU release, is not yet available. Also, Lozinsky was not suspected as a member of an organized criminal group, and this was also written in a NABU press release. The article under which Lozinsky is suspected provides for imprisonment for 8-12 years and confiscation of property. But, as the defense of the suspect notes, it also suggests proof that Lozinsky himself demanded a bribe and was himself responsible for the result. The investigation for two days did not provide evidence that Lozinsky demanded a bribe. And the final decision depended not on him, but on the director of the Oak Institute. Such is the “Case of generators”.
There is another article in the code – 369. It provides for the receipt of a bribe by an employee, but not his demand. This article is softer. She may even be punished with a fine. However, the prosecutor’s office did not declare such a suspicion.
This haste and the events that took place in parallel – in particular, the dismissal of key representatives of the regional bloc of the government and Kyrylo Timoshenko, who is responsible for the regions in the OP – still make us think about the purely political side of the matter. Ideally, this should not be the case, but there are no perfectly politically pure litigations. And yet, it is important to maintain a balance so that NABU, SAPO and EAC, which have suffered through years of political struggle, do not become, first of all, instruments for political decisions, instead of instruments for achieving justice.
Andrey Golub, translation Skeleton.Info