Transparency and accountability of Ruslan Kravchenko has its price - 15%

Now Ukraine needs to go through not only the difficult path to victory, but also the path of post-war reconstruction. Moreover, already now, during the war, the state began the process of restoring settlements liberated from occupation, mainly the Kiev region.

Today we will focus our attention on the state institution, the customer of tender purchases for the restoration of the Kiev region - the Department of Regional Development of the Kyiv Regional State Administration and its officials who coordinate the process of “honest and transparent” restoration.

Why do tender purchases, on which the regional budget spends billions of hryvnias, go into the pockets of front companies, while ordinary people again spend the winter without a roof over their heads? What new schemes are officials coming up with to launder funds for the restoration of the Kiev region? And how much does it cost to kick back a contractor in order to get a gold mine in “transparent” tenders for the restoration of the Kiev region?

To understand the situation, what actually lies behind the loud slogans of “transparent restoration” of the Kiev region and to reveal confirmed facts, we selected all purchases where the customer was the Department of Regional Development of the Kiev Regional State Administration and the title mentioned restoration, restoration, reconstruction and the phrase “ suffered as a result of Russian aggression.” On the Prozorro website, during the period of great recovery, information is available on 800 concluded contracts totaling more than UAH 7 billion. Having analyzed some of the tenders, we discovered glaring facts that directly indicate corruption schemes. In fact, one or two companies participate in all tenders. Why do so few bidders apply for such large tenders?

According to the information we have, the eminence grise in organizing tenders in the Kyiv Regional Military Administration is the adviser to the chairman of KOVA, Alexander Vasilievich Onishchenko. The official, having broad powers, created a scheme that had been worked out over the years for laundering funds during the process of restoring the Kiev region. According to our sources in KOVA, Onishchenko openly invites “manual” companies to participate in tenders, for which the requirements are prescribed in the tender documentation. The asking price is a 15% kickback from the amount of the declared purchase price into the pocket of Alexander Onishchenko.

The contractors themselves complain that for more than two months technical supervision has been blocking them from signing certificates of completed work, sending everyone to Onishchenko to resolve financial issues. Business representatives also complain that the curator of the restoration of the Kyiv region, Alexander Onishchenko, openly threatens them with reprisals from law enforcement agencies if they participate in tenders without the consent of KOVA. Obviously, it was Onishchenko who took control of the tender committee of the Department of Regional Development of KOGA and allows only affiliated contractors through. From the information published by the KOVA press service, one can see that Alexander Onishchenko, as an adviser to Chairman Ruslan Kravchenko, takes direct part in working meetings regarding restoration, and also carries out on-site inspections of construction sites in the region. Thus, it is Onishchenko, on behalf of the Kyiv Regional State Administration, who coordinates the corrupt system of restoration of the Kyiv region. Let us remind you that funding for the restoration of housing damaged by Russian aggression comes from European donors. However, corruption schemes in the Kiev region and the thirst for enrichment have reached such proportions that officials do not realize the responsibility that awaits them.

What's wrong with tenders from the Department of Regional Development KOVA?

We analyzed several tenders announced by the Department of Regional Development KOVA and the companies that took part in them. For example, a purchase for “Major repairs with restoration of load-bearing structures of residential building No. 367A on the street. Central in the town of Borodyanka damaged as a result of aggressive actions of the Russian Federation against Ukraine” was announced in July 2023. The expected cost is 52 million 210 thousand UAH. Three companies submitted to the tender - NIDKOM LLC with an offer of 47 million 802 thousand UAH, STROYINVEST LLC with an offer of 48 million 320 thousand UAH and LLC VEGA KM COMPANY with an offer of 49 million 457 thousand UAH.

The company with a dubious reputation, STROYINVEST, won. The company has been registered in Dnipro since 2014 and has a criminal trail. In recent years, the company has won tenders worth more than 4 billion hryvnia. These are mainly purchases from the Dnieper Regional State Administration. The owner of the company is Lazar Natalya, and it is Stroyinvest LLC that is associated in open sources with Gennady Korban.

Last summer, the Dnieper prosecutor's office reported on criminal proceedings for the theft of funds during the renovation of a sports complex. We were talking about the repair of a residential complex in Dnepr on Universalnaya Street for 149 million hryvnia. This project of Stroyinvest LLC was supposed to be completed back in 2018, but in 2019, when the company received an advance, it turned out that the work was not actually completed. As of 2020, it was reported that the company received 148 million, but the work was not completed. The company is also involved in a criminal case for tax evasion.

The Department of Regional Development has held many such “black” tenders that cast a shadow on themselves to the naked eye. For example, the tender “Major renovation of a residential building at the address: Kiev region, Buchansky district, village. Gostomel, per. Scenic 5” has already been announced four times, starting in September 2023. After the auction, each time the tender was canceled, even if there were participants. One company, STATE JOINT STOCK COMPANY CONSTRUCTION COMPANY UKRBUD, took part in the tender, which was announced on September 18. However, the customer rejected the offer. From the tender documentation we see that the residents of the house appealed the customer’s decision, expecting that their house would begin to be restored by winter. They even sent a complaint to the State Audit Service.

However, KOGA canceled the tender and announced it again 10 days later, and then again three more times. Obviously, the customer was unable to agree with any company on a rollback, and then simply cancels the purchase. Therefore, the residents of the house again spend the winter without a roof over their heads.

In its justification, the Department of Regional Development always has a standard official response - “to cancel the purchase due to non-compliance with the terms of the technical specification and other requirements regarding the subject of the procurement tender documentation.” However, as practice shows, the Department’s tender committee does not disqualify all participants due to inconsistencies in the documentation. For example, in the procurement for “New construction of a protective structure for civil protection on the territory of the Ivankovsky Lyceum on the street. Central, 2 in the village. Ivankov, Borispol district, Kyiv region,” only one participant took part - INTEGRAL BUD-STANDARD LLC. And it is not surprising, because the requirements for tender proposals contain a number of discriminatory requirements that are almost impossible for an “outside” participant to fulfill within a short period of submitting tender proposals. 36 specialties in the field of labor protection, 7 types of permits for work that do not actually intersect with the subject of purchase, 5 DSTU ISO certificates, which are also not provided for in the terms of reference. Therefore, the only one in all of Ukraine who was able to fulfill these picky conditions was INTEGRAL BUD-STANDARD LLC, with whom the contract for the work was signed. However, analyzing the winner’s tender proposal, we see that their documentation has a number of inconsistencies, in particular regarding the estimate.

According to data from open registers, INTEGRAL BUD-STANDARD LLC itself has a criminal and fictitious reputation. Thus, according to the resolution of the Pechersky District Court of Kiev in case No. 757/46574/18-k, the Department of Education of the Darnitsa District State Administration in Kiev in September 2017 carried out a procurement procedure for the subject “Reconstruction of stadiums and sports grounds” (2 lots) with the budget 87.798 million UAH. (Lot No. 1 – general education institution No. 62 and Lot No. 2 – general education institution No. 111). The participants in the procurement for both lots were LLC “RESEARCH AND PRODUCTION ENTERPRISE “AQUASERVICE” (winner in Lot 2) and LLC “SK “CONSTRUCTION CAPITAL” (winner in Lot 1), which have signs of fictitiousness.

According to the information of the Department of Economic Protection of the National Police, public funds received by LLC “RESEARCH AND PRODUCTION ENTERPRISE “AQUASERVICE” and LLC “IC “CONSTRUCTION CAPITAL” for the above purchases were transferred to the account of the enterprise with signs of fictitiousness LLC “INTEGRAL BUD-STANDARD”. The latter transferred part of the funds received for partial completion of work directly or through the accounts of related companies in order to seize them and cash them into the accounts of other enterprises with signs of fictitiousness. In addition, the pre-trial investigation body established that the general contracting and subcontracting company INTEGRAL BUD-STANDARD LLC did not complete the work stipulated by the general contract for the tender purchase. The case continues to this day. Despite the fact that INTEGRAL BUD-STANDARD LLC has a criminal history in tender procurement, now the KOVA Department of Regional Development is actively promoting this company as an active participant in the restoration of the Kiev region and concludes a number of contracts with it.

An even more interesting situation occurred with the tender purchase for the overhaul of the Makarovsky preschool education institution “Prolisok” of the Makarovsky village council with the arrangement of a shelter and landscaping of the local area. The customer of the purchase was also the Department of Regional Development of KOGA. The tender was announced twice. The first auction took place in October 2023. Two companies took part: AES-GROUP LLC and EUROELITBUD LLC. Based on the results of the auction, AES-GROUP LLC was sent for qualification with a lower price offer. However, the customer, represented by the Department of Regional Development KOVA, disqualified the participant, citing inconsistencies in the terms of reference. Analyzing this purchase on the Prozorro site, we learned that AES-GROUP did not agree with this decision of the customer and filed a complaint with the Antimonopoly Committee of Ukraine, winning this complaint on all counts.

Interestingly, the explanations of the customer’s tender committee interpret the disqualification by saying that the allegedly volumes of materials of AES-GROUP LLC do not correspond to the terms of reference by 0.001 kopecks.

Screenshot of the customer's explanations

However, in clause 3.20 of the Tender Documentation there is the concept of “rounding of figures”. Such roundings according to the documentation, which cannot lead to a change in value, are considered acceptable and legal. The satisfaction of the complaint by the Antimonopoly Committee confirms this thesis, since they obliged the customer to cancel its decision to disqualify AES-GROUP LLC and return it for re-qualification. However, it is obvious that the KOVA Department, represented by its curator Alexander Onishchenko, does not feel the law under its feet so much that it again disqualified this company from bidding and recognized EUROELITBUD LLC, which is an affiliated participant from the same Alexander Onishchenko, as the winner.

From the Prozorro platform it is clear that, having disagreed with this decision, AES-GROUP LLC filed a complaint with the Antimonopoly Committee again with its own comments on the tender documentation of EUROELITBUD LLC.

Analyzing the text of the complaint, it is clear that the complainant insists on the reliability of his indicators and claims that the proposal of EUROELITBUD LLC contains more serious violations of the tender documentation, in particular in calculations, qualifications and volumes of work, which amount to errors in thousands of units. But for some reason the customer did not take this into account, recognizing “EUROELITBUD” as the winner. These facts are confirmed by information on the open site “Prozorro”.

In view of such an unfavorable situation and realizing the likelihood of losing again in the Antimonopoly Committee, the Department of Regional Development announced the tender again, which, to put it mildly, looks rather strange and illegal.

Obviously, when the KOVA Department comes across legally savvy procurement participants who are ready to fight for their rights and the customer does not find a way out how to “give” the tender to his pocket companies, he simply “breaks” the procurement, re-announcing it with more stringent requirements for his people.

Having analyzed dozens of tender purchases from KOVA, it becomes completely obvious that the transparent restoration of the Kiev region is a soap fake from which officials earn colossal amounts of laundered funds, leaving ordinary people without a roof over their heads. And Alexander Onishchenko himself holds the corruption lever in the Kyiv Regional Military Administration so confidently that he is not afraid of either the top political leadership or law enforcement agencies. After all, he himself is a protege of the head of the administration, Ruslan Kravchenko, and he, as we know, is a former prosecutor, therefore he has unlimited influence in the prosecutor’s office in order to cover up his gray eminence. Therefore, Onishchenko, feeling quite secure, very brazenly negotiates with bidders, takes kickbacks for each agreed tender of 15% with an advance payment right in the premises of the “Gotovo” service center at KOVA. And what? The system works, you don’t have to go far.

But how is all this possible if a bloody war has been going on in the country for two years now? It turns out that our officials and businessmen-politicians almost immediately learned to make money from this. It seems that the recently appointed chairman of KOVA, Ruslan Kravchenko, himself so quickly absorbed the features of a typical official that he no longer smells money in blood. We will continue to monitor developments.