British tax collectors joke that, before their compatriots learned to voluntarily pay taxes, local tax evaders had to be put into debtors’ prisons for 200 years. Ukrainian tax evaders are most afraid of Sviatoslav Piskun, deputy chairman of the State Tax Administration (STA) and chief of the tax police investigative division. In addition, he like no one else in Ukraine is capable of tracking and hence diverting financial flows. Suffice it to say that today about 300 money-laundering criminal cases, including those involving banks, are being dealt with by tax police investigators under the guidance of General Piskun. Yet, he maintains that Ukraine’s tax service and other law enforcement bodies “are not fighting banks and bankers, nor are they instituting criminal proceedings against banks.” Only concrete officials are being brought to justice, Gen. Piskun says. One of the top STA officials, he believes that controlling economic crime acquires a new quality today, “We spot not only the direct perpetrators of crimes. The main thing is to trace the whole chain of these people, including those employed by law enforcement bodies, local government, and public notaries, who help commit crimes listed in the criminal code article on money laundering.” In particular, Gen. Piskun claims it is next to impossible for local law enforcement personnel to investigate criminal cases related to the oblenerho (regional power-supply companies — Ed.) due to pressure from local authorities. As he says, “We have uncovered tax evasion and money laundering schemes, as well as instances of abuse of office, in ten oblenerhos, including the one in Sumy, where the criminal case has been dragging on for years.” Because of this, offenses committed at those companies have to be investigated mainly by the STA central headquarters officers.
Gen. Piskun thinks that the mechanism to combat money laundering has already been put into play in Ukraine, so all parliament needs to do is pass the proper law, following which the autumnal session of FATF (Financial Action Task Force) can discuss taking Ukraine off its blacklist. The general is also convinced that by stemming the tide of dirty money the tax collectors will encourage the owners of shadow capital made in a legal way to legalize it. Gen. Piskun hopes parliament will adopt the necessary law.
Meanwhile, the Slovyansky Bank case is the STA’s highest profile undertaking. The so-called opposition media have, as a rule, been accusing the STA of carrying out a political contract on the Slovyansky affair. What will the chief tax investigator say to this?
“Word has it you might be appointed Prosecutor General. Has the Presidential Administration discussed this with you? Do you think you are prepared to take up such a responsible job?”
“Honestly, nobody has ever discussed this subject with me personally.”
“And with others? With your superiors?”
“You’d better ask them. Yet, all I know is that the Prosecutor General is today a key coordinating element in the system of all law enforcement bodies. The Prosecutor General is largely responsible for the ability of law enforcement officers to solve and prevent crimes. A person who holds this office has a dramatic impact on the law abidance of the population, which is in turn more responsible for law-and-order in this country than all the law enforcement bodies combined. Public prosecutors should promote public observance of the law from their own examples. People must see the way the prosecution service works and understand that this body is guided only by the law and is capable of protecting their legitimate rights in any situation. But the main thing is that the prosecution service should not be the object of political bargaining. Otherwise, it will turn from the mechanism of to defend citizens from criminal transgressions into an instrument of legal mayhem.”
“Your recent promotion (it will be recalled that Gen. Piskun was previously the deputy chief of the tax police and chief of the investigative division) can be also regarded as a reward for prosecuting the Slovyansky and Feldman case. Are you satisfied with the court sentence in this case and do you think the punishment matches the crimes the defendants were charged with?”
“My promotion is no way connected with the Feldman case. The point was different: to take the case out of the investigating authorities’ hands. I wrote and spoke about this as long as three years ago, when I worked in the prosecution service, and I have also been trying to achieve this at my new place of work. An investigator should not be subordinated to police, i.e., the investigating body. For it is the investigator who instructs an inquest body to carry out certain actions. And how can an investigator demand that his superior duly fulfill such instructions? In addition, the police and the investigation have different qualitative criteria: for example, it does not matter for investigators how many cases are opened this month, while it is very essential to the police. Therefore, in my opinion, investigation should be independent in terms of procedure. And this can only be achieved if investigators are not subordinated to the police, an inquest body. This (and not promotion) is what I have been struggling for over several years, and I got my new appointment precisely because this problem has been solved in the tax authorities. Incidentally, this has also been solved in the police service, of which Petro Koliada, Deputy Minister of Internal Affairs and chief of this ministry’s general investigative department, informed a recent press conference. As to the court ruling, I think it is quite adequate in this case, for there are other facets of this case to be heard in court. I hope that in other episodes, too, the court will hand down fair sentences, but I don’t know if it will decide to increase the prison term or substitute a lesser punishment for a heavier one. This is up to the court, and I would in no way like to bring pressure to bear on it. Still, I am sure the court has in principle clarified the Slovyansky Bank situation and seen the operating mechanism, to which the investigators had drawn its attention. Let me recall, for example, the way this bank’s management worked with the Makiyivka Steel Mill. The enterprise would receive gas, the bank would issue a loan to pay for it, the mill would supply metal to Slovyansky for the credit, and the bank would settle payments with the mill by bills of exchange. The metal was taken abroad and sold there officially at $80, while the true price was $140. This case could take another fifteen years to investigate, but even this time will not suffice.”
“Is it true that at the beginning of his prison Odyssey, Feldman was proposed a bargain to have his sentence commuted?”
“It was not a bargain. I personally saw Feldman, and that was a normal investigative action within the law. I suggested that Feldman testify, and the law says that in this case the court should take into account the willingness of the accused to cooperate with the prosecution. The point was to change the pretrial treatment of Feldman. Had he accepted my suggestion, his defense attorneys could have sought to mitigate this treatment. Nobody could do anything unlawful to Feldman because, given the thirteen defense lawyers and the outcry raised over this case (even some people’s deputies quite often visited the pretrial detention center), dozens of eyes followed every day and every minute each step of the investigators. And the fact that the defense now depicts this episode in a distorted way only proves its incompetence.”
“STA Director Mykola Azarov said recently that investigative actions continue with respect to People’s Deputy Yuliya Tymoshenko. Could you specify this statement and predict the outcome of this affair? Are there the names of other current or former people’s deputies in the investigation portfolio?”
“Yuliya Tymoshenko’s criminal case is being investigated by the Prosecutor General’s Office. This is common knowledge. The episode of tax evasion is also under their jurisdiction. Tax Administration experts have only drawn up some conclusions on this matter at the request of the Prosecutor General’s Office. These conclusions have been duly sent to the prosecutors for examination. I do not know if she has been indicted. All I know is that this is an episode that really took place. The investigation portfolio also includes documents confirming the guilt of some other former and current people’s deputies (about ten). We have some information and we investigate such cases. I cannot yet name names. But you will hear them soon.”
“The public at large and the press often recall a commercial company called Professional which allegedly enjoys STA favoritism. If this is so, what caused this special attitude toward it? Did the tax authorities conduct any inspections of or investigative action about it? What are the results?”
“I don’t know much about this company. All I know is that Professional deals with material assistance, social programs, including maintenance of health centers for tax collectors – which the state is unable to do – including the medical treatment of children, such operations as removal and transplantation of kidneys or coronary operations that cost a great deal of money... This is an absolutely transparent and legal system. It would be ludicrous for us to inspect it. It has repeatedly been inspected by the prosecution service, the Ministry of Finance Auditing Department, the Security Service, and even ‘the organized crime...’ (Laughs) Let me explain: Organized Crime Department officers once came and seized all the documents... It turned out to be a mistake. In general, I find it difficult to speak about Professional because I have never dealt with it... I do not know the technical details of the firm, but I think it is engaged in normal and successful economic activities.”
“Naftohaz Ukrayiny is the largest debtor of taxes to the state budget. You said the other day that two criminal cases had been opened against its management. However, because of the plans to set up an international gas transport consortium, STA seems to have relaxed its grip on this company. Can you confirm or deny this?”
“I think that, before joining a consortium, this company should become clean and transparent. We deal with it, doing investigative actions, tracing its international contacts, and are in touch with Russia, the United States, and the countries of Europe. We are keeping Naftohaz Ukrayiny, as they put it, under close watch.”
