The government spent around £6bn on preparations for the Euros
according to some estimates. But having cancelled competitive tenders
set for contracts to build stadiums and infrastructure, critics say that
up to 40 per cent of the cash could have been pocketed by people in Mr
Yanukovych's inner circle.
Kiev's Olympic Stadium, the venue for
tomorrow's final, is at the centre of the controversy, with over half a
billion euros allegedly spent on its reconstruction, carried out through
a series of shell companies with no clear indication of who the final
beneficiaries are.
"This government sees its power not as a
service for the people but as a resource for profit for its members and
their families," said Ostap Semerak, an opposition MP and member of the
shadow cabinet of Yulia Tymoshenko. "The construction projects for the
Euros are simply part of a scheme to launder money in cash inside
Ukraine."
Ms Tymoshenko, the former prime minister and one of the
leaders of the 2004 Orange Revolution, was jailed last year on charges
that most people saw as political revenge by Mr Yanukovych, who narrowly
defeated her in a presidential poll in 2010.
Since he came to
power, Mr Yanukovych has surrounded himself by businessmen and
associates from his home city of Donetsk. Especially close to him are
oligarchs such as Rinat Akhmetov, the president of Shakhtar Donetsk
football club, and his right- hand man, Boris Kolesnikov, the Deputy
Prime Minister and was in charge of the organisation for Euro 2012.
There
are also shadowy figures such as Dmitry Firtash, an oligarch who made
millions through an interim company that dealt with Russian gas transit
and has been linked with corrupt practices and organised crime figures
in Russia, charges he has always denied.
"It's an open secret that
there are high-ranking politicians behind these companies," said a
Western diplomat in Kiev. "Something like 30-40 per cent of the state
money spent on the tournament has gone into the pockets of politicians.
They did everything they could to siphon the money into their pockets."
Mr
Kolesnikov, the Deputy Prime Minister, says that such allegations are
nonsense. He denies all claims of corruption around the Euros and says
that the real figure spent by the government was around £3bn. Mr
Kolesnikov is thought to be worth hundreds of millions of pounds
personally, having accumulated a fortune in Donetsk over the past two
decades. Mr Semerak and others claim that he personally has profited
from the infrastructure development around the Euros, charges which he
denies vehemently. He was arrested in 2005 on charges of abuse of office
and making a death threat.
He also denied all of those charges,
which were later dropped. "It's in Ukrainian traditions to pour dirt
over your opponents," he said in an interview on the balcony of his
office, a lavish suite of rooms in a government building in central
Kiev.
"If you want to talk about corruption, the first place to
look is to the government of Yulia Tymoshenko. When we came in, in March
2010, we only had a year and a half left, and there was not a single
project in place." He says the Olympic Stadium reconstruction cost about
€430m, which is a "completely normal amount" for such a project.
"Reconstruction is more expensive than building a new stadium – look at
how much Wembley cost," he said.
The fractious nature of Ukrainian
politics, where fist fights frequently erupt in parliament and opposing
sides hurl vitriol at each other on a regular basis, makes it hard to
dissect the mutual allegations and accusations from a neutral
perspective. But most Western observers agree that things have taken a
turn for the worse under the Yanukovych administration.
"Tymoshenko
was certainly no white swan, and there were real issues about
corruption within her government as well" said the Western diplomat in
Kiev. "But in the past two years there has been a real deterioration."
Mr
Semerak points to several instances of what he claims amounts to
corruption and mis-spending, such as the infamous case of wooden benches
purchased for the metro system in the city of Kharkov which cost
several thousand pounds each, with most of the money presumably
disappearing into someone's pocket.
He also mentions a helicopter
port built with money earmarked for Euro 2012 near a popular hunting
spot in central Ukraine, with the justification being that teams may
want to stop off for a rest there if they were flying between venues by
helicopter.
Most troubling, however, is the role of companies such
as Altkom, a shadowy entity based in Donetsk with a murky ownership
structure, that nevertheless won more than half a million pounds worth
of government contracts for construction projects related to the Euros.
Local reporters tracked down the nominal head of the company, who turned
out to be a yoga teacher in Cyprus named Lana Zamba.
Her husband
said she was simply paid a nominal sum to sign off on documents saying
she is a director of Altkom and a number of other companies. Nobody
knows who the real financial beneficiary is. Mr Kolesnikov brushed away
concerns about Altkom, saying it is "the biggest such construction
company in Ukraine". When confronted about how a yoga teacher from
Cyprus could possibly be in charge of such a huge company, he said he
did not know who the ultimate beneficiary was. "They operate within
Ukrainian law, and that is what matters," he said. "The government of
Ukraine is not obliged to find out who the owner of the company is,
whether they are a yoga teacher or a maths teacher, it doesn't matter."
He denied suggestions, voiced by the opposition, that he himself may have links to the company.
Anti-corruption
organisation Transparency International put Ukraine at 152nd place in
its most recent global corruption survey, below Nigeria, Togo and
Pakistan and some European politicians are demanding that Mr
Yanukovych's government explains where the money went. Two German MEPs
have written to Uefa's President, Michel Platini, with a number of
questions over the cancellation of tenders and the opaque accounting
practices employed by the Ukrainian authorities. "Not only would it mean
a damage to Uefa's image if the cancellation of competitive tendering
was tolerated just to ensure the final round could start on time, but
Uefa would act against its own assertions if it tolerated such practices
by looking the other way," said the letter.
In a written
response, Mr Platini essentially said that concerns over corruption were
not the business of Uefa. "We concentrate solely on the sporting
domain, and we do not have the authority, the capacity or the mandate to
judge or audit the way in which a country manages the construction of
tournament or other infrastructure," he wrote.
Mr Kolesnikov says
Uefa is "delighted" with Ukraine, and says only one thing went wrong at
the tournament. "The fans loved Ukraine, Uefa are happy, the only thing
that was unfortunate was that the Ukrainian football team didn't make it
to the later stages."
Power brokers: The men who matter
Viktor Yanukovych
Ukraine's
President grew up in the mining town of Donetsk and was jailed twice in
his youth for assault. He won an election in 2004 that observers said
was rigged and ushered in the Orange Revolution. Six years later, he
became president again. He has recently been making headlines over a
state-owned country mansion that he has "privatised".
Dmitry Firtash
Firtash
owns a number of power and energy businesses but is best known as the
co-owner of RosUkrEnergo, an opaque company that acts as a middle-man in
gas transit through Ukraine from Russia to Europe. Cables released by
WikiLeaks said that Mr Firtash told US diplomats that he had links to
Russian organised crime structures, in particular the notorious Russian
mafia overlord, Semyon Mogilevich, who is on the FBI's most wanted list.
Like many other oligarchs, he has made efforts to "go respectable" in
recent years, funding a Ukrainian Studies centre at Cambridge
University.
Rinat Akhmetov
Akhmetov is
Ukraine's biggest oligarch and was always seen as the economic power
behind Mr Yanukovych. Despite allegations linking him to organised
crime, Mr Akhmetov has won a number of libel cases against those who
have accused him of underhand dealings. He is the Roman Abramovich of
Ukraine, investing hundreds of millions of pounds into Shakhtar Donetsk,
the country's best football team.(
Shaun Walker per "The Independent")