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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

A FIELD DAY FOR CORRUPTION COMING SPF returns to Cabinet control

13 November, 2012 - 00:00

The Constitutional Court's ruling recognizing the State Property Fund's being under Parliament's control unconstitutional and subordinating it to the Cabinet caused reverberations in Verkhovna Rada matching those of the Speaker's election. Even though both events had been anticipated just as Leonid Kuchma's active lawmaking could not have avoided privatization, it being one of the gold veins of his presidential campaign.

Subordinating the SPF anew to the Cabinet plays into the government's hand mainly because it means an end to the SPF-Cabinet confrontation that has lasted so long. Secondly, the Cabinet will now have levers to control public property which, in view of expected investment, may help increase budget revenues (the latter is envisaged in the Cabinet's draft budget resolution submitted to Parliament). What privatization dividends reach the budget will serve to somewhat strengthen the Cabinet's position and push the issue of its retirement to the background, at least for awhile.

It should be noted, however, that the President is in no hurry to offer Parliament his candidate to head the SPF, as envisaged by the Constitution. In this case, as in that with the Procurator General, he prefers to have a "tame" acting head (remember Lanovy?) and this qualification fits Prosecutor General Ferents just fine. In this way he will have unlimited control of both privatization and the Procurator General's Office.

The Day's Iryna Havrylova asked People's Deputy Serhiy Teryokhin of the Reforms Center faction to comment on the situation.

"The Constitutional Court has once again formally interpreted the Constitution," Mr. Teriokhyn said. "And the relevant proviso reads that the Cabinet exercises control over public property. But then why did Verkhovna Rada stipulate all those special procedures in the Fundamental Law? I mean control of SPF on a parity basis. Precisely to prevent this property being regulated by a single branch of power and achieve a compromise between lawmakers, who would determine how public property is to be used, and the executive who would be responsible for such effective use. I think that the Court's decisions runs counter to the Constitution's spirit and is another piece of evidence – one of many – that the Constitutional Court is not completely independent. Assuming that such an interpretation of the constitutional clause is valid, one may wonder whether all the government-sired privatization programs are unconstitutional. If the Cabinet is to control public property (including management, use – in a word, lock, stock, and barrel), then what functions are left the State Property Fund? We all know President Kuchma's response. Several days ago he issued an edict to the effect that the management of blocks of government shares will from now on be the prerogative of the relevant ministries. In other words, we now have a revived Soviet system of control over state property. From now on a mistake made by a bureaucrat will cost more than that of a manager running an enterprise. I can foresee that the Court's ruling and the President's edict will cause an unprecedented upsurge in corruption. And not only in the privatization sphere. As for linking privatization investments to the presidential campaign, I would say that this connection sounds logical, although I am not certain that the bureaucrats allowed to pull certain public property levers will side with the President. More likely, he has just weakened internal administrative discipline; people in control of public property will be less dependent on their government salaries and will have a chance to do a little business of their own."

 

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