It's been a month since PricewaterhouseCoopers finished part two of the National Bank audit, but only now is the general public permitted to see its findings. The audit can now be found on the International Monetary Fund's Web site (www.imf.org), and will remain there until June 2.
Every government agency was given ample time to scrutinize the audit and decide how best to comment on its findings. But rather than prepare statements for the press, it seems that the government has merely spent the time working out ways to make the report as inaccessible as possible.
At the IMF's Web site, the report is available in 'read-only' form. Viewed on the Internet, no part of the text may be highlighted, copied or pasted. With the help of a computer specialist, it is possible to save a copy of the text on your hard drive, but you still won't be able to cut, copy, paste print or edit a word of it.
According to the IMF, PricewaterhouseCoopers requested that the audit be published online in read-only format. But who paid PricewaterhouseCoopers for the work, and in whose interests is it to keep public access to the audit report at a bare minimum?
The answer is clear – the National Bank of Ukraine, which is at least guilty of incompetence in overstating its currency reserves, and the IMF itself, for failing to properly scrutinize the activities of a borrower.
By trying to restrict public access to the report's findings, the government is only compounding its past faults. The government of Prime Minister Viktor Yushchenko (who headed the National Bank when the questionable operations with reserves were conducted) has done its best to hide the outcome of the audit from ordinary Ukrainians. Despite profuse promises to make the report public, the text has not been printed in any of the official media, and copies are not to be found on any government Web site. The report is available only on the IMF's Web site, in read-only form, and only in English.
Ukrainian journalists, most of whom don't speak or read English, had no other choice but to rely on their prime minister for the information about the results of the audit.
The prime minister was happy to oblige, putting forth his interpretation of the report at three press conferences (including an exclusive one for members of the Western press) on the day of the report's release. His take on the report can be summed up in three sentences:
1. No evidence of misappropriation of IMF funds was uncovered;
2. Ukraine's old accounting system is to blame for the discrepancies in calculating the reserves; 3. Ukraine didn't mean to mislead the IMF.
These three magical phrases have been intoned regularly since the release of the report, and both Ukrainian and foreign media seem to have fallen under their spell: Newspapers and television news programs have quoted them widely in reports, and by the time Yushchenko arrived in Washington on May 7, U.S. officials seemed to have forgiven and forgotten the whole thing. The former central bank chairman was spared criticism for possible past misdeeds, and U.S. officials returned to their traditional 'Ukraine must speed up economic reform and close down Chernobyl' theme in their statements to the press.
But while the Ukrainian government brazenly bluffed its way through the report's release, the IMF took a more humble line. According to a press release from the fund, the PricewaterhouseCoopers report describes 21 sets of transactions that may have affected the size of Ukraine's reserves, and the IMF was unaware of 'some' of them. The press release goes on to repeat some of the audit's footnotes:
'Within the scope of the special examination, no evidence of misappropriation of Ukraine's reserves was found. However, some of the non-Ukrainian banks have not confirmed the transactions with the NBU as requested by PricewaterhouseCoopers, and the report does not cover earnings derived from investments undertaken by third party banks.'
Effectively, this phrase describes why none of the back-to-back deals involving third parties (and described by the Financial Times in detail) showed up in the audit: They're not there because the auditors weren't supposed to look for them.
Finally, there's the National Bank of Ukraine. After refusing to comment for months on the audit, the best Ukraine's central bank could come up with was the following quotes given to Interfax by one of the bank's top officials: 'Many things are unclear in the report' and 'It's not clear where some of the figures in the report came from.' How's that for an official statement?
There are a lot of conclusions that can – and will – be made from this case. The simplest one being that Ukrainian officials have yet to grasp even the simplest principles of good public relations.
Instead of falling back on Soviet-style propaganda, Yushchenko would have been better advised to come out and state what is obvious to everyone:
'Yes, we're guilty. We did it, and we were wrong. But I didn't profit from these questionable operations, and neither do I know who did.'
It might not be 100 percent true, but even part of the truth would have been appreciated.
Katya Gorchinskaya is a staff writer for the Post.
