Editor’s note: this story has been updated with Vadym Melnyk’s salary, announced on Sept.14.
The government’s creation in January of the Bureau of Economic Security to investigate economic crimes was initially hailed as a step forward in fighting the massive economic crimes in Ukraine that go unpunished — from multibillion-dollar bank fraud to offshore tax evasion.
The bureau aims to replace the country’s corruption-mired tax police.
However, when the Cabinet of Ministers appointed Vadym Melnyk, a tax police veteran with 16 years of experience, as the head of the bureau on Aug. 20, the news got a mixed reaction.
Yaroslav Zheleznyak, deputy chairman of the Voice party, with 20 members in parliament, said there’s a “99% chance that nothing will change,” while ex-Finance Minister Oleksandr Danyliuk said that the “reform choked before it even started.”
Others, like Danylo Hetmantsev, the head of the parliamentary committee on finance, taxation and customs policy, said that “people can change” and that the results can be assessed in the next six months. Melnyk’s mind is at ease.
He said he will change everything and prove that the new state body will work in a completely different way. Failure is not an option, he said.
“I don’t want to bury my name and my experience. I will do everything to make it work,” Melnyk told the Kyiv Post.
“If I can’t launch the reform, I’ll just be worthless.”
Bureau’s team
“He will begin to build the only thing that he can — a corrupt and punitive machine,” Danyliuk wrote on Facebook.
In fairness, Danyliuk wanted the job badly.
Last summer, he even punched ex-Economy Minister Timofiy Mylovanov, whom he blamed for sabotaging his selection.
Melnyk, 49, is currently the only person in the bureau.
With a full workload of 4,000 employees, he is in a hurry to find a core team of at least 200–300 people by November. Overall, Melnyk estimated that around 600–700 people will be enough in the very beginning.
The bureau will likely stay at its current location, the former Kyiv headquarters of the tax police. “We already have weapons rooms there, premises, equipment,” Melnyk said. “It will save money for the budget.”
“It’s not a question of which building we will be sitting in, it’s about the model of future work,” he said. Melnyk plans to spend his budget on computer programs for the bureau’s team of analysts and on salary bonuses for those “who work well.”
The salary of detectives will start from $1,500, three times higher than average wages in the country. Melnyk wants to have roughly 200 investigators, 200 data analysts and 300 people working in various other fields.
On Sept. 14, during the press conference Melnyk announced his own salary at the bureau — around $4,500 per month, Ukrainska Pravda reported.
Every potential candidate working for the bureau will have to go through a polygraph.
“Passing a lie detector test is not mandatory in our country, but if a person refuses, then it raises questions,” said Melnyk.
The first 40 analysts will be enough to create a “strategic level” force, he believes. These analysts, who have law enforcement experience, will identify threats to the economy, including corruption and loopholes in the legislation.
“The analysts will tell us how to eliminate such threats,” said Melnyk.
Still, the question of where to find future employees remains open.
Melnyk gave up the idea of hiring former tax police officers en masse. The eight-month term spent leading the State Fiscal Service before his new position left him disappointed. Nearly 70% of all tax police employees lacked professionalism, he said.
“A lot of them have been spoiled by their unwillingness to work but they understand that analytics is important now,” Melnyk said.
Besides detectives and analysts, Melnyk wants to “strengthen special law enforcement activities.” The bureau will have units of undercover agents to detect criminal groups.
“Those who commit crimes will not even know that we already know about it,” said Melnyk. “We will be everywhere, we will know everything.”
Economic effect
Melnyk promised that businesses operating in Ukraine will feel the first positive signs of the economy being cleansed of illegal schemes in the next four to five months.
“There will be no immediate effect, but everyone will understand in which direction we are moving,” he said.
Melnyk believes that by fighting illegal schemes, Ukraine’s $40 billion’s budget could be doubled because half of the economy is in the shadow.
“The task of the bureau is to reduce criminal systems in the economy,” said Melnyk. “My task is to contribute to filling the budget at any price.”
He also vowed that his investigators will not be for sale. Bribes used to be a long-running problem in the tax police, where the price to close a case started from $100,000, according to Melnyk.
“With our new system, bribery won’t solve any problems,” he said. “Melnyk will see everything and find those who do it.”
