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Presidents office opposes spending bill
Journal Staff Report

KIEV, July 12 - President Viktor Yushchenko's office voiced concerns Thursday over the government's backing of a controversial bill that they claim could fuel massive corruption by making less transparent about $20 billion in annual spending by state companies.

Oleksandr Shlapak, Yushchenko's deputy chief of staff, said the presidential office will ask the Prosecutor General Office to investigate reports by several government officials that the bill has come into effect.

"We plan to ask the Prosecutor General over the reports by some officials that the bill is in effect," Shlapak said Thursday.

The bill was approved by Parliament on June 19, but was never signed by Yushchenko. Still, the government has taken steps to make sure the bill is published by its official newspaper in hopes that it will come into effect. The newspaper, Uriadoviy Kurier, on Saturday managed to print only 5% of its regular circulation after a court banned the newspaper from running it.

First Deputy Prime Minister and Finance Minister Mykola Azarov insisted the bill has been published and has come into effect. The bill makes less transparent purchases of goods and services by companies that are majority owned by the state and run by managers appointed by the government.

The bill also reduces the authority of the Tender Chamber, a special body that is supposed to supervise the purchases.

The bill affects up to 100 billion hryvnias, or $20 billion, in annual spending, according to Volodymyr Laba, the chairman of the board at the Tender Chamber. "This is in line with financial flows that are at the disposal of state companies," Laba said.

The bill lets state-owned monopoly companies to make purchases on their own bypassing transparent tenders determining the best price under the supervision of the chamber. It also authorizes other state companies to hold tenders only when buying at least UAH50,000 in goods and UAH500,000 in services, up from UAH30,000 and UAH300,000, respectively.

The bill would effectively make it more difficult for independent controllers to see whether a state-owned company had overspent on goods and services.

"It would benefit those who say the bill has been published," Laba said. "It is being lobbied by the government."

Laba said the urgency of the bill may be linked to the upcoming snap election due on Sept. 30 with the money that may potentially go to finance undisclosed parties and groups.

"This is not just the assumption of the Tender Chamber, it comes out of circumstances that surround the matter," Laba said. "This comes out of lobbying for the urgent introduction of a bill that contradicts the constitution." (tl/ez)




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