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#PwC: Trilateral cooperation on corruption in Ukraine

On June 3, the press service of the Dnipropetrovsk Oblast Administration reported on a new program to combat corruption with the help of experts at the international auditing and consulting company PricewaterhouseCoopers (PwC).

According to the press release, a trilateral memorandum of cooperation and coordination between the Dnipropetrovsk Oblast State Administration, the Dnipropetrovsk Oblast Council, and PricewaterhouseCoopers was signed on May 29.

“The document provides for the creation and implementation of effective tools to combat corruption as part of a comprehensive strategy of the Dnipropetrovsk Oblast, primarily through a comprehensive audit of the budgetary process,” the release states.

The press service reports that priority initiatives will include the creation of a platform for public discussion of critical issues in the anti-corruption fight, the coordination of interaction among the different departments and organizations, and  the improvement of phone helplines. The memorandum, will be in effect for one year.

Perhaps the matter of IP violations should feature on the platform. In December 2010 P-CED founder Terry Hallman contacted PwC via their web portal, saying:

I understand PwC is working with East Europe Foundation and British Council on BC's SE Project in Ukraine.

I'm pleased to see this effort, and commend you on volunteering.

However, there are some unaddressed legal issues involved. Namely, copyright. The entire project derives from

I'm not sure it would be appropriate to call the project to a halt on grounds of Intellectual Property Rights violations because the project is so badly needed for Ukraine. I am sure that the Ukrainian side will not think twice about IPR violations. Ukraine remains among the worst locations in the world for such violations. Without IPR protections, it is extremely unlikely that social enterprise can take root in Ukraine. Reason: any social enterprise project, anywhere in the world, which is capable of turning a profit can have the 'social' part stripped out in favor of increased financial profit. If you understand Ukraine, you surely understand that is instinctive. There is no cognitive loop involved. Ukrainians see no point and assign no importance for IPR. IPR theft is an Ukrainian sport.

By contrast, UK and the US do understand IPR protections. There is no way forward without establishing IPR protections from the start of this project in Ukraine. It is incumbent upon UK and US partners to set the course and hold fast to it.

Therefore, on principle, by law as understood in UK and the US, and to foster the viability of the entire SE project, it is appropriate and necessary to square IPR issues before the project proceeds further. It can be shut down entirely, but that does no good for anyone except to reinforce the importance of IPR.

I  shall look forward to your response, and will contact EEF and BC separately.

In the meantime, I wish all of you the best of holidays. And this note for the Christmas season: I'm not Scrooge, but maybe more the ghost of Christmas present. Remember Ignorance and Want at the end of that chapter.

With best wishes,

Terry Hallman


People-Centered Economic Development

Kharkiv, Ukraine

He was referring to the 'Marshall Plan' strategy which had been developed with the help of Maidan activists in Kharkiv between 2004 and 2006. It had been delivered to Ukraine's government in October 2006, for them to use free of cost, with the sole condition that they commit to change on one of Ukraine's most intractable problems, corruption in institutional childcare.

"The most urgent component of the project below is relief and modern medical treatment for tens of thousands of Ukraine’s children diagnosed as psychoneurologically handicapped. Many have died in state care, in primitive and inhumane conditions. Many are misdiagnosed, and end up in atrocious conditions. Following intense publicity and public discussion of the issue during final preparation of this project, Ukraine’s government agreed on 5 March, 2007 to open more than 400 new treatment facilities for these children all over Ukraine. That commitment from Ukraine’s government was a major step forward, clearly demonstrating Ukraine’s willingness and ability to take initiative in childcare reform first and foremost."

The risk of this work being hijacked arose in 2007, hence the decision to go public:

“As the 60th anniversary of the Marshall Plan came around in June 2007, noise was emerging within Ukraine of a certain political boss preparing a Marshall Plan for Ukraine.  This person was a reputed mob boss — exactly the sort of entity that the original Marshall Plan meant to oppose.  It seemed most likely that whatever he came up with would be self-serving, hijacking the label ‘Marshall Plan’ and turning the whole notion on its head.  I reviewed the original Marshall Plan and realized that what I had written was, in fact, the definition and spirit of the original Marshall Plan.  Thus, in June 2007, I appended the original title with “A Marshall Plan for Ukraine.”  After some discussion among trusted colleagues over timing, I published an abbreviated version of the paper in two parts in August 2007 in the ‘analytics’ section of the Ukrainian news journal”

By the end of 2007, we had doubts about USAID's integrity and wrote to them and the Senate Committee on Foreign Relations about the urgent need for assistance. It included plans for a civic anti-corruption network:

"The network is ready, including key players in Ukraine’s upper echelons aiming to protect and defend. I will work directly with other network partners in Ukraine and provide them with what they need. That network exists under the watchful eye of specific people in Ukraine whose job it is to know such things and to protect Ukrainian citizens as well as legal foreigners going out of their way to protect Ukraine’s people and legally insisting that Ukraine’s own laws be obeyed by more than mere foreigners. I have been assured that this particular governmental organization are my/our guardian angels. The network now needs cash and resources to help move things along. That is the P-CED Foundation that I am asking you to help get started."

At this point you may well be asking, why this didn't happen. 

In 2010, we'd discover that USAID wanted their own show, bringing in The British Council, The European Union, PwC and Erste Bank as partners. Aside from PwC, all these partners had been approached with the 'Marshall Plan' paper  Ironically, the British Council were also soliciting partners, so we applied - to be disregarded.. Following up on this with my MP revealed that eligibility criteria included the ability to make a financial contrbution.  Today, the British Council still solicit partnerships without making this criterion known. P-CED has served as a supplier in the British Council supply chain for a number of years, without payment for its IT support service,     

By then it was clear that the primary focus of our anti corruption activism was something they wanted to avoid at all costs. Death Camps, For Children was far beyond a risk averse private/public partnership was willing to go.  

"This is not a research activity where many, if any, other people dared to participate.  UNICEF was willfully blind to the matter because it was just too dangerous to bother to intercede  Powerful interests remained entrenched with enforcers to make it dangerous.  Jurists were correct, in my view.  It was more a mafia operation than anything else, aimed at misappropriation and laundering of large money.  That was perfectly congruent with how Ukraine operated before the revolution.  USAID wanted nothing to do with it, nor would they fund any organizations or activists who might try.  Some things could be done and some things could not be done.  Helping these children was something that could not be done.  So, I exposed it and made it the central focus and metric of Ukraine’s microeconomic development blueprint.  In that context, it was far more difficult to ignore, dismiss, or argue about.  For about six months, I really did not expect to survive.  Nevertheless, Ukraine’s government finally conceded the point and announced the opening of more than four hundred new treatment centers for children who were theretofore invisible under tight and deadly enforcement.”

A glance at the list of USAID donors and partners reveals that they include the foundations of Ukraine's leading oligarchs alongside Britiish institutions which include the John Smith Fellowship Trust.  When the Sunday Times eventually published the story of Torez, they would unwittingly point the finger:   

"The Ukrainian maxim: “I saw nothing, my home is on the other side of the village” has no place in the modern world. If by our deliberate blindness, children are allowed to suffer such depravities then, by our inaction, we are all guilty."

One of the last things Terry Hallman wrote before his death in 2011, was for an article that the Guardian social enterprise network rejected for publication:

"Hallman concludes that social business and social enterprise must be done by working backwards, from the problem: identify the worst social conditions in any given location, then analyze why the problem(s) exist. This method will always reveal all factors and barriers. Only then can the problem be understood, and then possibly fixed. But, he notes, barriers are often found in various organizations who are supposed to be trying to fix the problem, but have vested interests in direct conflict with achieving actual solutions."

PwC seem to have landed a contract to tackle corruption and Joe Biden's son has landed a nice job with an Ukrainian energy company while those taking a stand against corruption were hung out to dry.  Business as usual, it would seem.

is it any wonder that Maidan took to the streets?