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Is AID to Ukraine Fueling Corruption?

Is AID to Ukraine Fueling Corruption?


Since the start of the Russia-Ukraine conflict, more than forty-one countries have supplied a total of more than US$140 billion in civil and military aid to Ukraine. The United States has led the way having sent US$46.3 billion in military aid between January 2022 and October 2023.

The financial aid provided by the United States and members of the Western coalition, including the United Kingdom and the EU, has played a crucial role in Ukraine’s defence and counteroffensive against Russia. Unless corruption in Ukraine is properly addressed, however, Western donors risk wasting substantial sums in what is ostensibly a noble cause.

Just this past year, President Volodymyr Zelenskyy fired more than a dozen senior officials and all regional heads of military recruitment centres, after an audit revealed evidence of graft and alleged abuses by high-ranking officials, including illegal enrichment such as the purchase of luxury cars and properties throughout Europe.

As an example, back in June 2023, it was reported that the family of Yevhen Borisov, the former head of the military draft department in Odessa, owned real estate and valuable cars in Spain worth millions of dollars. These purchases were made during the ongoing battle, raising questions regarding the source of the money. A month later, based on evidence from the investigation, the Ukrainian court seized property, money and back accounts belong to Borysov and his family members.

Such incidents not only prove that corruption is still very much prevalent in Ukraine but also demonstrate that its alleged military victories against Russia have only served to mask the existence of the pervasive problem, a hangover from Ukraine’s Soviet history. Naturally, this has raised the question of whether military aid supplied by the West is truly being used for the rightful purpose of funding Ukraine’s defence.

Addressing reporters, Daria Kaleniuk, the Executive Director of the Anti-Corruption Action Centre in Ukraine – a group dedicated to rooting out public graft that is now focused on war profiteering following the large influxes of foreign aid funds – spoke of the importance of supervising the distribution of public funds. According to Kaleniuk, ‘corruption can kill [and] depending on how effective [the government is] in guarding the public funds, the soldier will either have a weapon or not.’ Groups of Ukrainian investigative journalists have even found evidence pointing to the questionable overpayment of basic supplies and food for the army far above retail prices.

In fact, a poll released in September revealed that 55 per cent of Ukrainians believe Western military aid should be conditional on fighting corruption. In other words, much of the Ukrainian population strongly believes that the war cannot be used as an excuse to stop fighting corruption.

Corruption in Ukraine has been a topic of both national and international concern since the collapse of the Soviet Union in 1991. Most recently, the phenomenon has limited the country’s prospects of joining the EU, with Former European Commission President Jean-Claude Juncker openly objecting to its accession along with Hungarian Prime Minister Viktor Orbán, who argues that Ukraine is ‘one of the most corrupt countries in the world.’ Orbán’s strong opposition against Ukraine’s accession was also the reason behind his decision to block EU€55billion in EU aid for the country back in December.

Prior to the start of the Russian-Ukraine conflict, money laundering and embezzlement were mainly conducted through poorly run businesses and state companies. Following the outbreak of war and the chaos that ensued, these corrupt practices have found a way to intensify.

Ukraine also risks losing the trust of foreign investors, as more cases of unfounded business expropriations continue to surface. Such includes the expropriation of Sense Bank, Ukraine’s top commercial lender.

Under the pretext of safeguarding the country’s national security against Russia, Ukraine justified its decision by invoking the indirect link between some of the Sense Bank’s ultimate beneficiaries from Russia. The expropriation has also harmed Sense Bank’s European substantial minority shareholders such as international banking group UniCredit and the Mark Foundation for Cancer Research.

It is clear that Russia’s war on Ukraine is being exploited by influential and politically connected Ukrainian figures for their own enrichment as they engage in the misappropriation of national and foreign aid funds and resort to extortion tactics against prominent commercial rivals. Such practices come at the expense of fair business practices, the rule of law and the overall welfare of the nation at a crucial time.

The violation of civil, property, and human rights under the guise of military defence is never justified. The supply of military aid to Ukraine should remain proportional to the country’s commitment towards implementing critical reforms aimed at terminating corruption.

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