This article is part of ECFR's Wider Europe Forum
The West should require Kyiv to take these specific steps to fight graft before disbursing further aid.
As Ukraine continues to battle Russian-supported separatists in the Donbas, Kyiv is also fighting another, perhaps equally important battle: a war against endemic corruption. Ukraine has made some genuine progress fighting graft, and reformers have pushed through a number of important anti-corruption reforms. All public procurement is to take place online through Ukraine’s ProZorro system, which should help to eliminate corrupt backroom deals and rigged tenders. Independent anti-corruption agencies that operate separately from the government have been created, and new traffic police now patrol Kyiv and other major cities.
But despite this progress, dangerous backsliding has taken place in recent months. Kyiv’s hopelessly corrupt Prosecutor Generals’ Office (PGO) is leading an increasingly open war against anti-corruption reformers both inside and outside the organisation. Although the PGO’s hated Prosecutor General Viktor Shokin was finally forced out, he managed to fire his only remaining reformist deputy before he left, and also attempted to sideline the new anti-corruption agencies. And with the effort to arrest anti-corruption prosecutor Vitaliy Kasko – who had already resigned in disgust from the PGO – it is clear the departure of Shokin will not change the PGO’s modus operandi. The PGO has also attacked civil society, raiding the offices of the Anti-Corruption Action Center (AntAC), one of Ukraine’s leading anti-corruption NGOs, on trumped-up charges of misappropriating aid money. AntAC relentlessly publicises corruption in the PGO, and the raid represents an obvious attempt to silence them.
The PGO’s war on reformers is bad enough, but President Petro Poroshenko’s unwillingness or inability to prioritise the fight against graft is also troubling. Poroshenko shows no intention of cleaning up the PGO by appointing truly independent reformers, and in response to a scathing New York Times editorial on the corruption in the PGO, Poroshenko lashed out at the paper, accusing it of involvement in a “hybrid war” against Ukraine. Poroshenko even sternly warned leading reformist MP Sergey Leschenko “not to write about his family Shokin and [Ihor] Konenko”, the latter being the deputy head of the president’s parliamentary faction, who has also been accused of corruption. While Poroshenko’s behaviour is disappointing, it is not surprising – in many ways, putting an oligarch in charge of a country that desperately requires deoligarchisation is akin to appointing an arsonist to head the local fire department.
It is time for the West to tell Kyiv that enough is enough. Western taxpayers underwrite Ukraine to the tune of tens of billions of dollars, and to get officials’ attention, the West should temporarily freeze aid until Kyiv demonstrates its readiness to truly confront corruption by taking the following three steps.
First and foremost, Kyiv must break the power of its predatory procuracy. According to Don Bowser, a senior anti-corruption adviser in Kyiv, “the prosecution service functions as a giant mafia organisation and is stone-cold corrupt. Its real functions are to extort, rent seek, and act as a political enforcement tool for the president.” The ideal solution in the long run is for Ukraine simply to abolish the PGO and move to an American-style justice system, in which the roles of investigating and prosecuting crimes are split between police and prosecutors.
In the short term, though, Kyiv should heed the demands of the leading civil society group Reanimation Package of Reforms (RPR) and establish an independent Qualification and Disciplinary Commission (QDC). RPR envisions the new commission having the power to employ Western prosecutors in addition to Ukrainians; to recruit, appoint, transfer, and dismiss prosecutors; to hold open competitions to fill positions within the PGO at both national and regional levels; and to allow lawyers without prior prosecutorial experience to work at the PGO in order to bring fresh blood into the institution.
In addition, the West must push for leadership changes at the PGO. In recent months, the PGO has launched criminal prosecutions against every internal reformer who has dared to challenge the old system, as well as the raid on the anti-corruption NGO AntAC. To end this resistance, the West should insist that Poroshenko appoint a true reformer, such as former deputy prosecutor Davit Sakvarelidze, as the next PGO head, and that the new head should be given the power to fire and hire senior PGO staff as s/he sees fit. Neither of these actions would resolve every issue with the PGO, but in the short term, these steps would have a significant impact on the organisation’s ability to block reforms.
Secondly, Ukraine needs to get serious about reforming its corrupt judiciary. RPR outlines several actions that the government must take to overhaul Ukraine’s judicial system, but implementing all these initiatives would take several years. According to Mykhailo Zhernakov, RPR’s leading expert on judicial reform, RPR’s immediate top priority is the “creation of new courts with new professional and responsible judges selected on a transparent competitive basis. A brand new Supreme Court with professional and responsible judges would be a particular game-changer.”
Since that would require amending the Constitution and adopting implementation legislation – steps which will take time – the West should instead insist that Kyiv pass draft Law 4180. Zhernakov says that this draft law would bring fresh blood into the judicial system by permitting lawyers without previous judicial experience to occupy positions in the Supreme Court and courts of appeal, and also require existing judges to pass a transparent re-attestation examination overseen by civil society.
Thirdly, the West should insist that Ukraine commit to finding out what happened to $1.8 billion from a previous IMF loan to support the banking system, which instead disappeared into various offshore accounts affiliated with PrivatBank, the country’s largest bank, which is owned by Ihor Kolomoisky, one of Ukraine’s leading oligarchs. As anti-corruption investigators Nashi Groshi exhaustively documented, PrivatBank first loaned the money to 54 fictional offshore entities to order goods from six fictional suppliers. Payment for the goods was prepaid into the suppliers’ bank accounts – which were, not coincidentally, located at the Cyprus branch of PrivatBank – with the loans collateralised by the goods on order. Inevitably, the goods were never delivered, leaving PrivatBank owning nothing but fictional goods, which had never existed in the first place.
As a Nashi Groshi investigator noted, “this transaction of $1.8 billion abroad with the help of fake contracts was simply an asset siphoning operation.” Neither Kolomoisky nor anyone else in Ukraine has been held accountable for this theft, and the West should insist that Kyiv’s new National Anti-Corruption Bureau (NAB) be allowed to begin an objective and independent review of what happened to this money – money that Ukraine’s citizen taxpayers must ultimately pay back.
Some might argue that imposing detailed conditions for aid would undermine Ukraine’s sovereignty. But in fact, imposing conditions is exactly what reformers want the West to do. Moreover, the conditions outlined here are not unduly onerous. They are easily achievable and would produce a genuine impact. Just as importantly, requiring Kyiv to take these steps would also serve as a litmus test for whether the new government is genuinely committed to anti-corruption reforms.
Ending corruption and moving to a system based on the rule of law were the key demands from the Revolution of Dignity’s protesters. By tying further aid to real anti-corruption reforms, the West can help Ukraine’s people realise the true promise of Euromaidan.
The European Council on Foreign Relations does not take collective positions. This commentary, like all publications of the European Council on Foreign Relations, represents only the views of its authors.
Read more on: Wider Europe Forum