206 - Corruption Complicates Defending Ukraine Against Russian Depredations

Stealing from the State

            Grand corruption, the large-scale pilfering that often accompanies access to large pots of new incoming money, always detracts in a major way from efforts everywhere to rebuild a nation, restore a land devastated by natural disaster (an earthquake, flood), uplift a shattered economy, and – especially – fight a major war against an overweening invader.  Vast amounts of cash tempt even the abstemious.  With every procurement of new pieces of road equipment, fighter aircraft, artillery components, machine guns, night-vision goggles, and even food rations, opportunities arise for inflated pricing, over-invoicing, kickbacks, and sheer theft.  Ukraine’s fight against Russia could crumble if corruption prevails.

            Politico indicates that the Biden administration is far more concerned about corruption in Ukraine than it lets on.  Revelations of high-level graft could derail the entire Western supply network. President Biden and his foreign policy team are talking seriously with Ukraine’s President Volodymyr Zelensky and his trusted associates about rolling out a range of serious reforms that ought to protect Ukraine against the kinds of corrupt practices that menaced the war against the Taliban in Afghanistan. The goal of Washington’s quiet initiative is to reduce “opportunities for corruption.”  And there are many.

            Specifically, in coded words, “Deoligarchization, particularly of the energy and mining sectors, is a core tenet to building back a better Ukraine” a U. S. policy document declares.  Washington is already helping improve Ukraine’s auditing capabilities. It may appoint an inspector general, as early administrations did in Afghanistan. It seeks to return public banks to private ownership and to help Ukraine provide careful oversight of the officials who procure armaments, military foodstuffs, and the like.

            Corruption is largely (but not completely) absent in the Nordic nations, in New Zealand, Australia, Canada, Germany, the Netherlands, Switzerland, Luxembourg, Estonia, and Singapore. At least, on a relative basis, Transparency International’s Corruption Perceptions Index suggests that those places are the globe’s least corrupt, and that Uruguay, Chile, and Costa Rica standout for reduced corruption in Latin America and that Seychelles, Mauritius, Cape Verde, and Botswana are among the very few African countries comparatively free of rampant corruption. Greed, after all, is hard-wired into the human psyche, probably from ancient times.

            The United States and the United Kingdom are rated as low corrupt entities by the CPI, albeit the United States has recently fallen to the twenty-fourth place on the scale. That means that twenty-three countries are perceived to be less corrupt and 156 or so are considered to be more corrupt. Sen. Robert Menendez’s recent arraignment as someone who is suspected of protecting Egypt’s continued gifts of financial and military aid from Washington in exchange for lots of gold bars and heaps of cash stuffed into jackets (plus cars and electronics) may only be one egregious example of the kinds of successful influence peddling that occurs in and around the power brokers of our nation’s capital. Justices of the Supreme Court – imagine! -- also seem to have indulged in trading access for favorable considerations.  Certainly, several justices traveled in luxury and enjoyed gracing right-wing gab fests in fancy surroundings.

            Corruption in the wider world is as dangerous, seriously distorting policy priorities, denuding food reserves while citizens starve, and greatly reducing what countries can spend on critical infrastructure maintenance or reconstruction. The two dams that failed and sent cascades of water over and through Derna, Libya, killing at least 11,000 people, are but examples. The collapse of the state electricity monopoly in South Africa, causing years of blackouts and industrial chaos, is another large-scale result of too many politicians and others lining their own rather than the public’s pockets.  South Africa’s major potable water crisis in Gauteng Province, and the collapse of its purification machinery, is another consequence of grand corruption over decades. Zimbabwe’s municipal water supply problems stem from a similar epidemic of sticky fingers.

            These kinds of pervasive institutionalized misappropriations of public resources for private gain – the very definition of corruption – now concern Washington’s transfer of billions of dollars’ worth of equipment and budgetary monies to Ukraine.  Washington and Europe have been generous and want to continue to deliver the immense dollops of aid that Ukraine’s defense of its realm absolutely requires; Ukraine cannot hold off Putin without what is already promised (at least $24 billion from the U. S. and $5.3 billion from Europe) and what more that will be needed as the war consumes its second year and another 100,000 lives.

            Any confirmations of corruption that arise on or near the war front, any over-invoicing by Ukrainians (food supplies may have been handled in this way already, with kickbacks), any fiddling with the prices paid to suppliers of war materiel, any disclosure of under the table payments (there must be some already) that are not being prosecuted, and any high level shifts of large sums from military needs to private accounts will chill, even possibly doom, the Western largesse that has helped Ukraine prosecute an amazing underdog repulse of the much more numerous, much better supplied (and vastly corrupt), Russians.

            Ukraine, after all, has been corrupt and corrupted for decades, first under the Soviets, then under their own Russian-affiliated early kleptocratic leaders, The CPI last year rated Ukraine 116^th out of 180 countries, with Russia (137th) ranked more corrupt (along with dozens of African, Asian, and Latin American entities.

            President Zelensky knows his country and its reputation.  In recent months he sacked a minister of defense and six deputies, presumably for some variety of underhand dealings. He also discharged lesser officials. Military contractors had tripled the prices of food – eggs and cabbages -- for the troops. Men allegedly paid bribes to recruiters to avoid being conscripted for induction into the army. Yet only twenty-five Ukrainians were successfully prosecuted for corruption in 2022.

Those actions could not have begun to purge Ukraine of corruption.  Despite loyalty to their charismatic president and a fierce antagonism to Putin and Russia’s invaders, there must be many in high or lower governmental places who have found clever (as well as nasty) ways to take personal advantage of the vast sums pouring into Ukraine to support the war. Where greed is a common weakness, that would be only natural. The ingenuity and persistence of corrupt actors pilfering funds provided for war fighting are endless.

On a final more positive note, one American commentator who was actively engaged in ferreting out corruption in Ukraine before the invasion, and since, believes “that there is a new cadre of voices who are serving on the frontlines in Ukraine who won’t accept passively sitting by while the country is looted again. That’s great news for Ukraine.” And for donors, spectators, and commentators.  Let us hope, and be vigilant.

PS Let me draw readers’ attention to two excellent NY Times op-ed articles from yesterday: Tom Friedman’s “How Four Leaders Are Turning the World Upside Down” in-print, and Anne Case and Angus Deaton’s “Without a College Degree, Life in America Is Staggeringly Shorter,” online. The latter elaborates with very good data on the points my Newsletter on Monday was making. Both are worth reading.

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