Ukraine Reform Monitor No. 3

ZELENSKYY DOUBLES DOWN...
Last month, in one of his nightly television addresses, Ukrainian President Volodymyr Zelenskyy vented his "fury" at what he termed acts of betrayal toward the Ukrainian state – namely, instances in which ombudsmen and government functionaries have enriched themselves at the expense of Ukrainian society. Zelenskyy's remarks come on the heels of the recent arrest, by the Prosecutor General's Office and the State Bureau of Investigation, of Yevhen Borysov, head of Odessa's military recruitment office. Borysov has been accused of illicitly raking in more than $5 million on the back of various business ventures. He is currently being held in Kyiv district court on about $4 million bail.

Zelenskyy's address also showcased his disappointment with the results of an audit on military recruitment offices and procedures when the country has been receiving billions in aid from the West. Ukraine is pushing to pass reforms and alter its governing procedures to get them in line for membership with the EU. Brussels has said that the country has satisfied two out of seven requirements needed to commence membership talks, something that Zelenskyy is aiming to have happen by the end of the year. (Financial Times, July 26, 2023)

...AND TARGETS MILITARY CORRUPTION
Zelenskyy's July broadside, in turn, set the stage for a major campaign on Kyiv's part to curb corruption in the ranks of the country's military. This month, the Ukrainian government fired all regional military recruitment chiefs as a result of widespread allegations of corruption. In all, according to State Bureau of Investigation statistics, 112 criminal cases have been opened to date against regional military officials. "This system should be run by people who know exactly what war is and why cynicism and bribery during war is treason," Zelenskyy has announced. In the future, he maintains, the posts in question will be filled by professionals - "soldiers who have been at the front or who cannot be in the trenches because they have lost their health, lost their limbs."

That decision marks a significant strategic shift, against the backdrop of ongoing Western aid to Ukraine. According to Volodymyr Fesenko, head of the PENTA Center, a political think tank, Zelenskyy has come to see soldiers with combat experience as "moral guardians against corruption in the system." However, Fesenko cautions, the potential for backsliding is great. "Even for the new chiefs, the temptations will be great in the system. These are lucrative posts, because many people are trying to pay money in order not to have to go to war." (Deutsche Welle, August 17, 2023)

BELATEDLY, KYIV MAKES AN ENERGY FIX
In July, the National Anti-Corruption Bureau and Special Prosecutor's Office arrested Heorhiy Lohvynskyi, an ex-MP from the People's Front party, for misappropriation of state funds. Lohvynskyi is the seventh suspect in the "Gold Mandarin Oil" scandal – a convoluted scheme that resulted in roughly $1.4 million being siphoned off from state coffers. Lohnyvskyi is alleged to have misled the European Court on Human Rights (ECHR) on the relationship between Gold Mandarin Oil and the Kyivenergo energy company, Back in 2013, Gold Mandarin had appealed to the ECHR for $1.4 million to be transferred from the Ukrainian state budget to satisfy Kyivenergo's unpaid debt to the company. Lohvynskyi is accused of approving the transfer, obscuring details of other payments that had already taken place, resulting in Gold Mandarin receiving another $1.4 million from the state. (The New Voice of Ukraine, July 11, 2023)

FAST-TRACKING WEAPONS - AND GRAFT?
The exigencies of war with Russia could be working against Ukraine's anti-corruption drive. Over the past year-and-a-half, the Ukrainian government has struggled to properly outfit its soldiers on the front lines fighting Russia's full scale invasion. As a result, a new expose in the New York Times notes, Kyiv has begun to cut corners in its fight against corruption. Specifically, the government of Ukrainian President Volodymyr Zelenskyy has "stopped blacklisting suppliers who had ripped off the military," most prominently arms financier Serhiy Pashinsky, who had previously been a target of the government for allegedly reselling weapons at marked-up prices. The Ukrainian government, the Times reports, has also "abandoned many public-disclosure rules intended to reveal self-dealing" of the sort Pashinsky had become notorious for. 

The subject of profiteering, the paper says, is one of growing concern for Western governments aiding Kyiv's war effort. It is reportedly "one reason the American and British governments are buying ammunition for Ukraine rather than simply handing over money." (New York Times, August 12, 2023)