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In Ukraine, There's Once Again Talk Of An Anti-Corruption Campaign. Will It Really Happen This Time?

Ukrainian President Volodymyr Zelenskiy (center), European Council President Charles Michel (left), and European Commission President Ursula von der Leyen give a joint press conference after a EU-Ukraine summit on February 3 in Kyiv, where the country's efforts to tackle graft were high on the agenda.
Ukrainian President Volodymyr Zelenskiy (center), European Council President Charles Michel (left), and European Commission President Ursula von der Leyen give a joint press conference after a EU-Ukraine summit on February 3 in Kyiv, where the country's efforts to tackle graft were high on the agenda.

Talk of a crackdown on corruption and a new effort to cut powerful tycoons down to size seems to sweep through Ukraine every year.

But the prospects for substantive change tend to melt away like snow in springtime, leaving a barren landscape that’s all too familiar to reform advocates both inside and outside the country.

So, it’s no surprise that a slew of high-level dismissals and headlines on corruption investigations have left some observers skeptical that it will amount to substance more than show.

But with Ukraine in the grips of a devastating Russian bid to subjugate the country by force, the stakes for the government to stamp out a problem that has hampered its development since independence in 1991 are higher than ever before, experts say.

Like the war itself, it is now an existential issue for Ukraine, some analysts say.

Almost a year after Russia launched a large-scale invasion, dramatically escalating a conflict that had persisted in the eastern Donbas region since 2014, the United States and the European Union are providing billions of dollars a month in military and financial aid to help Ukraine defend itself.

With no end to the war in sight and total promised foreign aid surpassing $100 billion, a growing number of politicians and voters in the United States and the EU are wondering whether it’s too much.

In a possible sign of a fundamental change in tolerance toward corruption, the Ukrainian government reacted immediately last month to a media investigation exposing evidence of graft in military food procurement, firing some officials while others voluntarily stepped down.

In the two weeks since that story broke, Zelenskiy, has replaced five regional governors, five regional prosecutors, several deputy ministers, and the acting head of the State Customs Service in the biggest reshuffle since Russia launched its invasion on February 24, 2022.

Ukrainian law enforcement also carried out a search at the home of Ihor Kolomoyskiy, a powerful businessman who in the eyes of some Western officials epitomizes the problem of suspected corruption linking the state and the so-called “oligarchs.”

David Dalton, a senior analyst at the British-based firm Dragonfly Intelligence and author of a book titled The Ukrainian Oligarchy After The Euromaidan, said it was a “big change” to see the Ukrainian government acting on reports of high-level corruption.

“In the past, these would probably have been ignored,” Dalton told RFE/RL. “It is the onset of a potentially profound and potentially very beneficial accelerated evolution of the governance regime, driven by war.”

Like other experts, however, he warned that the fight against corruption “hasn’t been institutionalized yet, and could still be reversed later.”

The weekly Dzerkalo Tyzhnya reported on January 21 that the Defense Ministry had purchased food, including eggs and potatoes, for its troops at inflated prices, causing an uproar in Ukraine and prompting the government to announce an investigation.

Several officials have been fired and the deputy defense minister overseeing procurement stepped down.

Ukrainian Defense Minister Oleksiy Reznikov
Ukrainian Defense Minister Oleksiy Reznikov

Defense Minister Oleksiy Reznikov may also be on his way out: The head of Zelenskiy’s Servant of the People party faction in parliament said on February 5 that Reznikov would be moved to a different ministry, though the next day he said no changes in the military leadership were expected this week.

Reznikov has denied any wrongdoing and said the procurement system needs reform. His former deputy Vyacheslav Shapovalov, who oversaw logistical support for the army, has been detained and is the subject of a criminal investigation.

Also stepping down was Kyrylo Tymoshenko, the high-profile deputy head of the presidential office who oversaw regional policy and had earlier worked on Zelenskiy's election campaign, following media reports that he had been using expensive cars.

In past years, signs of clampdowns on corruption have often dissipated without producing substantial results: investigations would be announced and people detained, but there would be little follow through, experts said.

“There's a lot of exposure of corruption, but then there is often no accountability. High-profile cases are never prosecuted properly,” Orysia Lutsevych, director of the Ukraine Forum at Chatham House, a London-based research organization, told RFE/RL.

A Rival’s Lesson

But with a war raging, Ukrainians suffering economically and emotionally, and Kyiv heavily dependent on foreign aid, Zelenskiy’s administration has “little wiggle room” and must address corruption head on, she said.

The pressure from Ukrainian citizens and Western governments “is much higher now to deliver on anti-corruption. It's a matter of life and death, literally,” she said.

It is also a matter of political survival, said Roman Kravets, a political columnist at popular online newspaper Ukrainska Pravda.

Former Ukrainian President Petro Poroshenko (file photo)
Former Ukrainian President Petro Poroshenko (file photo)

Petro Poroshenko, Zelenskiy’s predecessor, reacted slowly during his 2019 election campaign to accusations that the son of his business partner skimmed money from the financially strapped military, seriously damaging his ratings. Poroshenko lost to Zelenskiy by a landslide in the runoff vote.

Zelenskiy “understood that experience, he lived it, and he does not want to take on the negativity of other people,” Kravets told RFE/RL’s Ukrainian Service.

“Zelenskiy and his team clearly understand the needs of society. There is a lot of anger, people react very sharply to some unfair things. And in order not to put their entire [hold on] power at risk they have begun to listen to public opinion and make quick decisions,” he said.

Tetyana Shevchuk, legal counsel for the Anti-Corruption Action Center in Kyiv, said the dismissals send a positive signal but do not address the core problem of weak institutions.

“What we need is systematic reforms and integrity of these reforms. We are doing some, but still a lot of work has to be done,” Shevchuk told RFE/RL.

“I hope real investigations and prosecutions will take place in the coming months, but my inner skeptic says that it could be just a temporary thing,” she said.

Zelenskiy’s dismissal of five governors and five regional prosecutors was paired with his pledge to clean up corruption in the wake of the military food procurement scandal.

However, some observers see other motives at play behind the scenes as well.

Kravets said there are also aspects of a power play under way. He said the five regional leaders dismissed were close to Tymoshenko, the Zelenskiy aide who resigned.

Andriy Yermak, the head of the Office of the President of Ukraine (file photo)
Andriy Yermak, the head of the Office of the President of Ukraine (file photo)

Andriy Yermak, Tymoshenko’s former boss and the man considered by many to be the second-most powerful person in Ukraine, may have used the public backlash against Tymoshenko’s spending habits to oust a competitor and consolidate power, Kravets said.

Yermak “is essentially trying to be the only one who has the president’s ear,” he told RFE/RL. Yermak’s spokeswoman, Dasha Zarivna, did not immediately respond to an e-mailed request for comment.

In a February 2 tweet following a call with his U.S. counterpart, national-security adviser Jake Sullivan, Yermak said that Zelenskiy and his government “are determined to comprehensively contribute” to “cleansing the organs of power of corruption risks.”

European Choice

Meanwhile, some have voiced doubts about the sincerely of the February 1 search of tycoon Kolomoyskiy’s home by the Security Service of Ukraine (SBU), which came a day before the arrival of EU officials in Kyiv to discuss, in part, Ukraine’s potential future membership in the bloc.

Ukraine was granted candidate status for EU membership in June.

But Brussels has been firm in its position that, while it backs Ukraine's bid to join the EU, Kyiv will first need to implement a wide array of democratic and economic reforms and root out endemic corruption. The European Commission will publish an in-depth assessment of Ukraine’s reform progress in October.

In its most recent annual publication, on January 31, Transparency International ranked Ukraine 116th out of 180 countries in its corruption perception index, with lower numbers meaning higher perceptions of corruption. The global civil society organization said that Ukraine has improved substantially over the past decade but that much remains to be done in strengthening government institutions.

For some in the West, no one personifies the problem more than Kolomoyskiy, who is widely viewed as the quintessential representative of the 1990s bare-knuckle capitalism in Ukraine.

In an unusual move seen as a signal to Zelenskiy to clamp down on corruption, U.S. President Joe Biden’s administration publicly announced in March 2021 that it was banning Kolomoyskiy and his family from traveling to the United States “due to his involvement in significant corruption,” which Secretary of State Antony Blinken said had “undermined rule of law and the Ukrainian public’s faith in their government’s democratic institutions.”

Months earlier, in August 2020, the Justice Department filed a civil case in the state of Florida to seize several U.S. commercial buildings belonging to Kolomoyskiy, accusing him of purchasing the property with laundered money. The Justice Department is also conducting a criminal investigation into the matter.

Media outlets controlled by Kolomoyskiy backed Zelenskiy’s presidential bid in 2019, triggering fears that the politically inexperienced comedian and TV personality would be beholden to the tycoon.

Ukrainian tycoon Ihor Kolomoyskiy (file photo)
Ukrainian tycoon Ihor Kolomoyskiy (file photo)

While Zelenskiy has kept his distance from Kolomoyskiy, Ukrainian prosecutors have not brought charges against the tycoon during the president’s four years despite widespread suspicions of financial crimes.

Ukraine’s Central Bank has claimed that Kolomoyskiy “siphoned” $5.5 billion from his own lender, Privatbank, leaving the government to bail it out in 2016 to stave off an economic catastrophe.

Authorities said the search of Kolomoyskiy’s residence by state security agents on February 1 was based on allegations of embezzlement of up to $1 billion from oil assets that Kolomoyskiy partially owned alongside the state.

It looked “like a show before the EU summit,” Shevchuk said.

The SBU has not charged Kolomoyskiy with a crime or said anything about the results of the search.

In his nightly message to the nation on the evening before the summit, Zelenskiy said his government “will continue our fight against the internal enemy” -- a reference to corruption -- and promised that “new steps will follow.”

That would be welcome news for the European Commission, which has set seven groups of requirements for Ukraine to fulfill before it can begin the accession process. Many of them concern judicial and law enforcement reform which lie at the heart of the corruption problem.

Since achieving its independence three decade ago, Ukraine’s law enforcement agencies and courts have been routinely used as tools of influence by tycoons and politicians seeking to settle scores with opponents, stop investigations, or hinder business competitors.

Mixed Record On Reform

Zelenskiy, an outsider, ran on a promise to break that ossified system and bring Ukraine into the EU. Upon taking power, he quickly formed a government comprised of young officials to do just that.

However, he dismissed them and his respected prosecutor, Ruslan Ryaboshapka, just months later amid reports of a backlash from vested interests, including tycoons, leaving supporters at home and abroad deeply disappointed.

His new prosecutor, Iryna Venediktova, was viewed as a loyalist. She pursued criminal cases against Zelenskiy’s predecessor and rival, Poroshenko, raising concerns it was politically motivated, while leaving Kolomoyskiy untouched.

Experts say Zelenskiy’s record on fighting corruption has been mixed to date. His ability to push through laws reforming the judicial system have been partially offset by interference with anti-corruption institutions, they said.

Most notably , his office also delayed the appointment of Oleksandr Klymenko as head of the Special Anti-Corruption Prosecutor’s Office (SAPO) for months in the hopes of installing its preferred candidate.

Klymenko had launched a bribery investigation into Oleh Tatarov, Zelenskiy’s deputy chief of staff in 2020, while serving in the National Anti-Corruption Bureau (NABU).

The United States and the EU called the delay “incomprehensible and unjustified.”

Zelenskiy’s office also reportedly sought to fire the then head of NABU, Artem Sytnyk, in 2021 after he launched an investigation into the misuse of COVID-19 funds.

NABU has the power to investigate corruption cases and arrest individuals while SAPO oversees those investigations and prosecutes them in the High Anti-Corruption Court (HACC).

NABU and SAPO are independent of the Prosecutor-General’s Office while HACC is independent of the country’s other courts, making them powerful instruments for fighting corruption.

Their creation was mandated by Western governments in exchange for aid after the downfall in 2014 of Moscow-friendly President Viktor Yanukovych, whose rule was tarnished by allegations of widespread corruption, following months of massive protests known as the Euromaidan.

Vitaliy Shabunin (file photo)
Vitaliy Shabunin (file photo)

NABU and SAPO have achieved “truly impressive results” since the appointment of Klymenko in June, Vitaliy Shabunin, the head of the Anti-Corruption Action Center's executive board, said in interview earlier this year.

The anti-corruption institutions prosecuted 37 cases last year, winning 33.

How serious Zelenskiy is about fighting corruption will be visible in whether he protects NABU, SAPO, and HACC from interference, Lutsevych and Shabunin said.
The state could try to transfer cases from NABU to the Prosecutor’s Office or the Security Services (SBU) to derail investigations, Shabunin warned in the interview.

It has been done before. Klymenko’s investigation of Tatarov was handed to Venediktova and later quashed.

NABU had been investigating Kolomoyskiy’s financial transactions with the state-owned oil companies for months prior to the search by the SBU on February 1.
The SBU could try to take over that case as well.

“We have to watch whether there's any obstruction to their activity from high offices because that is where the problem is,” Lutsevych said. “We have to watch their actions rather than their declarations.”

RFE/RL’s Ukrainian Service contributed to this report.
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    Todd Prince

    Todd Prince is a senior correspondent for RFE/RL based in Washington, D.C. He lived in Russia from 1999 to 2016, working as a reporter for Bloomberg News and an investment adviser for Merrill Lynch. He has traveled extensively around Russia, Ukraine, and Central Asia.

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