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Analysis | The wave of graft scandals in Ukraine is a healthy sign


The sudden increase in corruption scandals in war-torn Ukraine is not unexpected after nearly a year of war. However, it must be seen in its context, namely the complete absence of such revelations about Russia, the future conqueror of Ukraine. Against this backdrop, the scandals are actually a sign of remarkable robustness in a country that survives only thanks to heroic military and Western life support.

Last weekend, well-known investigative journalist Yury Nikolov published a procurement contract from the Ministry of Defense for the purchase of food for the military at prices 50% or more above retail prices. The Defense Ministry denied wrongdoing, but did not actually dispute the details of Nikolov’s reporting. Since Russia invaded last February, the ministry’s tenders have been classified and thus not visible in Ukraine’s state-of-the-art Prozorro public procurement system; Department officials have refused to respond to questions from lawmakers about contracts until the war is over. Nikolov’s demand for a return to pre-war transparency is likely to fall on deaf ears because of the difficult trade-off between informing civil society and giving too much information to the enemy. But President Volodymyr Zelenskiy, who won the election on anti-corruption pledges, cannot be accused of ignoring wartime corruption and profit-seeking.

Deputy Defense Minister Vyacheslav Shapovalov resigned on Tuesday in the wake of the food scandal.

Kyrylo Tymoshenko, Zelensky’s deputy chief of staff, tendered his resignation on Monday; he was one of the key officials responsible for rebuilding Ukraine after the Russian attacks, and reportedly drove around in October in a Chevrolet truck donated to Ukraine for emergency evacuations. After the story became public, Tymoshenko handed over the truck to the emergency services. He was then accused of using a Porsche borrowed from a wealthy businessman and renting a large mansion cheaply from a well-connected construction magnate.

Over the weekend, Ukrainian law enforcement arrested Deputy Infrastructure Minister Vasily Lozinskiy in a sting operation involving a $400,000 bribe on an equipment purchase. Lozinsky is not just a civil servant, but an associate of Prime Minister Denys Shmyhal during his days in the Lviv city government.

This kind of news was almost white noise in pre-war Ukraine. When I helped set up an investigative team at Forbes Ukraine in 2012, our reports of corruption were often met with a tired look: so what else is new? After the 2014 Revolution of Dignity, pledging to fight graft became a ritual for politicians of all levels. But while many corrupt plans were blown up, others took their place. In a recent interview, Yaroslav Zhelezniak, a top legislator on the Finance, Taxation and Customs Committee of the Ukrainian parliament, estimated that Ukraine loses 10 billion hrivnya ($271 million) a month just through customs corruption alone; peacetime numbers were often similar.

In wartime, however, business as usual is particularly blatant. According to Bloomberg’s consensus estimate, Ukraine’s economy contracted by 32.5% last year. In 2023, the country is counting on more than $30 billion in international aid to finance a budget deficit estimated at 20% of GDP; the deficit is about the same size as the planned budget revenue. Stealing under such circumstances helps the Russian invaders in many ways, not the least of which is testing the patience of international donors.

You could also argue that publishing revelations about corruption helps Ukraine’s enemies.

“Daily scandals during a war and ahead of a new wave of hard fighting are no accident,” Oleksiy Arestovich, a former Zelenskiy aide, wrote on his Telegram channel. “A large-scale psychological operation is being carried out against us and many of us were not ready for it.”

As a Russian, however, I see a striking contrast between the freely spreading Ukrainian reports of corrupt dealings and the total absence of similar news from my native country. Corruption in the Russian military indisputably contributed to the failure of the blitzkrieg plan for Ukraine last year. And yet, a year after the fratricide campaign, not even the many investigative channels that have gone public over the past five years have uncovered any major procurement scandals—and not, of course, because there’s nothing to see there.

Vladimir Putin has pushed the journalists who write for these publications out of the country. No matter how good your sources are in Russia, it is difficult to get graft from Georgia or Lithuania there, and the “patriotic” press that supported or accepted the invasion and continued to operate in Moscow and other Russian cities simply did not the means or means. motivation to dig up those kinds of stories. In December 2022, Putin allowed officials participating in his “special military operation” to stop publicly disclosing their income and fortunes, and now parliament has also ended financial disclosures from lawmakers. Dare to poke your nose into officials’ affairs and you’ll find yourself living somewhere far removed from any data that would make for something sensational.

I have heard from Ukrainians that Zelenskiy has become an authoritarian since the beginning of the war – impatient with advice that contradicts his own thoughts, intolerant of political opposition and independent activism. That is not the message the corruption revelations are sending. Despite the harrowing conditions facing Ukraine, the independent-minded press is still doing its best to keep officials under a magnifying glass. I have my issues with the Ukrainian media: they follow the government’s line pretty closely about the military action. However, that is probably unavoidable in a country fighting for survival, a prime goal for journalists as much as for other Ukrainians. However, it is important that awareness of the common predicament does not deter reporters from identifying and investigating procurement contradictions or detecting informal ties between politicians and business. Former Ukrainian economy minister Tymofiy Mylovanov recently commented on Twitter that the scandals prove one thing: about his country: “Corruption is incidental, but the culture change to fight it is systemic.” Such optimism may not be entirely justified. My experience in both Russia and Ukraine tells me that a year ago one monstrously corrupt country invaded another – and that patriotism in both countries will often serve as a cover for the most cynical theft. When the fighting is over and the fog of war lifts, successful profiteers in both countries will show their money.

However, there is a big difference. If the regime in Russia survives, these profiteers will be able to enjoy life without shame if the Kremlin sees them as allies. The scammers of Ukraine will never feel so safe. The country’s anarchist, justice-obsessed, grassroots-driven civil society and the media fundamentally associated with it will always harass the thieves, even if they cannot be defeated immediately. That this hallmark of Ukrainian democracy has survived a year of brutal invasion and accompanying tightening of screws is evidence, if not of a systemic shift, then of the same Ukrainian spirit that has denied Russia a swift military victory and perhaps still will deny one also a slow one.

More from Bloomberg’s opinion:

Poland’s vocation, this is no time for rummaging around: Andreas Kluth

Will Germany abandon Ukraine? It’s not that simple: Hal Brands

If Turkey Blocks Sweden and Finland, Will NATO Boot Turkey?: James Stavridis

This column does not necessarily reflect the views of the editors or Bloomberg LP and its owners.

Leonid Bershidsky, former Bloomberg Opinion columnist for Europe, is a member of the Bloomberg News Automation Team. He recently published Russian translations of George Orwell’s “1984” and Franz Kafka’s “The Trial”.

More stories like this are available at bloomberg.com/opinion

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