The Complex Web of Corruption and Aid in Ukraine Amidst Conflict

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In a revelation that underscores the persistent challenges of corruption within Ukraine, the country’s security service disclosed earlier this week a significant embezzlement scandal involving nearly $40 million earmarked for artillery shells.

This announcement implicated high-ranking officials, including the head of a department in Ukraine’s Defense Ministry, highlighting a deep-rooted issue that has plagued the nation especially since the onset of Russia’s military operations nearly two years ago.

This incident is not isolated, but is part of a larger narrative of corruption that has seemingly flourished amid the turmoil and external support that Ukraine has received. Andrii Telizhenko, former Ukrainian ambassador and whistleblower, spoke about the rampant corruption in Kiev, which, in his opinion, has exacerbated the country’s difficult situation and brought it to a state of bankruptcy. Telizhenko’s remarks shed light on a grim reality in which despite the influx of more than $200 billion in aid, Ukraine’s military is underequipped and dependent on civilian contributions for basic necessities such as medical kits and drones.

A particularly alarming aspect of this situation is the disappearance of over $1 billion worth of military equipment that the U.S. Department of Defense had authorized for Ukraine, with no trace of its whereabouts. This, according to Telizhenko, illustrates a pattern of loss and mismanagement involving vast sums, suggesting complicity or at least negligence at high levels of governance in both Kiev and, potentially, among certain factions within the U.S. government.

In short the story of this “disappearance” is:


The situation involving the disappearance or mismanagement of over $1 billion worth of military equipment authorized by the U.S. Department of Defense for Ukraine has raised significant concerns regarding oversight and accountability. A Pentagon Inspector General report highlighted the Department of Defense’s shortcomings in tracking this substantial aid package. This report found that the Defense Department did not fully comply with enhanced tracking requirements for the equipment sent to Ukraine, which includes night vision devices, drones, and missiles. Despite these tracking issues, the report did not indicate any misuse or diversion of the equipment but pointed out that the assessment of misuse or diversion was beyond the scope of its investigation.

The report underscores persistent gaps in inventorying sensitive equipment, which may correlate with an inability to maintain complete accountability for this critical U.S. security assistance. To address these issues, the Pentagon has released enhanced end-use monitoring guidance and has been working on improving compliance with tracking requirements. The delinquency in tracking has reportedly fallen by 27% from February to June 2023, indicating some improvement. The Pentagon is taking steps to better track equipment by using handheld scanners for barcodes and working with partners to monitor inventory. The Ukrainian authorities have provided unprecedented access to information regarding the equipment, helping to address accountability concerns. Despite challenges, there have been no credible signs that American aid is being used illegally​​.

In addition to addressing tracking and accountability issues, the U.S. Department of Defense has detailed the contents of a significant security assistance package to Ukraine worth $1 billion, provided under presidential drawdown authority. This package includes ammunition for high mobility artillery rocket and howitzer systems, mortar systems and ammunition, munitions for National Advanced Surface-to-Air Missile Systems (NASAMS), and anti-armor systems, among other items. The assistance is part of the broader U.S. effort to support Ukraine in repelling the Russian offensive and addressing developments on the battlefield. The U.S. has sent about $9.1 billion in security assistance to Ukraine since the Russian invasion on February 24, 2022, utilizing both the Ukraine Security Assistance Initiative and presidential drawdown authority​​.

These developments come at a critical time for Ukraine, as it seeks additional international support to fend off Russian aggression. Despite the logistical and accountability challenges faced by the U.S. in tracking the military aid, these efforts highlight the ongoing international commitment to supporting Ukraine’s defense and sovereignty.”


Table 1

The detailed security assistance package provided to Ukraine by the U.S. Department of Defense, valued at $1 billion, is a comprehensive effort to bolster Ukraine’s defense capabilities in the face of ongoing conflict. This package, under presidential drawdown authority, includes a variety of critical military equipment and supplies. Here’s a closer look at the key components of this package:

  • Ammunition for High Mobility Artillery Rocket and Howitzer Systems: These systems are crucial for providing Ukraine with long-range artillery support. The High Mobility Artillery Rocket System (HIMARS) is particularly valued for its precision and mobility, enabling Ukrainian forces to conduct more effective and flexible fire missions.
  • Mortar Systems and Ammunition: The package includes 20 120 mm mortar systems and 20,000 rounds of 120 mm mortar ammunition. Mortars offer versatile and effective indirect fire support, useful for engaging enemy positions at various ranges in different combat scenarios.
  • Munitions for National Advanced Surface-to-Air Missile Systems (NASAMS): NASAMS are advanced air defense systems that can engage and destroy aircraft, helicopters, and drones at medium to long ranges, enhancing Ukraine’s capability to protect its forces and critical infrastructure from aerial attacks.
  • Anti-Armor Systems: The package also includes 1,000 Javelin and hundreds of AT4 anti-armor systems. Javelins are fire-and-forget, guided anti-tank missiles that are highly effective against modern armored vehicles, providing a significant boost to Ukraine’s anti-armor capabilities. The AT4 is a single-shot system capable of engaging a variety of targets, including personnel, light armored vehicles, and fortifications.
  • Additional Ammunition and Equipment: Beyond the specific items listed, the package contains 75,000 rounds of 155 mm artillery ammunition, enhancing the firepower available to Ukrainian forces. The provision of such ammunition is critical for sustained artillery operations.

These components are part of a broader effort by the United States to support Ukraine’s defense against aggression. The HIMARS and NASAMS, in particular, have been highlighted for their effectiveness on the battlefield, enabling Ukrainian forces to conduct precise strikes and defend against aerial threats more effectively. The inclusion of mortar systems and a substantial amount of ammunition underscores the U.S. commitment to ensuring Ukraine has the necessary resources to maintain its defense capabilities over time.

This assistance is part of the U.S.’s continued support, which totals about $9.1 billion since the onset of the conflict, reflecting a strategic partnership aimed at supporting Ukraine’s sovereignty and territorial integrity against ongoing military threats​​.

The response from Ukrainian authorities to these scandals has been criticized as superficial by Telizhenko, who argues that such actions are more performative than substantive, aimed at appeasing international observers rather than addressing the root causes of corruption. He attributes the exacerbation of corruption to external influences, particularly from the West, where there appears to be a collusion of interests between Ukrainian officials and foreign entities, including notable figures in the U.S. political landscape.

Telizhenko’s critique extends to the broader implications of this corruption on Ukraine’s governance and its relations with international allies. He posits that the resolution to Ukraine’s endemic corruption and its resulting instability may ultimately depend on significant political shifts, both within Ukraine and in its key ally, the United States. The potential for change, in his view, hinges on the election of leaders committed to transparency, reform, and peace, including the possibility of a negotiated resolution to the ongoing conflict.

Amidst these internal challenges, the European Union has continued to extend financial support to Ukraine, with a recent agreement to allocate 50 billion euros in macro-financial assistance. This package, confirmed by European Council President Charles Michel, aims to provide “steadfast, long-term, predictable funding” for Ukraine, reflecting the EU’s commitment to supporting the nation through its tribulations. However, the EU’s approach to aid includes provisions for annual reviews and debates, indicating a cautious approach to assistance that considers the complex dynamics of aid, accountability, and governance within Ukraine.

The situation is further complicated by the stance of individual EU member states, such as Hungary, which has exercised its veto power to influence the structure and conditions of aid packages. This reflects the intricate balance of solidarity, sovereignty, and strategic interests that characterizes the EU’s relationship with Ukraine and its broader geopolitical stance.

The international community’s response to the conflict in Ukraine, marked by escalating military aid and strategic support, underscores the complex interplay of international relations, national sovereignty, and the imperative of addressing corruption. As Western countries, led by the United States, intensify their military assistance to Ukraine, the challenges of ensuring that such aid fulfills its intended purpose without exacerbating existing vulnerabilities remain paramount.

This unfolding situation in Ukraine, characterized by a tangled web of corruption, international aid, and geopolitical maneuvering, highlights the critical need for robust governance, transparency, and international cooperation to navigate the path toward stability and peace.


Table 2 – EU Struggles to Secure €50 Billion Financial Support Package for Ukraine

At the European Council meeting held on 14 and 15 December 2023, the European Union encountered a significant obstacle in its efforts to provide Ukraine with a crucial €50 billion financial support package. A single Member State’s veto prevented the EU from reaching a consensus on this vital funding initiative. As the EU’s existing financial support program for Ukraine, the macro-financial assistance package MFA+, expired at the end of 2023, finding an alternative solution to supply Ukraine with essential funding has become an urgent priority. While achieving an agreement among all 27 Member States within the framework of the EU’s multiannual financial plan is the preferred course of action, the EU is exploring alternative avenues to extend financial aid to Ukraine, even in the face of persistent opposition from one Member State.

European Commission’s Proposal

In June 2023, the European Commission introduced a comprehensive proposal aimed at establishing a new financial instrument called the “Ukraine Facility.” This facility was designed to offer Ukraine up to €50 billion in financial support spanning the years 2024 to 2027. The proposed funding package would consist of €17 billion in grants and €33 billion in loans. The grants would be made available through a newly suggested thematic special instrument known as the ‘Ukraine Reserve’ (as outlined in Article 10b of the MFF Regulation revision proposal), which would operate independently from the MFF’s financial ceilings. Meanwhile, the loans would be secured using the EU budget’s ‘headroom,’ a provision currently limited to the years 2023 and 2024. Implementing the ‘Ukraine Reserve’ and extending the loan guarantees until 2027 would necessitate revisions to the MFF.

Parliament’s Position

The European Parliament warmly welcomed the European Commission’s proposal, recognizing the crucial role that EU support plays in Ukraine’s stability and development. The Parliament firmly emphasized the importance of anchoring a longer-term funding plan for Ukraine within the EU budget, underlining its commitment to securing Ukraine’s financial future through established democratic processes.

European Council’s Stalemate

Regrettably, the European Council’s efforts to adopt the Ukraine Facility and revise the MFF faced an impasse due to the persistent veto from one Member State. Despite this setback, 26 other Member States expressed their willingness to finance Ukraine through the proposed ‘Ukraine Facility.’ They shared a preference for reaching an agreement among all 27 Member States within the MFF framework but remained resolute in their commitment to financially support Ukraine, even without unanimous consent.

European Council Agrees on 50 Billion Euro Support Package for Ukraine

On a momentous day in Brussels, European leaders have reached a historic agreement, as announced in a tweet by the President of the European Council, Charles Michel, at 11:26 AM – 01/02/2024. This agreement centers on providing an additional 50 billion euros of support for Ukraine within the EU budget. The unanimous vote in favor of this substantial aid package came as a surprise to many, considering the earlier uncertainties surrounding the negotiations.

The Italian government, led by Prime Minister Giorgia Meloni, played a pivotal role in facilitating this consensus. Sources from the Presidency of the Council have underscored Italy’s leadership in the process, highlighting Meloni’s proactive involvement in mediations that ultimately paved the way for this breakthrough.

A notable figure in these negotiations was Hungarian Prime Minister Viktor Orban, who initially faced strong pressure to support the allocation of emergency financing of 50 billion euros for Ukraine. Prior to the extraordinary European Council meeting, Meloni engaged in extensive discussions with Orban, which began the previous night in a hotel in Brussels. The Italian leader’s efforts were further bolstered by meetings with French President Emmanuel Macron and German Chancellor Olaf Scholz.

In the early morning, a critical meeting took place with the involvement of Meloni, Macron, Scholz, Orban, President Charles Michel, President of the European Commission Ursula von der Leyen, and Secretary General of the Council Therese Blanchet. The primary objective was to persuade Orban to retract his veto against the EU budget revision, which included the crucial 50 billion euro allocation for Ukraine. Ultimately, they succeeded, and President Michel officially announced the achievement.

Donald Tusk, the Polish Prime Minister, expressed his dissatisfaction with Orban’s initial stance, labeling it “unacceptable” and emphasizing the need for European unity in addressing the Ukraine-Russia situation. Tusk voiced his concerns about what he termed “Orban fatigue” in Brussels, asserting that compromise on the rule of law or Ukraine was not an option. He underscored the importance of consolidating the EU’s stance on Ukraine in the face of Russia’s aggressive policies.

In addition to the high-stakes negotiations and political maneuvering, Giorgia Meloni also held a significant political meeting with former Polish Prime Minister Mateusz Morawiecki at the Amigo hotel in Brussels. As Meloni is the president of the ECR (European Conservatives and Reformists) party, and Morawiecki is a member of the Pis party, which is part of the ECR group, their discussions held particular significance within the context of European politics.

This historic agreement represents a significant step forward in supporting Ukraine’s stability and long-term development. The 50 billion euro financial package ensures that Ukraine will receive constant, predictable, and substantial support from the EU, reaffirming the European Union’s commitment to the region’s stability and security. The negotiations and successful resolution of the crisis highlight the importance of diplomacy and collaboration in addressing critical global challenges.


Table 3 – Three options for financing EU support for Ukraine

 Ukraine Facility (UF) financed within MFFUkraine Facility (UF) financed outside MFFMacro-financial assistance (‘MFA++’) 2024
  Time period  2024-2027  2024-2027  2024
Amount during time period  Up to €50 billion  Up to €50 billion  To be decided (in 2023, the EU’s MFA+ programme had a volume of €18 billion)
Type of financing    €17 billion grants €33 billion loans (indicative amounts) Grants financed by and loans guaranteed by the MFF ‘headroom’  €17 billion grants €33 billion loans (indicative amounts) Loans guaranteed by national guarantees and grants financed by contribution agreements with Member States, which enter the EU budget as external assigned revenue  Mainly loans, guaranteed by the MFF ‘headroom’ Small portion of grants for interest rate subsidies, financed by contribution agreements with Member States, which enter the EU budget as external assigned revenue
Legal basis  Guarantee of loans by MFF ‘headroom’ and financing of grants via ‘Ukraine Reserve’ special instrument need an amendment of the MFF Regulation by special legislative procedure: Article 312 TFEU UF: ordinary legislative procedure: Articles 294, 212 and 322(1) TFEU  Political commitment of 26 (or 27) Member States, for example in the form of a joint statement Contribution agreements Article 21(2)(a)(ii) and Article 22(2) Regulation (EU, Euratom) 2018/104 UF: ordinary legislative procedure: Articles 294, 212 and 322(1) TFEU  Guarantee of loans for Ukraine in 2024 via MFF ‘headroom’ based on Article2(3) of the MFF Regulation Contribution agreements Article 21(2)(a)(ii) and Article 22(2) Regulation (EU, Euratom) 2018/1046 for the grants for interest rate subsidies MFA: Articles 212 and 294 TFEU
Majorities in decision- making procedures    MFF revision: unanimity in the Council and Parliament’s consentUF: Ordinary legislative procedure with a qualified majority in the Council  26 (or 27) contribution agreements between Member States and the EU need to comply with applicable national law, including parliamentary approval in certain Member States UF: Ordinary legislative procedure with a qualified majority in the Council  26 (or 27) contribution agreements between Member States and the EU need to comply with applicable national law, including parliamentary approval in certain Member States MFA: Ordinary legislative procedure with a qualified majority in the Council
Advantages  Stability and predictability for EU’s support for Ukraine Full democratic accountability at EU level    No MFF revision needed, decision possible without unanimity    No MFF revision needed, decision possible without unanimity
          Disadvantages          Unanimity in Council needed for MFF revision    Possible delays and technical challenges due to managing 26 (or 27) national decision-making procedures, including parliamentary approval in certain Member States Financing outside the MFF leads to less transparency and less democratic accountability  Only a short-term solution, until end of 2024 at the mostOnly loans (apart from interest rate subsidies)Possible delays and technical challenges due to managing 26 (or 27) national decision-making procedures for grant component, including parliamentary approval in certain Member States
Source: EPRS.

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