Ukraine Accelerates Fight Against Corruption

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Written by Mark Simakovsky

Ukraine’s battle with corruption remains uneven, yet signs are emerging the government is taking a more serious stance on this intractable issue. Over the past twenty-five years since independence, Ukraine has struggled, as the country consistently ranks in the bottom third of the world’s most corrupt countries. This phenomenon has sapped Ukraine’s economic development, limited foreign investment, ensured domestic instability and contributed to the upheaval that has brought both peaceful and violent revolutionary political change over the past ten years.

Ukraine’s 2004 Orange Revolution, President Yanukovych’s election victory in 2009 and protests that led to his ultimate overthrow in 2013 were all tied to public outrage and frustration with the Ukrainian governments unwillingness to stamp out state-sanctioned corruption. The election of President Poroshenko after the overthrow of President Yanukovych gave many Ukrainians hope that a new dawn was emerging, where entrenched corruption and halting reform efforts would be overturned, giving Ukraine a real chance at integrating into Euro-Atlantic institutions like the EU and NATO.

In the last U.S. administration, Vice President Biden made anti-corruption a hallmark of U.S. policy on Ukraine, calling Poroshenko almost monthly and stressing the need to move faster on reform. Perhaps understanding both the patience of the U.S. was wearing thin and the foreign policy vision of the Trump Administration did not necessarily favor continued U.S. support for Ukraine, the Poroshenko government has begun to appreciate the cost associated with ineffective anti-corruption efforts. The current government has started to understand its own fate will be tied to success in battling corruption and as a result is making steps to address both public and foreign concerns.

President Poroshenko has made it a priority to initiate difficult domestic reforms that could help erode corruption, including reorganizing the armed forces, pushing through a troubled asset declaration initiative for government officials, and hiring of special anti-corruption prosecutors. In addition, the government has made reforming key sectors of the economy, such as the healthcare and banking sector, a higher priority.

Despite these hopes, a recent poll taken last year in Ukraine noted that 72 percent of Ukrainians believe their country is headed in the wrong direction and corruption is still seen as the second largest problem in the country after the war raging against Russia in eastern Ukraine.

Ukraine has a long way to go to convince its own population and staunchest international supporters like the EU, U.S. and IMF, that the country is emerging from its status as one of the most corrupt countries in the world. The world is watching these anti-corruption efforts, often skeptically given the long history of inaction against malfeasance in Ukraine. So far, the Poroshenko administration’s progress has been halting yet hopeful. The Ukrainian government can continue to make progress in the fight against corruption by taking several important steps.

First, it should continue to prosecute those who have been known to abuse their political power. The government should redouble its efforts at creating an independent anti-corruption court. In addition, the government must follow through on its promise to investigate the e-declarations process that forced public sector officials to provide public insight into their finances. The National Anti-Corruption Bureau (NABU) must be given the independence, resources and legal authorities required to do its job.

The government should also expand its reform efforts government-wide, as reforms in education, public health, public safety and economy will narrow the chances for corrupt activities. For example, continuing to implement police officer reform can help ensure officers do not take bribes and abuse their power. In addition, Ukraine should also continue to promote the privatization of state-owned enterprises, whose existence fuels much of the corruption that poisons the country today.

Just last year, Ukraine showed minor improvement in Transparency International’s Corruption Perception Index. There is a growing sense that the government is making more positive strides in combating corruption at the highest levels of government. The government’s willingness, finally, to form the National Anti-Corruption Bureau (NABU) to take actions against officials who violate public trust and undermine the country’s democratic institutions was an important step in this regard.

In the last few months alone, at least four high-profile Ukrainian officials have been detained, arrested or indicted in cases involving fraud and embezzlement of public funds. NABU’s actions have received public support, as well as drawing initial praise from those grown frustrated with the governments seeming unwillingness to seriously tackle corruption. NABU has addressed nearly 60 cases since it was formed in 2015, purportedly facilitating the return of hundreds of millions of dollars in embezzled funds and stolen financial assets.

In particular, three recent cases are important to scrutinize as a test-case for the government’s, and President Poroshenko’s personal, willingness to support this effort. NABU recently brought a case against Roman Nasirov, the head of the State Fiscal Service of Ukraine, an entity similar to the U.S. Internal Revenue Service. Nasirov, who also served as an advisor to President Poroshenko, was accused of fraud and of embezzling $74 million. Despite his connection to Poroshenko, Nasirov could face up to six years in prison if convicted.

For millions of Ukrainians, this arrest – one of the highest profile corruption charges in Ukraine’s history – has the potential to showcase that top officials in the current government cannot flaunt the country’s laws. The true test of this case is whether the judiciary will be effectively able to independently handle the case and see it through to its conclusion.

NABU officials also charged Mykola Martynenko and Sergiy Pereloma with embezzling $17.3 million of government funds. Martynenko, a former member of parliament and deputy head of Prime Minister Arseniy Yatsenyuk’s People’s Front party, was accused of profiting from the sale of uranium to a state-owned enrichment plant in 2014. Pereloma, the first deputy chairman of Ukraine’s state-run oil and gas company Naftogaz, was accused of being as an intermediary for the sale.

These cases, if appropriately prosecuted and handled by the country’s judiciary, represent a key moment in Ukraine’s anti-corruption and anti-graft campaigns. The arrest of these individuals gives hope that Ukraine has grown more serious about investigating top officials who are involved in nefarious activities, even officials in the Poroshenko administration.

The Poroshenko government needs to continue its anti-corruption efforts if it wants to ensure that the initial praise for moving in the right direction turns into lasting reform, perhaps moving Poroshenko’s legacy from one of a transitionary figure to the father of a new Ukraine. As the Trump Administration pursues its own “reset” with Russia, these steps will also help ensure that the new Administration does not use the specter of corruption in Ukraine as rationale for downgrading U.S.-Ukraine ties.

About the author: Mark Simakovsky is a Non-Resident Senior Fellow at the Atlantic Council and served in the Bush and Obama administrations at the Pentagon, most recently as chief of staff for NATO and Europe in the Office of the Secretary of Defense.

Photo by Wikimedia Commons.