Knocking on Europe’s Door: Anti-Corruption and the War in Ukraine

By Zachary Partnoy

Although few remember this now, Volodymyr Zelensky initially ran for President of Ukraine on a platform of fighting corruption. As it has turned out, after Vladimir Putin’s invasion of Ukraine on Feb. 24, 2022, Zelensky has had to fight a lot more than that. Nevertheless, Ukraine’s battle against corruption—the systemic byproduct of its Soviet and oligarchic history—is the engine of its journey towards democratization and integration into the European sphere, including the EU and NATO. Although the wealth of oligarchs has contributed to the “crowdfunding” of the defense effort, Ukraine cannot achieve a long-term victory against Russia if it does not “clean” up its economy, according to Orysia Lutsevych, a Ukraine expert at Chatham House, the U.K. think tank.

Given the implications for Ukraine’s future, it is important to analyze how Zelensky’s anti-corruption efforts have been impacted by the war itself, and to evaluate Ukraine’s chances of forging a new economic and political identity in the future after this devastating war is over. One thing is certain: Russia seeks a Ukraine in its own image, and part of Russification in the Putinist period is corruption.

Ukraine’s corruption problem

The challenge of corruption in Ukraine is largely a byproduct of its modern history as a constituent republic of the Soviet Union and a proximate neighbor of post-Soviet Russia, as its economy was transformed by oligarchy. An economic powerhouse within the Soviet Union due to its grain and energy, Ukraine in 1991 was home to many of the kinds of prominent state institutions that were greatly coveted during the “insider-dominated privatization process” of the early 1990s. Much as in Russia, Ukraine developed an oligarchic economy which has led to high levels of inequality and corruption, hampering efforts by successive Ukrainian governments to orient the country towards the European Union, which has stringent requirements for accession related to economic transparency.

Ukraine’s first president, Leonid Kuchma, laid out a program to “accelerate the transition to a market economy, liberalize prices, cut the tax rate, and slash the government’s budget deficit.” Under oligarchic pressure, however, Kuchma soon reversed course; market reform and anti-corruption efforts have been largely stymied since, particularly as Russia has tried to assert control over the country.

2013 Maidan revolution

Russian interference in Ukrainian domestic politics in the past twenty-five years has exacerbated existing economic challenges and ensured that corruption continues to have a strangling effect on Ukrainian growth and Westernization. The Putinist siloviki behind the administration of pro-Russian President Viktor Yanukovych (in office from 2010-2014) forcibly opposed the popular Maidan uprising (or Revolution of Dignity) in 2013-2014 against Yushchenko’s corrupt regime. The original spark of that remarkable spontaneous revolution was widespread public outrage over Yushchenko’s plan (at the behest of Putin) to enter a Eurasian Union, deepening economic ties with Russia.

Indeed, it has consistently been in Russia’s interest for Ukraine’s economy to remain corrupt. After all, it has served Vladimir Putin’s interests, before the war and during, to paint Ukraine as a hopelessly corrupt, Nazified country in need of liberation by Russia. Most Ukrainians do not wish to forge deeper ties with an unequal economy that features many of the structural challenges which they hope to escape through Western integration. Certainly, the Maidan Revolution— smeared by Putin as a CIA coup—indicated a groundswell of popular support for economic Westernization and anti-corruption efforts. Nevertheless, during the presidency of Petro Poroshenko (2014-2019), efforts to root out corruption met with limited success, frustrating Ukrainian voters. In 2019 Ukrainians again made a statement by electing an outsider with no political experience, who ran his campaign on an anti-corruption message: Volodymyr Zelensky.

Zelensky’s first years 2019-2022

In the first years of his presidency, Zelensky, who was elected in April 2019 with 73.2% of the vote, achieved a handful of notable successes in combating corruption, including improvements in “anti-corruption architecture, embracing digitalization, and conducting ambitious reforms in key sectors such as government procurement, banking, and energy,” but struggled to fundamentally tackle the problem at its roots, leading to dissatisfaction from voters Just thirteen months after becoming president, Zelensky’s approval rating was a paltry 38 percent and a Brookings report from 2020 remarked that “speculation runs rampant in Kyiv that oligarchs are reasserting control.”

When Russia invaded Ukraine on February 24, 2022, marching on Kiev with the goal of “decapitating” the Ukrainian leadership, the country rallied around its president, who showcased unexpected Churchillian skills, leading his country through an unprecedented threat to its sovereignty. The war against Russian aggression consumed the attention of Zelensky’s government, and although Ukraine’s kleptocrats recognized this as a time to get behind their president (many had also helped fund the fight against the Russian intervention in the Donbas in 2014), corruption has remained problematic in wartime. Given the desperate need for well-funded national defense, the siphoning off of any large amount of funds hampers the Ukrainian war effort. But the story is not just one of the stymying of national defense. In fact, Ukraine has improved its ranking on many global indices of corruption since the start of the war. So has the war helped or hindered Zelensky’s efforts to root out corruption?

The impact of the war

It is possible that, much as the Stalinist purges (in which 30,000 senior military officers were executed) limited the effectiveness of the Soviet war effort in the early phases of its defense against Hitler, so did Ukraine’s corruption problem make the challenge of mobilization even more difficult in its initial defense against Putin. Although Ukraine’s early military efforts exceeded international expectations, the Ukrainian military was nonetheless not as strong as it might have been, given that tycoons such as Serhiy Pashinsky are alleged to have defrauded over $25 million from the Ukrainian government in the decade leading up to the war. Pashinsky is tied to Ukraine’s largest private arms supplier, and therefore it has been difficult for the Zelensky government to easily prosecute him (he has since been charged in February 2024). The case of Pashinsky (until now) demonstrates that the Ukrainian government’s desperate need for weapons, despite the pre-war years of armament—forced it to roll back some anti-corruption laws, according to the New York Times.

Waging both a shooting war against Russia and a public diplomacy war for the hearts and minds of the rest of the world, including the West—–which needs for Ukraine to be a beacon of rule of law and democracy to justify its support——Zelensky faces a dilemma. Ukraine’s short-term survival need is for weapons and funding, whatever the source. But its long-term ambition to integrate with the EU and NATO, a geopolitical shift which could guarantee permanent security from Russian aggression, necessitates strict adherence to rule of law principles (the EU ranks highest of all regions in the Corruption Perceptions Index, meaning it is the least corrupt, partially due to its strict membership regulations). The case of Serhiy Pashinsky, whom Zelensky suggested was a “criminal” in 2019, is illustrative; Ukraine must decide whether to accept weapons from a fraudster or to take a hit in its military efforts in favor of a PR effort to distinguish itself from oligarchic Russia. The fact that Pashinsky was recently prosecuted suggests that Zelensky is keeping in mind the exigencies of his war for public opinion.

Zelensky has been aided by the fact that the war has induced a rally-around-the-flag effect in many once-corrupt Ukrainian oligarchs who do do not wish to see their country resorbed by Russia. These swindlers-cum-patriots have used their private wealth to contribute enormously to the Ukrainian war effort. In February 2024, the Atlantic Council even surmised that wartime Ukraine ranks very high on anti-corruption indices because of this rerouting of oligarchic capital flows. In 2023, Ukraine climbed twelve places in the Corruption Perceptions Index (which is compiled by Transparency International and is considered the international gold standard for measuring corruption. The CPI is calculated based on World Bank and World Economic Forum measurements of bribery, nepotism, red tape and level of judicial independence). Ukraine’s rise from a score of 33 to 36 was one of the “best results” of the year, according to Transparency International.

Indeed, although Ukraine has announced high-profile examples of wartime corruption (by officers accused of bribery and corruption in the Defense Ministry, a scandal which led to the resignation of Defense Minister Oleksiy Reznikov), including an alleged $40 million weapons embezzlement scheme, these discoveries would not have been possible without the development of an anti-corruption investigative and prosecutorial apparatus by the Zelensky government. This progress has bolstered Ukraine’s case for fast-track EU candidacy, proposed by the EU during the war (Ukraine vaulted past Bosnia and Herzegovina and Turkey, two other candidate nations in the rankings with weak corruption records). Ukraine’s ranking now stands at 104, which while still low, is a sign of remarkable progress since that of 144 in 2014. (Russia ranks 141st in the world and dropped two places during 2023; Vladimir Putin, however, asserted in November 2023 that Ukraine’s corruption is “unmatched anywhere in the world”). EU Commission President Ursula von der Leyen has hinted that Ukrainian wartime anti-corruption efforts have succeeded in making the country more acceptable to EU member states: “I must say it is amazing to see how fast and determined Ukraine is implementing these reforms despite the war,” Von der Leyen has said. “They are defending their country and reforming.”

Opponents and skeptics of support for Ukraine—including Prime Minister Viktor Orban of Hungary (whose own country is the most corrupt in the EU) and figures on the American right, including Tucker Carlson, who has frequently branded Ukraine a “client state”), have cast aspersions on these empirical improvements in anti-corruption. Orban, Carlson, and their ilk use Ukraine’s alleged endemic corruption as justification for withdrawing support. At this critical inflection point of the long-term support for Ukraine, particularly in American debates, it is important to treat this question assiduously and impartially. Ukraine’s efforts against corruption—itself a legacy of Soviet imperial control, not of their own national political policies—have been significant, and while work remains, they should be lauded and should not be used as disingenuous justification for abandoning the country in its self-defense.

But the challenge for Ukraine remains that while it has significantly improved its chances of entering the Western economic system more thoroughly, its journey towards the West may be irrevocably thwarted if it loses significant parts of its territory to Russia. Ukraine remains at the “Gates of Europe,” but its wartime anti-corruption efforts have perhaps its knocks on the door more likely to be heeded by those inside.

Sources:

Ny Times: https://www.nytimes.com/2024/02/28/world/europe/ukraine-weapons-politician-charged-corruption.html?smid=url-share

Atlantic Council: