Lessons Learned? Evaluating Past US Anti-Corruption Policy Responses to the Challenges of Securing US Arms Exports to Ukraine Today

This Guest Essay by Jodi Vittori is Part Two in my Ukraine Corruption Series

Jodi Vittori is the Global Politics and Security Concentration Co-Chair at Georgetown University’s Walsh School of Foreign Service and a non-resident fellow with the Carnegie Endowment for International Peace.  She is a retired US Air Force Lieutenant Colonel and also formerly worked for the anti-corruption civil society organizations Transparency International and Global Witness.

In recent discussions about US support for Ukraine, the specter of corruption has frequently emerged as a point of contention. Critics argue that this historical struggle with corruption might undermine the effectiveness of aid, including vital arms exports. However, it's crucial to recognize that Ukraine has not stood still in the face of these challenges. On the contrary, it has embarked on significant anti-corruption reforms, demonstrating a commitment to change that is often overlooked in the broader debate.

Despite these strides towards transparency and accountability, Ukraine's journey is not yet complete, as is the case with many countries. These issues are not presented to diminish this progress but to set the stage for a nuanced discussion about the complexities of supporting Ukraine today. This history of corruption should not deter support but rather inform a strategic approach to aid, ensuring it bolsters the continued fight for Ukraine to regain its occupied territory while building stronger democratic governance there.

Despite its progress, Ukraine has continued to rank poorly in a variety of corruption-related indices.  Notably, the latest edition of Transparency International’s Corruption Perception Index (CPI) published in January gave Ukraine a 34 out of 100, not much better than Russia’s score of 26 (where 0 is lots of perceived corruption and 100 is no perceived corruption; anything below 50 is considered bad).  Moreover, Transparency International’s Defense and Security Program gave Ukraine a grade of D on its Government Defense Integrity Index (GDI).  This index measures how susceptible a country’s defense sector is to corruption rather than measuring actual levels of corruption (A is good and F is bad).  Once again, Ukraine was scored neck-and-neck with Russia, which also received a D. There are a few caveats to this score, however.  First, Ukraine came quite close to getting a C.  Second, the data for the index was last compiled in 2019, so it does not reflect recent reforms, especially those undertaken since Russia’s 2022 invasion.  [Full disclosure: I ran the US office of Transparency International’s Defense & Security Program from 2017 to 2021.]

Recent scandals are not helping Ukraine’s reputation, either.  At the end of January, Ukraine’s SBU security service announced a scandal involving $40 million in arms procurement fraud involving the purchase of mortar shells.  In September 2023, Ukraine’s defense minister Oleksii Reznikov was fired over corruption cases that occurred under his watch, though he himself has a strong reputation for integrity.  In August last year there was a scandal involving fabric for military uniforms and the heads of the regional military recruitment centers were fired for allegedly taking bribes; last January there was even a scandal involving overpriced eggs.  Indeed, the Ukrainian Defense Ministry announced earlier this year that an internal audit revealed $260 million in financial violations in the latter part of 2023.

All corruption is bad, but these scandals need to be balanced against the comprehensive anti-corruption reforms that Ukraine has undertaken since its 2014 Maidan Revolution. It became the first country to set up a public beneficial ownership registry, meaning that anyone could look up who owns what companies; there could be no more anonymous shell companies, which are considered the “getaway car” for money laundering. [For context, the US regulations against anonymous shell companies only came into effect this January, the registry is not open to the public, and there are various loopholes.]

Ukraine also set up a public procurement system called Prozorro, which the Economist considers “among the best open procurement systems in the world.” Though public contracting using the system has been significantly curtailed since Russia’s 2022 invasion for security reasons, it remains the backbone for minimizing corruption for future post-war reconstruction efforts.

This has been combined with a strict asset declaration regime that limits the ability of politicians and civil servants to live beyond their means without getting caught plus new rules against oligarchs.  In short, while Ukraine is far from perfect, its anti-corruption legal code and procurement systems often meet or exceed Western standards.

Ukraine has enacted robust legal and law enforcement reforms plus it has a vigorous civil society, including citizen groups specifically dedicated to monitoring and rooting out corruption in the defense sector. In Ukraine’s efforts to prove it is a good steward of Western security assistance and a strong candidate for both European Union and NATO membership, the country continues to highlight its substantial reform efforts.

But if the US is serious about minimizing corruption in arms exports to Ukraine, there is a lot more that our own government could be doing to help. Around the proverbial defense water cooler, two anti-corruption institutions have been topics for discussion.

First is the proposal for a Special Inspector General for Ukraine Reconstruction (SIGUR). This is modeled off two prior special inspector generals—one for Iraq and one for Afghanistan (SIGIR and SIGAR, respectively). Of the two, SIGAR is far more famous and is still conducting some oversight functions over what American assistance remains after the August 2021 fall of Kabul to the Taliban.  Instituting a SIGUR has not received much of an affirmative response from many US policymakers nor from many in Ukrainian civil society.  A SIGUR should nonetheless be reconsidered because it offers some advantages that the current inspectors general oversight system cannot.

Most notably, a SIGUR can put all monitoring of US assistance—military, humanitarian, and reconstruction—under one dedicated inspector general. As part of Operation Atlantic Resolve, the Defense and State Department plus USAID inspectors general work with 20 other Federal oversight agencies as part of the Ukraine Oversight Interagency Working Group; that group just put out its first quarterly report last month.  But a working group of so many agencies is unwieldy.  A single supra-inspector general tasked with following the entire supply chain and across all relevant agencies would mean less likelihood that something could inadvertently fall through the bureaucratic cracks.  Moreover, inspectors general have a lot more on their plate than just Ukraine.  Providing a designated inspector general for Ukraine would mean that those agencies could devote greater resources to other fraud, waste, and abuse investigations within their respective agencies.

 Tracking the entire supply chain matters because susceptibility to corruption and diversion of arms is not just a Ukraine problem; many countries along that supply chain have a history of arms trade corruption and smuggling including Czechia, Romania, and Bulgaria.  Moreover, the United States has had its own problems with defense-related corruption. Indeed, Malaysian businessman Leonard Glenn Francis—better known as Fat Leonard—awaits sentencing as part of what has been considered the largest corruption scandal in US Navy history. 

A second anti-corruption-focused discussion has been to recreate a version of Task Force Shafafiyat (TF-S), albeit tailored for Ukraine.  The original task force TF-S was dual-hatted under both NATO and US forces with a mission to help root out corruption in the Afghan security forces. Having a military unit specifically tasked with monitoring all security sector-related corruption in Ukraine and ensuring anti-corruption tactics, techniques, and procedures are embedded throughout war plans, operations, and post-conflict efforts could have some benefits.  But should this suggestion be taken up seriously, I suggest policymakers consider some caveats based on my experience working for TF-S from 2011 to 2012.

First, the task force should consist of personnel trained in issues associated with counter-corruption, including finance, illicit finance, trade-based money laundering, organized crime, personnel, and contracting, as well as foreign area specialists.  The original TF-S was staffed with highly motivated military and civilian personnel, but very few had any background in Afghanistan nor in issues associated with corruption or illicit finance.  This also implies that such a task force be adequately staffed and given a budget and authorities commensurate with the mission requirements, which the original TF-S never had.

Second, there must be buy-in from the US, our NATO allies, and Ukraine.  The original TF-S was foisted upon then-President Hamid Karzai and he thus engaged with it as little as he could, limiting its effectiveness.  The task force should be in Ukraine and given the authorities it needs to work daily with its Ukrainian allies; it cannot be ensconced outside the country or buried on a base behind barbed wire fences. 

Finally, one of the key tenets of fighting corruption is that prophylactic measures to prevent corruption are far more effective than busting the “bad guys” after the money and/or arms have already disappeared.  With that in mind, the goal should be to work with the Ukrainian government to find gaps in US, NATO, and Ukrainian legislation, practices, and procedures that can contribute to corruption and diversion while balancing that with the need to get weapons and personnel out the door quickly.

One of the unfortunate trends vis-à-vis the nexus of corruption and conflict is that corruption tends to increase during conflict, and especially once the battle lines have stabilized. But the Ukrainian people have literally put their lives on the line to ensure this does not happen. Ukrainian government efforts—including public and transparent arrests, criminal proceedings, and dismissal of leadership—are a clear recognition of extant corruption and a demonstration of its continued focus on rooting out ingrained corruption. The ongoing fight against corruption is a shared interest between the US and Ukraine, and it presents a national security challenge for the broader West. Ukraine’s struggle against corruption should not be a pretext to end US support, but a driver for further cooperation on this shared challenge. We have something to learn from Ukraine in that regard. Russia uses corruption as a weapon and Ukraine is actively battling Russian corruption tradecraft. Thus, helping Ukraine harden itself against corruption can help harden US and NATO institutions, too.