Does Ukraine have a problem with corruption? Obviously.
Does that entitle Western countries to wag their fingers with self-serving braggadocio? No, not really.
As the U.S. Government Accountability Office reports, “the amount of fraud in unemployment insurance (UI) programs during the COVID-19 pandemic was likely between $100 billion and $135 billion. This is about 11 percent and 15 percent, respectively, of the total amount of UI benefits paid during the pandemic.” One suspects that about the same amount has been diverted from Western aid to Ukraine.
The German news magazine Der Spiegel explains “why Austria is attractive for Putin’s oligarchs”: “Since Vladimir Putin has ruled, wealthy Russians have increasingly flocked to Austria — attracted by a very special welcoming culture.” As the University of Birmingham’s Elisabeth Schimpfössl pithily puts it, “Money can open doors in Austria.”
Squeaky clean Estonia has also had its share of problems recently. Prime Minister Kaja Kallas’s husband owns stock in a company that still does business in Russia, despite his nation’s strong support of Ukraine. In her defense, Kallas “cited similarities with a controversy over the British prime minister’s wife, Akshata Murty, who was last year found to be receiving dividends from her stake in IT services company Infosys, which was still operating in Russia.”
London, Paris, Berlin, New York, and a host of other cities and off-shore havens have welcomed all manner of Russian monies in their banking and real estate sectors. The U.K. tried to tighten its rules in 2022, but with little success: “Britain’s experience highlights the challenges for governments trying to increase transparency in an effort to combat the flow of illicit funds.”
The United States is no stranger to high-level corruption as well. Former presidents and their spouses receive astronomical speaking fees. Former government officials routinely leverage their connections on behalf of the private sector. The Supreme Court’s landmark 2010 ruling that “struck down a ban on corporations spending money on behalf of candidates in political campaigns” effectively legalized bribery.
Then there’s Hunter Biden and, far more egregiously, Donald Trump. And who can forget former German Chancellor Helmut Kohl’s slush fund (he never agreed to disclose just who were the recipients of the cash) or former French President Jacques Chirac’s conviction for embezzling public funds while he was mayor of Paris? Or the Qatari corruption scandal that implicated highly placed officials of the European Parliament in 2022?
Here’s what the European Commission concluded in 2014: “The extent of corruption in Europe is ‘breathtaking’ and it costs the EU economy at least 120 billion euros annually. … EU Home Affairs Commissioner Cecilia Malmstroem … said the true cost of corruption was ‘probably much higher’ than 120 billion.” Indeed, according to Malmstroem, “The extent of the problem in Europe is breathtaking.”
Ukraine would be lucky to have the European Union’s “breathtaking” levels of corruption, of course. As Transparency International’s Corruption Perceptions Index and the World Bank’s Ease of Doing Business Index show, Ukraine still has a long way to go before it reaches the levels found in Malmstroem’s country, Sweden. But it’s also important to remember that most of Europe has a long way to go before they reach Sweden.
As these examples suggest, Ukraine is not uniquely corrupt or uniquely unwelcoming to business. It’s roughly in the same neighborhood as Romania, Bulgaria, and Hungary — all of which have long been members of the EU. And, unlike Hungary and Poland (another EU member), Ukraine’s record on democracy hasn’t gotten worse, despite the fact that it was largely ignored by the EU and NATO, and is now in the throes of a bloody war with Russia.
In fact, the war may have some salutary effects on Ukraine’s battle against corruption. True, there have been war profiteers (think of Rhett Butler in “Gone with the Wind”), but there’s also been a crackdown on government officials and oligarchs. Far more important, Ukrainian civil society has only gotten stronger as a result of the war, and it is fully committed to reducing corruption. So, too, are the soldiers risking their lives for the sake of what they expect to be a clean and prosperous Ukraine.
The West could make a huge difference by repeating its behavior toward Eastern European candidates for EU and NATO membership several decades ago. After both institutions opened their doors to Eastern Europe — but notably not to Ukraine, Belarus and Moldova — the Eastern Europeans had a powerful incentive to get their houses in order.
The same would happen in Ukraine. Instead of providing money for countless rule of law projects and pointing fingers at corrupt officials, the West needs to help Ukraine win the war decisively — after all, corruption becomes moot if Ukraine ceases to exist — and immediately begin negotiations on Ukraine’s membership in the EU and NATO. Membership in Western institutions is no guarantee of full-scale honesty, but the prospect of membership does guarantee a strengthening of efforts at full-scale honesty.
Like other people, Ukrainians are rational and will respond to incentives. Even the corruptioneers and oligarchs will be inclined abandon their corrupt ways if they know there’s a good material reason to do so.
thehill.com
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