Ukraine's Anti-Corruption Front
Remarkably, while fighting for their lives against Russian invasion, Ukrainians continue to wage their long internal battle against oligarchy and corruption. Ukraine is midway through this generational struggle, which began on the streets of the Maidan in Kyiv nearly a decade ago. In 2014, after deposing a kleptocratic president whose campaigns were bankrolled by agents of the Kremlin, Ukrainians got to work transforming this post-Soviet oligarchy into a modern European state under the rule of law.
Despite the steepness of that climb, they have never turned back. Ukrainian reformers innovated world-leading transparency systems, established an independent suite of specialized anticorruption agencies, restructured entire economic sectors, and decentralized governance. Voters renewed the anti-corruption mandate through democratic transitions. And when implementation flagged, civil society and foreign partners pressured the government to stay on track. While there remains much work to be done, the progress made in the past decade has been unprecedented. Indeed, it is our view that Kyiv’s momentum against oligarchy motivated Vladimir Putin to launch a full-scale invasion of Ukraine in 2022. That, in turn, cemented Ukrainians’ resolve to free themselves of Russian influence and oligarchic capture as they chart a European future.
Ukrainians’ aspirations to integrate into the Euro-Atlantic community, in combination with the national spirit forged in this brutal war, will continue to anchor Ukraine’s anticorruption journey through the coming decade. Accomplishing the mission will not get any easier, however, as corruption is still entrenched in powerful quarters across all three branches of the Ukrainian government. While Ukraine has improved from a ranking of 142nd of 175 nations in 2014, it currently ranks 116th of 180 nations on Transparency International’s 2022 Corruption Perceptions Index. Although Ukraine’s anticorruption systems are working during the war, martial law has set back public transparency. The specialized anti-corruption agencies constantly need additional resources and authorities to shore up their operational independence, but recently they have misused prosecutorial discretion in cases targeting reputable reformers. Some top appointees in the president’s office appear to care more about controlling the judicial system than about advancing reform. And Ukrainian oligarchs are biding their time until after the war to reassert their influence. In the face of those realities, continuing to uproot oligarchy—a critical part of winning the war, rebuilding the country, and preparing for EU accession—will require heavy domestic and foreign support.
Anti-corruption must be central in that support. This issue drove Ukrainians into the streets a decade ago. It has topped voters’ minds in every Ukrainian election since, helped trigger the largest war in Europe since WWII, and is now motivating Ukrainians to win even at enormous cost. Transparency and accountability mechanisms are essential to reassuring Western taxpayers that their wartime aid to Ukraine is safeguarded. They must also be key conditions of the ambitious reconstruction and European modernization that will inspire freedom’s cause globally. Countering corruption is as strategically vital today as the policy of containing communism was in the Cold War.
In this paper, we argue that Ukrainian anticorruption is mission-critical to the integrity and security of the rules-based international order. We recommend concrete steps that each major stakeholder in that order should take this year to support Ukrainian anti-corruption efforts. In sum:
Ukraine: Meet the biggest unmet deliverable in the seven preconditions for EU accession negotiations by reforming the Constitutional Court to empower vetting of judges and limit political influence. Vest the specialized anti-corruption agencies with all needed autonomy, resources, and authorities. Resume asset e-declarations and enact other rule-of-law reforms.
European Union: Invest more in Ukrainian investigative journalism, anti-corruption programming, and independent television news. Deepen cooperation with Ukrainian anti-corruption agencies and allow Ukraine access to more EU anti-corruption programs. Benchmark Ukraine’s advanced level of digitalization to that of EU member states.
United States Congress: Continue appropriating ample security aid without conditions. Condition macro-financial assistance upon the continued delivery of Ukrainian anti-corruption reforms. Codify US interagency coordination of inspectors general (IGs) and establish an international IG fusion cell in Kyiv. Scale up support for anticorruption programming.
G7 Donors: Empower the Multi-agency Donor Coordination Platform to prioritize anti-corruption reform conditionality, oversee the IG fusion cell, and incorporate feedback and advice from a board of Ukrainian civil society experts. Agree that donor agencies and their implementing partners will use Ukraine’s DREAM transparency system.
Contrary to the disinformation peddled by Kremlin propagandists, Ukraine is not a hopelessly corrupt country. It is a civic nation that is currently winning a historic two-front war against Russia and against corruption—a dual ordeal that is transforming Ukraine in its hero’s journey. But on both fronts, there remain many lands to liberate and enemies to vanquish before victory is assured. There is no greater strategic, political, economic, or moral investment in international peace, security, and prosperity than having Ukraine’s back in this just cause.
Limit Political Influence in the Selection Process for the Constitutional Court of Ukraine
Meet a top three G7 priority, which is to “Enact and implement legislation on the merit-based and transparent selection of judges of the Constitutional Court of Ukraine, including a pre-selection process based on an evaluation of the integrity and professionalism of candidates in line with Venice Commission recommendations”.
Resume Airtight Asset E-Declarations, Verification, and Political Party Financial Reporting
Meet a top three G7 priority, which is to “Restore the obligation of public officials (except those mobilized and directly involved in war efforts) to submit and disclose their asset declarations during Martial Law; reinstate the National Agency for Corruption Prevention (NACP) verification of asset declarations; ensure public access to asset declarations with relevant security redactions; and reinstate reporting requirements for political party financing, with relevant security redactions”.
Bolster the Independence and Capabilities of the National Anti-Corruption Agency of Ukraine
Meet half of a top three G7 priority, which is to “Strengthen institutional independence and capabilities of the National Anti-corruption Agency of Ukraine (NABU) including through legislative and regulatory improvements by increasing the staffing cap and providing adequate financing, providing independent wiretapping capacities, and establishing a forensic examination institution at NABU”.
Enhance the Autonomy and Capacity of the Specialized Anti-Corruption Prosecutor’s Office
Meet half of a top three G7 priority, which is to “Enact legislation to improve the selection procedures for the Specialized Anti-Corruption Prosecutor’s Office (SAPO) head and key officials, strengthen capacity to regulate its organizational activities, including budgetary and staffing, and establish mechanisms for discipline and accountability of SAPO leadership by introducing a separate disciplinary commission and independent audit commission and aligning functions of the head and the acting head”.
Boost Staff Capacity at the High Anti-Corruption Court
Enact legislation to authorize funding for the HACC to hire at least another 24 judges plus 120 additional staffers, and to secure new premises to house this increase in personnel. Implement this by selecting the 24 judges through the PCIE vetting process.
Select a Highly Respected Head to Comprehensively Reform the Asset Recovery and Management Agency
Complete a fair, independent, and merit-based selection process for the head of ARMA. Conduct a comprehensive analysis to identify measures that would strengthen the independence and operational effectiveness of ARMA.
Require Ukrainians to Upload All Reconstruction Projects to the DREAM Transparency Platform
Enact legislation requiring all Ukrainian persons involved in reconstruction projects to use DREAM. The system must be based on structured open data using globally recognized open contracting and beneficial ownership data standards. Advance reforms for audit and internal control bodies to ensure greater institutional independence, transparency, accountability, and capacity to implement international audit standards.
Monitor Implementation by the High Qualification Commission of Judges and Empower the Public Integrity Council
Empower the PIC to play a meaningful role in judicial selection, including the selection of first instance court judges through vetting of integrity and qualifications, setting a higher standard for overruling PIC vetoes and providing full government funding and resources to support PIC operations. Enact legislation to streamline judicial selection and qualification evaluations based on clear integrity and professionalism criteria and a transparent scoring methodology. Enact legislation to strengthen the independence of the HCJ Service of Disciplinary Inspectors by ensuring merit-based and transparent recruitment of inspectors and providing adequate remuneration. Adopt clear rules, standards, and processes for investigating and adjudicating judicial misconduct and complaints and developing solutions to address case backlog.
Revise the Anti-Oligarch Law and Broaden Anti-Monopoly Efforts
Revise the anti-oligarch law to safeguard against political influence and require divestiture of assets until individuals no longer meet the definition of an oligarch. Strengthen the independence and professionalism of the Anti-Monopoly Committee. Implement sectoral governance reforms and other deoligarchization measures in the state anti-corruption program.
Establish a Specialized High Administrative Court
Finalize the liquidation of the DACK and enact legislation to establish a new specialized high court that will hear administrative cases against national state agencies by judges who have been properly vetted for independence, professionalism, and integrity.
European UnionExpand All
Invest More in Investigative Journalism
The European Commission should earmark for investigative journalism 3% of all EU recovery and reconstruction funding for Ukraine. Over time, the EU Directorate-General for Neighborhood and Enlargement Negotiations (DG NEAR) should dedicate €100 million in pre-accession assistance annually to Ukrainian investigative journalism.
Invest in Broadly Owned Television News
The European Bank for Reconstruction and Development (EBRD) should launch an initiative to help migrate ownership of Ukrainian television news channels to more modern public shareholder bases free of political and oligarchic influences and governed with independence and high editorial standards for fair and informative reporting. The European Investment Bank should support this effort by providing debt financing and helping cultivate a broad network of lenders. The European Commission should launch an aid program to deliver technical assistance and support media NGOs focused on building up this independent post-oligarchic television news ecosystem.
Benchmark Transparency and Digital Services in Ukraine and the EU
DG NEAR, in collaboration with the World Bank, should produce a benchmark analysis comparing Ukrainian systems of political-economic transparency and digitalization of public services to levels in EU member states.
Invest More in Anti-Corruption Assistance
In the upcoming EUACI renewal, the Commission should more than double its budget to at least €50 million. The bulk of the new funds should be used to train a new generation of anti-corruption foot soldiers across civil society and all entities that will be involved in reconstruction.
Further Integrate Ukraine Into EU Anti-Corruption Agencies and Programs
Allow Ukraine association in the Anti-Fraud Program, the Justice Program, and the European Judicial Training Program. Deepen partnerships between the EPPO, OLAF, and Ukrainian anti-corruption agencies through working arrangements and cooperation agreements.
United States CongressExpand All
Codify Interagency Coordination of IGs Overseeing US Assistance to Ukraine
Codify the current arrangement whereby the IGs of US departments and agencies that are assisting Ukraine—Defense, USAID, State, and others—share information with each other and coordinate their work through an interagency working group that reports to Congress. Designate the IG of the department or agency providing the most aid to Ukraine—currently Defense—as head of this working group.
Require US IGs to Establish an International Fusion Cell in Kyiv
Alongside other members of the G7 and international partners, the US should establish a Kyiv-based fusion cell of representatives from the IG, auditor, and investigator offices of US and international donor agencies funding aid in Ukraine. The fusion cell could be located on-site with NABU and operate programs dedicated to partnership with civil society watchdogs and local experts.
Condition Non-Security Assistance Upon the Delivery of Anti-Corruption Reforms
To formally condition non-security aid to Ukraine upon the delivery of anti-corruption reforms sought by Ukraine’s civil society and international partners, legislate the following requirement: Unless and until the State Department certifies every 90 days that the Government of Ukraine is making progress on the ten anti-corruption reforms recommended in the Ukraine section of this paper, (i) US representatives at the IFIs shall advocate and vote against any new macro-financial or reconstruction aid programs to Ukraine; (ii) the US Treasury Department shall not issue new loan guarantees to Ukraine; (iii) USAID shall not provide further direct budgetary assistance to Ukraine. This requirement should automatically escalate to a certification that Ukraine has completed these ten reforms by two dates: December 31, 2023 for the first four; September 30, 2024 for the next six. The President should be allowed to waive these certification requirements on national security grounds.
Invest More in Assistance for Anti-Corruption and Digitalization
Scale up SACCI and TAPAS funding with a multi-year budgetary envelop of $100 million each (totaling $200 million), with SACCI ramping up the professionalization of anti-corruption qualifications across public and private reconstruction processes and TAPAS seeking to help Ukraine meet its digitalization ambition of becoming the world’s first paperless state.
Push Multilateral Donors to Utilize DREAM
Require US representatives at multilateral development banks and IFIs to advocate and vote for immediate and medium-term efforts to obligate donor agencies and their implementing partners to use DREAM in all reconstruction programming.
G7 DonorsExpand All
Align Donors Around Priority Anti-Corruption Reform Conditions
Condition recovery and reconstruction assistance upon Ukraine’s continued success in delivering anti-corruption reforms such as the top three priorities selected by the G7. The Multi-agency Donor Coordination Platform should start facilitating the process of aligning donor reform priorities.
Integrate DREAM Into Systems at Donor Agencies and Their Implementing Partners
Donors should make participation in Ukraine’s DREAM transparency system obligatory by (i) immediately including in reconstruction funding agreements a requirement that the receiving party or implementing partner use DREAM, and (ii) eventually integrating DREAM into donor agencies’ internal data systems to track procurement information.
Form a Ukrainian Civil Society Advisory Board
Establish a new board comprising Ukrainian civil society experts and, as needed, outside experts to provide substantive advice to the Multi-agency Donor Coordination Platform. The platform in turn should establish a civil society liaison office.
Preserve Decentralization and Empower Local Governments
Support the empowerment of local governments in Ukraine. Establish a new civil advisory board at the Multi-agency Donor Coordination Platform; as its first assignment, task it with making recommendations about how to elevate decentralized governance units in the recovery and reconstruction process.
Provide International Leadership for a Kyiv-Based Fusion Cell of Auditors
Launch a new Kyiv-based fusion cell of representatives from donor agencies’ IG, auditor, and investigator offices to facilitate information sharing and collaboration, led by an official who reports to the steering committee of the Multi-agency Donor Coordination Platform.
A MARSHALL PLAN FOR UKRAINE
We Need a Marshall Plan for Ukraine.
The Marshall Plan was an audacious, innovative strategy to tackle the most pressing challenges of its time. Breaking Western Europe’s cycle of conflict and rebuilding economies devastated by World War II was an immense task, and the Marshall Plan is a concrete example of the scale of change made possible by imagination, pragmatism, and generosity. GMF’s work carries this spirit into the 21st century.