Legendary Ukraine Corruption Continues Unabated – ‘Worst Since Collapse of USSR’


A few days ago Geoffrey Pyatt, the American ambassador in Kiev responsible for engineering Yatsenyuk’s elevation to the premiership of Ukraine two years ago on behalf of Victoria Nuland, expressed his grave concern as he addressed a defense and security seminar: He wants to see “meaningful steps to reform the trade and investment climate.” These are, of course, the abiding passions of every un- or under-employed Ukrainian.




“Ukraine has said that it wants to become a major defense exporter,” the ambassador elaborated. “I know that is possible, given the extraordinary capabilities that I have seen the Ukrainian industry demonstrate, but it can only happen if Ukraine continues to press ahead on critical reforms, tackles corruption, and works to meet NATO standards. This will require a paradigm shift in Ukraine’s defense industry, and a move away from a mindset of state-owned enterprises….”


Pyatt refers to a very specific circumstance in the above passage. Ukraine is a cesspit of illegal arms dealing, and this is a wellspring of corruption and illicit profit American defense contractors want to partake of. A source in Europe who is familiar with the trade but not part of it explained things this way in a note the other day:


“Ukraine has been the plaque tournant [hub, lively market] of illegal arms trade since the end of the U.S.S.R. The mob, the Kiev military, the far-right groups and some of the oligarchs all participate at different levels in this very, very dirty business…. None, as in none of this has been touched by the Kiev regime….”  




This tableau of trade in deadly devices is surely what Pyatt meant by “the extraordinary capabilities” he has witnessed among Ukraine’s weapons dealers.


See where we are headed here? The project is to neoliberalize Ukraine and make its defense machine, now so corrupt nobody but the Pentagon will provide it any assistance, NATO-compatible. But none of this is proceeding to plan.


The absence of “structural reform”—a phrase I have loved since my correspondent days for all the anti-social savagery it masks—is one problem. But it is the corruption that comes to crisis of late. There has been no sign of improvement since the February 2014 events; now it is worse than under any previous government, including the one ousted two years ago, my sources in Europe report.


“Corruption continues to be the worst at any time since the collapse of the U.S.S.R.,” a source with close contacts in Kiev writes. “Recently even the I.M.F.—i.e., the international office of U.S. Treasury, run by [Under Secretary] David Lipton—read the riot act…. The economy is in free fall…. The most competent ministers have left, resigned due to the inability to get anything significant done. Berlin and Paris are, I am told by Quai d’Orsay [French foreign ministry] contacts, “completement exacerbés” [highly aggravated, made furious] by the Kiev regime. There are demos practically every day against the gov’t.—of course, not reported in the int’l. media.”


The resignation this source had in mind was that of Aivaras Abromavicius, who stepped down earlier this month as economic development minister with this parting comment: “Neither me, nor my team, has any desire to serve as a cover-up for the covert corruption, or become puppets for those who, very much like the ‘old’ government, are trying to exercise control over the flow of public funds.”


Abromavicius, a Lithuanian by birth and a former fund manager, was among several foreign technocrats appointed to the Poroshenko cabinet—more or less by the I.M.F., and hence the Americans—to see through the neoliberal project. Subsequent to his departure, Lagarde let loose with her well-publicized warning: Clean up the act or the $17.5 billion check on my desk does not get signed.


As far as cleaning up the act regarding corruption, nothing gets done because the same people in power when Viktor Yanukovych was ousted two years ago are in power now.


Washington’s problem with Yanukovych was never corruption, we need to note. It was his view of Ukraine: An easterner, he considered that the nation’s long and close involvement with Russia had to be accommodated along with the western region’s tilt toward Europe.


No, Washington has a problem with Ukraine’s corruption now for the reasons Joe Biden and Geoffrey Pyatt make perfectly plain: Western corporations cannot put their money down on the table so long as Ukrainian bureaucrats, generals and business people keep stealing it at so obnoxious a rate.


This is one of a series of excerpts from a longer article which originally appeared in Salon under the byline Patrick L. Smith.  


The author is a longtime correspondent abroad, chiefly for the International Herald Tribune and The New Yorker. He is also an essayist, critic and editor.


His most recent book is “Time No Longer: Americans After the American Century” (Yale, 2013)