Why Ukraine Must Outsource Its Fight Against Corruption

BY JOSH COHEN

Over $12 billion disappears from Ukraine’s budget every year, and global graft watchdog Transparency International ranks the country as Europe’s most corrupt. Though Ukrainians face demands for petty bribes in all areas of their lives, the worst, grandest corruption is perpetuated by high-level politicians, officials, prosecutors, and oligarchs who operate with utter impunity. 

Recently, a staggering $1.8 billion in aid from the International Monetary Fund disappeared offshore thanks to the efforts of a single oligarch — and he has never been held accountable. The Euromaidan revolution that deposed the venal regime of ex-President Viktor Yanukovych and promised European-style governance is now nearly two years in the past. Ukraine must, at long last, find a way to tackle this endemic problem before it’s too late.

While Ukraine’s vibrant civil society continues to demand that Kiev confront corruption, old guard officials from both the government and parliament continue to fight change every step of the way. What’s to be done? Surprisingly, the most useful model for Ukraine could turn out to be the small and distant Central American country of Guatemala.

Faced with its own endemic graft, Guatemala decided to sacrifice a portion of its sovereignty, outsourcing its fight against corruption to a hybrid international/domestic body called the International Commission Against Impunity in Guatemala (CICIG). Doing the same would surely be a difficult pill for Kiev to swallow, but milder measures simply haven’t worked. 

It’s a radical step for Ukraine’s feuding politicians to take — but the fate of their country depends on it.

CICIG was created in 2006 under an agreement between Guatemala and the United Nations. It was established as an independent investigative agency to target powerful criminal networks who were running amok in the aftermath of the country’s long civil war. While CICIG operates under Guatemalan law in the Guatemalan courts, institutionally it stands apart from the rest of Guatemala’s government. Crucially, CICIG is fundedentirely by voluntary contributions by foreign countries — principally the United States — with the money administered by a trust fund created by the United Nations. As a result, its operating costs aren’t dependent on the fortunes of Guatemala’s economy.

The body’s accomplishments are significant. Since its launch, CICIG has investigated more than 200 cases of high-level corruption and brought charges against over 160 current or former government officials. And CICIG isn’t afraid to go after the worst offenders. The list of those it has prosecuted include powerful businessmen, former generals, former defense and interior ministers, former heads of the national police, a former president — and even the sitting president. President Otto Pérez Molina ended up resigning and was indicted in September after being investigated by the agency in a $120 million customs corruption case. As Carlos Castresana, CICIG’s first head, put it, the agency “puts government officials on notice that the era of impunity is over. It also shows Guatemala’s people that no one is above the law.”

CICIG owes its success to its unusual quasi-international structure. The agency’s current director, Ivan Velasquez, said that the key is its freedom to act outside of political constraints. “You can’t influence us,” he told the Wall Street Journal. “We aren’t linked to the business class, or military, or judges or lawmakers. That gives us enormous freedom.” While CICIG could have been a purely international body, Castresana emphasized that involving local authorities was key to ensuring domestic buy-in from both the Guatemalan government and civil society.

Following Guatemala’s example may be the only hope Ukraine’s immensely unpopular president Petro Poroshenko has of saving his political skin. But CICIG does have a number of shortcomings. To make a genuine dent in corruption, Ukraine needs an enhanced version that would preserve CICIG’s key innovation — its status as a hybrid domestic and international body — while making several important improvements.

CICIG’s first problem is its short mandate of just two years. Guatemala’s president must agree with the United Nations to renew the agency every time it expires. Consequently, its continued existence is alwaysin doubt. And it’s not surprising that many politicians aren’t favorably disposed to the agency, considering it has the power to investigate them for corrupt practices.

Needless to say, Ukrainian politicians, too, tend to block anti-corruption legislation by proposing endless changes or inserting anti-reform clauses into unrelated laws — so Ukraine would undoubtedly face the same problem. To ensure that the Ukrainian version of the agency doesn’t become a political football, it should begin with a minimum mandate of five years that would be extended automatically, unless it were explicitly ended through legislation.

Second, funding CICIG has been a constant challenge. According to ex-CICIG head Castresana, much of his time while running the agency was spent chasing donations from international donors. To mitigate this problem, the United States and other Western donors should fully fund the first five years of Ukraine’s version in advance. CICIG’s current budget is $12 million year, and since Ukraine’s population is three times Guatemala’s, $200 million should suffice for the first five-year period.

This may sound like a lot, but in the context of current donor support for Ukraine, it’s a drop in the bucket. U.S. Vice President Joe Biden has just committed $190 million to assist Ukraine in its fight against corruption. More broadly, the International Monetary Fund and Western donors have already spent tens of billions of dollars propping up Ukraine. Since reforming the country without fundamentally addressing corruption won’t succeed, the comparably small amount required to fund a Ukrainian CICIG should be seen as a hedge on money that has already been spent.

Finally, for a Ukrainian CICIG to succeed, it must possess two major powers the original does not. CICIG is an investigative agency, but holds no prosecutorial powers, forcing it to rely on the regular judicial system to secure convictions. This would be a huge problem in Ukraine, since the General Prosecutor’s Office is widely considered to be one of its most corrupt institutions. 

According to Yegor Sobolev, who heads the anti-corruption committee in parliament, the chief prosecutor — close Poroshenko ally Victor Shokin — has refused to pursue any of the hundreds of serious corruption cases Sobolev’s committee has brought him. Despite numerous calls for Shokin’s dismissal, Sobolev alleges that he remains in place because he protects the corrupt schemes that lead to the president. To avoid relying on someone like Shokin, the Ukrainian CICIG needs to be able to prosecute its own cases, in addition to investigating them.

It must also be allowed to work completely outside of Ukraine’s regular judicial system, since Ukraine’s judges are also corrupt to the core. The interior minister has even suggested shutting down the country’s courts for three months while an entirely new judicial system is built from scratch. Though such a drastic scheme is unlikely, it indicates why a Ukrainian CICIG would need its own judges and prosecutors — something former CICIG director Francisco Dall’Anese pined for as well.

Is it feasible for such a scheme to work in Ukraine? Institutionally, the pieces already exist. Ukraine’s National Anti-Corruption Bureau (NAB), which reformers consider the “point of the spear” in the war against graft, recently hired its first 70 investigators and detectives out of a planned 500. The NAB could serve as the nucleus for a Ukrainian CICIG.

Ukraine also recently created a special anti-corruption office within the General Prosecutor’s Office, leading toworries that the new anti-corruption prosecutor risks being “eaten by the system.” Placing this position in the Ukrainian CICIG instead would mitigate this risk while also providing the agency with the in-house prosecutors it needs.

Finally, nothing would prevent the new agency from hiring its own judges. To ensure the highest standards of justice, though, it should create a “Chinese Wall” between its judges and other staff, ensuring that its judges have separate facilities while banning any interaction between judges and prosecutors outside of the courtroom. In sum, while the original CICIG was embedded within Guatemala’s justice system, the Ukrainian version would function like an international tribunal, institutionally separated from the regular judicial system but still operating in Kiev under Ukrainian law.

The key question is whether Ukraine’s politicians have the political will to outsource such sensitive government responsibilities — especially if they fear becoming targets of investigations. But Ukrainian reformers and their Western allies are not without leverage. Sobolev already favors international involvement in Ukraine’s war on graft, and Kiev’s dependence on Western aid plus Ukrainian society’s demand that the government start a real fight against corruption could lend additional weight to the proposal.

Ukraine’s political class understands that the country’s mood is darkening. Only seven percent of Ukrainians believe the current strategy for fighting corruption is yielding results. Murmurs of a possible third Maidan are growing louder, and extremist groups such as Right Sector vow “an execution in some dark vault” for Poroshenko and his team in the event of a coup. 

The could compel Ukraine’s politicians to take radical steps that would be unimaginable in less-tense circumstances. Just to be sure, though, international donors should use the tremendous financial leverage they hold over Ukraine by making further financial aid contingent on Kiev establishing a Ukrainian version of CICIG.

Ukraine needs to treat the war against corruption as seriously as it does its conflict with Russia. It is no less existential a threat — and international help is no less necessary to win it.

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