Europe

Corruption claims taint Ukraine military

Ukrainian soldier aiming Grad rocket system on exercises, 28 Oct 16 Image copyright AFP
Image caption Training with Grad rockets: Sporadic clashes continue between Ukraine's military and pro-Russian rebels

Viktor Plakhuta couldn't take the corruption in Ukraine's defence sector any longer.

A former financial services worker, he was part of a wave of young, idealistic Ukrainians who entered government after the country's 2014 pro-Western revolution.

He joined the department responsible for military procurement and reform in the ministry of economic development and trade.

But after 10 months there he resigned, angry at what he said was widespread corruption and a lack of will to do anything about it.

"In the department, I was just carrying out tasks that fulfilled other people's personal interests and corruption," he said.

According to him, defence contracts were regularly inflated or given to insiders, and those who benefited reached the highest levels of power.

Yet the conflict with pro-Russian rebels in the east has made Ukraine's military competence a vital national issue.

Frustrated reformers

Mr Plakhuta is the latest in an exodus of reformers from government.

Recently Mikheil Saakashvili, the former Georgian president, resigned as governor of the Odessa region, as did the head of the national police, Khatia Dekonoidze. They complained that their reform efforts were being blocked.

Image copyright Reuters
Image caption Ex-Georgian President Mikheil Saakashvili said Kiev officials were blocking his reforms in Odessa

Mr Plakhuta's accusations come at a sensitive time for Ukraine's leaders. In European capitals "Ukraine fatigue" has been growing, due in part to what is seen as Kiev's lack of significant movement on reform.

Ukrainian officials are on the defensive after an open electronic database for their assets revealed astonishing levels of wealth - millions of dollars in cash in safety deposit boxes, vast collections of jewellery and watches, and multiple homes and tracts of real estate.

Ukraine politicians' huge cash piles exposed

Ukraine Odessa boss quits over corruption

Daily reality of Ukraine's 'frozen war'

And now Mr Plakhuta and other reformers are focusing on the defence industry. If they are right, and top officials are indeed illegally enriching themselves from the war effort, it could seriously damage the credibility of President Petro Poroshenko's government.

All this comes at a time when Kiev is growing worried that US President-elect Donald Trump might abandon Ukraine in favour of Russia, and the EU is struggling to bring an end to the Russian-Ukrainian conflict.

Secret papers

However, any attempts to expose illegal activity immediately run up against roadblocks. Defence purchases are often considered "state secrets" and all information relating to them is off-limits.

This arrangement originated during the secretive Soviet era, but recently it has become convenient for anyone wanting to pad their pockets.

Key information, like the sale price, is unknown. And whistleblowers and journalists risk long prison sentences if they divulge any of these details.

"It's a system that was specifically created to steal something and to create corruption," said Mr Plakhuta, who now works for the Ukrainian chapter of Transparency International, an anti-corruption watchdog.

Government officials, including those in the ministry of economic development and trade, did not respond to requests to comment on his allegations.

Image copyright Reuters
Image caption President Poroshenko (left) met Ukrainian troops at the front line in the east this week

The Ukrainian defence ministry has allocated some $500m (£395m) to purchase weapons and equipment next year.

"People need to know how much a Ukrainian tank costs to the budget and how many of them are being sold," said Oksana Syroyid, the deputy speaker of parliament and an opposition politician.

"I have papers here in this office where I can say that there appears to be corruption. But I'm unable to talk about them," she says, pointing to filing cabinets in the corner.

Even the definition of sensitive information is unclear. "The criteria for determining what's a state secret is in itself a state secret," said one lawyer, knowledgeable of the defence industry, who spoke on condition of anonymity.

Close ties

Nonetheless, those deals known to the public have raised questions.

According to open-source documents, Lenin Forge, a company owned by Mr Poroshenko, has sold military boats to the Ukrainian navy.

Likewise, Bogdan Motors - a company in which Ihor Gladkovsky holds an interest - has sold trucks to the army. Mr Gladkovsky is a business partner of Mr Poroshenko and serves as first deputy secretary of the country's national security and defence council.

Ukraine's defence ministry said information about the sale price, or whether a competitive tender was held, was "restricted" and a "state secret".

Officials at Bogdan Motors said that the company had signed two "minor contracts" with the defence ministry in October last year, but added no more details. Officials at Lenin Forge did not respond to questions.

Image copyright Ukroboronprom website
Image caption Ukroboronprom website: The Ukrainian state defence giant is being reorganised

The deals appear to be legal according to Ukrainian law - Mr Poroshenko and Mr Gladkovsky maintain they are not involved in the companies' daily management.

Still, questions remain. Officials did not answer whether the contracts were discussed during meetings of the national security and defence council with the two men present.

Regardless, some Western observers say it is too close for comfort.

"Do you really believe that they don't have a day-to-day involvement, even if they are part-owners? That's the litmus test," said one US defence industry insider with close ties to Ukraine. "Whether they're one, five or 10 degrees removed, they bring suspicion upon themselves."

'System is rigged'

Ukrainian officials say they are launching a major reform of the defence industry, including a restructuring of Ukroboronprom, the state-owned defence holding company.

Some changes, especially in equipment and supplies, have been felt. When the war began, Ukraine's army barely existed; now it has fought the Russian-backed militants to a standstill.

But many doubt the defence sector can be completely reformed, given that the law on state secrets will most likely stay in place for some time.

Kiev has also been pushing hard for the West to provide it weapons. But the potential for corruption has given Western officials and arms companies serious second thoughts.

"The system is rigged," said the defence industry insider.

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