Between Victory and Betrayal: How to Move Ukraine’s Anticorruption Reforms Forward

Background

As part of the Carnegie Endowment for International Peace’s ongoing Ukraine Reform Monitor project, a team of experts from VoxUkraine, the Reanimation Package of Reforms, Pact, and other civil society organizations convened a workshop in Kyiv to discuss anticorruption reforms. A follow-up workshop was organized in Washington, DC. Both discussions were held under the Chatham House Rule. The following reflects the conclusions drawn by the team.

Summary

• Average Ukrainians are, if anything, more frustrated with state corruption than they were before the Maidan. Corruption is on more citizens’ radars, and the lack of tangible progress on major corruption cases is a source of popular disenchantment with the post-Maidan leadership. While more Ukrainian officials are now willing to talk frankly about corruption, average citizens readily perceive the disconnect between this high-minded talk and inaction by law enforcement agencies.¹
• The high degree of polarization in Ukrainian politics reinforces foreign and domestic perceptions that the state is hopelessly corrupt. A key potential remedy supported by Ukrainians, according to polls, is for reformers to ensure the continued infusion of new blood into state institutions. Such moves may help reduce the level of polarization and improve the country’s political culture—or better yet, create a new culture altogether.
• While existing anticorruption legislation and institutions benefit from an impressive conceptual framework, state authorities simply lack the political will to confer upon these institutions the authority and budgetary capacity that would make them effective. Government institutions tasked with implementing anticorruption policies are either too weak or too incompetent to succeed. As a result, the reform process has been overshadowed by a lack of accountability, over-regulation, ineffective laws, and poor implementation.
• To date, Ukraine’s reformers have failed to communicate their goals and methods effectively to the public, and populist politicians have taken advantage of the resulting information vacuum. As a consequence, public trust in the government remains low.  In a recent survey, 70 percent of respondents said that they did not trust the new government.
• The lack of trust in the Rada and other government institutions further weakens the reform effort. While civil society has played a key role in pushing for change, some of its representatives have also contributed to increased polarization by using inflammatory rhetoric and unsupported accusations of corruption.
• Many forms of corruption and rent-seeking could, in theory, be mitigated through privatization. However, in the absence of meaningful judiciary reform, a new round of privatization is likely to play directly into the hands of existing patronage networks and reinforce the sense of impunity among the beneficiaries of corrupt schemes and shadowy practices.

Negative Public Sentiment

Two years after the Maidan, most Ukrainians see little progress in fighting corruption. Their disappointment is a reminder that the public sees corruption as a long-term challenge that requires serious action, scrutiny, and accountability on the part of the government. It will not be solved by promises alone.

Since the Maidan, Ukraine has created a new legislative and institutional framework for fighting corruption. Some of the most successful reform efforts have focused on increasing government transparency and public access to information. Yet many deeply corrupt institutions, such as the General Procurator’s Office (GPO), the judiciary, and special services (e.g., the Security Service of Ukraine), have not undergone meaningful lustration, notwithstanding the dismissal of the notorious former procurator general Viktor Shokin in March. In fact, both the dysfunctional GPO and judicial branch have been actively obstructing the reform process. Across the board, reform efforts are taking place on the foundations of the old system. Bribe-taking remains prevalent, and conflicts of interest rarely prevent powerful figures from being appointed to sought-after positions. Old beliefs remain prevalent in the halls of power, such as the notion that not stealing from the state amounts to stealing from one’s own family.

In a 2015 survey of business executives and managers commissioned by the American Chamber of Commerce in Ukraine, 88 percent of respondents said they had experienced corruption, and 98 percent believed that corruption in Ukraine was widespread.² Those surveyed suggested that, in order to better fight corruption, authorities should focus primarily on enforcing existing laws and ensuring punishment for those convicted. The courts were cited as among the most corrupt institutions in the country by 87 percent of those surveyed, while 73 percent of respondents said they had not seen any progress in the fight against corruption since the Maidan. At the same time, 65 percent said that one did not need to engage in corrupt activities in order to succeed in business in Ukraine.

Those surveyed believed the most frequent reason for engaging in corrupt activities was a desire to accelerate slow bureaucratic procedures. When asked about the biggest obstacles to fighting corruption in Ukraine, 48 percent of respondents identified the absence of political will, while only 17 percent cited “the mentality of Ukrainians.” Overall, 51 percent of respondents were optimistic about prospects for stronger anti-corruption measures in 2016.

Another large public perception survey commissioned by Pact found that almost 80 percent of Ukrainians believe that corruption levels have either increased or remained the same since the Maidan.³ However, the survey did not reveal a higher incidence of firsthand experiences with state corruption than the previous round of Pact-commissioned polling in 2011. When viewed side-by-side, these findings suggest that Ukrainians’ gloomy views about current corruption levels may be a consequence of their increased awareness of corruption, rather than an increase in the practice itself. This is likely a testament to the power of media coverage, which has been far more aggressive since the Maidan where cases of alleged corruption are concerned. The latest country-wide poll from the International Republican Institute underlines the media’s role in public perceptions of corruption: 53 percent of respondents report that they are “aware of high levels of corruption from mass media,” while only 22 percent agree with the prompt “During the last six months, your friends or relatives had to pay a bribe.”

The Pact survey suggested that Ukrainians experience corruption firsthand most often in their dealings with the healthcare and education systems, and state car inspections—respondents reported cases of extortion in more than 50 percent of their interactions with these institutions. There are, however, some tentative signs of a change in citizens’ attitude toward dealing with corruption, based on a comparison with previous surveys conducted between 2007 and 2011: while respondents report experiencing corruption at comparable levels, more people are now ready to confront corruption when they encounter it. The number of citizens who see a role for regular people in tackling corruption is now 24 percent, and 65 percent of Ukrainians believe that giving or taking bribes is not justifiable in most cases or never justifiable. The number of citizens who are willing to demand that officials perform their duties is 35 percent, while 31 percent are ready to complain to the supervisors of corrupt officials and 23 percent to file a complaint with law enforcement agencies.

Yet this change in attitudes is not likely to translate into action until there are visible changes on the part of the government. Ukrainians, as confirmed by other public opinion surveys, continue to feel that reforms will only be irreversible when corrupt officials are tried, convicted, and punished.⁴ The longer Ukraine’s leaders delay this step, the more difficult it will become for them to enact other key anti-corruption policies, given the way public opinion helps to shape the environment in which they operate. Already, the popular perception that the state has progressed little in the fight against corruption is making things difficult for the Poroshenko administration.

Institutional Reform

Anticorruption reforms have produced an impressive new institutional framework.⁵ They have also produced an impressive series of reform guidelines. Under these guidelines, all anticorruption initiatives are to be evaluated on the basis of the Anti-Corruption Reform Passport, which was produced by the Anti-Corruption Reform Task Force under the Ukrainian Ministry of Justice. The Passport identifies 43 specific reform goals divided into three broad categories: transparency, accountability, and social prevention (i.e. public vigilance in combatting corruption).

Yet these accomplishments belie a lack of progress in rebuilding old institutions and empowering new ones. Much of the problem can be attributed to the fact that anticorruption enforcement efforts are spread thin across a number of different institutions and there is no single body responsible for overseeing these efforts. Ukraine is blessed with a diverse, young, and committed team of reformers spread out over a number of agencies, but poor interagency coordination limits their effectiveness.

Nevertheless, reform of the country’s key institutions has yielded some successes. These include the revamped patrol police, which enjoys high levels of public trust and support. The new system of electronic public procurement (pro-Zorro) has reportedly saved significant amounts of money and provoked envy from some European countries. The finance ministry’s efforts to improve the business climate have met with mixed success. Despite the continued persistence of rent-seeking, the registration burden for businesses has been greatly reduced, cutting down on opportunities for bribery.

On the other hand, judicial reform and the reform of the General Procurator’s Office are widely deemed to be complete failures thus far. The Ministry of Justice has no authority to influence the process, and frustration with the slow pace of lustration pervades public debate.

This is not to say that there has been no progress. Although only a small number of judges have actually been fired, there has been a notable change in the methods of court management, and the authority to fire judges has shifted from the president to a new higher council. In early June, parliament approved far-reaching judicial reform legislation outlining more competitive hiring procedures for judges, as well as stricter penalties for those who issue verdicts that contradict the country’s legal code. Yet while as many as 80 corruption cases are currently under investigation—including charges against five judges and a prosecutor—there is little evidence thus far of the state’s willingness to mete out genuine punishment for key actors. The fact that the government drastically underfunded National Anti-Corruption Bureau of Ukraine (NABU) until Western partners interceded also points to a lack of political will to prosecute corruption.

Two other ongoing processes have yielded some success and should be continued. Some government components (e.g., state-owned enterprises, the National Bank of Ukraine, the new anticorruption institutions, and the new patrol police) have increased employees’ salaries in order to reduce incentives to take bribes. To attract young, educated civil servants, the system of remuneration should be reformed across the board. In addition, the ongoing process of decentralization should limit opportunities for abuse of power by prompting more active citizen engagement and by reducing the number of state institutions that provide duplicate services.

Many civil society actors are calling for more radical reforms. They argue that corrupt institutions should be entirely rebuilt, not simply repaired. Yet state actors often view these groups as unconstructive, excessively radical in their demands, and reluctant to practice the arts of compromise and joint problem-solving.

Unfortunately, the window for institutional reform may be closing. The newly appointed government under Prime Minister Volodymyr Groysman has a fragile majority that depends on support from oligarch-affiliated groups. The key unanswered question is whether Ukraine’s leaders are willing to accelerate anti-corruption reforms and avoid squandering the modest achievements of the past twenty months.

Policy Recommendations from the Working Group

On institutional reform

• Ensure full funding and independence for NABU and incorporate the lessons of the failures of Moldova’s National Anticorruption Center—an institution whose hands were tied by its lack of independence from the executive, which was in turn beholden to the country’s most powerful oligarch.
• Focus on reforming the GPO incrementally: changes should not be arbitrary, but based on objective criteria, as with the reform of the patrol police.

On combatting impunity

• Sentence those convicted of corruption to meaningful jail terms after their guilt has been firmly established in fair court proceedings. Court cases should be transparent and evidence should be made public. Corruption prosecutions should not become a form of window-dressing for half-hearted reform.
• Abolish immunity for parliamentary deputies and judges.
• Develop stronger protections for whistleblowers.

On elections

• Introduce elections based on proportional representation and open-list voting.
• Reduce oligarchs’ ability to influence the outcome of elections through the media by allowing campaign advertisements only on state-owned TV channels.

For Western partners

• Continue to enforce conditionality: the IMF, EU, and other donors should make support dependent on actual implementation of new progressive measures, not simply on the passage of legislation.  
• Place greater focus on civic education efforts.
• Support civil society’s participation in political decision-making by advocating for a more inclusive consultative environment and rigorous monitoring of the implementation process.
• Encourage civic actors to focus on providing actionable recommendations and on educating the public about their efforts. 

Notes

¹ Thomas de Waal, “Fighting a Culture of Corruption in Ukraine,” Carnegie Europe, April 18, 2016, http://carnegieeurope.eu/2016/04/18/fighting-culture-of-corruption-in-ukraine/ixa8

² American Chamber of Commerce in Ukraine Anti-Corruption Working Group  and Compliance Club “Chamber Corruption Perception Survey 2015,” American Chamber of Commerce in Ukraine, March 2016, http://www.chamber.ua/Content/Documents/-436507952Corruption-perception-survey-report-ENG.pdf

³ “UNITER Project Anti-Corruption Perception Survey 2015,” UNITER, December 22, 2015, http://uniter.org.ua/eng/press/uniter-project-anti-corruption-perception-survey-2015.html

⁴ Sean R. Roberts and Robert Orttung, “Changing Corrupt Behaviors Assessment: Addressing Everyday Corruption in Ukraine,” USAID, September 2015, https://www.usaid.gov/sites/default/files/documents/1863/Changing%20Corrupt%20Behaviors%20Assessment%20Oct.%202015_0.pdf

⁵ “Anti-corruption Institutions in Ukraine,” Reanimation Package of Reforms, January 28, 2016, http://rpr.org.ua/en/news/anti-corruption-institutions-in-ukraine/