Letter of happiness. What demands did the United States put forward for the Ukrainian government and why?
Translation of an article in Ukrainian media
Denis Rafalsky, 15:19, 27 September 2023
Original article on the Ukrainian media site ‘Strana’ available here. This article deals with the interminable struggle between the Ukrainian elite and its Euro-Atlantic partners (assisted by their proxies in Ukrainian ‘civil society’ and the ‘anti-corruption’ organs). I have published on this topic on my substack here, here, here, and here.
A letter with a list of required reforms which the United States sent to the Ukrainian government has been widely discussed in Ukraine.
The document was first published by Ukrainian media, then its authenticity was confirmed by the American Embassy in Kyiv.
As the letter states, the reforms are “related to the conditions for the provision of US assistance,” however, some are also related to the requirements of the European Union, as well as the IMF.
All of them are broken down point by point depending on the “priority” deadline: up to 3 months, up to 6 months, a year and a year and a half.
Some of the proposals of this new stage of reforms include changing the composition of the supervisory boards of some important state-owned enterprises and forming them for others; institutionally strengthening [the Western-controlled ‘Anti-Corruption’ organs] NABU and SAP (in the case of SAP, involving the granting of independence to them by the Prosecutor General); limiting the scope of activity of the SBU; continuing the restructuring the judicial system and the Ministry of Defense (including the organization of procurement).
In addition, one reforms proposes the introduction of market prices for gas and electricity.
According to experts interviewed by Strana, the letter is another confirmation that the United States, as a key ally of Ukraine, is changing its policy towards Kiev, shifting the emphasis from military assistance, which, of course, will continue to flow, to restructuring the public administration system, which sooner or later will affect both the economy and the political system. And the influence of Washington and the West in general on Ukraine - already extraordinary today - will increase even more.
At the same time, political circles believe that the Ukrainian authorities will ignore (or imitate) the fulfillment of many (if not most) demands, believing that in conditions of war the West will not dare to take harsh “disciplinary measures” in the form, for example, of stopping aid, as this could have fatal consequences for the situation on the battlefield. And according to this logic, the situation with corruption in various aspects of domestic politics is unlikely to change until the end of the war.
Our material gives the details.
The "Collective Shabunin" helped
We wrote that Ukrainian media leaked a letter sent by Deputy White House National Security Advisor Michael Pyle to the Ukraine Donor Coordination Platform, as well as to Prime Minister Denis Shmygal and the Office of the President of Ukraine.
It presents a list of reforms, the implementation of which will, among other things, determine the provision of assistance to Kiev from the United States, the EU, the countries of the G7, and the main international financial organizations: the IMF, the World Bank, the European Investment Bank, the European Bank for Reconstruction and Development and so on.
The document caused quite a serious resonance in political circles of Ukraine, in which at first a certain skepticism was felt: some felt that the Americans had nothing to do with it and that it was a product of pro-Western circles in Ukraine.
However, the US Embassy in Kyiv soon published a statement confirming American authorship:
“As part of an ongoing dialogue with Ukraine and stakeholders in Ukraine’s future success, the United States provided a proposed list of priority reforms for discussion and feedback at the Multi-Donor Coordination Platform in Brussels. This list was provided as a basis for consultation with the Government of Ukraine and key partners as part of our enduring support to Ukraine and its efforts to integrate into Europe, a goal the United States strongly supports. The aim of the effort is to prioritize and consolidate reform steps with Ukraine and among key stakeholders”
A high-ranking source in the Ukrainian government claims that Ukrainian sources from the American side could have participated in the drafting of the document.
“How can people in Washington or New York be so aware of the nuances of our government system? They rely on materials that are provided to them by our anti-corruption structures, let’s say the collective Shabunin (Vitaly Shabunin, Chairman of the Board of the Anti-Corruption Center, which operates on Western grants. He is also a member of the Public Council of the NABU. - Ed. ) and European structures, which work more and more closely with their American colleagues,” says the source, who requested anonymity.
One big supervisory board
Now let's talk more about the letter. As already mentioned, at the beginning of the list there is a clarification that the listed reforms are “related to the conditions for the provision of assistance from the United States.” But then, at some points, it is mentioned that this or that reform is required by the European Union and the IMF.
Some of the items are grouped by estimated completion time: up to three months, 3-6 months, a year and a year and a half. It is noteworthy that in the leaked press version, the numbering in one group is incorrect: perhaps some points were removed, deciding not to show them to journalists.
Let us note: the paragraph devoted to the reform of supervisory boards generally does not indicate any deadlines for implementation. It is possible that reform is being demanded from the Ukrainian leadership right now. It is proposed, in particular, to introduce additional members to the supervisory boards of Ukrenergo and Naftogaz [Ukrainian state energy and gas corporations – trans.] and create supervisory boards for Energoatom [the nuclear energy corpoartion – trans.], the Operator of the Gas Transmission System of Ukraine and the new state-owned company Ukrainian Defense Industry (formerly Ukroboronprom).
In the reforms proposed for law enforcement agencies, the paragraph on the Specialized Anti-Corruption Prosecutor's Office (SAP) stands out in volume. Of course, these demands have been made before - for example, from pro-Western anti-corruption experts or in IMF statements, but now, so to speak, they have been made in the first person and publicly.
More precisely: a course has been taken to expand the institutional independence of the SAP from the Office of the Prosecutor General (which is now de facto controlled by the president), as well as to strengthen the influence of Western structures on the formation of the SAP staff. To do this, the Verkhovna Rada must adopt a bill on a new reform of this special prosecutor's office.
The competition for the selection of the head and key officials of SAP should be held with the “direct and meaningful participation of independent experts.”
This will probably mean holding a competition based on the patterns of already existing selections - for example, candidates for judges of the Constitutional Court, where experts agreed upon by the West play a key role. To assess the performance of SAP management, it is necessary to introduce an “external audit”, for which, again, “external experts with international experience” will be needed. In addition, the special prosecutor's office should "strengthen [its] procedural independence" from the attorney general.
Today, the head of the SAP reports directly to the Prosecutor General, being one of his deputies. By law, the Prosecutor General cannot give instructions to SAP prosecutors, but in fact, in the absence of a special prosecutor, the Prosecutor General sometimes took over the leadership of this unit. It is also proposed that at the new stage of reform, the SAP be given “powers regarding extradition and provision of mutual assistance.”
As for NABU, working in conjunction with the special prosecutor's office, they want, among other things, to increase the number of investigators by at least 300 people and provide the right to wiretap. For the National Anti-Corruption Agency, which controls the register of e-declarations, according to the authors of the letter, an “independent, transparent, competitive and timely competition” for a new leader is needed.
The letter proposes to complete these anti-corruption reforms within a period of up to three months.
An exception has been made for the High Anti-Corruption Court, where they want to increase the number of judges and allow them to consider “certain cases” not individually, but by a panel of three judges. This reform will take 3-6 months.
At the same time, it is proposed to manage the creation of a new Supreme Administrative Court - a new specialized court for administrative cases, which should replace the District Administrative Court of Kyiv (OASC), which was dissolved due to scandals. It was the only court in the country that could overturn decisions of government authorities other than the president. There was a constant behind-the-scenes political struggle for control over it, in which the Western partners also participated. The OASC eventually fell victim to this confrontation.
The same paragraph speaks of the need to reform the Supreme Court (SC) by checking all its judges who came under suspicion after the resonant case of the Chairman of the Supreme Court Vsevolod Knyazev , and the election of new judges “with the involvement of independent experts and civil society.” That is, it is proposed to cleanse the Supreme Court and, instead of the “purged” judges, recruit new ones under the control of the same “international experts”.
During the year, reforms should be carried out to “strengthen” the National Agency for the identification, search and management of assets obtained from corruption and other crimes (ARMA), the reform of the Constitutional Court should be continued (which implies the selection of judges, again, by “international experts” ), restarting the selection and qualification assessment of judges “within the framework of the newly created High Qualification Commission of Judges.”
Finally, a separate item is the introduction of “market prices” for gas and electricity, even though in Ukraine there is a moratorium on increasing utility tariffs for the population during martial law. But, as we see, the Americans propose to lift this moratorium and raise prices.
A lot has been written about the reforms of the Ministry of Defense. It was ordered to change procurement procedures and move closer to NATO standards.
Among the reforms, scheduled for one and a half years, are the launch of the reorganization of the Bureau of Economic Security of Ukraine and the completion of reform of the Office of the Prosecutor General. With regard to the State Customs Service, it is proposed to introduce a new competitive procedure for selecting the heads of this body “with the constructive participation of international experts.” It is also proposed to reform the State Border Service, focusing on the efficiency of cross-border movement of people and trade and informing the public about cases of corruption.
In this group, the proposed reform of the SBU stands out in terms of the volume of description. The letter strongly advises to reduce its powers, leaving only counterintelligence, cybersecurity and the fight against terrorism. In addition, it is proposed to re-certify all employees under the supervision of a certain “authoritative disciplinary committee”, strengthen parliamentary and civil control over the activities of the intelligence service, and also “give other institutions the opportunity to carry out judicial interception of data separately from the SBU” (this refers to the previously mentioned possibility of wiretapping for NABU).
Many people noticed that the list does not include an item about holding elections in Ukraine in the near future . According to a number of interlocutors in the Rada, this means that the West is not yet insisting on them. Although there is also another opinion on this matter: the next legally possible election date - March 31, 2024 - is still far away, so there is no need to push this topic now. Therefore, as winter approaches, it will be interesting to observe the mood overseas and in Europe.
And if necessary, it is easy to make changes to the state budget by allocating money for elections, as well as changing legislation.
With an eye on the US elections
Let's return to the letter about reforms.
A high-ranking source in the government, in a conversation with Strana, urged against being surprised by the link between the allocation of Western funding and the demand for reforms in Ukraine.
“This line did not start today or yesterday, but probably in the spring. First, some things appeared under the IMF, then some migrated into the criteria for opening negotiations on EU membership , now they have come up in this letter. This is if you go by significant moments. Our Western colleagues act in their usual manner. First, the pressure is gentle. The IMF cannot force us to do anything. The EU got involved, putting forward the conditions for candidacy, which, as events unfolded, began to include new requirements, for example, the restoration of e-declaration . [an online asset declaration system pushed by the West to ‘fight corruption’, see here – trans.] The letter, as far as I understand, came on the heels of the president’s visit to the United States,” says a government source.
Why is there such an emphasis now on reforms in warring Ukraine? The official American version: The United States wants Ukraine to be a “successful project.”
“As President Biden said in his White House meeting with President Zelenskyy, “Just as we are committed to helping the Ukrainian people defend themselves now, we’re also committed to helping them recover and rebuild for the future, including supporting reforms that are going to combat corruption, creating an environment where businesses can thrive and where American and European businesses want to invest.” the American embassy said in its statement on the letter.
“The shift in emphasis from war to domestic politics and reform is understandable. We do not yet have the convincing military successes that the Biden administration and other allies of Ukraine were probably counting on. Therefore, we need to show its success as a pro-Western liberal democratic project. Money simply because of war won’t be given anymore. Fight corruption , make the energy sector profitable, less subsidized, etc.,” comments political scientist Vadim Karasev to Strana.
And achieving results in Ukraine is also important for the Biden team for domestic political reasons.
“Ukraine will be a pre-election topic. He is already being asked questions about how American taxpayers’ money is being spent and what is being done to fight Ukrainian corruption. There is a search for weighty arguments that will also be useful for counter-propaganda in the fight against Republicans dissatisfied with the assistance to Kiev. Biden will respond: here’s Pritzker (newly appointed US Special Envoy for Ukraine Recovery Penny Pritzker - Ed. ), and here's a list of necessary reforms that Ukraine will carry out further along the list,” Karasev believes.
A high-ranking interlocutor of the publication in power speaks of the importance of both reasons for overseas partners.
"Part of this (pressure regarding reforms - Ed. ) is due to the fact that the current administration needs to show the electorate during the campaign that money is not being stolen from the state budget, but is being spent on reforms, all kinds of struggles and, of course, the front. But our allies really want to reform everything where they work. In Afghanistan, for example. Reforms are their postulate,” our source said with a touch of irony.
The second version, which is widespread in political circles of Ukraine: the Americans, through the mechanisms they propose, want to put the Ukrainian government, the elite and, in general, processes within the country under very strict control.
“The United States, as the main investor in Ukraine, intends to take control of the main economic, financial and political processes in the country in this way. There are not very many chances of not fulfilling at least part of the demands, because the government has been driven into a corner by the war. Ukraine still remains a tasty morsel, especially its mineral resources, which are largely controlled by an oligarchic “cooperative” that has yet to be finished off so as to ensure the transfer of important minerals into “safe hands.” In general, in the list of proposed reforms, attention is drawn to the strengthening of the anti-corruption vertical, the current effectiveness of which the United States is not very happy about, so they want to make it as independent as possible from the Ukrainian authorities. That way, it would become an effective tool of control and pressure on those who are disobedient or move contrary to the wishes of Washington,” tells Strana political scientist Andrey Zolotarev.
At the same time, a source in political circles believes that until the end of the war the West will not be able to radically change the situation in Ukraine, either in terms of corruption or in other areas.
“The Ukrainian authorities ignored many of the demands of the West even before the war - and nothing: the IMF continued to regularly provide loans. And during the war, they even ignore it, believing that the Americans will not stop helping anyway. After all, if they stop, then Ukraine may lose the war to Russia. And such a threat to the United States, as they believe in Kiev, will always be worse than any corruption. In addition, over the past 9 years, the Ukrainian elites have learned well to imitate compliance with demands and take control of any structures that the West intended to use for control over them. It is worth recalling that at one time the Supreme Court was also formed as part of the reforms demanded by the West. And now it turns out that it needs to be cleansed again. And so on in almost everything. Therefore, until the end of the war, the West will not be able to take control of the most important processes within Ukraine and somehow change the situation with the same corruption. But after the war, in connection with the allocation of funds for reconstruction and with negotiations on accession to the EU, the conversation with Kiev will be much tougher," says the source.