Why the Prosecutor General's Office's data on embezzlement in the Ministry of Defense cannot be considered completely reliable.
On Friday, September 2, Prosecutor General Yuriy Lutsenko spoke about the level of embezzlement in the Ukrainian army between 2005 and 2015.
According to Mr. Lutsenko, military equipment worth UAH 1,8 billion was sold off during this period. Among other things, the Ukrainian army lost 832 tanks, 232 helicopters, 202 aircraft, and 714 armored combat vehicles. Yuriy Lutsenko cited theft in the Armed Forces as one of the reasons for the defeat at Ilovaisk. Later, the Prosecutor General's press secretary, Larisa Sargan, published an infographic on her Facebook page, which showed that the sale was most active when [the Minister of Defense] was [the Minister of Defense]. Anatoly GritsenkoThis sparked a storm of indignation on social media, with the former minister being called out for his numerous public appearances in which he positioned himself as an active fighter against corruption. However, if one examines the structure of defense budgets throughout the pre-war period, one can conclude that the Prosecutor General's Office data was manipulated, as the Ministry of Defense simply had no choice but to sell off its assets en masse, writes apostrophe.ua.
Prosecutor General Yuriy Lutsenko revealed shocking figures on the level of embezzlement within the Ministry of Defense between 2005 and 2014 on September 2 at a meeting of the Verkhovna Rada Committee on National Security and Defense. According to Mr. Lutsenko, during this period, 832 tanks, 232 helicopters, 202 aircraft and drones, 714 infantry fighting vehicles and armored personnel carriers, 4930 vehicles, 2355 units of various missiles, 1,824 small arms, and ammunition were sold for a total of 560 million hryvnias. In total, according to the Prosecutor General, property worth over 1,8 billion hryvnias was sold. "The Prosecutor General's Office has opened a number of criminal cases regarding the theft of military property," Lutsenko stated. According to him, these thefts led to a critical decline in the army's combat capability and, as a consequence, became one of the reasons for the defeat near Ilovaisk in 2014.
Later, Larisa Sargan, the Prosecutor General's press secretary, posted an infographic on Facebook showing how much military equipment had been sold under each defense minister. It appeared that the most active sales occurred during Anatoliy Hrytsenko's tenure as defense minister from 2005 to 2007 (for a total of over 1,3 billion hryvnias). Moreover, according to Ms. Sargan's data, the total value of equipment sold from 2005 to 2014 exceeded the amount cited by Yuriy Lutsenko by a good billion hryvnias. This sparked outrage among bloggers, who pointed out Mr. Hrytsenko's numerous public appearances in which he positioned himself as a champion of corruption within the military.
However, if we examine the structure of the Defense Ministry's funding in the pre-war and post-Maidan periods, we are forced to conclude that the Prosecutor General's Office is spreading half-truths. By and large, the figures indicating massive sell-offs of military property cannot, in and of themselves, serve as grounds for accusations against Anatoliy Hrytsenko or any other defense minister, including those who served during Viktor Yanukovych's presidency. The fact is that from 2005 to 2014, one of the sources of income for the Defense Ministry's state budget was the so-called special fund. It was filled with funds earned by the military department through its own business activities, including the sale of surplus military property, such as combat equipment.
For example, the 2005 White Book (an annual official publication covering the activities of the armed forces) stated that the 2006 budget allocated UAH 8,9 billion for the Ministry of Defense, of which UAH 2 billion was to come from a special fund. Incidentally, the special fund, despite all attempts to abolish it, remained in effect until the outbreak of the war. For example, the 2013 White Book states that UAH 981 million of the UAH 15,3 billion allocated by the state budget is to come from the special fund.
Several other important circumstances are worth noting. Firstly, from 2005 to 2014, the special fund was filled at an average rate of 7-10%, so it wasn't even considered a significant source of revenue. The primary focus was always on direct budget revenues, which never covered even the army's minimum needs. For example, in 2009, then-Minister of Defense Yuriy Yekhanurov noted that the Armed Forces of Ukraine needed at least UAH 17,5 billion per year to develop, and UAH 32 billion to implement all programs. Moreover, due to the financial crisis that hit the country, 2009 was also quite meager in terms of military support: according to the 2009 White Paper, UAH 8,3 billion came directly from the budget, while the special fund, which was projected to be UAH 4,2 billion that year, was filled at only 7%.
Secondly, the Ministry of Defense doesn't form the budget—it can only name desired figures. The final decision is always made by the Verkhovna Rada, which approves the state budget law. And if none of the budgets covered even the army's minimum needs, then the cause of the critical decline in combat readiness should be sought not in the actions of individual ministers, but in the national attitude toward the armed forces. In the pre-war period, they underwent three unsuccessful reform programs, approved at the highest level and, as we see, always financed on a residual basis. This, in fact, led to the Ukrainian Armed Forces' inability to repel Russian aggression in 2014.
And finally, thirdly, already under Anatoliy Hrytsenko, the Ministry of Defense lost the right to directly trade weapons. This function was assigned to the state-owned company Ukrspetsexport, and the proceeds from these transactions went to the state budget. The very logic of financing the Ukrainian Armed Forces from 2005 to 2014 forced the Ministry of Defense to part with its assets. Moreover, on the largest possible scale, as required by the state budget laws adopted by the Verkhovna Rada.
Yuriy Lutsenko's data on the quantity of equipment sold is not sensational. It is easily found in open sources, including international ones. For example, in 1991, the UN General Assembly decided to create the Register of Conventional Arms, where governments voluntarily contributed data on the export and import of major weapons systems—warships, including submarines; battle tanks; combat armored vehicles; aircraft, helicopters; large-caliber artillery systems; missiles and missile launchers, including man-portable air defense systems (MANPADS). Ukraine began submitting information on its arms exports to the Register in 1994 and did so almost annually until 2012 (data is only missing for 2011). If you open these reports and add up the total amount of equipment Ukraine sold abroad between 2005 and 2014, even excluding 2011 and 2013, the figures obtained are more or less close to Yuriy Lutsenko's data. Specifically, our country sold 640 tanks, 875 armored combat vehicles, 352 large-caliber artillery systems, 235 various aircraft, 40 helicopters, and 1821 missiles, various rocket launchers, and MANPADS. The main buyers of Ukrainian equipment at various times included Georgia and Azerbaijan, African countries such as Nigeria, Kenya, and Congo, as well as the United Kingdom, the United States, and the Russian Federation. Specifically, in 2007, we sold 100 Kh-59 high-precision air-to-ground missiles to Russia, while the US and UK expressed interest in various Ukrainian weaponry, ranging from large quantities of MANPADS to aircraft, tactical missile systems, and armored vehicles. This interest is easily explained: NATO countries participated in a targeted program to dispose of Ukrainian MANPADS, anti-personnel mines, and small arms, while isolated purchases of other weapons may be linked to the Americans' desire to study Soviet military equipment to develop their own, more advanced systems.
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