When Bart Gruyaert agreed to help rebuild destroyed apartment buildings outside Kiev, he hoped to be a link in Ukraine’s massive reconstruction program, repairing only some of the damage caused by the Russian invasion.
But when the French company he worked for, Neo-Eco, applied for building permits in the city of Gostomel, the local military government asked the company to transfer the funds for the multimillion-dollar project to its bank account, under the pretext that the company would direct the project execute.
Officials told Gruyaert: “It would be better if you transfer the money received to our account,” he recalled.
“But it doesn’t work that way,” he told AFP.
The company refused and progress on the initiative, which had secured €20 million in private funding, immediately slowed.
It was the latest example of the endemic corruption that has plagued Ukraine since it became independent after the fall of the Soviet Union in 1991.
After Neo-Eco refused the bank transfer, the local government started delaying things, adding new requirements to the contract and incentivizing the company to give “envelopes” to the right people, Gruyaert claimed.
The company reluctantly decided to abandon the project in September 2023, saying it was “impossible” to work under such conditions.
Following the saga, Ukrainian investigators said they had exposed a system of “embezzlement” in the Gostomel military administration and accused its head Sergiy Borysiuk of appropriating about 21 million hryvnia ($470,000) intended for the reconstruction of houses and apartments.
In June 2023, after the allegations came to light, Borysiuk was fired by President Volodymyr Zelensky.
He had pre-empted his removal with a news conference several days earlier in which he said he had done “everything possible” to safeguard reconstruction efforts.
“It seems to me that you are looking for the enemy in the wrong place,” he said.
– Deep corruption –
The case is far from isolated.
Even though Ukraine has stepped up its anti-graft measures over the past decade to achieve its ambition to join the European Union, corruption scandals are still rife.
Transparency International ranked Ukraine 104th out of 180 countries in its ‘corruption perception index’, up from 144 in 2013.
For some officials, the Russian invasion has opened up new opportunities for personal enrichment.
During the war, several high-profile cases of alleged embezzlement of reconstruction funds came to light, as well as the arrest of officials for selling exemption certificates for the military.
While there may be embarrassment for Ukraine, which relies on billions of dollars in Western financial aid, Andriy Borovyk, director of Transparency International Ukraine, said the attention to the cases showed the problem had not been “forgotten.”
And authorities are also touting the discovery of such schemes as a sign of “effective” enforcement.
Just a decade ago, “who would have thought that high-ranking officials could be accused of crimes?” said Viktor Pavlushchyk, head of the National Agency for Corruption Prevention.
“Now we have some very good examples,” he said.
According to the National Anti-Corruption Bureau, about 500 corruption cases have been opened this year and 60 convictions have been secured.
– Anti-corruption ‘DREAM’ –
But there are still fears that the ongoing problem will hamper Ukraine’s massive reconstruction agenda, deterring international partners from providing funds.
The total cost of rebuilding the Ukrainian uprisings is estimated at $486 billion, according to a joint study by the World Bank, the UN, the EU and the Ukrainian government.
Gruyaert is undeterred by his experiences in Gostomel, which was occupied by Russian troops in the first weeks of the February 2022 invasion.
Ukraine is making “a lot of progress” on corruption, Gruyaert said, adding that Neo-Eco has had to learn to “zigzag between the different obstacles.”
The company is working on several other projects and is encouraging other foreign investors to join.
But, hurt by the Gostomel experience, it is now prioritizing working with cities where it is confident no bribes will be asked.
Most admit that much remains to be done in the fight against corruption in Ukraine, especially when it comes to reconstruction.
It is still common for local officials to have stakes in construction companies through their relatives, several figures told AFP.
Ukraine is trying to eliminate such conflicts of interest and make the entire process more transparent.
Last year the country launched a platform with all open projects.
The goal, called “DREAM”, is to allow investors, journalists and Ukrainians to monitor the progress of construction projects, said head Viktor Nestulia.
A commitment to such openness will be crucial to reassure foreign investors, said Mustafa Nayyem, an activist and journalist who led the reconstruction agency until earlier this year.
“The war is not an excuse not to fight corruption,” he told AFP.
Corruption “is not in the Ukrainian DNA, it is just a matter of will.”
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