The big winner in Ukraine scandal? Russia — just as it always wanted

Vladimir Putin’s nightmare is a prosperous, rule-of-law Ukraine integrated into the affluent West on Russia’s border. Such a Ukrainian success story would trace back to its popular revolution on Maidan Square in February 2004. Might Ukraine not give the Russian people ideas to do the same?

It is for this reason that the Kremlin has conducted a frantic propaganda war to demonstrate Ukraine’s abject failure, its rampant corruption, and to instruct others in Russia’s “sphere of influence” not to follow Ukraine’s example.

It seems that Ukraine cannot get a lucky break in its quest to turn from Russia to become part of Europe. From its founding in August 1991 to today, Ukraine navigated an Orange Revolution (2004-5), lost Crimea to forced Russian annexation (April 2014) and fought the Russian-backed invasion of its eastern territory — largely with volunteers while it organized a national army.

When Ukrainian forces threatened to defeat Russian mercenaries, an invading Russian army shattered Ukrainian forces and forced Ukraine into an unfavorable peace process backed by Germany, France and the United Kingdom. Subsequently, the West stood by as Russia blockaded Ukrainian ports on the Sea of Azov, starting in November 2018 and thereby threatening Ukraine’s economy.

Ukraine has served as the frontline against Putin’s ambitions to incorporate a “New Russia” — Novorossiya — into an empire expanded to the borders of the European Union. Ukrainians bore the brunt of thwarting Putin’s ambitions in terms of some 2,000 soldiers killed, 13,000 other fatalities, millions displaced and occupied eastern Ukraine reduced to ruins populated by pensioners and children. This is a shameful tragedy that has failed to create a truly united European front against Russia’s rogue behavior.

Putin’s theme of corruption remains a major problem for Ukraine, along with his military threat. Corruption has held back Ukraine’s political and economic development since independence; as in most former Soviet republics, independent Ukraine came to be dominated by billionaire oligarchs who bought political parties, manipulated parliament, stacked the judiciary and seized control of gas, transportation and metallurgy wealth. Ukraine’s oligarchs are so deeply embedded in economic and political life that only a major campaign, backed by a unified West, can root them out. The task could be compared with Italy’s years-long campaign to control Sicily’s mafia.

Let’s all admit that some patience is required by all affected parties.

Ridding Ukraine of oligarchic corruption is exactly what Ukrainians want. In April, they overwhelmingly elected a young non-politician — Volodymyr Zelensky — as president and voted overwhelmingly for anti-establishment deputies. At last, Ukraine has a government with a mandate to clean up the judiciary, parliament and oligarchic dominance.

The preconditions were in place for a significant recovery with Western backing. During the loss of Crimea and the Russian invasion, Ukraine’s economy shrank up to 15 percent — but despite everything, including Russian naval disruption of its major ports, Ukraine’s economy has grown since 2016.

This brings us to Putin’s nightmare of a prosperous, westernized Ukraine. To thwart any hint of Ukrainian success, Russia continues to direct a scaled-back military operation in East Ukraine. Russia denies involvement despite massive evidence to the contrary, including leaks from the Kremlin’s lead man in Ukraine, Vladislav Surkov. International monitors from the Organization for Security and Cooperation in Europe (OSCE) are kept on a short leash but report regular violations by the Russian-backed side.

Putin’s military strategy is to keep a cold war simmering to retard Ukraine’s economic growth and to create uncertainty.

Putin’s cyber war against Ukraine eclipses his military activities. The Kremlin directs blistering fake news at Ukraine, 24/7. In the early days after Maidan, the Kremlin declared the Ukraine government illegitimate, a cabal of neo-Nazis and Russian-hating nationalists. After two democratic presidential elections, the Kremlin’s message has turned to corruption, despite Putin’s own criminality.

Russia’s message for Europe is that corruption makes Ukraine hopeless, a lost cause. Kremlin propaganda warns Europe it is wasting its financial assistance on Ukraine because it will end up in the wrong hands.

As a sign of the success of this message, left-leaning European press echo Russia’s message, calling Ukraine the most corrupt nation in Europe — when, in fact, Russia qualifies for this dubious achievement. Even reputable think tanks pose the question: “Is Europe giving up on Ukraine?” Europe’s response has been to link financial assistance and aid to Ukraine’s reaching anti-corruption benchmarks, such as reform of the judiciary, liberalizing the gas market and cleaning up crooked banks.

With European pressure and a reform-minded administration, Ukraine stood on the threshold of true reform, as international pressure aligned with the new Zelensky regime. Instead of trying to finagle its way out of reforms, the Zelensky government was expected to exercise its reform mandate with Europe’s backing. (We should note that even before Zelensky’s election, Ukraine was achieving notable successes in corruption reform and improving its international corruption ranking by ten places.)

Ukraine stood on the brink of success just as impeachment-minded Democrats and anti-Trump media pivoted from Russian collusion to Trump’s purported quid pro quo in a telephone call with Zelensky. In that call, monitored by numerous officials, Trump requested an investigation of a presumably corrupt Ukrainian gas company that hired, at an extravagant salary, the son of presidential candidate Joe Biden.

Ukraine’s corruption therefore became overnight Item #1 in U.S. press and social media conversation. Trump supporters now regard Ukraine not as a heroic guardian of freedom but as a den of thieves. Will the U.S. Senate continue its rare bipartisan support for Ukraine, given Ukraine’s new image?

In Ukraine, Zelensky has suffered his first major defeat. His old-guard opponents accuse him of incompetence born from inexperience. Ukrainians, who were prepared to take their chances with a novice outsider, are now having second thoughts.

Ukraine also cannot count on a divided Europe, much of which would like to return to “business as usual” with Russia. The sensational story of “crooked Ukraine” becoming a part of the Trump impeachment campaign will only strengthen pro-Russia forces in Europe.

As evidence is collected for a possible Trump impeachment, Ukraine will be presented as a den of corruption led by a young, confused president. If Zelensky claims the Trump call was benign, he will antagonize Democrats. If he asserts the Trump call was a quid pro quo, he’ll alienate Trump, who may serve a second term. Not an enviable position.

In a word, Ukraine has been thrown under the bus by the media and Democrats at the very time when it was poised to truly join the West. Ukraine has a long, bloody, tragic history. Our politicians seem intent on keeping up this record.

Paul Roderick Gregory is a professor of economics at the University of Houston, Texas, a research fellow at the Hoover Institution at Stanford University and a research fellow at the German Institute for Economic Research. Follow him on Twitter @PaulR_Gregory.