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April
17
2023

Before We Send Any More Money To Ukraine -
Can We Find Out Where The Rest Of Our Cash Went?
Sam Faddis

Back during the days of the Soviet invasion of Afghanistan, we gave our allies, the mujaheddin, a whole bunch of man-portable ground-to-air missiles called Stingers. They used them to great effect against the Russians.

They also sold a bunch of them on the black market. We then spent a great deal of time wandering all over the world, making deals with black-market arms dealers and buying back our own missiles so they would not be used to shoot down commercial airliners by terrorist groups. Needless to say, we paid top dollar to get the missiles back.

This is the way the world works. If you pass out money and weapons to people around the world you don’t always know in advance the ramifications. You can guarantee, however, that along the way some folks with less than honorable intentions will line their own pockets.

Which brings us to Zelensky and Ukraine.

Seymour Hersh is reporting that the Ukrainians have embezzled at least $400 million of the money given them by the United States. Zelensky was confronted with the evidence of the embezzlement by CIA Director Burns and reportedly responded by dismissing a handful of officials but taking no serious action.

The Ukraine government, headed by Volodymyr Zelensky, has been using American taxpayers’ funds to pay dearly for the vitally needed diesel fuel that is keeping the Ukrainian army on the move in its war with Russia. It is unknown how much the Zelensky government is paying per gallon for the fuel, but the Pentagon was paying as much as $400 per gallon to transport gasoline from a port in Pakistan, via truck or parachute, into Afghanistan during the decades-long American war there.

What also is unknown is that Zelensky has been buying the fuel from Russia, the country with which it, and Washington, are at war, and the Ukrainian president and many in his entourage have been skimming untold millions from the American dollars earmarked for diesel fuel payments. One estimate by analysts from the Central Intelligence Agency put the embezzled funds at $400 million last year, at least; another expert compared the level of corruption in Kiev as approaching that of the Afghan war, “although there will be no professional audit reports emerging from the Ukraine.”

“Zelensky’s been buying discount diesel from the Russians,” one knowledgeable American intelligence official told me. “And who’s paying for the gas and oil? We are. Putin and his oligarchs are making millions” on it.

Many government ministries in Kiev have been literally “competing,” I was told, to set up front companies for export contracts for weapons and ammunition with private arms dealers around the world, all of which provide kickbacks. Many of those companies are in Poland and Czechia, but others are thought to exist in the Persian Gulf and Israel. “I wouldn’t be surprised to learn that there are others in places like the Cayman Islands and Panama, and there are lots of Americans involved,” an American expert on international trade told me. 

The issue of corruption was directly raised with Zelensky in a meeting last January in Kiev with CIA Director William Burns. His message to the Ukrainian president, I was told by an intelligence official with direct knowledge of the meeting, was out of a 1950s mob movie. The senior generals and government officialsin Kiev were angry at what they saw as Zelensky’s greed, so Burns told the Ukrainian president, because “he was taking a larger share of the skim money than was going to the generals.” 

None of this should be particularly surprising. Putin may be a thug, but Ukraine is one of the world’s most corrupt nations, and it has been for a very long time.

A 2016 report by the watchdog group Transparency International found that between 38 percent to 42 percent of Ukrainian households said they paid bribes just to access basic public services. The only nation in Europe considered more corrupt than Ukraine is Russia.

This is not even the first documented case of corruption involving funding for the ongoing conflict. Ukraine's Security Service (SBU) reported recently that it had uncovered an embezzlement scheme in which money for food for the Ukrainian military was being siphoned off and ending up in the pockets of unscrupulous contractors. Per the SBU, officials from one ministry department made agreements with the heads of two commercial enterprises regarding the wholesale supply of food to locations where the military is deployed. Funds from the ministry's budget were then transferred to the accounts of firms that "lacked a production base and technological equipment" to provide the relevant services.

"Instead of supplying the armed forces with the agreed quantities of food products, the participants in the fraudulent mechanism diverted the funds through a number of affiliated shadow companies," the statement said.

The Special Inspector General for Afghan Reconstruction (SIGAR) based on its experience in Afghanistan has been warning of the potential for American money to be stolen in Ukraine for some time.

"There is an understandable desire amid a crisis to focus on getting money out the door and to worry about oversight later, but too often that creates more problems than it solves. Given the ongoing conflict and the unprecedented volume of weapons being transferred to Ukraine, the risk that some equipment ends up on the black market or in the wrong hands is likely unavoidable

"The rapid influx of weapons and equipment also presents risks: diversion to illicit markets, misuse amongst groups fighting in Ukraine, or their acquisition by Russia or other non-state actors. Russia has reportedly enlisted mercenaries from Libya, Syria, and Chechnya, which has raised concerns about U.S.-provided equipment finding its way to these countries."

So, to recap. We have been shoveling billions of dollars of your money to the government of one of the most corrupt nations on the planet. We have ignored the lessons learned from doing the exact same thing for twenty years in Afghanistan. And, now, shockingly, it appears a great deal of the money we sent to those brave freedom fighters in Ukraine has ended up in the pockets of corrupt government officials.

The Pentagon is now making noises about investigating and trying to find out what is going on. Good idea.  Maybe before we send any more cash to Kyiv somebody ought to find out where all the money we sent already really went.

Retired CIA Operations Officer. Served in Near East and South Asia. Author, commentator. Senior Editor AND Magazine. Public Speaker. Host of Ground Truth.

andmagazine.substack.com