Kiev, Ukraine. If you were a defense contractor in the USA and Congress said, ya know who needs oversight? we trust you, after all your an American company. Here is a block grant of $30 million dollars, let us know what it bought, OK? Well, welcome to the world of the Poroshenko corrupt infested defense procurement system.
Because the Ukrainian defense sector relies on confidentiality for national security reasons, corrupt individuals are exploiting this secrecy for personal gain, diverting funds from needs of the soldiers on the front and from legitimate military-industrial development cloaked by the security laws Brussels is trying bring in line with western standards.
The Ukrainian Ministry of Economic Development and Trade is the main manager of State Defense Order budget funds used for increasing or creating new defense plants, and the responsible party paying for defense-related budget programs.
But there are some holy crap, Jesus Christ we are screwed, type problems for Ukraine with these guys touching anything involving money. Put aside the fact Ukraine is currently ranked number one as the most corrupt country on earth. Put aside that because there are no functional corruption courts, you can still bribe a judge and nothing will happen to the judge, he is literally teflon.
But consider Ukrainian procurement program activities and costs are classified.
The only information available to the public is information included in the national budget, in which an overall figure is provided for the implementation of state programs of defense industry reform and development, the development of new technologies, and the increase of existing production capacities for the purpose of defense goods manufacturing. Or you get one amount, but no detailed transparency on spending, outlays or overruns.
Briefly, here are some more points on corruption and defense.
The MEDT is the coordinating agency for the State Defense Order; it is also responsible for checking the budgets of all defense agencies and how those funds are used. It is therefore charged with checking its own distribution of funds. It is not everyday where you get to tell me you spent $5000 on a toilet seat and I pre approved that by handing you control of both ends of procurement.
The MEDT is tasked with distributing funds to state-owned enterprises, but lacks information on the real situation within these enterprises. Without access to information, the MEDT is unable to accurately calculate the financing needed for their work, and to monitor its delivery. In other words, thank you for the $36 million dollars for Ukrainian Army blow up dolls for soldiers stuck in Donbass. Don’t need them? Well don’t tell me, as MEDT, I operate without knowledge or information, makes the day go by faster.
The MEDT unnecessarily splits contracts, making it impossible to scrutinize whether the final product works effectively overall. Yes, Pavlo makes the fuzes for grenades and Petro the boddies. But it wont matter which one is defective, because by state mandate-I’m not supposed to know who is responsible.
The fact that the MEDT is the customer, but is not the ultimate owner and user of the products created in this process, creates an unnecessary layer of complexity, which hinders effective control and scrutiny. Yes, if the guidance system in the missile is off and it destroys the Rada, well that is just life! Because if I’m MEDT the last thing I know about is accountability, efficency, economy of purchase or if something works as we just spend money, with no other mandate.
If you thought the US Defense procurement was a criminal joke, oh you never saw the three ring circus like no other that is the Poroshenko Administration administering defense fund spending as currently operated.