The Ukraine Grift

By Pedro Gonzalez — 1 year ago
How much US taxpayer’s dollars are actually going to Ukraine?

With breathtaking speed and brain-killing narratives about a “feel good” crusade against the forces of darkness, Americans have found themselves in yet another confusing and expensive quagmire with no end in sight. 

Already U.S. involvement in the Russo-Ukrainian War appears to be a repeat of yesterday’s “forever wars” in Iraq and Afghanistan, with their incalculable human toll and estimated $6.5 trillion financial price tag by 2050 – and that’s just the interest payments – according to Brown University’s Costs of War Project. And just like Iraq and Afghanistan, the money Americans are supplying Ukraine is subject to waste, fraud, and abuse. Indeed, a documentary by CBS News quoted an assessment by Jonas Ohman, the founder of Blue-Yellow, a nonprofit that provides Ukrainian soldiers and volunteers with non-lethal supplies, that only 30 percent of aid was reaching the front lines in April.

We know plenty of aid is going to waste, but we don’t really know how much we have already or will yet commit. However, some estimates can be made. 

On May 20, The New York Times reported that the total commitment by the U.S. to Kiev since Russia invaded Ukraine on February 24 had reached $54 billion. “The scale is unprecedented and speaks — in terms of the U.S. perspective — to the earthquake presented by the current circumstances in Europe,” said Elias Yousif, an analyst at the Stimson Center.

But since then, there have been a series of announcements about disbursements and pledges of additional aid by the U.S. government. Below is a short list of funding statements from the Department of Defense and U.S. Agency for International Development:

It’s tricky to determine from the outside how much of this is entirely new aid and how much is related to the massive package pledged in May. Cross-referencing each announcement with news reports isn’t very helpful because the media’s vague language indicates that most reporters don’t know much more either — they are essentially just trying to keep up with the press releases that they are repeating. For different reasons, reports related to relevant departments and budgets are also not very helpful. But a conservative estimate puts the total commitment by the U.S. to Ukraine since the outset of the war in February at around $60-65 billion. By May, Rep. Thomas Massie (R-Ky.) estimated Congress was spending almost $500 per American family to fund the war in Ukraine. “The money isn’t being borrowed, it’s being printed, and the result will be more inflation,” he tweeted. 

Yet our already massive engagement could dramatically increase very soon. On September 2, Biden asked Congress to approve an additional $13.7 billion aid package for Ukraine, which would put total U.S. commitment in the ballpark of $70-80 billion.

Uncle Sam has so far pledged significantly more money to this war than all European Union countries combined, according to data compiled by the Kiel Institute for the World Economy. In June, the Wall Street Journal reported that U.S. spending on Ukraine hit roughly $130 million a day. Even as support among Americans for this arrangement declines amid domestic economic woes, seemingly endless bundles of cash are promised to the borderlands presided over by President Volodymyr Zelensky. “Inflation is nothing,” Zelensky scoffed at those Americans with the temerity to ask, shouldn’t we look out for our people and our problems first? “We are fighting for absolutely communal values,” he added. It’s unclear what Zelensky means, but perhaps he was referring to Western totems like gay marriage, which he has been preoccupied with promoting since the start of the war.

Beyond that, those “communal values” are as ambiguous as the true amount, efficacy, and nature of the aid being provided to Ukraine.

Democracy Promoters

Eighty billion in aid from the U.S. government would certainly be a big number to hit, but it represents only one slice of a much larger pie.

The Devex Funding Platform tracks more than 850 sources of information on the largest funders worldwide, from national governments to multilateral agencies and major philanthropic foundations. Between February 24 and August 16, it recorded more than $100 billion in commitments for Ukraine, with the U.S. as a leading funder. Notably, Devex reported that Ukraine is receiving “considerably higher commitments than crises of similar magnitude around the world.” For example, in June, “an analysis by the U.N. Office for the Coordination of Humanitarian Affairs found that humanitarian assistance was far better funded in Ukraine than in Syria, Yemen, and Afghanistan.” 

Setting aside ideological considerations and foreign policy intrigues, the interest Western elites have taken in Ukraine’s survival may have something to do with the fact that the country has long served as a global nexus of corruption. According to the Pandora Papers, of more than 300 implicated politicians and public officials, including several current and former national leaders, in more than 91 countries and territories to whom the documents are connected, Ukraine was home to more secret offshore holdings than any other — including Russia, Honduras, the United Arab Emirate, and Nigeria.

Presently, Natalie Jaresko, who served as Ukraine’s minister of finance until 2016, told Devex in August that Ukraine is currently running a budget deficit of about $5 billion a month and Western allies have committed about $30 billion. “So we’re going into the winter, and we have no credible plan in place — or at least not one that’s public — on how to get through the next six months,” she said. Jaresko added that World Bank and the International Monetary Fund, who “have basically said they’re out of credit space for Ukraine.” All this is happening at the same time Europe’s military support continues to decline. In July, according to data from the Kiel Institute, Europe’s six largest countries offered Ukraine no new military commitments. “Ukraine needs hardware,” urged Daniel Fiott, a European defense analyst at Vrije Universiteit Brussel, to Politico. 

Mr. Fiott needn’t worry; the U.S. will provide said hardware even if it must deplete its own arsenals and take it from the hands of American troops. 

War Machine

Since January 2021, the U.S. has committed more than $13.5 billion in security assistance alone to Ukraine. On August 24, Biden announced a $3 billion military aid package, the single largest such to date. In this case, the U.S. will buy the weapons through contracts instead of pulling from existing Defense Department inventory. But it’s doing that too.

Messages have emerged purportedly by military servicemen complaining the U.S. government is taking critical equipment directly from American troops and sending it to Ukraine without a plan to replenish it. Some claims are harder to verify than others simply because no one really knows how much we are sending — or how much is actually making it to the front lines as opposed to ending up in black markets — overseas. 

But some claims align with public reports. “Marine corps gave a shit ton of M777 Howitzers to Ukraine,” one person wrote in a message produced by Twitter user Terminalcwo. The M777 is a towed 155 mm artillery piece manufactured by BAE Systems. This expensive weapon is produced in the United Kingdom, where its titanium structures and recoil components are assembled, before it undergoes the final stages of integration and testing in Mississippi. 

This year, the Marines have shipped at least 108 — nearly a quarter — of its systems to Ukraine. But they can be replaced easily, right? Well, no. The world’s largest manufacturer of titanium, a critical component in the M777, is Russia’s VSMPO-Avisma. Just last year, VSMPO-Avisma signed an agreement with Boeing to be the company’s largest titanium supplier for current and future commercial aircraft. Now sanctions and embargoes on Russia will make it much harder for the West to replenish what it expends on Ukraine. 

Mark Cancian, a senior adviser at the Center for Strategic and International Studies, estimates the U.S. has sent Ukraine a third of its total inventory of anti-tank Javelin missiles and one-quarter of its stockpile of anti-air Stinger missiles. Replacing these could take years, but there is now also the problem of raw materials, like the mineral antimony.

Antimony, which Forbes called “the most important mineral you never heard of,” is a critical part of the defense-industrial supply chain used to make everything from armor-piercing bullets to night vision goggles and explosives and more. The last American mine in Idaho ceased production in 1997. Today, the world’s largest supplies are found in China, Tajikistan, and — of course — Russia. “There is no domestic mine for antimony,” according to a 2020 report from the U.S. Geological Survey. “China is the largest producer of mined and refined antimony and a major source of imports for the United States.” This is just the latest self-own wrought by decades of imperial hubris and lethargy on the part of the U.S., one it thinks it can solve by simply throwing more money at the problem even as the industrial complex itself buckles and groans.

Over the summer, 600 workers at Century Aluminum Company in Hawesville, Kentucky, America’s second-largest aluminum mill — accounting for 20 percent of U.S. supply — received pink slips after the plant’s electricity bill tripled in just a few months. “The Hawesville facility is the largest Century Aluminum smelter in the U.S. and the largest producer of military-grade aluminum in North America,” according to the company’s website. In a Bloomberg report, “Russia’s invasion of Ukraine” is named as a key driver of those skyrocketing energy prices. But that is inaccurate; it is the West’s reaction to the invasion that is fueling rising prices. And there is no end in sight. “At least two steel mills have begun suspending some operations to cut energy costs, according to one industry executive, who asked not to be identified because the information isn’t public,” Bloomberg added. 

Biden, as The Washington Post put it, “never planned for a war like this.” Nevertheless, Washington’s chief ideologues want to prepare us for a two-front war. In Foreign Policy, Matthew Kroenig, the deputy director of the Atlantic Council’s Scowcroft Center for Strategy and Security, wrote: “the United States and its allies must design a defense strategy capable of deterring and, if necessary, defeating both Russia and China in overlapping time frames.” But even the RAND Corporation has cast doubt on the U.S. establishment’s ability to serve such a tall order, given its disastrous handling of the proxy war in Ukraine, which it assumed would lead to a swift Russian defeat. “One of the central lessons of the Russo-Ukrainian War could be that the prevailing view that future wars will be short and decisive needs rethinking.” 

Either way is fine as far as the defense industry is concerned, which is raking in billions of dollars and seeing soaring stock prices thanks to the war in Ukraine. Most recently, the Army awarded a contract for $182 million on August 26 to Raytheon. 

No Brakes

As Europe’s pan-handler-in-chief Zelensky continues to demand unlimited aid and unflinching loyalty to his cause, going so far as to blacklist mild critics and anti-war voices outside Ukraine, the man himself seems comfortable with entertaining Russians with the right amount of money. According to a report in Il Tirreno, the president of Ukraine rented his Italian villa to a wealthy Russian guest in Forte dei Marmi, where rich Ukrainian and Russians have been hanging out in bathhouses, “ready to contend for the rent of millionaire villas as if the war did not exist.” In a sense, it doesn’t for the transnational elite to which Zelensky belongs. 

Though he has been deemed “a true wartime leader” by the likes of Hillary Clinton, Zelensky’s life seems rather luxurious, as he goes humming along from photoshoots with Vogue to ringing the opening bell of the New York Stock Exchange, as he did on September 6 to highlight his government’s new grift, “Advantage Ukraine,” which invites foreign investors to invest $400 billion in Ukraine.

In his sales pitch, Zelensky declared to investors wary of pouring their money into a country at war that Ukraine has just about booted out the Russians, “we have already started renovating everything that was destroyed by the Russian terror,” and all is well. “Invest in Ukraine — this will be your victory and a new success story for your companies. Slava Ukraini.” The camera cuts to a display of Zelensky frozen on a monitor behind a clapping crowd as the opening bell rapidly rings to off-screen whooping and cheering. And if this call for cash sounds familiar, it’s because Zelensky made a similar appeal at the World Economic Forum in Davos, Switzerland, two years ago. At that point, Ukraine had failed to attract more than $50 billion in foreign direct investment since 1991, according to the Kyiv Post, mostly due to corruption.

Today, it is no less corrupt, and in some ways, it is more corrupt than ever. But too many cars are hitched to this gravy train, and too many fools are willing to push it along even as it runs out of steam for it to stop. 

Pedro Gonzalez is a senior writer at Chronicles: a magazine of American culture, and the author of the Contra newsletter.

Read also:

Servant of the Corrupt, by Pedro Gonzalez

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