Zelensky’s Cash Haul

Zelensky’s Cash Haul

Of all the gifts that Ukrainian President Volodymyr Zelensky traveled across the world to thank American lawmakers for in-person five days before Christmas, one stood out. It wasn’t the Patriot missile system that he was receiving to counter Russian attacks on civilians or the humanitarian aid for refugees, though he was grateful for both. It was the cold, hard cash.

While much of the world’s attention has focused on military and humanitarian aid to Ukraine, a large part of the help the U.S. is giving goes straight to Zelensky’s government as cash support for its operations. “Financial assistance is also critically important,” Zelensky said in his speech to Congress Wednesday night. “Your money is not charity, it’s an investment in the global security and democracy that we handle in the most responsible way.”

Just how much cash is the U.S. “investing” in the Ukrainian government? A spokesperson for the United States Agency for International Development, which is responsible for disbursing the funds, puts the direct-to-budget number at $12 billion so far since the start of the war. Tim Rieser, the long-time foreign policy aide to the Senate Appropriations chief, Democrat Patrick Leahy of Vermont, says the next tranche in the spending bill that his boss just shepherded through Congress adds another $9.9 billion. That means of the $14 billion in new non-military aid the U.S. is providing Ukraine, most is cash to support Zelensky’s government, not humanitarian assistance.

The money is both crucial to the Ukrainian war effort and controversial. On the one hand, Ukraine is struggling to collect taxes, has seen at least a 35% drop in GDP compared to 2021 according to the International Monetary Fund, and is in desperate need of funds to pay soldiers and run the state in the middle of a war. On the other hand, cash infusions directly into the financial coffers of needy countries are frowned upon by foreign aid experts, in large part because the money is most susceptible to misuse. That’s a particular concern for officials on both sides of the aisle in Washington, given the history of corruption in Ukraine. “There is concern about oversight,” of the direct-to-budget financial support says Rieser, because “Ukraine has a history of corruption.”

The Biden administration and its allies on the Hill say the money is being properly accounted for. A USAID spokesperson says it is being funneled through the World Bank and that the administration has hired the accounting firm Deloitte to review direct-to-budget spending. The aid agency has plans in the coming weeks to partner with the U.S. Government Accountability Office to build the capacity of Ukraine’s Accounting Chamber, which audits the country’s budget, the spokesperson says. The end-of-year spending bill includes $13.5 million for additional oversight by the Inspectors General at USAID and the State Department.

Top Democrats admit the dollars are hard to track, however, and the administration is bracing for Republicans to attack U.S. direct-to-budget aid. After Zelensky’s speech, far-right critics of U.S. support for Ukraine reiterated their opposition. “He did not change my stance on suspending aid for Ukraine and investigating fraud in transfers already made,” said Rep. Matt Gaetz of Florida in a statement Wednesday. GOP leadership has so far been vague about what their plans are once they take power in the House. House Republican Leader Kevin McCarthy said before the midterm elections that his majority would not “write a blank check to Ukraine” but has declined to go into more detail.

Sporting a pin that depicted the Stars and Stripes alongside the Ukrainian flag, plus a matching yellow and blue tie, incoming House Foreign Affairs Committee Chair Michael McCaul on Wednesday slammed the Biden administration for failing to provide long-range artillery to Ukraine fast enough. Asked by TIME about the potential for increased GOP oversight over direct-to-budget aid next Congress, he agreed that the cash funding merits closer examination.

“We intend to do that,” McCaul said. “We’ve had zero oversight. We’ve had no hearings on Ukraine on the Foreign Affairs Committee, not one. So we are going to have those hearings. I think people deserve accountability, the taxpayer, and us as well.” Said McCaul, “It’s been just sort of writing a check without any responsibility attached. I think once [members and the public] see if it’s going into the right places, with accountability, they’re more likely to want to support this effort.” McCaul says that a majority of Republicans and Democrats support Ukraine.

Democrats say the GOP is playing politics with the issue. “It’s not that they really want oversight,” says current House Foreign Affairs Committee Chair Gregory Meeks. “They’re saying, ‘Oh, we should be spending the money someplace else.’ They’re whispering that it’s time for this war to end… I’m worried about where they’re gonna go moving forward, because it just seems to me that some of them decided, ‘We shouldn’t be funding Ukraine, we should send the money to the border,’ or something of that nature.” Meeks says House Republicans have had the opportunity to conduct oversight through classified hearings with U.S. officials, the Ukrainian ambassador, and other sources of intelligence. “When they get the answers, their answer is, ‘We don’t believe you. We don’t trust you.’ So there’s nothing that you can do,” he says.

Democrats remain confident that ultimately the strategic value of what Zelensky called an “investment” will win out. “In the middle of a war like this it is not possible to keep track of every dollar,” says Leahy’s aide, Tim Rieser. “What’s the alternative? Turn your back on Ukrainians risking and losing their lives to defend their country, or allow the Russians to seize control of Ukraine by force.”

—with reporting by Massimo Calabresi/Washington

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