From blockchain to photos, a look at America’s struggle to track Ukraine aid

American officials are turning to everything from blockchain technology to Ukrainian soldiers for help as they struggle to track the billions of dollars in U.S. weapons and other aid flowing into Ukraine, according to a State Department cable obtained by POLITICO.

The Biden administration also plans to tap a still-unnamed U.S. firm by February to implement a special three-year initiative to help the oversight effort, according to the “sensitive but unclassified” document.

The Sept. 6 cable from the U.S. Embassy in Kyiv is blunt in describing the challenges facing U.S. officials trying to watch every penny as Russian drones and missiles bombard Ukrainian cities. There are, for instance, severe limits on the number of American officials in the field and a number of security constraints on their movements. It’s also hard to find contractors willing to work in high-risk regions or set up in-person meetings with government officials, civil society leaders and others receiving the aid, the document states.

The cable comes to light as Republicans are increasingly calling for more vetting of the money and weapons flowing to Ukraine. It also comes as Russia ramps up its attacks on Ukraine’s civilian infrastructure, making it even harder to account for what’s already poured in of themore than $50 billion the United States has committed to Ukraine.

The cable, signed by U.S. Ambassador Bridget Brink, is a snapshot in time. But it underscores how crises like the Ukraine war — such as U.S. experiences in Afghanistan and Iraq — inevitably turn into hugely expensive undertakings that are hard to track precisely because of the chaos on the ground, often in countries with histories of corruption.

“Above all, kinetic activity and active combat between Ukrainian and Russian forces create an environment in which standard verification measures are sometimes impracticable or impossible,” the nine-page cable states.

The State Department declined to comment directly on the cable, but a spokesperson said in a statement: “The United States takes very seriously our responsibility to ensure appropriate oversight of all U.S. assistance.”

U.S. government agencies have existing mechanisms aimed at preventing misuse of funding, including inspectors general tasked with audits and investigations. The inspectors general from the State Department, Pentagon and U.S. Agency for International Developmenthave formed a Ukraine-focused working group to help coordinate their work.

They are also trying to align their efforts with European allies contributing billions to the fight.

But there are calls for additional Ukraine oversight. Some of those demands have come from the far-right wing of the Republican Party, although support for the general idea seems to be broader.

This month, Rep. Marjorie Taylor Greene (R-Ga.), who has insisted on curbs on aid to Ukraine, got a significant number of more mainstream Republicans to back a legislative proposal demanding a full audit of U.S. aid to Ukraine, though Democrats blocked it in committee.

Rep. Kevin McCarthy (R-Calif.), who is seeking to become House speaker in January, has also said in recent months that there will be no “blank check” for Ukraine.

Democrats have warned against such public assertions, saying it is important to send Russia a signal of American unity when it comes to support for Ukraine. Rep. Adam Smith (D-Wash.), the chair of the House Armed Services Committee,has also warned in recent days that alarmism about the possible misuse of Ukraine aid is feeding into Moscow’s propaganda.

The State Department cable shows the Biden administration trying to get ahead of the problem. Specific departments, agencies and programs already are adjusting their methods of overseeing the U.S. aid as the environment fluctuates in Ukraine, according to the cable. The approaches rely heavily on local Ukrainian staffers, some still in the country but many working remotely — largely coordinated by a senior embassy official. Technology is expected to play an even bigger role than in the past, the cable indicates.

Among the examples:

• Apps: The State Department’s Bureau of Conflict and Stabilization Operations, whose mission includes trying to strengthen fragile states, has a public-private partnership project to track assistance using “a commercial smartphone app that uploads all photo and video media onto a blockchain at the point of capture,” according to the cable. “The app will provide reliable, tangible evidence that assistance is reaching intended recipients, even in locales too dangerous or difficult for program implementer staff to reach.”
• Ukrainian troops: The Defense Department has planned to pursue an alternative to having U.S.-trained inspectors on the ground that relies on the Ukrainian Armed Forces to “conduct its own inspections” to satisfy some of the more stringent end-use monitoring requirements of the Defense Security Cooperation Agency. Those requirements include verifying serial numbers for items such as Switchblade drones and night-vision devices, the cable states.
• Documenting aid: The U.S. Agency for International Development, which has extensive experience in conflict settings, is at times requiring photo documentation of goods received by beneficiaries, “particularly in hard to reach areas,” according to the cable. USAID also is using third-party monitoring by Deloitte, the management consulting firm, to “review, identify gaps.” The U.S. often leans on firms such as Deloitte to assist its work overseas, including in conflict zones.

No matter the amount of planning, some Democrats have argued for special oversight for Ukraine in the long term. And they point to America’s experiences establishingspecial inspectors general for Iraq andAfghanistan. Those bodies were established as it became clear that dedicated teams of investigators with special resources were needed to monitor the vast amounts of money pouring into those countries, whose institutions were highly stressed or broken.

Rep. Sara Jacobs (D-Calif.), a member of the House Armed Services Committee, was an early advocate for establishing a dedicated inspector general for the Ukraine conflict. She sees it as an opportunity to rethink how the United States carries out“end-use monitoring,” the legal requirement to track the weapons and other security assistance that America provides to allies.

“The end-use monitoring regime we have in place, in general, was designed to make sure the Soviet Union did not steal our trade secrets, which is not the same as making sure our weapons don’t get used for things we do not intend them to get used for,” Jacobs said in an interview.

But she acknowledged that the nature of the battleground in Ukraine makes full-scale monitoring especially difficult. “We couldn’t do it now,” she said. “We don’t have enough mobility within the country to really be able to do it.”

The Defense Department inspector general’s office also said that the conflict presents unique challenges for oversight, particularly when it comes to determining exactly where weapons sent to the Ukrainian armed forces go if they are not immediately used in the battle.

Megan Reed, a department spokesperson, stressed that the end-use monitoring system was not designed for a war zone. “End-use monitoring was designed for peacetime,” she said. “End-use monitoring is really complex right now.”

Meanwhile, the United States is planning to establish a program called “Monitoring, Evaluation and Audit Services for Ukraine Reporting,” or MEASURE, to assist in the oversight effort. That includes a three-year contract “with a U.S. firm to establish an in-country presence to undertake remote and in-person monitoring with site visits as possible,” according to the cable.

Asked for details about the MEASURE plan’s status, the State Department spokesperson said in an email: “The program is currently under procurement, and we expect an award to be made in February.”

The three-year timeframe for the contract suggests that, even if the war ends soon, U.S. officials expect to continue to send aid to Ukraine well past that, especially given Russia’s attacks on Ukraine’s infrastructure. The September cable, however, states that the embassy hopes to have all aspects of its monitoring strategy in place within six months — by March. The State Department declined to comment on this timeline.

The cable notes that some embassy facilities and workspaces were being rebuilt, and says that is one reason some staffers still in the country often have been unable to go into the building, which is also operating at a reduced capacity due to the wartime conditions.

Asked why such rebuilding was necessary, the department spokesperson nodded to security. “It is standard operating procedure during a drawdown to minimize our footprint and reduce the amount of sensitive material remaining,” the spokesperson said. “Embassy Kyiv’s drawdown was conducted in accordance with this standard operating procedure.”

The spokesperson spoke on condition of anonymity because the topic involved sensitive diplomatic matters.

When asked if the oversight challenges have gotten steeper since the cable was published, the spokesperson would not indicate either way. “The U.S. Embassy is open and remains fully engaged on oversight of U.S. assistance, despite Russia’s relentless attacks,” the spokesperson said in the email.

The fluid situation could lead Ukraine to backslide on the progress it has made in fighting corruption in recent years, the cable warns, adding that the United States should keep supporting anti-corruption programs in the country.

“This will also help us advance a critical [U.S. government] goal, the accession of Ukraine into the European Union, which is contingent on robust, transparent and effective justice and anti-corruption systems and laws,” the cable states.

The Russian government, itself no stranger to corruption, has often used allegations of financial and related malfeasance as a way to demonize the Ukrainian leadership, making the topic a sensitive one for Americans.

“We know that the Russians are trying to sow doubt in our assistance to Ukraine by pushing these stories about misuse of weapons,” Jacobs said. “Every indication I’ve seen is in fact there hasn’t been misuse of weapons. But is it a valid concern by us that we are spending taxpayer dollars and we are giving weapons to a place that prior to this conflict had beenone of the proliferators of small arms in Europe? Yes.”

The cable stresses that “every section and agency at Embassy Kyiv is affected” by the unsafe ground conditions and staffing shortages when it comes to overseeing aid. That’s especially the case in “active conflict areas and places under temporary occupation.”

“Even with the conflict, some partner staff and beneficiaries have continued to operate in those areas and provide input, particularly related to human rights violations,” the cable states. “Embassy Kyiv’s local staff have performed heroically, enabling the mission to deliver and monitor assistance that otherwise would have been impossible.”