A Noble Crime: How Ukraine’s Anti-Corruption Prosecutor Created a $70M Parallel Budget

Over three years, 2.9 billion hryvnias ($70 million) have been “distributed” this way.

You read it and think: wonderful, money goes to the front, corrupt officials finance defense instead of sitting in prison. Modern Robin Hoods in the prosecutor’s office. Except there’s one problem: this is a crime.

Let’s dissect why even the noblest goal doesn’t make illegal actions legal, and why this precedent is more dangerous than it initially appears.

Article 19 of the Constitution: An Inconvenient Detail

There’s this boring article in the Constitution that everyone knows but rarely mentions:

“State authorities and local self-government bodies, their officials are obligated to act solely on the basis of, within the powers and in the manner provided by the Constitution and laws of Ukraine”

This is called the principle of legality. Not “act as you please if the goal is noble,” but only on the basis of law. The principle works very simply: if the law doesn’t permit it — it’s prohibited. This isn’t for citizens (they can do anything not forbidden), this is for the government.

Now let’s ask: where in the law does it say that a prosecutor can include in a plea agreement a condition about transferring funds to Sternenko’s, Prytula’s, or anyone else’s charitable foundation?

The short answer: nowhere.

What the Criminal Procedure Code Says

Let’s open Article 472 of Ukraine’s Criminal Procedure Code (CPC) — “Content of the plea agreement.” The agreement may include:

• Unconditional admission of guilt ✓
• Obligations to cooperate in exposing other persons ✓
• “Conditions for partial release from civil liability in the form of compensation to THE STATE for damages” ✓
• Agreed-upon punishment ✓
• Conditions for special confiscation ✓

See the word “STATE”? Don’t see the words “charitable foundation”? Me neither.

Article 469 CPC (as amended in October 2024) for corruption cases requires “full or partial compensation for damage caused.” Again — to whom? To the state or the victim. Not to third parties.

And Article 96–1 of the Criminal Code leaves no alternatives:

“Special confiscation is the compulsory gratuitous seizure by court decision into STATE ownership of money, valuables and other property”

Into state ownership. Not to a foundation. Not to volunteers. To the state.

Where This Money Should Actually Go

Budget Code of Ukraine, Article 13: proceeds from special confiscation = revenues of the special fund of the state budget with targeted allocation.

By the way, there’s precedent. When Russian and collaborator assets were confiscated, where did the money go? That’s right — to the state budget special fund. According to the State Treasury data, 25.8 billion hryvnias from nationalized Russian banks went exactly there. Why should SAP agreement funds suddenly take a different route?

And now the most interesting part: who decides how state budget funds are spent? That’s right, the Verkhovna Rada (Parliament). And who decides which charitable foundation receives money from agreements? The SAP prosecutor. See the problem?

How It Works in the Civilized World?

United States: Restitution

In America, plea bargaining is common practice. But there are clear rules. Title 18 U.S.C. § 3663, § 3663A — federal laws on restitution.

Where the money goes:

• Directly to crime victims (direct victims)
• To insurance companies that compensated victims
• To state victim compensation programs
• In exceptional cases — to government agencies for investigation costs

The Congressional Research Service in its report (RL34138) clearly states: “Federal courts may not order a defendant to pay restitution unless empowered to do so by statute”.

And even when plea agreements contain special conditions, restitution can only go to victims or their beneficiaries. Never — to arbitrary charitable organizations.

United Kingdom: Compensation Orders

Criminal Justice Act 1988, Proceeds of Crime Act 2002 — courts can order compensation to the victim or the state Criminal Injuries Compensation Authority (CICA). Confiscated assets go to a special government fund.

The practice of transferring funds from plea deals to charitable organizations does not exist.

European Union

Directive 2012/29/EU (Victims’ Rights Directive): compensation is always victim-oriented through national compensation schemes. There’s no arbitrary transfer to third parties.

Conclusion: Throughout the civilized world, money from deals with justice goes either to victims or to the state. Never — to officials’ favorite charitable foundations.

Anatomy of a Crime: Article 364 of the Criminal Code

Let’s see if there’s a criminal offense here. Article 364 Part 2 of Ukraine’s Criminal Code — “Abuse of power or official position.”

What’s needed for the offense:

1. Use of official position ✓
    SAP prosecutors act on behalf of the state
2. Contrary to the interests of service ✓
    Funds should have gone to the state budget according to law
3. To obtain unlawful benefit ✓
    Here’s where it gets interesting

Unlawful benefit isn’t just money in your pocket. It’s any benefit of a property or non-material nature. What do SAP prosecutors get?

• Reputational benefit (“volunteers,” “patriots”)
• Political capital
• Public praise
• Possible personal interest in a specific foundation’s activities

And what does the suspect get? Lenient punishment in exchange for a “charitable contribution”. Essentially — a “buyout” system. Instead of prison — a donation to Sternenko.

The Argument “But It’s for Drones!”

The most popular response: “Why are you nitpicking, the money goes to the front, to FPV drones! Better than corrupt officials sitting in prison at state expense!”

Alright, let’s imagine a situation. A police officer stops you for speeding. You give him a 500 hryvnia bribe. He takes this money and immediately transfers it to a charitable foundation for drones. Question: does this stop being a bribe?

No. It remains a bribe. The subject of a bribe doesn’t stop being a bribe based on how it was used.

Or another example. An official embezzles a million from the budget. But he immediately transfers it to “Sternenko’s Community.” Does this stop being embezzlement? No.

The law doesn’t work on the principle of “the end justifies the means.” Even the noblest goal doesn’t legalize a crime. Otherwise, we don’t live in a rule-of-law state, but in that same system where “our guys” can do anything if it’s “for the right cause.”

Robin Hood and the Rule of Law

Robin Hood also took from the rich and gave to the poor. Noble, right? Except he was a criminal. A beautiful, romantic one, but a criminal. The legal system cannot function on the principle of “whoever has nobler motives is right.”

Because once we allow breaking the law “for a good cause,” the question immediately arises: who determines which cause is noble?

Today a SAP prosecutor decides that money will go to Sternenko for drones. Okay, that’s genuinely needed. But tomorrow another prosecutor decides money will go to a Russian Orthodox Church foundation “for rebuilding temples”? Or to an opposition politician’s charity? Or to an organization “defending traditional values”?

If there’s no clear law — there’s discretionary power of an official. And discretionary power over billions of hryvnias is systemic corruption in its purest form.

Parallel Budget: A Threat to Democracy

Let’s voice the main problem. Over three years, SAP has “distributed” 2.9 billion hryvnias ($70 million). Let me remind you: this isn’t their money. These are state funds that should have gone to the budget.

Who decides how the state budget is spent? The Verkhovna Rada. This is called parliamentary oversight. This is one of democracy’s foundations.

Who decides which charitable foundations receive money from agreements? The prosecutor. Without oversight. Without parliament. Without any procedure.

Essentially, a parallel budget of billions of hryvnias has been created, managed by a few people at their discretion. Today they’re honest patriots. But tomorrow? When the government changes? When one of these people succumbs to temptation?

Institutions matter more than personalities. Good people in a bad system is a disaster waiting to happen. And what SAP is doing now is precisely creating a bad system under a noble cover.

Corruption Risks: Obvious Questions

Let’s imagine a hypothetical (or not so?) situation:

Scenario 1: An oligarch is caught for corruption. He knows the prosecutor is friends with Sternenko. The oligarch himself proposes transferring a million to the foundation. The prosecutor “meets him halfway” and makes a soft deal. Is this corruption?

Scenario 2: A prosecutor knows his career depends on “volunteering metrics.” He specifically seeks cases where he can make an agreement with transfer to the “right” foundation. He softens deals to get more money for the foundation. Is this abuse?

Scenario 3: SAP leadership lobbies for a specific foundation because their friends/relatives/political allies work there. Other foundations don’t appear in agreements. Is this a conflict of interest?

All these scenarios become possible when there’s no clear law and transparent procedure. Corruption begins where legality ends.

What To Do: Three Scenarios

Scenario 1: Admit the Mistake (won’t happen)

SAP publicly acknowledges it acted outside the law. NABU, the High Anti-Corruption Court, all involved admit the mistake. Funds are returned to the state budget. Parliament passes a clear law on directing agreement funds to defense with transparent oversight.

Probability: 0.1%. Because this means admitting that “patriotic prosecutors” violated the law for three years.

Scenario 2: Legalize Lawlessness (most likely)

Parliament retroactively passes a law “legalizing” the practice of transfers to charitable foundations. They create some commission for “oversight.” All actors receive indulgence.

Probability: 70%. Because “you can’t touch people working for the army.”

Problem: The precedent remains. The “parallel budget” mechanism becomes institutionalized. Who guarantees the next government won’t abuse it?

Scenario 3: Criminal Case (fantasy)

Someone from law enforcement dares to open a criminal case under Article 364. Investigation. Trial. Punishment for the guilty.

Probability: 0.01%. Because “who would dare touch anti-corruption fighters”?

Conclusion: What This Story Is Really About

This story isn’t about Sternenko. Not about drones. Not about patriotism or volunteering.

This story is about how the law is either for everyone, or it exists for no one.

This story is about how noble motives don’t legalize crime.

This story is about how even the best people in a system without oversight will eventually create a catastrophe.

For three years, SAP acted outside the law, creating a parallel budget of billions of hryvnias. That the money went to the front is wonderful. That it was illegal is a fact. Both things can be true simultaneously.

A rule-of-law state is when even a noble crime remains a crime. Because once we start dividing crimes into “noble” and “ignoble,” the law stops working. Only the arbitrariness of those in power remains.

P.S. A Question for Readers

Imagine tomorrow there’s a High Anti-Corruption Court ruling on transferring 100 million from an agreement to a Moscow Patriarchate charitable foundation “for rebuilding destroyed churches.” Using the same scheme. Under the same “precedent.”

Will you applaud? Or will you suddenly remember there should be a law?

The rule of law either exists or it doesn’t. There’s no third option.

Oleh Cheslavskyi — independent historian and analyst specializing in deconstructing imperial narratives.

Originally published at femida.ua