The Art of Crowdfunding War

(Bloomberg Businessweek) -- Yuri Deychakiwsky thinks he was home in North Potomac, Md., when he saw the video. He can’t recall exactly. After writing so many checks to support the war effort overseas, even watching bombs rain down on strangers doesn’t quite register in his memory.

Born in Cleveland to Ukrainian immigrants, Deychakiwsky is a 61-year-old cardiologist at Johns Hopkins Community Physicians in Bethesda. Around Christmastime in 2017, he wired $3,000 to a Ukrainian émigré in Syracuse, N.Y., for what his contact cryptically codenamed “our grasshopper”—a drone whose specs Deychakiwsky declines to share—which was to be used by the Ukrainian Volunteer Army, a battalion fighting Russian-backed separatists.

And now there it was on Deychakiwsky’s smartphone screen, dropping explosives on trenches in eastern Ukraine as enemy militants scrambled for cover. In one clip, a bomb detonated near a separatist. The man stood stunned for a moment, then sprinted for cover before falling down and crawling on his belly, possibly suffering from a leg wound. “It gives me an uneasy feeling as a physician and a Christian that I’m participating in this,” Deychakiwsky says. “I try not to step on ants. I don’t hunt. I couldn’t shoot Bambi. But of course I eat hamburgers, too.”

The Art of Crowdfunding War

After decades caught between Russia and the rest of Europe, Ukraine saw its post-Soviet identity crisis come to a head in 2013, when pro-Russian President Viktor Yanukovych abandoned a trade deal with the European Union. Massive political protests and street battles in Kiev followed—the so-called Euromaidan Revolution—and in February 2014, Yanukovych climbed into a Russian military helicopter and fled into exile across the border. Within days, Russia had taken advantage of the unrest to seize Crimea. It also began arming separatist forces in the eastern Donbas region and (though it denied this) sending soldiers and mercenaries of its own.

Fighting broke out that spring, and many Ukrainians were drawn deep into the business of war. The country’s military was in ruins. Decades of corruption and neglect had left, by the government’s own count, just 6,000 of 41,000 land troops combat-ready. As separatists won a series of victories, armored cars requisitioned from a local bank ferried Ukrainian troops to the front. Soldiers were issued medical kits whose only useful item was a condom. Some arrived in sandals or were forced to scavenge weapons from dead separatists. Many wounded troops returned to Kiev and died in military-hospital hallways for lack of beds and surgical instruments.

Volunteers rushed into the gap. More than 15,000 men and women, many of them veterans of the Euromaidan protests, streamed to the front. They assembled in battalions that sometimes had ties to ultranationalist groups, who were united by Russophobia and an obsession with Ukrainian identity—to the point, in some cases, of racism. An improvised supply chain formed to keep the war effort operational. A former marketing manager for Danone SA drove back and forth to the east, eventually delivering $2 million in basic provisions. The owner of a manufacturing company rehabbed mothballed Soviet tanks for $500 a pop and got them rolling to the front. An aikido instructor started a volunteer ambulance corps.

And a network of private donors emerged to fund it all. They paid for sniper rifles and thermal scopes, for veterans’ medical treatment and, later on, mental health services. Within a year the Volunteer Council, a civil group within the Ministry of Defense, had cataloged donations totaling about $12 million to $14 million, an accounting that didn’t cover all volunteer groups, nor donations from corporations, in-kind support, or manpower. Diaspora groups in the U.S., Canada, and Europe gave millions of dollars more.

They kept giving, albeit in lower numbers, even as the war entered a phase frequently described in the Western press as a “frozen conflict.” Despite the term, eastern Ukraine remains a tinderbox. The Organization for Security and Co-operation in Europe has counted hundreds of thousands of annual cease-fire violations along the roughly 300-mile contact line; in November, Russia seized three Ukrainian naval vessels and 24 sailors, prompting President Petro Poroshenko to declare martial law in border areas. International monitors reported a doubling of cease-fire violations in the two weeks that followed.

The Art of Crowdfunding War

Deychakiwsky won’t say on the record how much money he’s given, but he keeps a spreadsheet, and the amount he provides off the record is substantial. “I could have retired by now,” he says with a laugh. “It’s why I drive a Chevy.” Most of his donations go to humanitarian assistance, he’s quick to add, not bomb-dropping drones.

Some of the donor activity has familiar historical echoes—think Golda Meir raising $50 million for Israel’s young military or Irish groups passing tin cups around Boston and New York bars for the Troubles back home. But Ukraine’s crowdfunded war is something new. Volunteer battalions trumpet victories on social media. Medics collect donations through mobile payment services, then use smartphones to gather visual evidence that the aid reached the front. Engineers buy, design, and retrofit cheap, reliable drones. Coders write targeting software for artillerymen to use on tablet computers. The org chart, from funding through to delivery, would be familiar to any startup.

There are pitfalls to all this innovation, though. Ukraine’s oligarchs backed some of the battalions, prompting concerns about militia loyalties. The parallel supply chain bypasses Ukraine’s endemic corruption instead of fixing it. And there are few checks to keep weaponry out of the hands of neo-Nazis or criminals. Vigilante war financiers may have saved the country and battled Russian proxies to a standstill, but Ukraine will be reckoning with their legacy for years to come.

The Art of Crowdfunding War

In May 2014, Vitaliy Deynega, a freelance IT specialist, was chain-smoking in his kitchen in Kiev, reading about the Russian-backed separatists gaining ground in the east. Deynega is a vegetarian who admires Mohandas Gandhi’s views on nonviolent resistance and once attended Burning Man. But that night, he posted on Facebook that he would personally spend 10,000 hryvnias, about $900 at the time, to buy body armor and night vision scopes for Ukrainian troops. Friends applauded him, and he began fundraising; within six weeks, he’d raised 100 times his original stake. He soon formed Come Back Alive, which would become one of the country’s most celebrated charities—or perhaps more accurately, one of its leading quasi-military organizations.

Come Back Alive could get equipment to the front with stunning efficiency. A few months into the war, an army captain named Andrii Skorokhod recalls, he requested a thermal scope, to identify sources of body heat, and promptly forgot about it. One night not long after, a bus arrived at his position near Donetsk filled with journalists, volunteers, and a woman shouting, “Where is Andrii?” He signed a form, and she handed him a new Pulsar scope worth several thousand dollars.

Deynega’s group has spent about $5 million on equipment to date. Donors are listed in neat rows on the charity’s website, for contributions ranging from a few cents to $50,000. “I just want to help my army fight bad guys,” he says. “We don’t want to mess with lethal equipment.” It’s true that thermal scopes aren’t themselves lethal, but the claim is disingenuous: Late one night in May 2015, Skorokhod moved to intercept a party of separatists. Without the scope, he says, he would have staggered around in the dark hoping to spot them first. With it, he could detect their heat signatures and direct rifle fire from his half-dozen men and a .50-caliber machine gun team until the separatists were dead.

The informal supply chain sprung up in part because Ukraine’s European allies refused to sell the country weapons for fear of intensifying the conflict. American support has been limited to advisers sent by President Obama and antitank missiles sent by President Trump. Donor cash filled the breach early on, helping keep military defeats at Ilovaisk, Debaltseve, and Donetsk International Airport to merely disastrous levels rather than existentially threatening ones.

To date, nearly 13,000 people on both sides have died in the fighting, most in the early years. In February 2015, Ukraine, Russia, and separatists signed the Minsk II agreement, which called for a cease-fire and the withdrawal of heavy weaponry from the front. Everyone dug in, and the frozen conflict began. Donations have since fallen off, but they’ve been sufficient for volunteers to buy targeting software, drones, and sniper rifles suitable for the new normal of trench warfare. And when Poroshenko declared martial law late last year, donations to Come Back Alive shot up tenfold before settling back down.

On the July afternoon I visit Pisky, a front-line town that saw heavy fighting in late 2014 and early 2015, it’s abandoned. A once-upscale gated community I pass through is now a ruin of bombed-out homes and overgrown flora. It seems peaceful, but it’s an illusion. Shrapnel crunches underfoot—my guide from the 56th Brigade points out a house that was destroyed by mortars just two weeks prior. A few days later, not far away, a teenage couple will wander into a field and step on an explosive, adding their names to the list of dead.

The Art of Crowdfunding War

Not far down the road, Andrii Moruga sits atop a BMP-1 light infantry vehicle and directs a baby-faced lieutenant to aim the cannon at a transmission tower as part of a training exercise. Moruga was wounded during the monthslong battle for the Donetsk airport when an artillery shell landed near him, sending shrapnel into his back and severing three of his fingertips. The shrapnel also cut a comrade in half. While recuperating in a hospital, he watched a documentary in which American troops called in mortar strikes using a smartphone. “Why can’t we do that?” he asked himself.

Now he spends two weeks a month on the front lines training troops to use Armor, tablet-based software that lets tank and mortar crews target separatists. The program was designed a loose collection of Ukrainian programmers. Come Back Alive provides the tablets and rugged laptops that run the software.

A few miles to the northeast, in Avdiivka, Ruslan Shpakovich, a former rental-car company worker, is in town to install scopes on Remington sniper rifles privately purchased for the 92nd Brigade. Shpakovich, who learned his trade as a junior marksman during the Soviet era, says there are hundreds of such rifles on the front lines. Russia ships a steady stream of domestically manufactured models to separatists in rebel-controlled territory; on the Ukrainian side, Kiev’s gun retailers serve as snipers’ de facto armory. Private donors purchase hunting rifles—from $3,000 for the Savage 110 BA Stealth model to $19,000 for the Accuracy International AI-AX—and ship them to the trenches.

The Art of Crowdfunding War

The closer you get to death-dealing arms, the more elusive donors’ names become. Shpakovich alludes to an unnamed millionaire businessman who lost assets in Crimea and eastern Ukraine and now buys 20 rifles a month that are in turn affixed with sniper scopes purchased through an anonymous expatriate in the Czech Republic. Ammunition is expensive, Shpakovich says, so volunteers—again unnamed—make thousands of sniper rounds by hand every month. I ask if I can meet some of the suppliers. His only response is a conspiratorial twinkle of the eye.

When I later visit the Kramatorsk headquarters of the Ukrainian Volunteer Army, the ultranationalist battalion that received Deychakiwsky’s grasshopper, officials tell me about a Moscow proctologist who, for reasons they won’t expand upon, buys them scopes. I press them for his name. “American spy,” one man calls me, in English. The question of whether or not it’s a joke hangs in the air for the next half-hour.

The source for much of the military aid is the estimated 20 million people of Ukrainian descent living abroad. The wealthiest portion of the diaspora is in the U.S. and Canada, and their story has numerous chapters: late 19th century, post-World War II, and post-Soviet waves. The 2010 U.S. census recorded 345,000 foreign-born Ukrainian-Americans.

When the conflict began, these different groups came together. The result was organizations such as Revived Soldiers Ukraine, founded by Irina Vashchuk Discipio, who’d moved to Pasadena to run middle distances for the University of Southern California track team in 2003. Her charity has helped more than two dozen wounded veterans—by raising money, arranging flights, and negotiating cheaper surgeries from doctors, some of them Ukrainian-American.

Trump’s cozy relationship with the Kremlin has kept the diaspora’s pump jacks bobbing for cash. Yuri Pleskun, a real estate investor who immigrated to New York in the 1980s, recalls asking the late Senator John McCain during a meeting in 2017 whether he could start ferrying sniper rifles to Ukraine. McCain demurred. “Senator,” Pleskun recalls saying, “I will personally fly those weapons.” (McCain’s office didn’t respond to a request for comment before he died in August.)

Pleskun loves telling this story. But it highlights the legal and ethical issues of vigilante funding. David Laufman, who until recently served as chief of the Counterintelligence and Export Control Section at the U.S. Department of Justice, says certain forms of assistance could violate export control laws and the Foreign Agents Registration Act, among other federal laws.

Of the most popular companies for foreign fund transfers, PayPal Holdings Inc. adheres to a U.S.-led export regime called International Traffic in Arms Regulations. PayPal reports that it’s shuttered Deynega’s Come Back Alive accounts at least three times for violating its terms of service, along with those of dozens of other Ukrainian nonprofits. Deynega says he continues to accept donations through MoneyGram and Western Union, which Deychakiwsky also describes using. (MoneyGram International Inc. didn’t reply to a request for comment, while a Western Union Co. spokeswoman says the company has “a sophisticated filtering program in place that screens every Western Union transaction in real time against internal and government watch lists.”)

Then there’s the question of where the money ends up. The U.S. spending bill signed in March 2018 banned assistance to the Azov Battalion, a volunteer group that subsequently incorporated with the Ukrainian military and whose logo bears a striking resemblance to the Nazi SS insignia. But Azov is only the most flagrantly problematic remnant of the ultranationalist groups that formed volunteer battalions early on and that persist as a sort of shadow force today. Others have been absorbed by the Ukrainian army, but they often still wear battalion patches and remain loyal to old commanders.

I meet Julia Paevska, the founder of a volunteer ambulance corps and a former member of Right Sector, a leading ultranationalist group, at a restaurant in Mariupol, a port city just 12 miles from the front line. Everyone I talk to describes Paevska, dappled with Buddhist tattoos and sporting dyed blue hair, as motivated purely by patriotism. Her organization, whose equipment includes an old Chevrolet Suburban retrofitted with a night vision camera on the grille, has saved 450 soldiers with serious or critical injuries in the past four years, by her estimate. She runs through about $20,000, half of it from abroad, in cash, fuel, and medical supplies every month.

The Art of Crowdfunding War

For lunch, we order shashlik. Paevska’s driver, a stoic, bearded man, sits facing the entrance. The waitress appears with the plate of grilled kebabs and some dull cutlery. The driver doesn’t jump—but I do—when Paevska’s six-inch switchblade flashes open with a loud crack. She spears herself a chunk of pork. “Volunteers have rights,” she says. “They poured their blood on the land. It’s their land. It’s our land. I’ll bite my enemy’s throat.” She wipes down her knife, retracts the blade, and pockets it.

Some politicians in Kiev would prefer that the volunteers fade away. They served their purpose, and now they’re a reputational liability among Western allies and a potential domestic political threat; vigilantism is on the rise, and last year the Carnegie Endowment for International Peace warned of “the potential for business tycoons to use volunteer forces as small private armies to settle corporate raiding disputes.” Paevska, who left Right Sector amid infighting, makes clear that politicians can’t wish the movement away. “There’s no such thing as ex-Right Sector,” she says.

The next day, I share a disconcerting moment with Max, a 25-year-old medic in Paevska’s corps who won’t give his last name. We meet at an abandoned seaside restaurant that serves as her base of operations near Shyrokyne, just over a mile from the trenches. He’s wearing a T-shirt from the neo-Nazi apparel company Sva Stone and an Iron Cross ring. I play dumb and ask what the insignia represents. “It has a lot of meanings,” he says. Waves lap against the beach as I consider the possibilities.

The diaspora tends to depict characters like Max as an unfortunate footnote to the wider struggle. “Any of those elements are a discredit to the cause,” Deychakiwsky says. Roman Fontana, a Maryland-based attorney and Iraq War veteran whose mother has Ukrainian ancestry, spent three months in the country in 2015 as a privately paid military trainer of young officers who’d previously been members of Azov Battalion. Of the 45 he trained, he says, four had outright neo-Nazi views. He depicts their ideology as a confused brew of nationalism, racism, and centuries-old anxiety about territorial integrity. “When I was in the Marines,” Fontana tells me, “we’d have the occasional hillbilly Klansman, too.”

Even granted the legal hurdles, Ukrainian citizens and diaspora members have never had more tools for organizing or ways to get involved, from coding military software to slipping hardware and money around international arms controls. It’s not hard to imagine the Ukrainian model replicating itself in Taiwan, the Baltic states, and other countries living in the shadow of larger, hostile powers.

Yet Ukraine can also be viewed as a cautionary tale. Although Ukrainians often vilify Russia for its meddling, their country’s military crisis was largely self-inflicted, and it continues today. The government is spending more on its military—$6.1 billion last year, up 28 percent from 2017—but graft persists. Ukraine ranked 130th on Transparency International’s 2017 Corruption Perceptions Index (tied with Myanmar and Sierra Leone, among others), and while that score reflects steady improvement since 2013, military procurement remains a mess. Last year, for example, AC Bogdan Motors JSC, owned by a business partner of President Poroshenko, sold 100 ambulances for $32,000 apiece to the military in a no-bid contract. The vehicles turned out to be overpriced and defective, a major scandal for the president. (Bogdan Motors denies any impropriety in obtaining the contract.)

“The cost of corruption in the military is the lives of soldiers,” says Daria Kaleniuk, executive director of the Anti-Corruption Action Center, one of many good-governance nonprofits founded by veterans of the Euromaidan resistance. We meet the day after she and other activists protested a decision by Ukraine’s anticorruption office to close its investigation into a $520,000 embezzlement scheme involving military backpacks and the interior minister’s son. (He denied involvement.) Her hands and forearms are still stained green with zelionka, a Soviet-era antiseptic-turned-weapon. It’s used against reformers in Russia and now in Ukraine. Paid thugs had doused her and her colleagues with it.

The Art of Crowdfunding War

Kaleniuk’s nonprofit has successfully overturned about $150 million in dubious government tenders since 2012, by the group’s count. But reform is stuck in a liminal state: There’s more information than ever about corruption but few mechanisms to imprison offenders and confiscate their ill-gotten wealth. Lots of important people want Kaleniuk to fail. As we finish chatting, her smartphone, clad in a “F--- Corruption” protective case, chirps. A colleague who posted photos of the zelionka attack online and asked for help identifying the assailants is getting anonymous threats.

Elections will take place in March, and former Prime Minister Yulia Tymoshenko leads in presidential polling. She’s no revolutionary—her central policy plank is modest bumps for the minimum wage and pensions. She also spent more than two years in prison in connection with a 2009 Russian gas deal she brokered while prime minister, though her prosecution was widely believed to have been politically orchestrated.

With the vote coming soon, the volunteers have taken a small step back; in the months after we speak, Paevska, for example, will join an official army medic unit while continuing to run her ambulance corps. But they won’t go away. Warts and all, the volunteer organizations are Ukraine’s most trusted institution, according to a June poll by the nongovernmental Ukrainian Centre for Economic and Political Studies. They’re ahead of the church and military, not to mention parliament, the presidency, and the judiciary, which finished near the bottom of the list. And tensions with Russia persist. In December, the interior minister warned that Russian propaganda interference in the upcoming election will be “colossal.” The following month, Ukrainian Christians broke from the Russian Orthodox Church, a move that outraged political and religious leaders in Russia.

It all adds up to a delicate moment for Ukraine. A nervous energy surrounds Kaleniuk and everyone else I meet. They pluck flower petals at cafe tables, arrive early to meetings, fiddle with cellphones. That energy must go somewhere. It’s a threat to Russia and its proxies, to Ukrainian oligarchs and politicians hungry to resume feeding at the trough, to international conflict mediators, and to Western arms-trafficking laws.

“The machine continues because so many people love it,” Anna Sandalova, the former Danone marketing manager who ferried food to the front, says of corruption in Ukraine. She mothballed her charity in 2016 and is now a Kiev city council deputy for a minority party, where she has limited power to effect change. “I stay in waiting for the third Maidan,” she says, harking back to the 2004 Orange Revolution and the 2013 Euromaidan protests. “When things are ready.” —With Pavel Stepanenko and Oksana Parafeniuk

Reporting for this piece was facilitated by a grant from the Pulitzer Center on Crisis Reporting.

To contact the editor responsible for this story: Jeremy Keehn at jkeehn3@bloomberg.net

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