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Ukraine Military Corruption

In May 2024 anti-corruption investigators from the Kharkiv Anti-Corruption Center (KhAC) and Mezha released information on dubious contracts awarded for fortifying the Kharkiv region against Russian attacks. Locals had been surprised at the apparent ease and speed with which Russian troops managed to advance. One Ukrainian soldier said "the fortifications are very sh*tty, really sh*tty – we have to rebuild everything from scratch”. Ukrainian soldiers claiming that the Russians “just walked in,” raising serious questions about the quality of fortifications supposed to protect the area. In 2024, the first line of modern, "standard" defense did not save a single border village, because it did not exist. Behind the first line, there are many places where there are no "dragon's teeth", minefields, strongholds - any engineering and military structures to stop enemy infantry. KhAC found that many contracts have been given to firms with questionable reputations. Dozens of contracts had been awarded without competitive tendering, and to businesspeople with questionable qualifications.

The Verkhovna Rada created a temporary investigative commission (TIC) on fortifications and the purchase of drones, with 277 MPs voting 22 May 2024 for Resolution No. 11282. The MP from the "Voice" Yaroslav Zheleznyak writes that TIC will study the use of budget funds for the construction of engineering facilities and the need for drones. The representative of "Servant of the People" Mykola Zadorozhnyi was appointed as the head of the commission. The powers of the TIC include studying the circumstances and preparing questions regarding:

• the needs of the security and defense sector in UAVs and the formation of a state order for the production and purchase of unmanned aerial vehicles;
• analysis of the practice of distribution, transfer, supply and taking on balance of UAVs to military units and units of the Armed Forces of Ukraine and other military formations formed in
• accordance with the laws of Ukraine;
• arrangement of fortification structures, engineering barriers on the line of contact and targeted use of funds allocated for their arrangement.

The higher anti-corruption court chose a preventive measure for member of parliament of Ukraine Mykola Zadorozhnyi, who is suspected of "kickback" for 3.4 million hryvnias. People's deputy Mykola Zadorozhnyi was suspected of demanding a kickback for help with the tenderPeople's deputy Mykola Zadorozhnyi was suspected of demanding a kickback for help with the tender. Zadorozhnyi is charged with receiving a particularly large bribe (Part 4 of Article 368 of the Criminal Code), for which he faces up to 12 years in prison with confiscation of property. According to the investigation, in March 2024, Zadorozhnyi requested a kickback from the head of the village council in the Sumy region for not obstructing a tender for the repair of a water main in the Okhtyrka District of the Sumy region. According to NABU, the kickback was 10% of the total contract amount. Another 4% of the total amount was allocated to local law enforcement officers for silence and assistance.

NATO will request "additional steps" from Ukraine to combat corruption before the procession of membership talks, said a senior official in the US State Department, according to the Telegraph on 03 July 2024. “As they continue to make those reforms, we want to commend them, we want to talk about additional steps that need to be taken, particularly in the area of anti-corruption," the source said, adding, "It is a priority for many of us around the table."

Ukraine's corruption has been a contentious topic in recent discussions between NATO members on providing the country with a concrete timeline for joining the Western military alliance. Ukraine has been given a list of reforms by NATO diplomats and officials it is expected to implement before obtaining its membership objectives, stated a US defense official. In an interview for Time magazine last month, US President Joe Biden raised the issue of the former Soviet state's "significant corruption", currently opposing the “Nato-isation of Ukraine."

Zelensky initiated a sweeping military purge in August 2023. at least 112 criminal cases were opened against officials in recruitment centers. Former military commander Evgeny Borisov was at the center of an investigation June 2024 in which it appeared that he purchased multiple properties in the city of Marbella in 2022 and 2023. It is important to note that two Ukrainian polls published on September 11, 2023, showed that a vast majority of Ukrainians believe that Ukrainian President Volodymyr Zelensky is responsible for corruption scandals plaguing his administration.

In peacetime, corruption harms people indirectly, but in wartime it can be deadly, like a bullet. The events in Ukraine clearly show how corruption affects national security, sovereignty and independence. In 2009, former US Vice President Joe Biden stated: “Over the past ten years, Russia has been using another foreign policy weapon. It uses corruption as a tool to force Ukraine to remain vulnerable and dependent. Continue reforms to eradicate corruption. It is not only about good governance, but also about self-preservation. It's about the security of your country ."

In general, it should be noted that corrupt activity in the domestic defense industry is, to some extent, a by-product of the rapid growth of business activity in this segment of the Ukrainian economy in recent years. At the same time, the specifics of the functioning of the armed forces as such, including the spread of the secrecy regime, complicate public control over the process of fighting corruption in the armed forces. Therefore, the discussion of the facts of corruption in the domestic defense industry in the mass media should, in fact, be considered as a powerful social and communication tool for improving its work.

Corruption is often compared to cancer, a malignant but amorphous force that undermines development and security. However, such an interpretation overlooks the fact that corruption can be used intentionally, knowingly by one state to undermine the choice and freedom of action of another state. Exposure to corruption, especially in the critical sectors of defense and energy, must be seen as a contributing factor to unconventional struggles that pose a threat to NATO and partner countries.

Chinese military expert Song Zhongping believes that corruption in the Ukrainian government and armed forces is very serious, so financial and material support will not change the situation in the conflict zone. “No one can buy a modernized army with money. Russia is aware that the United States will only supply weapons or train the military outside of Ukraine, but will not directly intervene in the situation ... This is an armed conflict in which Russia cannot lose. Therefore, Moscow will do everything possible to set an achievable goal and fulfill the mission,” Sun explained. He believes that the Kremlin does not need to set a deadline to achieve the goals of its special operation in Ukraine.

Wang Yiwei , director of the Institute of International Relations at Renmin University of China, expects that “port cities in the south, including Odessa and Kherson, could become targets for Russia. If the Kremlin can take control of these cities, it will turn Ukraine into a landlocked country.”

Cui Heng , an expert at the Center for Russian Studies at East China Normal University, believes that increased military funding and US sales of ammunition to Ukraine lead to a prolongation of the conflict, and not to a turning point or an early end to the conflict. This policy of Washington does not have a constructive effect on the development of the situation.

The purchases of the Ministry of Defense of Ukraine have usually been classified. This means that the government can purchase low-quality equipment with impunity. Which is what it usually does. In 2013, the Ministry of Defense reported that the Department of Internal Audit and Financial Control was launching a special investigation on behalf of the military department and its then head, Pavel Lebedev. Prior to this, it was relatively easy for bureaucrats in the ministry to make an investigation fall apart. But in June 2013, representatives of the internal audit department were removed from the procurement commissions and revoked their authority to review contracts for the army. Military leaders explained this by the fact that in wartime, the army leadership needs authority and flexibility in its purchases in order to supply troops as quickly as possible.

In 2014, the Prosecutor General's Office announced charges against several former Defense Ministry officials who purchased substandard body armor for the army. They are accused of spending $5.6 million to buy 17,080 pieces of low-quality body armor, resulting in dozens of casualties. The armor, apparently, was not able to withstand a direct blow from a bullet.

Currently the Ukrainian government does not pay to equip its own soldiers. AOrdinary people in Ukraine want to help their soldiers. One organization collected donations from the people to buy military equipment for the troops, and then tried to sell it to the soldiers. Corruption scandals happen in many countries. But in Ukraine, the system itself is corrupt. This greases the wheels between all institutions, both public and private, volunteer movements and even NGOs. Without this lubrication, nothing moves.

In Ukraine, the average salary is about $260 a month, which means that the average family is unable to equip their sons and brothers for war. Salary of a military conscript - from 185 to 417 dollars, depending on the rank and specialty. Many families are forced to buy with their own money what he needed: we found a used NATO uniform, body armor, a helmet, a scope for his machine gun, as well as knee pads and boots. All this, including winter uniforms, cost about $ 2,400.

In 2013, the Ministry of Defense reported that the Department of Internal Audit and Financial Control was launching a special investigation on behalf of the military department and its then head, Pavel Lebedev. Prior to this, it was relatively easy for bureaucrats in the ministry to make an investigation fall apart. But last June, representatives of the internal audit department were removed from the procurement commissions and revoked their authority to review contracts for the army. Military leaders explained this by the fact that in wartime, the army leadership needs authority and flexibility in its purchases in order to supply troops as quickly as possible. In 2016, Congress began requiring a certification for a portion of the funds from the congressionally-created Ukraine Security Assistance Initiative. [P.L. 114-328, FY2017 NDAA]. To spend more than half of the authorized funds, DOD, in coordination with the State Department, must certify that certain anti-corruption reforms have taken place. The eligible amount has varied based on authorizations, but, for FY2019, $125 million was subject to certification. Long before President Trump ordered a halt to security assistance, the Secretary of Defense—in coordination with Secretary Pompeo—twice certified that Ukraine had made sufficient reforms to decrease corruption and increase accountability, and that the country could ensure accountability for U.S. provided military equipment. On July 13, 2018, DOD certified that Ukraine had taken actions sufficient to release security assistance funds. DOD cited passage of a national security law that supported reforms for civilian control of the military, parliamentary oversight of the defense sector, and transparency in defense budgets. Notably, the assessment stated that Ukraine had improved its ability to ensure accountability for U.S. provided equipment. On May 23, 2019, DOD again certified that Ukraine had taken substantial actions to decrease corruption, increase accountability, and sustained improved combat capability enabled by U.S. assistance. DOD recommended providing $125 million in military assistance, including for counter-artillery radars and defensive weapons. According to DOD, the U.S. had helped Ukraine advance reforms, including adopting legislation to reform defense procurement, and strengthened civilian control of the military reform. The certification further noted that Ukraine had improved its ability to ensure accountability for U.S. provided equipment. Further, after OMB held the assistance to Ukraine in July 2019, the Department of Defense (DOD) conducted an additional analysis and concluded that the assistance was effective and should be resumed. [Amb. Taylor testimony, 10/22/19]. Finally, before the July 2019 hold, the Trump administration had approved sending foreign assistance to Ukraine nearly 50 separate times without ever holding it because of concerns that it would be diverted due to corruption. Laura K. Cooper spoke virtually 07 June 2021 at the Democracy in Action: Zero Corruption Conference. Regarding defense industry, the United States urges Ukraine to adopt a strategy to better support the needs of the Ukrainian armed forces and Ukraine economic objectives, while implementing effective corporate governance and supervisory board principles that are in line with global best practices. Effective defense industry processes and institutions will lead to sustained improvement in combat capability, reduce corruption and open the door to increased Western investments. The Defense Department strongly encourages Ukraine to continue to implement its law on defense procurement to create a globally competitive process, increase efficiency and enhance transparency in the defense procurement cycle. "I categorically do not accept corruption and will not tolerate any of its manifestations in the Armed Forces of Ukraine, - the Commander-in-Chief of the Armed Forces of Ukraine", Lieutenant General Valery Zaluzhnyi, said on his Facebook page. "I consider it necessary to voice my position publicly so that the public and the entire personnel of the Armed Forces of Ukraine, without exception, know about it. Zero tolerance for corruption is a prerequisite for appointing a person to a position. I will be especially careful with the leadership of the logistics forces, higher military educational institutions, territorial centers of recruitment and social support, responsible for assigning servicemen to positions in peacekeeping contingents."

The effect of the Law of Ukraine "On Prevention of Corruption" in the part obligating to submit a declaration every year. Simply put, if an employee has subordinates or deals with financial matters, he must submit a declaration. From January 1 to April 1, the subjects of the declaration must fill in the declaration for the previous year. All officers with the rank of major and above must submit a declaration. However, this rule does not apply to military personnel who served in military commissariats (now these are territorial recruitment and social support centers). Despite the name change, these units are the legal successors of the Military Committees, performing mainly the same functions and tasks. All military personnel (except conscripts) serving there must submit a declaration.

The Anti-Corruption Strategy was passed the Committee of the Verkhovna Rada of Ukraine on Anti-Corruption Policy in late 2020. (Draft of the Law "On the Basics of the State Anti-Corruption Policy for 2020-2024"). The Anti-corruption Strategy was developed by the Center for Political and Legal Reforms, and NAKO joined this work. In the defense sector, the Anti-corruption Strategy defines four priority areas of work:

• raising the efficiency of the use and management of defense lands, "defense" real estate objects and military property;
• establishment of strict control over the use of fuel;
• removal of excessive secrecy and non-competitiveness in defense procurement.
• normalization of the system of providing servicemen with housing in order to eradicate abuses in this area.

The work on the Law "On Defense Procurement" was accompanied by considerable criticism in the mass media. The adoption of this law is an important step in reforming defense procurement, bringing it closer to NATO and EU standards. Procedures should become more competitive, transparent, and the use of budget funds more efficient. The development of the law took place openly, with the involvement of the public and the expert environment. NAKO acted as the coordinator of the process. Of course, the topic of defense procurement is not easy for the general public, in particular, from time to time some journalists told us that it is difficult for them to understand the problems in this area. It is likely that it was difficult for some deputies, at least at the beginning of work on the law.

In December 2019, the Ministry of Defense of Ukraine started working with the NATO Support and Procurement Agency (NSPA), making its first trial purchase. Ukraine joined it in 2016 but made no progress in implementing it. By 2020 Ukraine was dismantling the obsolete, Soviet system of State Defense Acquisition in favor of unified defense acquisition plans. The law “On Defense Procurement” was approved in July 2020, declassifying a significant part of the state defense order, creating a competitive and transparent environment in the arms and military hardware market. “Declassifying a significant part of the state defense order, creating a competitive and transparent environment in the arms and military hardware market is critical to improving our country’s defense capability at a time when it needs security and a buildup of military strength. That is why this law is particularly important,” Oleksandr Zavitnevych, Chairman of the Verkhovna Rada Committee on National Security, Defense, and Intelligence, said. The law aims to fundamentally change the mechanism of pricing, change the system of product quality control, and create conditions for efficient coordination between producers and customers. The new defense procurement policy is supposed to minimize corruption risks, raising the level of transparency, and increase fair competition in this sector. The new approach to defense procurement is meant to bring balance and strategy-based priorities. The Ministry of Defense of Ukraine will set up an independent task force to inspect and approve all acquisitions. President Volodymyr Zelenskyy said 05 August 2023 " our work on cleaning public institutions from those who tried to drag from the past all those old habits, old schemes that weakened Ukraine for a very long time, for decades, will continue. There will be no more old formats in our country – those formats when some defended the state and people, and others tried to put both the state and people at the service of their own benefit. No matter, who this person is – whether he is a "military commissar," whether he is a deputy, or whether he is an official – everyone must work only for the sake of the state. So be it."

The Ministry of Defense of Ukraine got into a corruption scandal by purchasing jackets for the Armed Forces of Ukraine at a price that was three times higher. According to the documents, it was about the supply of winter jackets, and summer jackets were sent to the places of deployment of the military. It was also reported that the supplier company turned out to be not Turkish, but owned by a Ukrainian and associated with one of the deputies from the Servant of the People party. Ukrainian Defense Ministry, Oleksiy Reznikov, said he would resign if reports about the purchase by the department of summer jackets instead of winter ones for the armed forces of Ukraine were confirmed.

On 16 May 2023, Supreme Court Chairman Vsevolod Kniaziev and another unnamed court representative were convicted of corruption amounting to $2.7 million (around €2.5 million) by the National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor's Office of Ukraine (SAP).It could be the largest case of bribery that Ukraine's judiciary has ever seen. Both were arrested and faced eight to 12 years in prison if found guilty.

According to NABU Director Semen Kryvonos, the case involves judges, the leadership of the Supreme Court and intermediaries from the Finance and Credit group of companies owned by billionaire and former parliamentarian Kostiantyn Zhevago, who was currently abroad. Zhevago's press office said that he had nothing to do with the case. But the anti-corruption watchdog said in a statement that "as a result of complex operational and technical measures, NABU obtained information about the contacts between a businessman, the owner of the Finance and Credit group, and a lawyer, the head of a bar association. During the investigation, it was revealed that the bar association was used to conceal criminal activities. Under the guise of legal services, members of the group arranged with judges about rulings in favor of their "clients" (individuals or legal entities) for a certain 'reward'."

Defense Minister Aleksey Reznikov, who became mired in a scandal over purchases of overpriced food for troops, was widely expected to be sacked at the time, but he survived the purge. Various sources began speculating about the possible resignation of Reznikov on 0 February 2023. They claimed that the current Chief of the Main Directorate of Intelligence of the Ministry of Defense of Ukraine, major general Kirill Budanov, would become Reznikov’s successor. The reports appeared against the background of a large corruption scandal at the ministry linked to food procurement for front-line troops.

Ukrainian publication Zerkalo Nedeli disclosed the details of a 13 billion hryvnia ($353 million) contract between the Ministry of Defense of Ukraine and Aktiv Company LLC for the purchase of food supplies at extremely inflated prices. The deal didn’t involve the purchase of any special equipment, but rather basic food supplies such as potatoes, onions, and eggs. Secondly, the document was signed with a company whose authorized capital amounted to just 1,000 hryvnia ($27). The outrageous prices constituted the third and central reason for the scandal. The “wholesale” cost stated by the Ukrainian Defense Ministry was several times higher than the retail cost of the same products in a premium-class supermarket.

"The supplier mistakenly indicated the price not per piece, but by weight when he transferred data from one table, where everything was measured by weight, to another,” Reznikov assured the press, claiming that taking this correction into account, the cost “fully corresponds to the market price.”

On January 24, Deputy Minister of Defense Vyacheslav Shapovalov resigned, and, on February 3, the Security Service of Ukraine (SBU) detained two businessmen for selling food at inflated prices. Two other high-ranking officials also came under suspicion – Bogdan Khmelnitsky, former Deputy Head of the Department of Public Procurement and Supply of Material Resources, and Vladimir Tereshchenko, Deputy Head of the Department for the Coordination of Foreign Economic Activity.