Ukraine’s National Police and Security Service on Ukraine (SBU) and the country’s Ministry of Defense announced on Jan. 27 that they have uncovered an insider network that has been charged with embezzling almost $40 million in funds marked for weapons purchases.
Four of the suspects are current or former employees of the Ministry of Defense, including the head of the Department of Military and Technical Policy, Development of Weapons and Military Equipment of the Ministry of Defense, and the head and commercial director of the Lviv Arsenal company.
Another suspect is a former official from the ministry, who has been detained while trying to leave the country at a border crossing point.
A businessman representing a foreign company, presumed to be the arms supplier, also has been charged.
If convicted, each faces up to 12 years in prison and confiscation of property.
The embezzlement involved a contract signed in October 2022 for the foreign supply of 100,000 sorely needed mortar shells for Ukraine’s defense effort. Russia invaded Ukraine on Feb. 24, 2022, escalating the war that started in 2014 with Russia’s annexation of Crimea.
The weapons were scheduled for delivery to the military in December 2022, but to date, no part of the order has been fulfilled. The Defense Ministry paid in advance for the shipment.
Corruption within the military has been a particularly sensitive issue in Ukraine as it tries to maintain wartime public morale and present its case to join the 27-nation European Union.
“This is not the first example of the unwavering struggle of the new team of the Ministry of Defense against unscrupulous officials of the Ministry of Defense,” the ministry said in a statement.
“The Ministry of Defense, together with law enforcement agencies, will continue to expose corrupt individuals within the framework of the program of the Minister of Defense of Ukraine regarding zero tolerance for corruption.”
To address the ongoing corruption, Ukraine said it is reforming its procurement process and has introduced a new framework that the ministry said will be implemented according to NATO standards.
Lyudmila Daragan, Ukraine’s state secretary of the Ministry of Defense, and Oleksandr Bogomolov, director of the National Institute of Strategic Studies, signed a partnership and cooperation memorandum on Jan. 27 to address key problems facing Ukraine’s armed forces and other sectors of the defense forces. Ukraine’s National Institute of Strategic Studies advises the office of the president and Ukraine’s National Security and Defence Council.
“The Ministry of Defense is currently carrying out a number of reforms, which are divided into stages and separate projects. Many of them require the creation of new laws, changes to existing regulations, and adjustments to existing outdated management processes,” Ms. Daragan said. “It is very important for us to receive independent and professional recommendations regarding the next steps and help in this process.”
Defence Minister Oleksii Reznikov was dismissed in September 2023 over various corruption cases despite enjoying a solid reputation in representing Ukraine in its discussions with Western allies.
Although he was not alleged to have engaged personally in corruption, several cases hit the military under his stewardship, one for supplying troops with food, another over procuring suitable clothing for servicemen.
“The Ministry of Defense continues its uncompromising fight against those who embezzle money from weapons purchases. We have no place for corrupt people,” Deputy Minister of Defense of Ukraine Dmytro Klimenkov said on Jan. 27.
“We are fighting not only against the Russian occupiers, but also against internal traitors. These are the changes we warned about, and this work will continue.”
To date, the United States has provided more than $44 billion in military aid to Ukraine since February 2022. But the Pentagon has run out of funds to replenish its stocks, so most military aid to Ukraine, for the time being, is halted.
Congress is currently debating a $105 billion supplemental spending package, proposed by the Biden administration in October 2023, that packages together defense funding for Israel, Ukraine, and the U.S. southern border.
Without international arms shipments, Ukraine would most likely be forced into a brutal stalemate with Russia and, at some point, would need to cede some of its territory to its aggressor, analysts say.
