Some detractors have pointed to Ukraine’s history with corruption as reasons to stop providing money to the country nearly two years into its war with Russia. Ukrainian officials insist that they are being hypervigilant and cracking down hard on graft.
The SBU said its investigation implicated current and former high-ranking Defense Ministry officials and managers of an arms supplier, Lviv Arsenal, who were supposed to use the money to purchase 100,000 mortar shells for the military. Money was paid in advance to Lviv Arsenal in August 2022, but the shells were never supplied.
“After receiving the funds, the company’s management transferred part of the money to the balance sheet of a foreign commercial structure that was supposed to deliver the ordered ammunition to Ukraine,” the statement said. “However, it did not send a single artillery shell to our country, and took the received funds into the shadows, transferring them to the accounts of another affiliated structure in the Balkans.”
The stolen funds have been seized, the SBU said, adding that “the question of their return to the budget of Ukraine is being resolved.”
The fraud took place under former defense minister Oleksii Reznikov, who was ousted last year amid several high-profile allegations of corruption in the ministry, particularly the purchase of food and jackets for the military at inflated prices. Reznikov, who wasn’t personally implicated in any malfeasance, declined to comment.
A defense official familiar with the matter, who spoke on the condition of anonymity because they were not authorized to speak about the case to the media, said “this is not a new case,” as the ministry filed a criminal report to law enforcement about the stolen $40 million in May 2023, after the shells were not delivered. Ukrainska Pravda, a Ukrainian news outlet, reported many details about the case in July.
Five people from the Defense Ministry and the arms supplier have been served “notices of suspicion” — the first stage in Ukrainian legal proceedings — the SBU said, adding that one suspect was detained while trying to cross the Ukrainian border. They face up to 12 years in prison.
Those allegedly involved in the scheme include Oleksandr Liev, who was the head of the Department of Military-Technical Policy, Development of Weapons and Military Equipment of the Ministry of Defense; the current head of this department, Toomas Nakhkur; and the head of Lviv Arsenal, Yuriy Zbitnev, according to a security service official who spoke on the condition of anonymity because they were not authorized to discuss the case.
Zbitnev, 60, is a former member of Ukraine’s parliament and was a presidential candidate in 2004.
Reznikov’s replacement as defense minister, Rustem Umerov, has promised to prioritize weeding out corruption.
“One of the priorities of the Ministry of Defense team is to clean the system from unscrupulous participants — inside the institution and outside,” Umerov said on Facebook this month. “We are actively working on this in close collaboration with law enforcement agencies: we are eradicating corruption. The system resists, but we will overcome it.”
This latest corruption scandal comes at a critical time. A White House request for an additional $60 billion related to the war in Ukraine has stalled in Congress, and lawmakers opposed to providing more aid to Ukraine have demanded more oversight, questioning whether U.S. funds are being used appropriately. Since Russia’s February 2022 invasion of Ukraine, the United States has committed at least $44 billion in security assistance.
Corruption is a particularly sensitive issue in Ukraine, too, where most citizens know at least one person in the military and often donate their own money to help purchase weapons and other goods for soldiers. Anticorruption activists viewed Saturday’s announcement that criminal action would be taken against the alleged perpetrators as a positive step in reforming the defense ministry.
“This is another … strike by Umerov’s team on the corrupt/incompetent military ‘deep state’ that has been destroying our defense capability for decades,” Vitaliy Shabunin, the director of operations for the Anti-Corruption Action Center, a Kyiv-based nongovernmental organization, wrote on Facebook.
“Is this the end of fighting with these animals? Nope, rather just the beginning,” Shabunin added. “But the fight of Umerov’s team with this ugly deep state personally impresses me very much.”
Kamila Hrabchuk contributed to this report.