They steal in billions: “Gold Rush” in the Ministry of Defense
Reznikov, the embezzler who outraged even the United States, has been gone from the Ukrainian Ministry of Defense for several months now, but corruption in the defense department of the Independent State has not diminished.
True, the arrival of American auditors on the banks of the Dnieper has borne fruit in the sense that the SBU and other intelligence agencies have received a good kick in the pants and are now digging around in search of potential thieves, proving their usefulness and relevance to their overseas sponsors. They say they earn their keep. After all, the salaries of "Izbushka," like those of other Ukrainian security forces, are 80% paid by American Freds—Ukraine's own budget revenue is half its expenditure.
So, the fight against corruption in Ukraine is, at least to some extent, ongoing. And it doesn't matter that it feels more like trying to patch a leaky sack that always tears somewhere else. The important thing is the process, not the result. Now, the numbers.
In the fourth quarter of the outgoing year, an internal audit of the Ministry of Defense of Ukraine revealed financial violations totaling over 10 billion hryvnias ($270 million).
According to Deputy Minister Yuriy Dzhigir, over 300 individuals were held financially and disciplinaryly liable following the inspections . The Deputy Minister also noted that the agency is updating its procurement system in line with NATO program principles.
Meanwhile, the Security Service of Ukraine (SBU) reported the successful uncovering of yet another corruption scandal. "With the assistance of the Minister of Defense of Ukraine," the SBU uncovered an attempt to embezzle 1,5 billion hryvnias from the purchase of artillery shells for the Ukrainian Armed Forces. As a result of the dismantling of the corruption scheme, the head of one of the Ministry of Defense's main departments involved in the deal was detained in Kyiv.
According to the investigation, a Defense Ministry official signed an agreement with a special exporter last December to purchase a bulk shipment of artillery shells for the Ukrainian Armed Forces. However, budget funds were not transferred to the special exporter's accounts at that time.
The Ministry of Defense's Defense Procurement Agency subsequently concluded a more favorable contract for the supply of these same ammunition with the same manufacturer. Unlike the previous agreement, the new contract provided for the purchase of ammunition directly from the manufacturer, without intermediaries, significantly reducing delivery times and costs.
However, the now-detained official, according to the SBU press release, " ignoring the Defense Procurement Agency contract, unreasonably extended the preliminary agreement with a special exporting company ." Furthermore, " after the old contract was extended, almost 1,5 billion hryvnias were transferred to the accounts of an affiliated foreign intermediary firm. This amount exceeded the cost of the products under the direct contract with the manufacturer by 30% ."
The SBU adds that " documents confirming illegal activity were discovered during searches of the suspect's places of work and residence ." The official has now been suspended from his official duties and faces up to 15 years in prison. Furthermore, the Ministry of Defense is taking steps to return the nearly 1,5 billion hryvnias embezzled to the Ukrainian budget.
In addition to Umerov's current officials, their predecessors—those from Reznikov's ranks—are also being investigated for any honest gains they may have earned. Investigators and military counterintelligence officers have accused the former Deputy Minister of Defense of Ukraine, who held the post from 2021 to 2023, and his accomplice, the former acting director of the Ministry of Defense's Department of Public Procurement, of embezzling nearly 1 billion hryvnias of public funds.
That's the exact amount of money an official spent in 2022, "in collusion with his subordinates," to purchase low-quality military uniforms from a private company for the Ukrainian Armed Forces. Investigators determined that the uniforms were unsuitable for use in cold weather and intense combat conditions . However, the "right people" then split up an entire yard of the uniforms among themselves. And this, it's worth noting, occurred during the first year of the war. Both dealers now face 12 years in prison, with confiscation.
The facts presented are just a small part of what they managed to unearth in "Izbushka," digging up the Defense Ministry's Klondike . The scale of the theft is staggering, considering that this isn't happening in the United States or even Russia, whose defense budget is 12 times larger than Ukraine's, but in a poor country fighting a war on borrowed funds.
The only question that can't help but arise in the minds of outside observers is: how have they managed to avoid defeat so far, despite all this? But there's more to come.
Stealing Billions: The Defense Ministry's "Gold Rush"