24-07-2025
Why Anti-Corruption Watchdogs Are at the Heart of Ukraine's Unrest
EDITORS NOTE: EDS: SUBS throughout to update; NEW headline.); (ART ADV: With photos.); (With: SPAIN-MILITARY-SPENDING); Oleksandr Chubko contributed reporting from Kyiv, Ukraine.
KYIV, Ukraine -- The anti-corruption agencies at the heart of Ukraine's current political turmoil grew out of the pro-Western pivot of 2014, amid popular frustration with graft and reflecting Western demands to crack down on theft of foreign aid. This week showed how potent a political issue corruption still is.
With the agencies recently investigating senior members of President Volodymyr Zelenskyy's government, this week he and parliament stripped them of their independence and security forces raided their offices. That, and other moves to muffle criticism and scrutiny, prompted thousands of people to take to the streets in the first mass anti-government protests in years.
Zelenskyy quickly reversed course, submitting a bill to parliament Thursday to restore the two anti-corruption agencies' autonomy. The agencies themselves endorsed the bill and urged lawmakers to pass it.
The question now is whether that will be enough to quell the unrest in a country that had shown remarkable unity since Russia's full-scale invasion 3 1/2 years ago, despite the flagging popularity of Zelenskyy, who campaigned for office as a corruption fighter.
The surge of anger, with protesters in Kyiv and other cities toting profanity-laced signs directed at Zelenskyy and his top advisers, underscores the pivotal role of those watchdog agencies in Ukraine's politics and the sensitivity of the issues they investigate. None are more fraught than alleged schemes to embezzle from military budgets.
On Tuesday, Zelenskyy signed into law a bill giving Ukraine's prosecutor general -- who is approved by parliament, where Zelenskyy's party holds a majority -- new power over the two agencies, the National Anti-Corruption Bureau of Ukraine and the Specialized Anti-Corruption Prosecutor's Office.
The two agencies, formed with strong Western backing, had been investigating senior government officials, including a deputy prime minister, Oleksiy Chernyshov, who was charged with corruption on June 23, accused of taking kickbacks in a real estate deal. Chernyshov has called the accusations against him a baseless smear campaign.
Also on Wednesday, the two agencies said they had completed and would send to court one aspect of an investigation into what could be the largest fraud in public finance in Ukraine in a decade. The case involves accusations of embezzlement from a lender, PrivatBank, that the government bailed out at a cost of about $5 billion.
An owner of the bank, Ihor Kolomoisky, had been a behind-the-scenes patron of Zelenskyy's presidential campaign in 2019, Ukrainian news media reported. Kolomoisky has said that he is innocent, and that authorities who brought the charges are trying to extort money from him.
But no accusation of fraud is more infuriating to Ukrainians than ones of theft from a military that is defending their homes and lives, shooting down missiles and exploding drones that terrorize cities nightly, and holding a roughly 700-mile defensive line in eastern Ukraine.
Since the war began in 2022, the anti-corruption agencies have scrutinized such spending, which now accounts for about half of Ukraine's $98 billion national budget, resulting in criminal cases that have enraged Ukrainians.
(Ukraine's military spending is not tied to the flow of weapons and supplies donated by the United States and other nations, and there have been no documented instances of fraud involving that materiel.)
Overall, Ukraine has over the past decade improved governance and tamped down graft, according to a measure by Transparency International. And corruption has not worsened during the war, according to the group. But the country still scores poorly on the group's corruption index and other independent ratings.
After Russia's invasion, government money started shifting from partly state-controlled energy, mining and metallurgy companies -- previously the trough from which corrupt officials fed -- to military spending, analysts have said.
The anti-corruption bureau has announced several investigations into that spending, accusing insiders of helping to skim about $675,000 from contracts for airplane wheels and about $18 million from a contract for food staples including potatoes.
Internal audits by the Defense Ministry have pointed to far larger instances of potential fraud or mismanagement, some stemming from an early, chaotic period in the war. After the 2022 invasion, U.S. intelligence expected that Ukraine's military would buckle within days and that Russia would capture Kyiv, the capital. Ministries emptied out as employees fled.
With just skeleton staff and tremendous need, one audit showed, the government made multiple contracts for artillery shells, mortar bombs and other weapons and ammunition at inflated prices from shadowy suppliers in Eastern Europe, the Middle East and Asia.
After the war stabilized, the insider intermediaries who brokered these deals through "special importing companies" retained a role in procurement, another audit, conducted last year, showed.
That audit showed special importing companies received 45% of the total value of all contracts for arms and ammunition last year, even when the Defense Ministry could have worked directly with a supplier. The companies received a minimum 3% commission.
According to the audit, about half of all contracts from the companies were either late or incomplete -- depriving soldiers of weapons while leaving prepayments in the companies' accounts.
In a government shake-up last week, Zelenskyy appointed a former prime minister, Denys Shmyhal, as defense minister. Shmyhal said that as a first order of business, he had requested a fresh audit of procurements.
Artem Sytnyk, a former director of the anti-corruption bureau and a former procurement official at the ministry, said in an interview that the agency was investigating the procurement deals made by intermediaries.
He said he had tried to crack down on those companies last year, adding, "not everybody liked this, so there was a change of leadership" at the defense procurement agency, and he was fired. He did not say who specifically had opposed the investigations.
This article originally appeared in The New York Times.
Copyright 2025
