KYIV, Ukraine (AP) — As renewed Russian assaults on Ukraine’s energy infrastructure lead to rolling blackouts ahead of winter, a major scandal involving embezzlement and kickbacks within the state-owned nuclear power company has emerged, drawing scrutiny towards high-ranking officials.
This unfolding crisis marks one of the most significant governmental challenges since Russia’s full-scale invasion, with media reports linking a close associate of President Volodymyr Zelenskyy to the allegations.
In response to public outrage, Zelenskyy called for the dismissal of his justice and energy ministers, who subsequently resigned, according to Prime Minister Yuliia Svyrydenko.
Anti-corruption watchdogs, which Zelenskyy previously sought to diminish, unveiled the results of a 15-month investigation that included 1,000 hours of wiretaps. This probe led to the detainment of five individuals and implicated another seven in a scheme involving about $100 million in kickbacks within the energy sector.
Ukrainian officials are urgently seeking European funds to address escalating energy shortages as Moscow intensifies its attacks on essential infrastructure and natural gas production in a bid to undermine public morale. Concurrently, Ukraine’s outnumbered forces are facing continual assaults in the nearly four-year-long conflict.
Historically beset by corruption since gaining independence, Zelenskyy came to power promising to eradicate graft. However, prior military procurement scandals had already resulted in the removal of Defense Minister Oleksii Reznikov in 2023. The present timing of the current scandal could hardly be more detrimental.
“Internally, this scandal will be used to undermine unity and stability within the country. Externally, our enemies will use it as an argument to halt aid to Ukraine,” said Oleksandr Merezhko, a lawmaker from Zelenskyy’s party. “It reflects poorly on our European and American partners. While Russians are destroying our power grid and citizens experience blackouts, someone at the top was profiting during the war.”
An unresolved question remains regarding the extent of the corruption, especially given the president’s consolidation of power.
The National Anti-Corruption Bureau (NABU) did not disclose the names of the suspects but indicated that they included a businessman, a former adviser to the energy minister, and an executive responsible for security at state energy company Energoatom, among others involved with money laundering. The bureau labeled the investigation “Midas.”
NABU also accused eight individuals of bribery, misconduct in office, and possession of disproportionate assets. The investigation involved over 70 raids and garnered the support of Zelenskyy, who urged government officials to cooperate. Energoatom has stated that the inquiry did not disrupt its operations.
Excerpts from the wiretaps reveal discussions among the suspects about coercing Energoatom contractors to extract 10%-15% in kickbacks and bribes. The network exploited a regulation enforced during martial law that barred contractors from asserting claims against companies like Energoatom, which has annual revenues of approximately $4.7 billion.
The tapes, which have yet to be independently corroborated by the Associated Press, allege that around $1.2 million was paid to a former deputy prime minister, referred to as “Che Guevara” among conspirators.
Amid the unfolding scandal, Zelenskyy advocated for the recall of Justice Minister Herman Halushchenko and current Energy Minister Svitlana Grynchuk, both of whom later submitted their resignations, as stated by the Prime Minister.
Zelenskyy emphasized, “Among other things, this is a matter of trust,” in a video message on Telegram. This has prompted inquiries into the level of awareness that senior officials had regarding the corrupt activities, particularly since wartime powers are concentrated within the presidency. Zelenskyy had attempted to limit the powers of anti-corruption watchdogs last summer but reversed that decision following significant public protests.
NABU released findings months later, detailing conversations in which Mindich, a co-owner of Zelenskyy’s Kvartal 95 media production company, used the code name “Karlsson.” Under Zelenskyy, Mindich has gained substantial influence within various sectors, including profitable domestic drone production. The agency has also investigated his alleged ties to Fire Point, a notable drone manufacturer, amid suspicions that the company misled the government about weapon prices.
Despite distancing himself from Mindich, Merezhko voiced concern that associates of the president may have succumbed to the temptation of quick profits during this critical time.
Halushchenko, following his suspension as justice minister, stated on Facebook that he intends to defend his actions legally, asserting his commitment to a civilized course of action.
The current investigation exposes issues of trust and oversight within the government, especially considering prior warnings regarding vulnerabilities at nuclear facilities. Criticism focusing on Halushchenko’s management has emerged, calling for his removal over allegations of corruption and failure to provide adequate oversight.
The implications of this scandal could affect Ukraine’s extensive foreign aid, as international stakeholders closely monitor developments within the energy sector—an area receiving significant support from Western nations. A spokesperson for German Chancellor Friedrich Merz expressed concern over the allegations, emphasizing the critical need for Ukraine to effectively combat corruption.
“While we currently have confidence in the Ukrainian government to clarify this matter transparently, developments will be closely examined, and necessary consequences may follow,” the spokesperson noted.
