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KIEV, Ukraine (AP) — As Russia’s new attacks on Ukraine’s energy infrastructure are causing blackouts ahead of winter, a major embezzlement and bribery scandal involving a state-owned nuclear power company has put top officials under scrutiny.
This is fast becoming one of the most significant government crises since the full-scale invasion of Moscow, with media reports implicating a close ally of President Volodymyr Zelensky.
Responding to the public backlash, Zelensky called for his justice and energy ministers to be fired amid the investigation. He later submitted his resignation, the Prime Minister said.
Anti-corruption watchdogs – the same agencies that Zelensky tried to weaken earlier this year – revealed the findings of a 15-month investigation, which included 1,000 hours of wiretaps, resulting in the detention of five people, and another seven linked to nearly $100 million of bribes in the energy sector.
Ukrainian officials are scrambling for European funds to deal with growing energy shortages as Moscow targets critical infrastructure and natural gas production in a bid to sap public morale. Meanwhile, Ukraine’s outnumbered forces are retreating under sustained attacks in the nearly 4-year-old war.
The country has been plagued by corruption since gaining independence, and Zelensky was elected on a mandate to eliminate corruption. Military procurement scandals led to the ouster of Defense Minister Oleksiy Reznikov in 2023.
But its timing couldn’t be worse.
Oleksandr Merezhko, a lawmaker from Zelensky’s party, said, “Internally, this scandal will be used to undermine unity and stability within the country. Externally, our enemies will use it as an argument to withhold aid to Ukraine.” “It looks really bad in the eyes of our European and American partners. While the Russians destroy our power grid and people have to endure blackouts, someone at the top was stealing money during the war.”
An important question is how extreme is the corruption.
The National Anti-Corruption Bureau, known as NABU, avoided identifying the suspects, but said they included a businessman, a former adviser to the energy minister, an executive who oversaw physical security at the state energy company Energoatom, and others responsible for money laundering. It named this scheme “Midas”.
The agency also charged eight people with bribery, abuse of position and having disproportionate assets.
The investigation, which saw NABU conduct more than 70 raids, was welcomed by Zelensky, who urged authorities to cooperate with it. Energoatom says the inquiry did not cause any disruption to its operations.
NABU released excerpts of the tapes, in which the network discussed, using code names and secret language, blackmailing and pressuring Energoatom contractors to extort 10%–15% in bribes and kickbacks in exchange for doing business without facing internal obstructions.
The network took advantage of a regulation implemented during martial law that barred contractors from claiming debts in court from companies providing essential services such as Energoatom, which has annual revenues of about $4.7 billion. Four others worked for money laundering in the Kiev office.
The tape, which has not been independently verified by The Associated Press, says about $1.2 million was given to a former deputy prime minister whom the conspirators dubbed “Che Guevara” after the revolutionary leader.
Amid the scandal, Zelensky called for the removal of Justice Minister Herman Hlyushchenko, who was also a former energy minister, and current Energy Minister Svitlana Grinchchuk.
Prime Minister Yulia Sviridenko said she had submitted her resignation. He also said the Cabinet had submitted proposals to impose sanctions against Zelensky’s close associate Timur Mindich and businessman Alexander Tsukerman.
“Among other things, this is a matter of trust,” Zelensky said in a video on his Telegram channel.
This raises questions about what the country’s highest officials knew about the plan, especially since war powers were concentrated in the office of the President. Zelensky tried to water down Ukraine’s anti-corruption watchdog last summer, but reversed course after widespread protests.
Months later, the watchdogs released their findings.
In the tape, Mindich, 46, co-owner of Zelensky’s Kvartal 95 media production company, is believed to be speaking under the code name “Carlsson”. Under Zelensky, Mindich has gained clout and influence in several industries, including lucrative domestic drone production.
NABU has investigated his alleged connection with drone maker Fire Point, which has risen to prominence by winning government contracts. NABU investigated the company over concerns it was misleading the government on arms prices.
Merezhkho said, “It seems that Zelensky distanced himself from Mindich a long time ago and when the scandal broke, Zelensky did not begin to cover Mindich.” “But I don’t rule out that someone in his group might have been tempted to make a quick buck.”
The AP gained access to the company’s factory in August. Its officials deny connections to Mindich.
“The main issue here is that a company allegedly affiliated with Mindich is getting government contracts out of competition because of personal ties to the administration,” said Yuri Nikolov, a Ukrainian investigative journalist who tracked the businessman’s dealings with Fire Point.
Following his suspension as Justice Minister, Hlyushchenko said in a Facebook post that he would defend himself in court.
“I believe being suspended for the duration of the investigation is a decent and appropriate action,” he said. “I will defend myself in the legal field and prove my position.”
Hlyushchenko, who was energy minister from 2021 until July, when he took over as justice minister, has not been formally charged.
“The silver lining in this story is that we have effective and truly independent anti-corruption bodies that have shown concrete results,” Merezhkho said. “As it turns out, no one is above the law and no one is immune.”
Political analyst Oleh Saikian said the plan involved “millions, hundreds of millions of dollars”, but cautioned that its full scale was not known. Although it is not the largest corruption scandal in Ukraine’s history, he said it occurred during the war and is linked to “key players” in the government.
In the NABU tapes, two discussions included delaying the construction of defensive fortifications for the energy sites and waiting for a more profitable option before protecting them from Russian attacks. The conversation mentioned giving a contract to make defensive security to a known company and subsequently increasing the kickback to 15%.
An AP investigation this year revealed that despite more than a year of warnings from Ukrainian officials about vulnerabilities near nuclear sites, the Energy Ministry failed to take prompt action.
Particularly at risk were the unprotected switchyards outside the perimeter of Ukraine’s three active nuclear plants – vital for generating electricity. Lawmakers highlighted this failure in a motion calling for Halushenko’s removal as energy minister and criticizing him for alleged corruption and poor oversight.
Ukraine’s partners have invested money in its energy sector and may be concerned over the scandal.
A spokesman for German Chancellor Friedrich Merz said the government was concerned by the reports of corruption, adding that it involved “an area that receives considerable support from Germany.”
Spokesman Stephan Cornelius pointed to the concerns expressed in last week’s European Commission report and said Ukraine needed to ensure progress in fighting corruption.
“We will now continue to monitor developments in this concrete case and seek consequences if necessary,” Cornelius said. But “for now we trust the Ukrainian government to make sure it gets cleaned up, and to the anti-corruption authority that it will uncover this case and bring it to a transparent conclusion.”
Follow AP’s coverage of the war
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