Ukraine has announced plans to overhaul its energy sector as it reels from the most damaging corruption scandal of Volodymyr Zelensky’s presidency.
So what? This is a pivotal moment in the war against Russia. Kyiv needs Europe and the US on side, as well as its own citizenry. But the alleged involvement of the president’s close associates in a plot to skim around $100 million from a major industry could
•
erode domestic political trust;
•
threaten energy security at a time of bombing and blackouts; and
•
undermine Western trust as Ukraine faces a looming budget shortfall.
One for me. Ukrainian anti-corruption agencies said last week that they had uncovered a $100 million kickback and money laundering network, which channelled payments through contractors at the state nuclear operator Energoatom. They allege that suppliers were forced to pay 10 to 15 per cent of the values of their contracts to maintain their status.Damning. The National Anti-Corruption Bureau of Ukraine and the Specialised Anti-Corruption Prosecutor’s Office released audio recordings and transcripts from wiretaps, conducted 70 searches and reportedly seized more than $4 million in cash.
Under the kosh. German Galushchenko, who was energy minister until July, is the most senior member of the government accused of involvement. Galushchenko, now the justice minister, was suspended from his post last Wednesday. He denies wrongdoing.
Close to home. Timur Mindich, a friend and former business partner of Zelensky, is accused of operating a “laundry room” for criminally obtained funds. An apartment reportedly belonging to him was placed under surveillance. It is said to have a golden toilet and the president reportedly celebrated his birthday there five years ago. Mindich is believed to have fled the country and could not immediately be reached for comment.
Cold fury. The scandal has caused outrage in Ukraine, where the population is enduring blackouts from Russian bombing and preparing to hunker down for winter with its energy infrastructure under siege. Energoatom supplies more than half of the country’s electricity.Taking action. In a bid to stem the crisis, Zelensky said that the leadership of at least three state-run energy companies would be sacked and replaced. He urged the energy and justice ministers to resign and has backed probes into the sector.
Told you so. But the scandal has stoked unease in the EU, which remains deadlocked over a £124 billion loan reliant on frozen Russian assets. Anti-corruption reforms are a key hurdle for membership to the bloc and critics such as Hungary’s Viktor Orbán now have fresh ammunition to attack Ukraine. He has accused Kyiv of being run by a “wartime mafia network”.
It doesn’t help that Zelensky stated his intention to end the independence of Nabu and Sapo over the summer. He abandoned the move after the first major anti-government street protests since Russia’s full-scale invasion.
Soldier on. This weekend the president visited Athens to agree a deal to import US-supplied liquefied natural gas via Greece. He also went to Paris on Monday, where he secured 100 warplanes, and to Spain yesterday. As well as bolstering energy needs and defence cooperation, he pushed for renewed support at a time when some allies are showing fatigue.What’s more… Peace talks have stalled and under thick fog the key city of Pokrovsk is on the verge of falling to Moscow. Securing Ukraine’s reputation is vital.
Photograph by Angelos Tzortzinis AFP via Getty Images