Ukraine detains 5 people in US$100M energy sector graft investigation

A worker walks in front of a transformer which was destroyed after a recent Russian missile attack at DTEK's power plant in Ukraine, Nov. 28, 2024. (AP Photo/Evgeniy Maloletka, file)

KYIV, Ukraine -- A Ukrainian anti-corruption agency said Tuesday it has detained five people and identified seven other suspects in a major graft investigation that is centring on alleged kickbacks worth some US$100 million in the country’s energy sector.

The National Anti-Corruption Bureau did not name the suspects in its statement but said they included a businessman believed to be the scheme’s mastermind; a former adviser to the country’s energy minister; and an executive of national atomic energy company Energoatom.

The statement came a day after the agency revealed some details of a 15-month investigation into suspected energy sector corruption, including at Energoatom.

Large amounts of Ukrainian and foreign funds have flowed into the energy sector as infrastructure is repeatedly repaired following relentless Russian aerial attacks. Ukraine’s Energy Ministry said Tuesday that Russia attacked energy infrastructure in the Kharkiv, Odesa and Donetsk regions overnight and that scheduled power outages were in place in most regions of Ukraine.

The Anti-Corruption Bureau is tasked with rooting out entrenched corruption, which is widely regarded as an impediment to Kyiv’s efforts to obtain membership in the European Union. It targets high-level corruption, particularly cases involving senior officials and state-owned enterprises.

It has previously reported uncovering a major graft scheme involving inflated military procurement contracts and the embezzlement of millions of dollars’ worth of funds earmarked to buy mortar shells for Ukraine’s efforts to foil Russia’s all-out invasion.

Ukrainian President Volodymyr Zelenskyy welcomed the latest probe. “Any effective action against corruption is an urgent need,” he said in his Monday night address to the nation.

He urged government officials to cooperate with investigators.

Zelenskyy has also faced public disapproval over the issue of graft. He quickly reversed course last month on a law that would have curbed the independence of the country’s anti-corruption watchdogs after widespread street protests. EU officials also pressed him to change his mind.

The anti-graft investigators allege that Energoatom’s suppliers were forced to pay bribes, amounting to between 10 per cent and 15 per cent of a contract’s value, to keep providing services and goods to the company.

They also suspect that several high-ranking officials used their connections to “maintain control over personnel decisions, procurement processes and the flow of financial resources” to run the kickback scheme.

Energoatom, a state-owned enterprise which generates more than a half of Ukraine’s energy supply, said in a statement that the probe has not disrupted production or operational safety.

Meanwhile, Ukraine’s general staff claimed Tuesday its forces struck two Russian oil refineries and an oil terminal as part of its long-range drone campaign to deny Moscow vital revenue for its war effort.

Ukrainian forces hit Russia’s Saratov oil refinery overnight for the fifth time in recent months, starting what it called a “massive fire,” the general staff said. Another target was the Orsknefteorgsintez refinery, which produces over 30 types of petroleum products and supplies the Russian military, it said.

Ukrainian forces also attacked an oil terminal in the port of Feodosia, in Russian-occupied Crimea. The terminal is used to supply fuel and lubricants to the occupied peninsula and parts of southern Ukraine.

In Moscow, Russia’s Federal Security Service, known as the FSB, claimed Tuesday that it had thwarted a Ukrainian intelligence plot to recruit Russian pilots and hijack a MiG-31 fighter jet carrying a hypersonic Kinzhal missile.

The FSB routinely claims to have thwarted plots against Russia, usually without providing any evidence. Ukrainian officials made no immediate comment.

By Illia Novikov