With Ukraine fighting off Russia's war for four years now, the nation's security and defense sector is beset by scandals and controversies.
Even as Ukraine’s leaders tout progress in establishing a modern NATO-compatible army and a globally competitive military industry, reforms stall amid corruption, nepotism and non-transparent defense procurement.
All the while, Ukraine is committing more money to its defense and security, with 2018 figures reaching Hr 129 billion ($4.95 billion) or more than 5 percent of the country’s gross domestic product, including Hr 86 billion ($3.1 billion) for the army alone.
Yet the skyrocketing spending is barely making a difference at the front. Soldiers and officers still rely heavily on decades-old Soviet-era weaponry and military equipment. A series of recent scandals underscore the progress that still needs to be made.
Here are some of the biggest scandals:
Hladkovsky and Bohdan
Oleh Hladkovsky, Ukrainian President Petro Poroshenko’s former business partner and a deputy secretary of the National Security and Defense Council, the main coordinating and controlling body in the defense area, is believed to wield influence in approving secretive, no-bid military procurement contracts.
Automaker Bohdan Group, owned by Hladkovsky and formerly co-owned by Poroshenko, won a Defense Ministry tender and provided 100 new Bohdan-2251 field ambulances at a price of $32,000 each. It was the first time Bohdan had produced such vehicles, the design of which was based on a Chinese Great Wall car.
However, the quality of the new ambulances has been challenged. Many broke down after only several months in service, according to a member of the Volunteers Council of the Defense Ministry, Valentyna Varava.
On Feb. 11, the ministry said production would be suspended until the defects are fixed. The corporation claimed that its cars broke down due to the use of low-quality fuel by the army, and the careless use of the vehicles.
Nevertheless, the Defense Ministry intends to buy even more of Hladkovsky’s vehicles. The deal between the Bohdan Group and the military was later classified as secret.
An offshore company affiliated with Hladkovsky also won a military contract.
HUDC Holding Limited, a Cyprusbased firm of unknown ownership, sold four armored vehicles to a state-owned defense company SpetsTechnoEksport in 2015 for $428,000. Hladkovsky’s office told the Kyiv Post that he “used to have an indirect connection” to the seller company through a different offshore firm.
In June, Ukrainian journalist Oleksandr Dubinsky published what he said were copies of agreements showing the same offshore firm lending money to its Russian auto-making subsidiary Avto Real between September and December 2014, claiming that Hladkovsky was doing business in Russia even amid its war on Ukraine.
Hladkovsky didn’t comment on the accusations, but instead wrote to the Security Service of Ukraine, or SBU, asking the law enforcement agency to open a treason case against Dubinsky. The SBU complied, accusing Dubinsky of “misinforming citizens about security threats.”
Interior Minister Arsen Avakov’s son Oleksandr has been charged with embezzling Hr 14 million in a case related to the supply of overpriced backpacks to the National Guard. He was arrested by the National Anti-Corruption Bureau of Ukraine in October and released by a court without bail.
In December, a court returned Oleksandr Avakov’s passport and took off his electronic bracelet and Ukrainska Pravda reported that he was allowed to spend his Christmas holidays in Italy. Moreover, the freeze on his assets was canceled by a court in the same month.
In October, the National AntiCorruption Bureau of Ukraine arrested Deputy Defense Minister Ihor Pavlovskyi and the head of the ministry’s procurement department, Volodymyr Hulyevych.
They are suspected of embezzling Hr 149 million ($5.5 million) through the purchase of fuel at inflated prices for the Defense Ministry.
The fuel supplier in the case is a Ukrainian company called Trade
Commodity. According to the online procurement system ProZorro, Trade Commodity won 16 open procurement tenders worth $80 million with the Defense Ministry over 2015–2017, supplying gasoline, jet fuel, and diesel fuel.
One of the self-acknowledged investors of Trade Commodity is businessman Andriy Adamovsky. He is best known as a former business partner of Oleksandr Hranovsky, an influential lawmaker with the Bloc of Petro Poroshenko faction. This connection caused the Ukrainian media to link the company’s success to Hranovsky. The lawmaker denied any connection to Trade Commodity.
The National Anti-Corruption Bureau, or NABU, is also investigating a case of embezzlement, abuse of power and forgery involving Kyiv’s Rybalsky Kuznya shipyard, which is owned by Poroshenko and his top ally Ihor Kononenko — also a member of the president’s dominant, 136-member faction in parliament.
Rybalsky Kuznya denied accusations of involvement in corruption.
The Border Guard concluded a contract in 2015 to buy Triton mine-resistant armored vehicles worth Hr 59 million from Rybalsky Kuznya. It took delivery of the vehicles in 2015–2016.
According to a 2015 decision by the Cabinet of Ministers, the Kharkiv Oblast branch of Ukraine’s Border Guard was expected to buy 34 remote weapon stations worth Hr 161.5 million, or Hr 4.75 million per station. However, de facto the price of each remote weapon station supplied by Rybalsky Kuznya amounted to Hr 14.9 million, the NABU said.
The NABU also said that the vehicles supplied by Rybalsky Kuznya had not been used for their intended purposes and that they were unsuitable for use.
Nevertheless, Rybalsky Kuznia shipyard also won government contracts, including military ones, worth $2.5 million in 2016 and contracts worth $560,000 in 2017.
While Poroshenko’s biggest company, confectionary holding Roshen, has been allegedly managed by a blind trust since 2016, Kuznia is owned by Poroshenko through his Ukrainian fund Prime Assets Capital.
The progress of Ukraine’s military reforms has recently come under fire.
Glen Grant, a British military analyst and former adviser to Ukraine’s Defense Ministry, wrote in a Jan. 31 op-ed for the Kyiv Post that “the Ukrainian army gets better every day, but overall it is not one of the best in Europe because it has some critical organizational flaws.”
“Giving the army Javelin anti-tank missiles will not remove those flaws, and may even make them worse,” Grant said. “This is because there is no doctrine, equipping and training for doing this. The vision of a mobile army is lacking at all levels.”
Grant said that Ukraine does not have the “operational ability to deliver force anywhere and win battles.” He argued that, to win in Russia’s war, the nation must shed its Soviet military mentality and completely transform its army.
Natan Chazin, a Ukrainian veteran of Russia’s war in the Donbas and former advisor to Chief of the General Staff Viktor Muzhenko, was even harsher in an op-ed published on Feb. 14. Chazin argued that military reform in Ukraine was “dead” and said that Ukraine’s army cannot be “transformed to the state of even marginal effectiveness.”
Shyrokyi Lan swamp
Up to Hr 370 million ($14.2 million) was allocated in early 2017 to completely overhaul Shyrokyi Lan, the army’s huge training camp in Mykolaiv Oblast some 370 kilometers south of Kyiv.
By the end of 2017, 11 modern container-style housing units, a medical center, a canteen and a command headquarters were supposed to have been built, according to presidential adviser Yuriy Biriukov.
However, in mid-March, a year after Biriukov’s claim, the soldiers living in the camp’s old, cold canvas tents found themselves knee-deep in mud as puddles of water swamped the area during the springtime thaw, as they have every year since 2014.
Outraged by their appalling living conditions, soldiers complained on Facebook. Grilled about where all the money had gone, presidential adviser Biriukov claimed that modernization work at the Shyrokyi Lan would be delayed, for “a hundred objective reasons,” until August 2018, and that it was the soldiers themselves who were responsible for the living conditions.
The official said on Facebook on March 11 that the scandal was being intentionally stirred up by “those fighting against us” and “their useful idiots.”
On March 13, the Shirokiy Lan scandal turned deadly, when one soldier was killed and another seven badly injured in a deadly blaze as they tried to heat up a tent by using gasoline to ignite the damp firewood delivered to the camp.
In late October 2017, the Mykolaiv Shipyard, one of Ukraine’s biggest and oldest shipbuilding yards, which employs some 700 workers, was halted due to the total absence of funding and nearly Hr 60 million wage arrears.
For nearly 27 years prior to that, the yard had been working on the construction of a missile cruiser, the “Ukraine.” However, the Cabinet of Ministers ceased to allocate funds to keep the ship maintained as far back as in February 2015, pushing the enterprise to its ultimate decline.
Furthermore, in late December, the Ministry of Defense officially refused to accept the rusty, long-outdated Soviet-era battleship, even though, according to the shipyard’s management, it was 95-percent complete.
Amid the row, Ukrainian Prime Minister Volodymyr Groysman in late December 2017 publicly demanded that UkrOboronProm’s head Roman Romanov resign over his failure to pay off the wage debts at the Mykolaiv Shipyard. Romanov stepped down only in mid-February after a months-long war of words with the government.
Nonetheless, the issue remains unsolved. As the concern’s new director general told the Kyiv Post in a recent interview, the Mykolaiv Shipyard cannot sign new contracts and may have to close.
Kalynivka depot fire
There have been four major fires and explosions at Ukrainian army ammunition depots since 2014. The latest incident, a fire at an ammunition depot near the town of Kalynivka, 238 kilometers southwest of Kyiv, between Sept. 26–27, 2017, raised questions of negligence and budget fraud in storing the army’s ammunition.
While claims of sabotage started to circulate shortly after the fire, evidence started to emerge that the depot had fire safety problems.
Following the incident, the chief military prosecutor, Anatoliy Matios, also said that the depot’s fire alarm system had not been operating. Moreover, on the night of the incident, the entire depot was protected by “several air-defense positions and was patrolled by 17 armed guards,” primarily elderly people paid “very low wages.”
Also, according to presidential adviser Biriukov, in 2017 alone, the Kalynivka depot received Hr 25.5 million ($978,700) for technical and security improvements.
Kyiv Armored Plant
In late October 2017, an investigation by the Nashi Groshi TV program revealed that the top managers of the Kyiv Armored Plant in 2014– 2015 allegedly siphoned off as much as Hr 100 million ($3.7 million) in funds allocated to buy spare parts for armored vehicles for the military.
The plant, which is also a part of the UkrOboronProm state defense industry holding company, bought the parts through a chain of up to four private intermediary companies, none of which had any manufacturing capacities nor stocks of goods, nor even offices located at their statutory addresses.
And in the end, the armored plant was not supplied with any of the components that were to have been delivered under the contract, Nashi Groshi journalists said.
The military prosecutor's office in Kyiv started an inquiry into the case as far back as December 2015; However, there has been no progress in the inquiry since then, Nashi Groshi said.
UkrOboronProm rejected all of the allegations, accusing Nashi Groshi journalist Denys Bihus of “incompetence” and “twisting facts.”
Since the outbreak of Russia’s war in the Donbas in 2014, there have been over 10,000 non-combat Ukrainian military casualties because of careless weapons handling, excessive alcohol consumption, or criminality, Chief Military Prosecutor Matios claimed in a TV interview on Oct. 28.
In the Donbas war zone alone, up to 3,700 soldiers have died from non-combat injuries, in addition to the already known death toll of 2,700 soldiers killed in action, according to the prosecutor.
“Two full brigades have been lost due to ignoring army rules, and criminal behavior,” Matios said.
A boy hangs on a self-propelled howitzer barrel during the Power of the Undefeated arms exhibition in Kyiv on Aug. 23, 2017.
Deputy secretary of the National Security and Defense Council Oleh Hladkovsky sits at the council's meeting in Kyiv on Feb. 18, 2015. (UNIAN)
A Ukrainian soldier checks his ammunition reserve at a machine gun nest near the Russian-occupied Donetsk Oblast city of Debaltseve, 600 kilometers southwest of Kyiv, on July 31, 2017. (Volodymyr Petrov)
Deputy Defense Minister Ihor Pavlovsky (C) stands at a hearing of Kyiv’s Solomyansky District Court on Oct. 13. He has been charged with embezzling Hr 149 million ($5.5 million) through the purchase of fuel for the Defense Ministry. (Oleg Petrasiuk)