Cracks Beneath the Surface
Despite their strong commitment to support Ukraine in its fight against Russia’s aggression, EU leaders should have asked this question when on 10 November, a major corruption scandal with the involvement of top politicians and high-ranking figures of the energy sector has been revealed in Ukraine. In addition, Timur Mindich, an influential businessman and one of the closest friends and business associates of President Zelenskyy, had fled Ukraine at night, just hours before the anti-corruption bodies searched his home. All that was left behind him, is millions of euros in cash and a major political scandal on the horizon which can shake the war-torn country’s political system at its foundations. Not to mention the harm it can cause to Ukraine’s fast-track European accession.
Just a week before this major corruption-related case was revealed by the National Anti-Corruption Bureau of Ukraine (NABU), the European Commission issued its annual enlargement report which gave an overall positive assessment of Ukraine’s reform progress.
However the Commission said that, despite significant progress by Ukraine in combating corruption, certain forces within the country continue to try to undermine that fight and the pressure on the NABU continues. The document also noted that Ukraine must refrain from any steps that could undermine the progress already achieved in combating corruption.
’Any action that weakens or reverses strong anti-corruption reforms must be avoided,’ the report says.
Despite serious concerns regarding Ukraine’s anti-corruption efforts, EU Commissioner for Enlargement Marta Kos, placed Ukraine among the four EU candidate countries that have made the greatest progress over the past year in implementing reforms necessary for EU membership.
Operation Midas
When going into details on this issue, it is inevitable to take a brief look at the developments in Ukraine this July when President Zelenskyy’s attack on the anti-corruption bodies triggered international criticism both in Europe and the US after which the independence of NABU and the Specialised Anti-Corruption Prosecutor’s Office (SAPO) was swiftly restored. With regard to the Commission’s positive report on Ukraine, it is also worth noting that in a Facebook post, Volodymyr Zelenskyy stressed Kyiv’s progress toward EU membership, skipping the concerns of the EU concerning the corruption in Ukraine. Then came 10 November with hundreds of NABU and SAPO officials conducting major searches in the energy sector, including at former energy minister and current Justice Minister Herman Halushchenko’s home and Energoatom, Ukraine’s state-owned nuclear power company to ’expose corruption in the energy sector.’
With fifteen months of work and more than 70 searches, in the covert operation code-named ’Midas’, detectives have uncovered a large-scale corruption scheme influencing strategic state-owned companies, including Energoatom, NABU said.
The same day, NABU detectives also conducted searches at the home of Timur Mindich, a businessman and co-owner of Kvartal 95, a production company Zelenskyy established before he became Ukrainian president. Mindich left Ukraine just hours before the searches began. The Ukrainian authorities have not yet explained how the case of Mindich is linked to the Energoatom-related scandal.
According to NABU, officials and associated individuals systematically received illegal benefits from contractors of Energoatom, by demanding payoffs of between 10-15 percent of contract values.
According to the criminal scheme, Energoatom, Ukraine’s strategic state company was operated by a shadow manager who received substantial support from a number of state officials and corporate actors. One of the main suspects is closely linked to an ex-Ukrainian MP Andriy Derkach who left Ukraine for Russia after the war in Ukraine started. To illustrate how large-scale Operation Midas has been, the anti-corruption agencies published audio recordings from the investigation.
The probe concerns the activities of senior officials in the energy and defence sectors who are suspected of forming a criminal organisation, money laundering and illicit enrichment, the Ukrainian authorities said in a statement.
Power, Influence, and the EU’s Blind Spot
When talking about Mindich, it should be noted that he was in the focus of attention of the Ukrainian anti-corruption bodies back in July when NABU and SAPO were preparing a notice of suspicion to be served on him. The same month, President Zelenskyy, with the alleged intention of countering Russian influence over the activities of the anti-corruption bodies, tried to strip these agencies of their independence… According to media sources, the authorities managed to record Mindich in an apartment at the same address where Zelenskyy’s birthday party took place five years ago…
Under pressure from international circles, the independence of Ukraine’s anti-corruption bodies was restored.
Mindich avoided arrest – temporarily he left Ukraine for Austria-, at the same time another close friend of Zelenskyy, a key minister in Ukraine’s government Oleksiy Chernyshov – Deputy Prime Minister and National Unity Minister, former territorial development minister and CEO of Naftohaz Ukraine – was named as a suspect in a high-profile corruption investigation…
Despite Mindich held no official government office, he had great influence over the Ukrainian policymaking.
In addition, he was allegedly involved in military construction projects. However, it is still not clear what led NABU and SAPO to focus on him. News outlets earlier also reported that Mindich could have been on the ’shopping list’ of the FBI, when investigating a large-scale money laundering case on the British Virgin Islands.
Considering the above, for all European citizens, the only adequate question should be what had led the European Commission to issue a positive report on Ukraine with a number of cases in the focus of attention which reveal that state-level corruption in Ukraine not only still exists but it continues to rife in the country, with President Zelenskyy’s obviously full knowledge and consent, raising even the possibility of being directly involved in these criminal schemes.