Startling corruption allegations against a close ally of President Volodymyr Zelensky have landed at a precarious moment for Ukraine’s security, politics and international standing — and could prove hugely damaging to his leadership.
A joint investigation by the National Anti-Corruption Bureau of Ukraine (Nabu) and the Special Anti-Corruption Prosecutor’s Office (Sapo) alleged on Tuesday that it had uncovered a $100m (£76m) kickback scheme involving the national nuclear energy company Energoatom.
Some of those implicated are close to Zelensky, including his former business partner Timur Mindich, raising the stakes for a government already tested by nearly four years of war.
It comes as Russia digs deeper into the strategic eastern stronghold of Pokrovsk, and across the country civilians endure rolling blackouts as winter approaches, amid a long-standing barrage on energy infrastructure. Meanwhile, the EU continues to mull whether to use the proceeds of frozen Russian assets to fund Ukraine’s defence — a debate Kyiv can scarcely afford to lose.
A new headache for Zelensky
Zelensky — who ran for office on an anti-corruption platform — welcomed the investigation this week, and has imposed sanctions on Mindich, the alleged ringleader of the scheme, and businessman Oleksandr Tsukerman, both of whom have fled the country.
Among the 12 people the agencies said had been detained or were under suspicion, Mindich, a co-owner of Zelensky’s Kvartal 95 production company, is the most controversial due to his long-time proximity to the President. He was not immediately reachable for comment.
The alleged involvement of Mindich and other close allies of Zelensky makes this scandal uniquely damaging, according to Dr Stephen Hall, an expert in post-Soviet politics at the University of Bath. Zelensky’s government has weathered corruption controversies before, including the President’s own abortive effort to curtail the independence of Nabu and Sapo earlier this year.
A drone explodes during a Russian strike on Kyiv on Friday. The war will see its fourth anniversary in a few months (Photo: Gleb Garanich/Reuters)Yet critics “have never been able to make it stick”, Hall said.
Zelensky himself has not been implicated but will now face questions about whether he knew of — or even benefited from — the alleged scheme.
His next steps are pivotal, Hall said. While the sanctions on Mindich will be welcomed, there is already a call from Estonia’s former president Toomas Hendrik Ilves for Kyiv to issue an international arrest warrant.
Not pushing the issue to the hilt risks signalling that Zelensky’s “relationships are more important to him than Ukraine’s survival”, said Hall.
The corrosiveness of wartime corruption
Corruption in wartime has a corrosive effect, said Professor Elizabeth David-Barrett, director of the Centre for the Study of Corruption at the University of Sussex. “It undermines trust in government at a time when government is asking a lot of its people” — including risking their lives, she said.
As Russia bombards Ukraine’s power grid nightly, causing punishing blackouts, Ukrainians must now confront the possibility of another kind of attack — this time from within.
People take shelter in a metro station, being used as a bomb shelter during Russian drone attacks, in Kyiv early on Friday (Photo: Dan Bashakov/AP)This may spell trouble for Zelensky’s waning political popularity, but may not entirely weaken Ukrainians’ determination to fight Russia, said Ann Marie Dailey, a geopolitical strategist at the Rand think-tank. “Every Ukrainian knows there is corruption in their country,” she said.
But exposing corruption was at the root of Ukraine’s independence movement and its resistance to Russian influence, she added.
The fact that such scandals are exposed at all is, David-Barrett said, itself evidence of institutional progress. Since 2014, the trend has been “quite positive” in Ukraine, she said.
Nonetheless, it sows doubt among allies and hands a powerful megaphone to Ukraine’s adversaries.
Keeping allies on side — and sceptics at bay
The timing could hardly be worse for Kyiv’s diplomatic efforts. Even a staunch ally like European foreign policy chief Kaja Kallas called the episode “extremely unfortunate”. The German Chancellor, Friedrich Merz, emphasised his “expectation” that Kyiv should fight corruption “energetically”.
The EU approved a €6bn (£5.3bn) loan funding deal for Ukraine on Thursday but the scandal could cast a shadow over the questions of Ukraine joining the bloc. Next month, the EU is set to debate the legally fraught question of using the proceeds of frozen Russian assets to fund Ukraine’s defence.
Painting Ukraine as irredeemably corrupt is one of Russia’s most successful propaganda messages, Dailey said, because it resonates both with hard-pressed taxpayers and anti-war sentiment. So it is already offering Ukraine’s sceptics a potent weapon.
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On Thursday, the Hungarian Prime Minister, Viktor Orbán, pointed to the scandal as evidence that Ukraine’s progress towards EU membership was a “golden illusion” that did not merit the support of European taxpayers.
Which is why, experts say, the current moment may well be a test of Zelensky’s leadership — and “he doesn’t generally take attacks on his close allies particularly well”, said Hall.
The risk is acute, Dailey agreed. But, she said, played right, “it’s actually a really great opportunity to demonstrate how and why Ukraine is different from Russia”.
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