Top Ukrainian ministers submit their resignations as the country is rocked by a corruption scandal

As Russia’s renewed attacks on Ukraine’s energy infrastructure cause rolling blackouts ahead of winter, a major embezzlement and kickbacks scandal involving the state-owned nuclear power company has emerged as one of the most significant government crises since Moscow’s full-scale invasion began.

The scandal, which reportedly implicates a close associate of President Volodymyr Zelenskyy, has prompted swift political fallout. Responding to public backlash, Zelenskyy called for the dismissal of his justice and energy ministers, who subsequently submitted their resignations, according to Prime Minister Yuliia Svyrydenko.

Anti-corruption watchdogs unveiled findings from a 15-month investigation that included 1,000 hours of wiretaps. The probe has resulted in the detention of five individuals, with another seven linked to approximately $100 million in kickbacks in the energy sector. The National Anti-Corruption Bureau (NABU) dubbed the scheme “Midas.”

Ukrainian officials now face the dual challenge of managing mounting energy shortages while dealing with this corruption scandal. The country is seeking European funds as Moscow targets critical infrastructure and natural gas production in an apparent effort to undermine public morale. Meanwhile, Ukraine’s outnumbered forces continue to retreat under relentless Russian assaults nearly four years into the war.

“Internally this scandal will be used to undermine unity and stability within the country. Externally, our enemies will use it as an argument to stop aid to Ukraine,” said Oleksandr Merezhko, a lawmaker with Zelenskyy’s party. “It looks really bad in the eyes of our European and American partners. While Russians destroy our power grid and people have to endure blackouts, someone at the top was stealing money during the war.”

Ukraine has long struggled with corruption since gaining independence, and Zelenskyy was elected on an anti-graft mandate. Military procurement scandals led to the ouster of Defense Minister Oleksii Reznikov in 2023, but the timing of this latest corruption case is particularly damaging.

While NABU refrained from identifying all suspects, they described a network that included a businessman, a former adviser to the energy minister, an executive overseeing physical protection at state energy company Energoatom, and others responsible for money laundering. The investigation involved more than 70 raids.

The agency released tape excerpts in which members of the network, using code names and secretive language, discussed blackmail and pressuring Energoatom contractors to extract 10%-15% in kickbacks and bribes. The scheme exploited regulations enforced during martial law that prohibit contractors from claiming debts in court from essential service providers like Energoatom, which has annual revenues of about $4.7 billion.

At the center of the controversy is Timur Mindich, 46, a co-owner of Zelenskyy’s Kvartal 95 media production company. In the tapes, Mindich is believed to be speaking under the code name “Karlsson.” Since Zelenskyy’s rise to power, Mindich has gained significant influence across multiple industries, including domestic drone production.

“It looks like Zelensky distanced himself from Mindich long ago and when the scandal broke out, Zelensky didn’t start to cover Mindich,” Merezhko observed. “But I don’t rule out that someone from his entourage might have succumbed to temptation to make a quick buck.”

NABU has also investigated Mindich’s alleged connection with Fire Point, a drone manufacturer that secured government contracts. Ukrainian investigative journalist Yurii Nikolov, who examined the businessman’s dealings, noted: “The key issue here is that the company supposedly affiliated to Mindich is getting government contracts outside the competition, because of the personal relationship to the administration.”

After his suspension, former Justice Minister Herman Halushchenko stated on Facebook that he would defend himself in court. “I believe that being suspended for the duration of the investigation is a civilized and proper course of action,” he wrote. Halushchenko, who previously served as energy minister from 2021 until July 2024, has not been formally charged.

The NABU recordings also revealed discussions about delaying defensive fortifications for energy sites while waiting for more profitable alternatives before shielding them from Russian attacks. An Associated Press investigation earlier this year found that despite warnings from Ukrainian officials about vulnerabilities near nuclear sites, the Energy Ministry failed to act promptly. Particularly at risk were unprotected switchyards outside Ukraine’s three active nuclear plants.

Ukraine’s international partners, who have invested heavily in the country’s energy sector, are likely to view the scandal with concern. A spokesperson for German Chancellor Friedrich Merz expressed worry about corruption in “a sector that receives considerable support from Germany.”

“We will now watch developments in this concrete case and, if necessary, consequences will have to be drawn from it,” the spokesperson added, while expressing confidence that Ukrainian authorities would investigate thoroughly.

Political analyst Oleh Saakian noted that while not the largest corruption scandal in Ukraine’s history, its occurrence during wartime and connection to “key players” in the government makes it particularly significant. The full scale of the scheme, which involved “millions, tens of millions of dollars,” is still being determined.