You're reading: Corrupt officials make a quick buck off war

SLOVIANSK, Ukraine -- Dirty and exhausted paratroopers in shabby uniforms who defended Ukrainian checkpoints between then-separatist controlled Sloviansk and Kramatorsk in late May, claimed at the time that NATO military outfits delivered for their unit were sold at a Dnipropetrovsk street market instead of reaching them.

Later that month the soldiers from Chernivtsi, who were keeping positions in Luhansk Oblast, were laughing out loud when they heard about people falling for an ad campaign that invited them to send money to the army by texting a certain number. They reckoned they would never see this money, despite the fact that Ukraine’s Defense Ministry was running the campaign.

In November, the National Guardsmen the town of Debaltseve in Donetsk Oblast asked the Kyiv Post to start an awareness campaign in the media to inform the public that soldiers still had no winter clothes, while senior officials reported that the army was ready for the winter.

When many Ukrainians regularly help the army, others make money off it.

One of them allegedly was Oleksandr Zrazhevsky, who headed the state procurement department of defense ministry before he was arrested on Nov. 21 for attempts to allegedly embezzle Hr 3 million (close to $200,000), according to the police.

When the police, along with military prosecutors, searched Zrazhevsky’s deposit box in a bank, they found $420,000 in cash.

The military prosecutor’s office told the Kyiv Post in a written response to a query that Zrazhevsky signed a deal in October worth over Hr 443 million (about $28 million) with a fictitious firm to procure diesel for army needs. Now he is facing up to six years in jail and is accused of abuse of power, among other things, the prosecutor’s office said.

Zrazhevsky was detained after a rival in the fuel tender, Okko Business, complained to the state Anti-Monopoly Committee once it realized that its cheaper offer was ignored, Nashi Groshi TV investigation project discovered. Eventually, the defense ministry gave the contract to Okko Business, saving about Hr 700,000 hryvnias (more than $40,000).

The fictitious firm was called Inter Prise, and it was registered as owned by an unemployed Kyiv resident, who was unaware of it, Nashi Groshi found.

This fuel rip-off was not a unique case.

In July the military prosecutor’s office arrested Eduard Iliyin, then head of the Kyiv Armor and Tank Plant, and accused him of transferring Hr 12 million (around $1 million) to the accounts of a fictitious company with the aim of withdrawing the money later from the accounts.

“This money was designated for production of armored vehicles,” the prosecutor’s office told the Kyiv Post. They are now searching one of Iliyin’s accomplices, while the former official is facing up to 12 years in jail.

Journalists of Nashi Groshi investigative team also found that Ukraine’s defense ministry was selling arms and military equipment from its stock to private firms until July.

Alisa Yurchenko, a journalist of Nashi Hroshi found that the ministry sold 35,000 Kalashnikovs to a private Kyiv firm at extremely low prices. Later, the firm resold then at 36 times the price.

“The first company was buying them for Hr 460 ($30) per item and then they appeared at gun shops for Hr 17,000 ($1,100) per machine gun,” Yurchenko said, when speaking at conference for investigative reporters in Kyiv on Dec. 6.

The ministry also sold helicopter this year for Hr 300,000 ($20,000) per item, when their market price was millions of hryvnias. Later these helicopters were offered for sale in the internet.

President Petro Poroshenko said in October that all these cases uncovered by journalists will be thoroughly investigated, and those who are found guilty would be punished.

Because of corruption in procurement and the defense ministry, foreign donors are reluctant to send aid to Ukraine. Sometimes they prefer volunteers handling the aid.

When in late November the Canadian government sent 3,000 sets of winter outfits for Ukrainian soldiers, it was the volunteers who met the plane at the airport and sent the clothes to the war zone.

Other volunteers received the Canadian outfits at the places of their destination, counting them on arrival and then delivering to soldiers.

“Now all the cargos will be supervised by representatives of Council of Volunteers and Ukrainian-Canadian Congress,” prominent volunteer Daviv Arakhamia, who now assists the defense ministry in procurement issues, wrote on his Facebook. “This is a personal order by prime minister of Canada, who hinted that when once again these goods disappear or in unknown way appear at the market – that would be the last help for our country.”

Kyiv Post staff writer Oksana Grytsenko can be reached at [email protected]