Heads roll in Ukraine graft purge, but defense chief Reznikov rejects rumors he’s out – POLITICO

KYIV — Heads are rolling in President Volodymyr Zelenskyy’s expanding purge against corruption in Ukraine, but Defense Minister Oleksii Reznikov is denying rumors that he’s destined for the exit — a move that would be viewed as a considerable setback for Kyiv in the middle of its war with Russia.

Two weeks ago, Ukraine was shaken by two major corruption scandals centered on government procurement of military catering services and electrical generators. Rather than sweeping the suspect deals under the carpet, Zelenskyy launched a major crackdown, in a bid to show allies in the U.S. and EU that Ukraine is making a clean break from the past.

Tetiana Shevchuk, a lawyer with the Anti-Corruption Action Center, a watchdog, said Zelenskyy needed to draw a line in the sand: “Because even when the war is going on, people saw that officials are conducting ‘business as usual’. They saw that corrupt schemes have not disappeared, and it made people really angry. Therefore, the president had to show he is on the side of fighting against corruption.”

Since the initial revelations, the graft investigations have snowballed, with enforcers uncovering further possible profiteering in the defense ministry. Two former deputy defense ministers have been placed in pre-trial detention.

Given the focus on his ministry in the scandal, speculation by journalists and politicians has swirled that Reznikov — one of the best-known faces of Ukraine’s war against the Russian invaders — is set to be fired or at least transferred to another ministry.

But losing such a top name would be a big blow. At a press conference on Sunday, Reznikov dismissed the claims about his imminent departure as rumors and said that only Zelenskyy was in a position to remove him. Although Reznikov admits the anti-corruption department at his ministry failed and needs reform, he said he was still focused on ensuring that Ukraine’s soldiers were properly equipped.

“Our key priority now is the stable supply of Ukrainian soldiers with all they need,” Reznikov said during the press conference.

Despite his insistence that any decision on his removal could only come from Zelenskyy, Reznikov did still caution that he was ready to depart — and that no officials would serve in their posts forever.

The speculation about Reznikov’s fate picked up on Sunday when David Arakhamia, head of Zelenskyy’s affiliated Servant of the People party faction in the parliament, published a statement saying Reznikov would soon be transferred to the position of minister for strategic industries to strengthen military-industrial cooperation. Major General Kyrylo Budanov, current head of the Military Intelligence Directorate, would head the Ministry of Defense, Arakhamia said.

However, on Monday, Arakhamia seemed to row back somewhat, and claimed no reshuffle in the defense ministry was planned for this week. Mariana Bezuhla, deputy head of the national security and defense committee in the Ukrainian parliament, also said that the parliament had decided to postpone any staff decisions in the defense ministry as they consider the broader risks for national defense ahead of another meeting of defense officials at the U.S. Ramstein air base in Germany and before an expected upcoming Russian offensive.  

Zelenskyy steps in

The defense ministry is not the only department to be swept up in the investigations. Over the first days of February, the Security Service of Ukraine, State Investigation Bureau, and Economic Security Bureau conducted dozens of searches at the customs service, the tax service and in local administrations. Officials of several different levels were dismissed en masse for sabotaging their service during war and hurting the state.     

“Unfortunately, in some areas, the only way to guarantee legitimacy is by changing leaders along with the implementation of institutional changes,” Zelenskyy said in a video address on February 1. “I see from the reaction in society that people support the actions of law enforcement officers. So, the movement towards justice can be felt. And justice will be ensured.” 

Yuriy Nikolov, founder of the Nashi Groshi (Our Money) investigative website, who broke the story about the defense ministry’s alleged profiteering on food and catering services for soldiers in January, said the dismissals and continued searches were first steps in the right direction.

“Now let’s wait for the court sentences. It all looked like a well-coordinated show,” Nikolov told POLITICO.  “At the same time, it is good that the government prefers this kind of demonstrative fight against corruption, instead of covering up corrupt officials.”

Still, even though Reznikov declared zero tolerance for corruption and admitted that defense procurement during war needs reform, he has still refused to publish army price contract data on food and non-secret equipment, Nikolov said.

During his press conference, Reznikov insisted he could not reveal sensitive military information during a period of martial law as it could be used by the enemy. “We have to maintain the balance of public control and keep certain procurement procedures secret,” he said.

Two deputies down

Alleged corruption in secret procurement deals has, however, already cost him two of his deputies.  

Deputy Defense Minister Vyacheslav Shapovalov, who oversaw logistical support for the army, tendered his resignation in January following a scandal involving the purchase of military rations at inflated prices. In his resignation letter, Shapovalov asked to be dismissed in order “not to pose a threat to the stable supply of the Armed Forces of Ukraine as a result of a campaign of accusations related to the purchase of food services.”

Another of Reznikov’s former deputies, Bohdan Khmelnytsky, who managed defense procurement in the ministry until December, was also arrested over accusations he lobbied for a purchase of 3,000 poor-quality bulletproof vests for the army worth more than 100 million hryvnias (€2.5 million), the Security Service of Ukraine reported.  If found guilty he faces up to eight years in prison. The director of the company that supplied the bulletproof vests under the illicit contract has been identified as a suspect by the authorities and now faces up to 12 years in prison if found guilty.

Both ex-officials can be released on bail.  

Another unnamed defense ministry official, a non-staff adviser to the deputy defense minister of Ukraine, was also identified as a suspect in relation to the alleged embezzlement of 1.7 billion hryvnias (€43 million) from the defense budget, the General Prosecutors Office of Ukraine reported.  

When asked about corruption cases against former staffers, Reznikov stressed people had to be considered innocent until proven guilty.

Reputational risk

At the press conference on Sunday, Reznikov claimed that during his time in the defense ministry, he managed to reorganize it, introduced competition into food supplies and filled empty stocks.

However, the anti-corruption department of the ministry completely failed, he admitted. He argued the situation in the department was so unsatisfactory that the National Agency for the Prevention of Corruption gave him an order to conduct an official audit of employees. And it showed the department had to be reorganized.

“At a closed meeting with the watchdogs and investigative journalists I offered them to delegate people to the reloaded anti-corruption department. We also agreed to create a public anti-corruption council within the defense ministry,” Reznikov said.

Nikolov was one of the watchdogs attending the closed meeting. He said the minister did not bring any invoices or receipts for food products for the army, or any corrected contract prices to the meeting. Moreover, the minister called the demand to reveal the price of an egg or a potato “an idiocy” and said prices should not be published at all, Nikolov said in a statement. Overpriced eggs were one of the features of the inflated catering contracts that received particular public attention.

Reznikov instead suggested creating an advisory body with the public. He would also hold meetings, and working groups, and promised to provide invoices upon request, the journalist added.

“So far, it looks like the head of state, Zelenskyy, has lost patience with the antics of his staff, but some of his staff do not want to leave their comfort zone and are trying to leave some corruption options for themselves for the future,” Nikolov said.

Reznikov was not personally accused of any wrongdoing by law enforcement agencies.

But the minister acknowledged that there was reputational damage in relation to his team and communications. “This is a loss of reputation today, it must be recognized and learned from,” he said. At the same time, he believed he had nothing to be ashamed of: “My conscience is absolutely clear,” he said.