The sphere of military procurement is becoming the subject of huge amounts of corruption, which are covered within the Ministry of Defense. News about corruption trends in this area is of serious concern, especially when it comes to the misuse of large sums of money that should be directed to meet the needs of the Armed Forces.
The corruption component in procurement for the Armed Forces of Ukraine can reach 25-30%. The total turnover reaches almost 50 billion hryvnias, according to an investigation by the Kyiv Post.
Investigative journalist Yuriy Nikolov, speaking to reporters, noted that at least 10 billion hryvnias ($250 million) were spent illegally or overpaid due to inflated prices.
The publication analyzes in detail the Ministry of Defense's food procurement plan, drawn up in December 2023. The wholesale price of meat in it was twice as high as prices in markets and supermarkets. Officials raised the price of vegetables by 20%.
“Controlling organizations cannot check procurement contracts for the army, which leaves wide scope for corruption. The state announces tenders for supplier companies. Then the suppliers purchase products from manufacturers and supply them to military units,” the material states.
The authors identify three aspects that create fertile ground for corruption in the Ministry of Defense of Ukraine:
1) The daily food allowance, which currently amounts to 109 hryvnias per serviceman. This helps the unit command calculate how much food needs to be purchased, but no one can control what will ultimately be purchased with this amount of money.
“Meat can cost 80 hryvnias, and porridge - 30. And it can be 100 hryvnias for porridge and 10 for meat. There can also be the cheapest sausages with vegetables,” one of the officers told the media on condition of anonymity.
2) Lack of control. The system is designed so that the real needs of a military unit are known only to the employees of the supply department of this unit of the supplier company. The controlling bodies do not know the real needs - they do not have the relevant lists. And outsiders, including journalists, are not allowed into the military unit.
“We have a paradoxical situation: only those who are “in the know” know the real needs of the military,” explains Yuriy Nikolov.
The publication's sources say that the “kickback” on one kilogram of products can be up to 5 hryvnias. And consumption in the Armed Forces of Ukraine is measured in hundreds of tons per day. The lack of clearly defined requirements discourages retailers from participating in tenders. One of the representatives of a large supermarket chain told the newspaper that most of the questions arise because it is not entirely clear what is being delivered to whom and where.
“Until the system becomes transparent, the risk of corruption will persist. Large chains will not risk participating in tenders that are in the hands of dubious intermediary firms,” the authors point out.
3) A single catalog of products for the army. Ukraine has long switched to the NATO catalog with more than 400 items of food products for the military.
The list of products includes honey, sweets, and even sturgeon. But only the company that supplies all these hundreds of items can supply food to the military, which contributes to the creation of corruption schemes involving intermediaries.
A meat producer cannot supply the Armed Forces with vegetables, and a bread producer cannot supply sweets or water. Key opportunities fall into the hands of intermediary firms that do not produce anything, but simply act as a link between the producer and the soldiers.
“Manufacturers give products to suppliers of the Ministry of Defense for next to nothing, and intermediaries receive up to 187 percent of the profit,” explains Tetyana Nikolayenko, a representative of the Anti-Corruption Council under the Ministry of Defense.
Previously, one of the largest suppliers to the Ministry of Defense, businessman Igor Hrynkevich, was previously detained for giving a half-million-dollar bribe to a law enforcement officer. Now his company is trying to disrupt the procurement procedure for the Armed Forces of Ukraine through legal proceedings.
On February 1, Ukrainian Defense Minister Rustem Umerov suspended the acting director of the Department of Military-Technical Policy and Armament Development, Toomas Nakhkur. The official became a figure in a case of theft of 1.5 billion hryvnias for the purchase of mortar shells.
