Detention of one of the entrepreneurs suspected of money laundering by the DBR. Photo by DBR
On 2 February, Ukraine’s State Bureau of Investigation (DBR) detained the country’s ex-deputy defense minister, officials, servicemen, and businessmen on accusations of money laundering on food procurement.
The DBR, created in 2016 as part of Ukraine’s anti-corruption reform to investigate high-ranking criminal offenses, claimed that five detained servicemen and entrepreneurs were supplying food for Ukraine’s military units at inflated prices, while former Defense Minister Viacheslav Shapovalov was lobbying for their contracts on state food procurement.
The DBR claim supports the journalist investigation published on 21 January 2023 by Ukrainian media zn.ua. Journalists stirred a nationwide outrage by publishing what they said was a draft contract of Ukraine’s Ministry of Defense on food procurement for 2023 with prices considerably higher than market prices.
Detention of Ukraine’s deputy defense minister Viacheslav Shapovalov suspected of corruption by the DBR. Photo by DBR
Ukraine’s deputy defense minister Viacheslav Shapovalov, who was responsible for the rear supply and procurement work in the ministry, resigned on 24 January 2023, following the scandal.
He said his accusation was a “manipulation,” but he would resign “in order to not create threats to the stable work of the ministry.”
However, the DBR searched his house on 1 February and gave him a notice of suspicion. The court ruled to arrest him for two months for the time of investigation and court hearings.
Ukraine’s defense minister Oleksiy Reznikov also said that journalists have partially misinterpreted the contract. However, he also recognized that there are systemic problems with the procurement in the defense ministry.
He promised to partially open procurement contracts despite the war, as it used to be in Ukraine before martial law was introduced with Russia’s invason of 24 February 2022. He also said he will facilitate any work of investigators in the ministry.
The DBR investigation claims that in certain cases prices in the contract are not higher just because of the included delivery of food to any military unit, but also because of corruption. The investigators claim UAH 4.6 million ($110,000) were laundered by the five detained servicemen and entrepreneurs.
“The DBR detained a criminal group of 5 people, which included representatives of supplier companies and military personnel who are responsible for providing food to one of the military units of the Armed Forces. Also, a military serviceman who managed the ‘black accounting’ of the criminals was detained,” DBR writes.
During the search, the agency found draft accounting, records, illegal weapons, ammunition, explosive devices, and more than UAH 1 million ($27,000) in cash.
At the same time, in yet another case investigated by Ukraine’s National Police, three officials of Odesa Oblast administration, including its former deputy head, were accused by money laundering for the total sum of UAH 7 million ($170,000), also mainly during food procurement.
The money found during the detention of the group of 5 entrepreneurs and servicemen suspected of corruption. In case of sufficient evidence of the crime, the money will be confiscated in the court. Photo by DBR.
The arrested former Deputy Minister of Defense Viacheslav Shapovalov faces an even more serious accusation. He is accused not only of lobbying food contracts with inflated prices but also of purchasing low-quality bulletproof vests, helmets, clothing, and other items for a total sum of UAH 1 billion ($25 million).
“The official not only knew about the facts of the supply of low-quality products, but also put pressure on subordinates to accept low-quality products at military warehouses and organize repeated laboratory tests of armor plates that failed the initial tests. At the same time, he ignored the appeal of the Logistics Forces Command of the Armed Forces of Ukraine regarding the need to ensure proper acceptance and control of product quality,” the DBR writes.
These cases are only the latest examples of a nationwide campaign which increasingly evolves as the largest yet anti-corruption drive in Ukraine.
Only during January 2023, dozens of officials were already dismissed, resigned themselves or were searched and arrested by law enforcement agencies for suspicion of corruption.
This includes five heads of Ukraine’s Oblast Administrations, Deputy Defense Minister Viacheslav Shapovalov, director of the department of state procurement in the Ministry of Defense Bohdan Khmelnytskyi, deputy head of presidential office Kyrylo Tymoshenko, former Ministers of Internal Affairs Arsen Avakov and Vadym Stoliar, deputy Minister of Infrastructure Vasyl Lozynskyi and others. Also, the entire State Customs management team was dismissed.
The investigation in the majority of cases is led by Ukraine’s anti-corruption institutions established after the 2014 Revolution of Dignity, in particular the State Bureau of Investigations (DBR) and the National Anti-Corruption Bureau of Ukraine (NABU). The cases are then passed to the Special Anti-corruption prosecutor’s office (SAP) which presents them in the created in 2019 High Anti-corruption court of Ukraine.
The court has already proved to effectively imprison dozens of Ukrainian judges and other officials for corruption and confiscate illegal assets, while it is currently also considering cases against top-officials.
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