When Western allies poured billions into Ukraine's wartime industries, they demanded one safeguard: independent supervisory boards staffed by foreign experts to prevent corruption. A New York Times investigation reveals how President Volodymyr Zelensky's administration systematically dismantled that oversight at state-owned companies controlling power distribution, nuclear energy, and weapons procurement—allowing what investigators now say was rampant graft to flourish unchecked.
The sabotage reached across Ukraine's most critical wartime sectors. Officials stacked boards with loyalists, left foreign expert seats deliberately vacant, and rewrote company charters to strip oversight powers. The result: hundreds of millions spent without meaningful scrutiny, culminating in a $100 million kickback scandal at the nuclear power company Energoatom that has engulfed Zelensky's inner circle.
Government Pressure and Strategic Dismissal at Ukrenergo
The playbook emerged at Ukrenergo, Ukraine's power grid operator, months before Russia's invasion. In late 2021, Energy Minister Herman Halushchenko began pressuring CEO Volodymyr Kudrytskyi to hire management candidates with limited energy experience. "He started insisting," Kudrytskyi told the Times. "He started aggressively trying to make me appoint them."
Kudrytskyi initially resisted because his supervisory board—seven members split between four foreign experts and three Ukrainian representatives—backed him. But when the board's term expired, the Energy Ministry hijacked the selection. Rather than choosing exclusively from the EU-World Bank shortlist, Halushchenko insisted on Roman Pionkowski, a Polish consultant who scored too low to make the approved list, two officials said.
After Russia's invasion, political pressure intensified. Though Kudrytskyi secured $1.5 billion from Western partners, Halushchenko wanted him fired. One foreign board member had resigned, and the government never filled the seat—creating an even split. Pionkowski sided with Ukrainian representatives and voted for dismissal. The two other foreign members resigned in protest, calling the firing "politically motivated".
European donors froze new Ukrenergo payments but honored existing commitments. Western capitals, unwilling to appear as if abandoning Ukraine, took no stronger action, four European officials said. International aid through Ukrenergo plummeted to just 5-10% of previous levels. One candidate Kudrytskyi refused to hire is now under investigation in the Energoatom case and has reportedly fled Ukraine. Halushchenko recently resigned amid that investigation.
Defense Agency Spending Without Board Protection
After scandals over inflated defense contracts, donors pushed Ukraine to create an independent Defense Procurement Agency. Since launching in January 2024, it has spent at least $1 billion in European money either with an incomplete board or none at all.
Maryna Bezrukova, the agency's first director, said operating without board protection left her vulnerable to administration pressure. The Defense Ministry pushed her to approve dubious contracts, including one with a state weapons factory that could not effectively produce mortar shells. Under pressure, she signed off. Many shells failed to fire, prompting public outcry.
On the eve of the board's first meeting last December, the Defense Ministry rewrote the agency's charter, granting itself authority over hiring and firing the director. The board protested and renewed Bezrukova's contract. When a foreign expert resigned, the administration fired both government representatives, eliminating the board's quorum. Bezrukova was dismissed early this year.
"Supervisory boards are just window dressing," she said. "They're not real."
The Energoatom Scandal
At Energoatom, where NABU (Ukraine's National Anti-Corruption Bureau) investigators say officials orchestrated a $100 million kickback scheme, the government stalled board contracts for a year.
Incoming board member Tim Stone planned to review a controversial project to buy old Russian-designed reactors from Bulgaria. The $600 million project needed Western backing, but donors and anti-corruption watchdogs immediately raised red flags.
"They understood that as soon as they start the activities of the supervisory board they can lose control," lawmaker Oleksii Movchan told the Times. "They didn't want to lose control."
While the board remained inactive, contractors had to pay kickbacks of up to 15 percent, investigators say. Stone walked away. "The whole thing was just a complete rat's nest," he said.
When Ukraine finalized the board in January, it kept Stone's seat empty—leaving an even split that left Energoatom powerless to prevent corruption.
As a result, eight people face charges, including embezzlement and money laundering. Five were detained in the kickback investigation, including Energoatom's former executive director for physical protection. Zelensky's right-hand man resigned after anti-corruption investigators raided his home.
In response to the scandal, Prime Minister Yulia Svyrydenko denied government interference with Energoatom's board. She blamed the board for not stopping corruption. And she fired all its members.
