Two senior Ministry of Defense officials now suspects in procurement scandal
The Ministry of Defense procurement scandal broke out after a journalistic investigation (Photo:gur.gov.ua)
Ukraine’s Prosecutor General's Office has issued notices of suspicion to three people involved in the Ukrainian army’s food procurement, including two senior Defense Ministry officials, Ukrainian news agency Ukrainska Pravda reported on Feb. 1
Ukrainian MP and leader of the ruling Servant of the People party faction in parliament, Davyd Arakhamia, also confirmed the information on his Telegram channel.
Referring to sources inside the ministry, Ukrainska Pravda said that Bohdan Khmelnytsky, deputy director of the public procurement department, was served with a notice of suspicion on charges of embezzlement of UAH 107,796,050 (about $3 million) of public funds and providing the Armed Forces with 5,700 low-quality bulletproof vests.
Former Deputy Minister of Defense Vyacheslav Shapovalov is suspected for illegal actions that led to a shortage of personal protective equipment for the Ukrainian army worth more than UAH 1 billion ($27 million).
Volodymyr Tereshchenko, the former deputy director of State Enterprise for Foreign Trade and Investment “Promoboronexport,” who is now deputy head of the Department for Coordination of Foreign Economic Activity of the Ministry of Defense, is suspected of misappropriation of UAH 1,340,000 ($36,000) of state funds "by means of abuse and forgery," Ukrainska Pravda reported.
The Prosecutor General's Office is yet to respond to requests for comments from the new agency.
Defense Minister Oleksiy Reznikov said on Jan. 31 that the ministry would regain control over procurement for the army under the restrictions of martial law.
Commenting on the food procurement scandal, the minister said that he and his team had drawn the conclusion that the Defense Ministry was not open enough.
What is known about Ukrainian army’s food procurement scandal
Yuriy Nikolov, the founder of the Nashi Hroshi (Our Money) investigation project, wrote in an article posted by the Ukrainian online newspaper ZN.UA on Jan. 21 that the Ukrainian Defense Ministry overpays for food by 2-3 times compared to prices in Kyiv’s supermarkets.
Nikolov compared some prices for foods in a state contract with a catering company he obtained from "a source within the Armed Forces of Ukraine" with the prices in Ukraine's Silpo supermarket chain.
Ukraine’s Defense Ministry called the publication "misleading" and “manipulative”. Reznikov said it was an attempt to undermine confidence of Ukrainians in the military authorities.
The President's Office announced an inspection. The Ministry of Defense has promised its own inspection, as well as documents for a Ukrainian SBU security service investigation into "misinformation that deliberately harms the interests of defense in a special time.”
The Defense Ministry contractor, Activ company, which the Ukrainian newspaper ZN.UA had written was a "pad" or mediator, claimed "deliberate manipulation" from the side of the newspaper.
The National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor's Office said they are investigating possible abuses by the Ministry of Defense during the purchase of products for the military. The amount of contracts under inspection is UAH13 billion ($351 million).
As allegations of fraud swirled, Deputy Minister of Defense Vyacheslav Shapovalov resigned. The head of the Ministry of Defense department, Bohdan Khmelnytskyi, who was responsible for procurement, was also dismissed.
Reznikov has since admitted to MPs from parliament committees that numerous inaccuracies were indeed found in the contracts that are now being checked.
The military food contracts for 2023 are not yet in effect.
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