Ukraine says defense officials stole $40 million meant for mortar munitions

Ukraine’s security service has accused high-ranking defense personnel of scheming with a Ukrainian defense contractor to defraud the government of nearly $40 million.

The Security Service of Ukraine (SBU) said that five people — three government officials, an executive of Lviv Arsenal and a foreign commercial group representative — cooperated to steal 1.5 billion hryvnias ($39.6 million) from a 2022 purchase of 100,000 mortar rounds meant for Ukrainian soldiers.

One suspect has been detained after attempting to flee the country, the SBU said. All those indicted in the fraud face up to 12 years in prison if convicted.

While Ukraine paid nearly the full cost for the transaction, the munitions were never received, the SBU report said. It was discovered that some funds were moved to accounts in Ukraine and the Balkans.

In December, Ukraine arrested another senior defense ministry official, stating that another $40 million had been embezzled in a similar artillery contract.

Ukraine has sought to show its commitment to combating corruption from within, as part of efforts to maintain trust that foreign aid will be used effectively, and advance its efforts to eventually join the European Union and NATO.

The latest case comes just more than a year after a corruption scandal claimed several top officials, and months after the country’s defense chief resigned amid various claims of corruption within the department — though none that implicated him directly.

Ukrainian President Volodymyr Zelensky won his 2019 election on an anti-corruption platform. While he battles ongoing graft internally, he is also struggling to secure ongoing Western support for the war, particularly from the United States, where Ukraine support has become entangled with messy border politics in Congress.

That reality, combined with the high rate of ammunition being used in the fight against Russian forces, is starting to have an impact on the ground.

U.S. Defense Department official Celeste Wallander has said that Ukrainian ammunition stores, including artillery munitions, are below what’s required to successfully repel further Russian incursions. Shortages are allowing Russia to probe Ukraine for weakness, she added.

“The Ministry of Defence continues to fight uncompromisingly against those who embezzle from weapons procurement. We have no place for corrupt officials.” Ukraine’s Deputy Defense Minister Dmytro Klymenkov said in a statement Saturday.

According to Ukraine’s prosecutor general, the stolen funds have been seized and will be reclaimed for the defense budget.

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