Ukraine Is Fighting Two Wars: Inside Its Long, Unfinished Battle Against Corruption

Last Updated:December 04, 2025, 18:14 IST

The Energoatom scandal is only the latest reminder that Ukraine’s internal vulnerabilities did not begin with the war.

Ukrainians protest in the first wartime rally against a law, which curbs independence of anti-corruption institutions, amid Russia's attack on Ukraine, in Kyiv, Ukraine July 24, 2025. (REUTERS)

For much of the world, Ukraine’s story begins with the Russian annexation of Crimea in 2014 and the full-scale invasion in 2022. Inside the country, though, another storyline has run in parallel for decades.

After independence in 1991, Ukraine inherited weak Soviet-era institutions, an unreformed judiciary, and an economy that quickly became dominated by a handful of oligarchs who accumulated enormous influence in the 1990s through privatisations, media ownership and control of key industries.

This created a structure in which political parties, business interests and parts of the law-enforcement system became mutually dependent. Elections were heavily shaped by oligarch-backed networks; state contracts and regulatory decisions often favoured entrenched interests; and courts frequently failed to act against high-level wrongdoing. By the early 2000s, corruption was not just an aberration but an organising feature of the political economy.

The Post-2014 Reform Drive

To its credit, Ukraine did not ignore these problems. The 2014 Revolution of Dignity, or the Maidan revolution, was partly an uprising against this system. The country enacted one of the most far-reaching anti-corruption reform packages in the region.

Key institutions included:

But dismantling networks that had developed over two decades proved difficult. Judicial reforms stalled repeatedly; high-profile cases were slow to move; and oligarchic influence remained embedded in the media, energy markets and political financing.

So even though Ukraine had taken important steps after 2014, it entered 2022 with unresolved institutional weaknesses: corruption at senior levels, incomplete judicial reform, and powerful economic actors who could still shape political outcomes.

How Deep-Rooted Was The Corruption Problem Before 2022?

In 2021, the last full year before the all-out war, Transparency ’s Corruption Perceptions Index gave Ukraine a score of 32 out of 100 and ranked it 122nd out of 180 countries. “This decline in error indicates a period of stagnation. The authorities are delaying the implementation of many important anti-corruption promises," Andriy Borovik, executive director of Transparency Ukraine, had said at the time. The report highlighted that Ukraine’s improvements were not enough to outweigh the negatives in the corruption fight.

The European Court of Auditors, in a 2021 special report on “grand corruption" in Ukraine, was equally blunt. From 2016 to 2020, it found, the three main obstacles to foreign investment did not change: widespread corruption, lack of trust in the judiciary, and market monopolisation plus “state capture" by oligarchs. For international partners, that meant Ukraine was not just battling ordinary bribery; it was dealing with a system in which powerful business and political actors could still bend state institutions to their will.

Chatham House, in a 2018 study, went further, arguing that Ukraine “broadly fits the category of a state with a limited access order" in which corrupt practices are the norm and “the system is not just corrupt; it runs on corruption."

Zelenskyy, EU Aspirations And The New Anti-Corruption Front

Volodymyr Zelenskyy’s 2019 landslide victory was in part a revolt against that status quo. A comedian who campaigned on cleaning up politics and “breaking" the oligarchs, he rode a wave of public anger at corruption that had built up over the years.

Since the full-scale invasion, the war has both sharpened and complicated this agenda. On one hand, Ukraine’s bid for European Union membership makes anti-corruption reforms non-negotiable: Brussels has repeatedly said there can be “no compromise" on corruption as a condition for accession. On the other hand, the war has concentrated power in the presidential office and created new opportunities for graft in areas like defence procurement and emergency reconstruction.

Recent scandals, including a major probe into alleged kickbacks in the state energy sector and clashes over the independence of NABU and SAPO, show that the old patterns have not disappeared.

The Energoatom Scandal

In November this year, Ukraine’s anti-corruption bodies uncovered one of the biggest graft scandals of the war period. On November 10, the Anti-Corruption Bureau (NABU) and the Specialised Anti-Corruption Prosecutor’s Office (SAPO) announced the results of a 15-month covert probe—Operation Midas—which revealed a massive embezzlement and money-laundering scheme centred on Energoatom, the state nuclear power operator that runs Ukraine’s four nuclear plants.

According to investigators, at least $100 million had been siphoned from Energoatom through a kickback network that controlled procurement contracts during wartime. At the heart of the scheme was Timur Mindich, a businessman and co-owner of Kvartal-95, the media company that President Volodymyr Zelenskyy co-founded before entering politics.

Two Energoatom officials installed in senior positions, Ihor Myroniuk and Dmytro Basov, allegedly demanded a 10–15 per cent kickback on every supplier contract. Those who refused risked not being paid at all, an especially powerful threat because Energoatom is exempt from paying its debts during wartime.

The kickback money was then laundered through an off-books “back office" run by Mindich’s associate Oleksandr Tsukerman, with help from three others: Ihor Fursenko, Lesya Ustymenko and Lyudmyla Zorina. Myroniuk, Basov, Fursenko, Ustymenko and Zorina were detained; Mindich and Tsukerman fled the country. NABU also charged Oleksiy Chernyshov, a former vice-prime minister, with illicit enrichment in a parallel case linked to the network.

What shocked the public was not only the scale of the graft, but its proximity to Ukraine’s political leadership. The investigation pointed to individuals with close ties to the Office of the President, raising uncomfortable questions about political protection and awareness. Former energy minister Herman Halushchenko, who later became justice minister, appeared in NABU’s recordings as a senior figure offering political cover and facilitating access. He was swiftly dismissed on Zelenskyy’s request once the scandal broke, along with energy minister Svitlana Hrynchuk.

The affair’s tentacles reached further still. Several figures implicated in the operation had past links to Andriy Derkach, a former Energoatom chief who has been sanctioned by both Ukraine and the United States for allegedly running a network of Russian agents before fleeing to Russia in 2023. Investigators found that the back office used to launder money even operated from an apartment belonging to the Derkach family.

The most politically explosive allegation concerned Andriy Yermak, the influential head of the president’s office. A prominent opposition MP claimed that the codename “Ali Baba" appearing in NABU’s recordings referred to Yermak, a claim that electrified Kyiv’s political sphere even though it has not been proven. Yermak’s dominant role in cabinet appointments and policy decisions led many in Ukraine to question how a scheme of this scale could have operated without his knowledge.

The scandal also collided with another political firestorm. Months earlier, Zelenskyy’s parliamentary majority had passed a law curbing the autonomy of NABU and SAPO, triggering the first mass anti-government protests since the 2022 invasion. The law was withdrawn, but Ukrainian investigative media later alleged that the attempt to weaken anti-corruption bodies had been orchestrated from within the president’s office to slow down the very investigation that would later become Operation Midas.

Although Zelenskyy condemned the scandal and moved quickly to dismiss implicated ministers, he stopped short of removing Yermak, deepening public distrust at a moment when Ukraine’s international credibility and domestic cohesion are already under strain.

The timing was particularly fraught: revelations about Energoatom emerged just days before a 28-point “peace plan" was handed to Kyiv by a US envoy, raising fears that both Washington and Moscow might now use Ukraine’s internal turmoil to push Kyiv toward concessions.

Yet amid the political fallout, the scandal also demonstrated the resilience of Ukraine’s post-2014 institutional architecture. NABU and SAPO, products of the very reform drive meant to break the old system, were able to uncover and expose a complex, well-shielded graft network even during wartime.

What Happens Next?

What comes next is uncertain, but the political fallout is already severe. The Energoatom affair is the most damaging corruption scandal of Zelenskyy’s presidency, and it has triggered an immediate wave of demands for accountability from civil society groups, opposition lawmakers and influential veterans, many of whom are urging him to take uncompromising action even if it means dismissing, and potentially prosecuting, people long considered close to him.

Former president Petro Poroshenko has gone further, calling for the entire cabinet to be removed and replaced with a government of national unity, though such a scenario is widely viewed as unrealistic, not least because Poroshenko himself was tainted by a defence procurement scandal that helped fuel his defeat in 2019.

Analysts also point to a deeper structural problem: under martial law, Zelenskyy’s party exercised near-total control over state institutions, and with elections suspended during wartime, Ukraine effectively operates under a “mono-government" that limits political checks and balances.

For Western partners who have staked diplomatic and financial capital on Ukraine’s reform trajectory, the revelations are unsettling; for Moscow, they are a gift. At a moment when Kyiv is fighting for both its territorial survival and its credibility abroad, the scandal underscores that Ukraine’s internal battles may prove just as consequential as the one on its front lines.

News explainers Ukraine Is Fighting Two Wars: Inside Its Long, Unfinished Battle Against Corruption

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