Endemic Corruption Destroying Energy Infrastructure In Ukraine

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Written by Uriel Araujo, PhD, anthropology researcher with a focus on international and ethnic conflicts

The topic of corruption in Ukraine is once again surfacing. According to a The Times story written by their Kyiv’s correspondent Maxim Tucker, the country has “failed to build bunkers for electricity substations that protect them from Russian airstrikes” thereby leaving “the country vulnerable before the winter.” To “prevent the collapse of its energy system,” Ukraine is for now having to rely on” British-supplied gabions — rudimentary rock-filled cages”, as well as “anti-air attack systems provided by its western partners.”

Tucker acknowledges the presence of British military and intelligence personnel (including engineers) operating in Ukraine, which, among other things, helped create concrete structures to protect energy grid locations against Russian attacks amid the ongoing conflict. According to the journalist, the British warned their Ukrainian “colleagues” that they should build extra structures, which has not happened: “nine months later, President Zelensky’s government has not done so, amid accusations that government corruption has stalled the work.” In fact, around 80 per cent of the country’s energy infrastructure is currently damaged or ruined.

The situation is so bad that even the head of Ukraine’s State Agency for Restoration and Infrastructure Development resigned. Mustafa Nayyem directed the government agency tasked with preserving strategic infrastructure, and he had requested €1.4 billion for “third-level protection” bunkers used in substations. The funds were blocked, due to (he claims) “vested interests” having to do with bribes no longer being paid to Kyiv’s officers:

“It was impossible to work. When you see that the leadership of the government is creating some artificial obstacles for you, it’s useless… They [the government] didn’t pay contractors; the contractors stopped all projects.”

Nayyem’s successor, Sergiy Sukhomlyn, is then quoted as saying that contractors had been expecting “too much profit” and so the Agency was renegotiating their contracts, redesigning some of the defence structures to cut costs. The Times news piece goes on to describe how contractors are allegedly harassed by Ukrainian officials:

“One of the leading Ukrainian building companies involved in the substation protection contracts has had its offices raided by officials who, it says, acted without a warrant, seizing computers, telephones and documents. The company also said the government had failed to release the funds needed for them to build the bunkers.”

In September, Ukraine’s leader Volodymyr Zelensky dismissed Volodymyr Kudrytsky, the chief executive of Ukraine’s state energy company, over summer power cuts. This has only consolidated more power with Zelensky’s own Chief of Staff, Andriy Yermak and his own people. According to a Business Insider (BI) story, Yermak is Zelensky’s “right-hand man” as well as the country’s “real power broker”. He is described as having consolidated a new corrupt oligarchy under Ukrainian martial law.

The December 2023 piece then describes how Washington was demanding “numerous reforms the White House expected Kyiv to make in return for continued financial assistance from the United States”, including “ beefed-up supervision of state-owned enterprises in the energy sector”. None of it happened and the American money kept on flowing – but this could change pretty soon with the new US presidency.

Still according to BI, during the former Donald Trump administration in fact Yermak, “then an advisor to Zelensky, was dispatched to meet with Rudy Giuliani, who on Trump’s behalf was pushing Kyiv to investigate Hunter Biden’s ties to Burisma, the Ukrainian energy firm” At the time Yermak did promise Zelensky would pledge to investigate Burisma (a holding company for energy exploration that employed Joe Biden’s son, Hunter Biden). It never happened.

Corruption also plays a role in American geoeconomic interests in Eastern Europe and I wrote before about Joe Biden’s own family shady dealing in Ukraine. Back to Yermak, one of his lieutenants, Kyrylo Tymoshenko, is described as still being a kind of “gatekeeper” for government building projects – Tymoshenko was the President’s deputy head of office, but resigned last year under pressure amid an anti-corruption campaign. He remains a political force, however.

Far from being an isolated scandal, the systemic problem of corruption in Ukraine has been a pressing issue. As Tucker puts it, it has been one of the major obstacles to the country’s goal of joining the European Union. Corruption is far from being the only matter, though. The other obstacles include lack of democracy (with the opposition having been banned), and lack of transparency.

Another issue, as I wrote before, are the civil rights problems – which relegate minorities such as Russians to second-class status, according to scholars like Nicolai N. Petro, a professor of political science at the University of Rhode Island, who was a US Fulbright scholar in Ukraine in 2013-2014. This is a problem also acknowledged by the European Commission for Democracy through Law, better known as the Venice Commission. This European body, among other things, has recommended that Kyiv revise the State Language Law, and take “positive action” to enable ethnic “minorities to assert their specific identity” in order to comply with the ECHR human rights standards.

I’ve argued that the “Ukrainian Question” in fact is a challenge to the very idea of Europe (as it envisions itself). It “short-circuits”, so to speak, some of the key values of the West itself: in other words, by welcoming post-Maidan Ukraine as “uno de noi”, the European bloc thereby denies much of the human-rights narrative that is supposed to be the core and even the raison d’être of its main institutions. It is true that the West is no stranger to hypocrisy, and thus has been more than willing to turn a blind to the fascist and neo-Nazi elements of Ukrainian nationalism (and even to whitewash it). With endemic corruption however, there lies a structural issue that impacts the economy and now is even sabotaging warfare efforts.

From Kyiv’s perspective, the situation of course should not get any better with a US Republican administration under Donald Trump curbing aid. With oligarchic corruption, chauvinistic nationalism, an unwinnable war pushed by the West, an energy crisis and the upcoming winter, things are not looking good for Ukrainian civilians who keep leaving the country in large numbers to escape the harsher news conscription laws.

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