Ukraine is preparing to obtain Western military equipment, but its own defense industry remains "mired in corruption," journalist Askold Krushelnycky has written in an article for Foreign Policy, according to Voice of America.
A 2017 report written by the National Anti-Corruption Bureau of Ukraine (NABU) alleges that officials at Ukroboronprom siphoned off funds from a $39 million contract to supply parts for Antonov An-32 aircraft to the Iraqi defense ministry.
"The documents show that the anti-corruption bureau was looking into two executives at Ukrspecexport, the concern's export arm, and an Indian citizen living in Ukraine's capital, Kyiv, who allegedly transferred around $6 million to the bank account of a company, called Paramount General Trading, in the United Arab Emirates," the article says.
The UAE-based company was supposed to acquire the spare parts, however, an investigation found that the company did not supply anything, and the parts were furnished from existing Ukroboronprom stock.
"The bureau concludes the 'bank accounts were used … by Ukrspecexport officials for acts of corruption in connection with laundering of criminally obtained money,'" reads the report.
"The anti-corruption bureau's report states that detectives discovered some of the money from Paramount General Trading's account was transferred to various other companies and bank accounts. For instance, a $140,000 payment was made to a Wells Fargo bank account belonging to a company called Aragon International Petroleum, whose beneficial owner was the daughter of one of the Ukrspecexport executives," according to the documents cited by the journalist.
The report also states the daughter had another account at ABN AMRO Bank in the Netherlands, which also received $140,000. The anti-corruption bureau's detectives suspected that funds were also transferred to another of the executive's daughters, who is a U.S. citizen.
Ukroboronprom spokeswoman Roksolana Sheiko said many of the corruption allegations are part of the Kremlin's hybrid war propaganda offensive against Ukraine. She admitted that the Iraqi spare parts contract was investigated by police and the Prosecutor General's Office but said "there was no violation detected by the company or its officials."
"The accusations you mention are the part of a hybrid/information warfare against Ukraine and, in the vast majority, are not true," the Presidential Administration replied in a written statement.
In an interview with Foreign Policy in Washington, D.C., Ukraine's Deputy Prosecutor General Yevhen Yenin acknowledged that the pace of efforts to fight corruption has been slow but argued that reform takes time.
"The expectations for new anti-corruption bodies are often very exaggerated. The scale of corruption is so huge that's impossible to overcome this issue in one day or one year," he said.
He said thousands of people in the corruption-infested judicial system, including judges, have to be replaced, but sacking up to 10,000 people for the sake of show and trying to replace them swiftly with qualified personnel is impractical.
U.S. Secretary of State Rex Tillerson also emphasized the importance of combating corruption in Ukraine.
"It serves no purpose for Ukraine to fight for its body in Donbas if it loses its soul to corruption. Anti-corruption institutions must be supported, resourced, and defended," he said.