BRUSSELS — A corruption scandal engulfing Ukrainian President Volodymyr Zelensky’s government is casting an ominous shadow over plans by European nations to send Ukraine a big influx of money and over Kyiv’s bid to join the European Union.
The scandal, involving kickbacks at Ukraine’s state nuclear power company and implicating a close friend and former business partner of Zelensky’s, has revived concerns about European money being siphoned off by graft instead of helping Kyiv defend against Russia’s invasion.
BRUSSELS — A corruption scandal engulfing Ukrainian President Volodymyr Zelensky’s government is casting an ominous shadow over plans by European nations to send Ukraine a big influx of money and over Kyiv’s bid to join the European Union.
The scandal, involving kickbacks at Ukraine’s state nuclear power company and implicating a close friend and former business partner of Zelensky’s, has revived concerns about European money being siphoned off by graft instead of helping Kyiv defend against Russia’s invasion.
E.U. nations have poured billions into Ukraine’s energy sector and infrastructure, which Russian attacks have battered in almost four years of war, and they have donated billions more in weapons.
European nations also now bear the main responsibility for aid to Ukraine following decisions by the Trump administration to halt new direct financial assistance.
German Chancellor Friedrich Merz’s office said he called Zelensky on Thursday to emphasize European concerns. “We expect Ukraine to press ahead with anti-corruption measures and reforms in its own country,” Merz said.
Guillaume Mercier, a spokesman for the European Commission, the bloc’s executive branch, said Thursday that the European Union is closely watching the probe in Kyiv. Ukraine must safeguard its independent anti-corruption agencies, Mercier said, and “ensure the integrity of all energy-related financial support.”
At the same time, E.U. officials hastened to add that the dismantling of the scheme by investigators shows anti-corruption efforts are working. Mercier also noted that there was “no evidence to this day” of E.U. money being “diverted to unintended purposes.”
E.U. foreign policy chief Kaja Kallas told Reuters the scandal was “extremely unfortunate,” and said that Kyiv should “take it very seriously.”
Ukraine’s two main anti-corruption agencies, the National Anti-Corruption Bureau (NABU) and Specialized Anti-Corruption Prosecutor’s Office (SAPO), announced the wide-ranging corruption investigation this week, which could ensnare associates close to Zelensky.
Over the summer, Zelensky’s office tried and failed to effectively neuter those watchdogs, triggering mass protests in Ukraine and rare public condemnation from Brussels. He eventually backed down from his efforts to curtain the independence of the agencies.
In the scheme described by investigators this week, perpetrators netted about $100 million in kickbacks from contracts signed by state nuclear energy company Energoatom.
Detectives said some of the contracts were for building structures to protect energy installations as Russian missile strikes have decimated the Ukrainian power grid, leading to electricity outages and cutting off heat as the weather turns cold.
Ukraine’s energy and justice ministers resigned on Wednesday at the president’s request over the scandal. Tymur Mindich, the president’s former business partner who was implicated as a central figure in the scheme, has fled the country.
European leaders are now warning Kyiv to pursue a crackdown and demanding answers, even as they offer reassurances that they will keep supporting Ukraine’s defense and developing plans to use frozen Russian assets to do so.
The timing of the revelations, however, hardly could be worse as Zelensky appeals to European supporters for fresh funding. Ukraine’s promise to curb pervasive corruption is under scrutiny as a condition to secure E.U. aid and also to move forward with its bid to join the bloc.
Since the Trump administration scaled back U.S. support, Zelensky’s European partners have become Ukraine’s chief providers of financial and military aid, and they are brainstorming ways to inject Kyiv with new money as it faces a budget crunch. One proposal is to tap the roughly $200 billion in immobilized Russian sovereign assets, but the effort has faced numerous hurdles.
Ukraine has long struggled with a troubling legacy of corruption dating from the Soviet era and the early years following the Soviet Union’s collapse. Ukrainian citizens have taken to the streets in outrage, including in the Orange Revolution in 2004-2005 and the 2014 Maidan Revolution, to denounce corrupt officials and demand democratic reforms.
European officials said that they had little choice but to continue supporting Ukraine against Russia’s brutal attacks while simultaneously urging Kyiv to eradicate graft.
In Kyiv, explosions rang out throughout the capital in the early-morning hours on Friday. At least five people were killed and 34 injured in an overnight Russian missile and drone barrage that rained down on the capital and other regions, including Odesa and Sumy, local authorities said.
“It was one of those nights after which we must conduct a headcount of our colleagues at E.U. Delegation,” the E.U.’s ambassador to Ukraine, Katarina Mathernova, posted on Facebook. “We are still counting and praying that everyone is alive.”
Dutch Finance Minister Eelco Heinen on Thursday said he was in talks with Ukrainian officials to make clear “that they have to fight corruption.”
“And it’s also part of the conditionality we put on packages we design for Ukraine,” Heinen told reporters Thursday on the sidelines of an E.U. meeting in Brussels.
Asked if the disclosures have shaken E.U. confidence, Lithuanian Finance Minister Kristupas Vaitiekunas responded in blunt terms: “Maybe, but what other options do we have?”
Vaitiekunas said Ukraine is fighting “for its own freedom and the right to choose the way they live,” and so “despite the scandal, there are no other options.”
Since Russia launched its 2022 invasion of its neighbor, the European Union and its member states have given over $200 billion to Ukraine in financial, humanitarian and military help, including as grants, loans and in-kind support, according to the bloc’s figures.
The E.U. previously has suspended aid disbursements to Ukraine over stalled reforms, including this summer. Before the latest probe, E.U. officials had pointed to previous corruption concerns and pledged to track all cash disbursements if the bloc gives Ukraine access to the giant stash of Russian money.
European officials have focused on the Russian assets as leaders contend with taxpayer fatigue, economic woes, a U.S. pullback and alarm bells about a Ukrainian budget crisis next year.
But the plan, which Moscow strongly denounces, has deadlocked, largely over reservations about the legal, financial and political risk from Belgium, where most of the frozen money is held.
E.U. leaders postponed a decision on accessing the money at least until December, as the European Commission tries to address Belgium’s concerns, and develop alternatives to seizing the Russian money.
Commission President Ursula von der Leyen said Thursday other options include joint borrowing backed by the E.U. budget or an agreement for nations to “raise the necessary capital by themselves.”
E.U. diplomats say the commission is floating the idea that member states dig into their pockets as way of pressing the message that using the immobilized funds is the easiest approach.
“It’s completely fair to discuss all the consequences of doing something, but it’s important to remember that the consequences of not doing something, of Europe failing Ukraine, will also have an impact,” Danish Economy Minister Stephanie Lose told reporters.
“We don’t grow money on trees,” Lose said. “It’s also a reflection of how difficult it is to find viable options.”
The embezzlement scandal in Ukraine, however, has provided ammunition to skeptics of European aid for Kyiv, chief among them Hungary’s Kremlin-friendly prime minister, Viktor Orban, who has sought to block both E.U. funding and membership for Ukraine.
U.S. critics of financial support for Ukraine also have often cited the issue of corruption. “A wartime mafia network with countless ties to President Zelensky has been exposed,” Orban posted on social media. “This is the chaos into which the Brusselian elite want to pour European taxpayers’ money.”
As part of the country’s E.U. accession bid, Ukrainian authorities should commit to improving how they oversee state-owned enterprises and public procurement, Mercier, the commission’s spokesman for E.U. enlargement, said.
He said Kyiv also needs to build a solid track record of enforcement, “in particular as concerns high-level corruption cases.”
Joining the E.U., the world’s biggest trading bloc takes years and is contingent on the E.U. monitoring governance, anti-corruption and other reforms.
In a series of reports on the progress of candidate countries, the commission this month praised Ukraine for advancing reforms in wartime, but also warned of “limited progress” on combating corruption.
Beatriz Ríos in Brussels and Siobhán O’Grady and David L. Stern in Kyiv contributed to this report.
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