Military and civilian authorities in Ukraine’s Kharkov Region paid millions of dollars to fake companies for the supply of non-existent building materials to construct defensive fortifications, the newspaper Ukrainska Pravda reported on Monday. With no fortifications built, Russian forces have advanced rapidly through the region.
Russia has seized dozens of towns and villages in the northern part of Kharkov Region after launching an offensive last Friday. According to the latest update from the Russian Defense Ministry, Russian troops had captured the village of Bugrovatka on Monday and are inflicting losses on Ukrainian manpower and hardware near Veseloye, Volchansk, and Liptsi, the latter of which is located just 20km from the outskirts of Kharkov city.
Writing in Ukrainska Pravda on Monday, Ukrainian anti-corruption activist Martina Boguslavets explained that Kharkov’s Department of Housing and Communal Services (ZhKG) and Regional Military Administration (OVA) had been given 7 billion hryvnias ($176.5 million to build fortifications to hold back this advance.
Much of this money was embezzled, Boguslavets claimed. For the supply of wood, the ZhKG and OVA signed contracts worth 270 million hryvnias ($6.8 million) with five companies that were set up immediately after the contracts were announced. No bidding process took place, and at least two of these companies were owned by the same person, Boguslavets wrote.
“Moreover, the owners of these firms do not resemble successful businessmen and businesswomen,” she wrote. “They have dozens of court cases, from whiskey theft to domestic violence against a husband and mother; some of them are deprived of parental rights and have had enforcement proceedings for bank loans.”
Boguslavets described these business owners as “avatars,” placed in charge of the companies either for a small fee or without their knowledge. One of the supposed CEOs, whose firm was paid 52 million hryvnias ($1.3 million) is an agricultural laborer, according to Boguslavets’ documents.
“The naked eye can see how a government official mercilessly registers new companies, using for this purpose people who, due to the circumstances, may not be aware of this,” she wrote. “And this someone continues to make money on blood.”
The lack of defensive fortifications allowed Russian forces to enter Kharkov Region almost unopposed, Denis Yaroslavsky, commander of a Ukrainian special reconnaissance unit, told the BBC on Monday. “There was no first line of defense. We saw it. The Russians just walked in. They just walked in, without any mined fields,” Yaroslavsky said.
“Either it was an act of negligence or corruption. It wasn’t a failure. It was a betrayal,” he added.
The story of the embezzled defense money is the latest in a long series of tales of corruption to emerge from Ukraine. Earlier this week, Poland canceled trade talks with Kiev after Ukrainian Agriculture Minister Nikolay Solsky was accused of illegally appropriating state land worth nearly $7.4 million. Several months earlier, Ukraine’s security service, the SBU, announced that it had uncovered a major embezzlement scheme in which Ukrainian officials and private contractors stole around $40 million earmarked for shell procurement.