NYT sounds the alarm: how 4 years of government interference in state-owned companies risk costing Ukraine billions

When the state demands transparency from everyone but itself

For several years, the Ukrainian government has been swearing to the West from the stands of "zero tolerance for corruption," while in the meantime, the most influential US publication is publishing an investigation into how this same government systematically broke the fuses in state-owned companies created at the request of international partners.^{1 2}For a country asking for hundreds of billions for reconstruction, the New York Times headline about corruption risks at Energoatom, pressure on Ukrenergo, and manual management of defense contracts is not just a reputational scratch, but a blow to the nervous system of trust.^{1 2}And if earlier they tried to cover up corruption with the rhetoric of “it’s not the time, it’s war,” now the conversation will have to be held out loud — with the EU, NATO, the IMF, and those who are already tired of financing a country where supervisory boards are being turned into scenery.^{1 4}.

How the idea of ​​"independent supervisory boards" was born

After the start of the full-scale invasion, the West did not simply open up financial resources to Ukraine, but set conditions: state-owned companies in the energy, nuclear, defense, and infrastructure sectors must be under the control of independent supervisory boards with strong foreign representation.^{1 5}These councils have been given the power to approve managers, block questionable contracts, and serve as political safeguards — from Ukrenergo to Energoatom and the newly created Defense Procurement Agency.^{1 3 6}The idea was simple and at the same time painful: if the country has been drowning state-owned enterprises in corruption for decades, it needs an external fuse that will not pick up the phone when “someone from Bankova Street” calls.^{1 4}.

On paper, Ukraine agreed to almost everything: the statutes included wording about "independence," and the presentations included beautiful slides for Brussels and Washington.^{1 5}The problem turned out to be that, in parallel with the public “European integration picture,” a less visible part of the plan was being launched — how to ensure that supervisory boards exist but do not actually interfere with those who are accustomed to perceiving state cash flows as a political resource.^{2 4}.

Energoatom: $100 million, reactors from Bulgaria, and a paralyzed board

The most high-profile episode described in the NYT concerns the state-owned company Energoatom, which operates Ukraine's nuclear power plants and is critical to the country's energy security.^{1 8 9}. Anti-corruption authorities are investigating a scheme where around $100 million could have been siphoned off through “kickbacks” on nuclear-related procurements — and public reports implicate people from the president’s close political circle^{1 2}. Instead of demonstrating how control works, the government accused the Energoatom Supervisory Board of “not seeing” corruption, as if its members personally signed contracts worth millions.^{1 9}.

The NYT investigation, however, paints a different picture: the authorities dragged on for a year with the formation of the council, left places for foreign experts vacant, and built the balance between state representatives and independent members in such a way that it was practically impossible to make a decision without the will of the ministries.^{1 2}When British expert Tim Stone tried to investigate the scandalous $600 million purchase of two old Russian reactors from Bulgaria, his contract was delayed and then simply left empty — it’s convenient when the voice of an “independent foreigner” can disrupt the scheme.^{1 8}.

Bulgarian reactors: old technology with new risks

The agreement to purchase two Russian reactors in Bulgaria has long raised questions among international experts: the equipment was manufactured before the full-scale war, it has been idle for years, and its origin from Russian projects adds nuances of safety, certification, and political sensitivity.^{8 9}European energy analysts warned that in addition to technical and sanctions risks, the deal opens up huge scope for price gouging, manipulation by intermediaries and the creation of a “gray zone” for kickbacks.^{8 10}When this particular story became the center of Ukrainian “Minditchgate,” Brussels perceived it not as a local scandal but as a test of Kyiv’s ability to keep its word on energy reforms.^{4 7}.

A paralyzed supervisory board in this context works as an ideal tool: formally, the company lives by “best European practices,” but in fact, key decisions are made by a narrow circle of political players and managers who can explain any purchase by “exceptional conditions of martial law.”^{1 3 9}When everything comes to the surface through the NYT and Ukrainian anti-corruption investigations, the same supervisory boards that were not allowed to work fully for years suddenly turn out to be the culprits.^{1 11}.

Ukrenergo: how pressure on management broke the balance

The second pillar of the NYT story is the national electricity grid operator Ukrenergo, which has undergone a deep transformation to synchronize with the European energy system ENTSO-E and is considered one of the most reformed enterprises in the sector.^{1 12}Even before the full-scale war, in late 2021, Energy Minister Herman Galushchenko, according to the NYT and Ukrainian sources, put pressure on General Director Volodymyr Kudrytskyi, demanding to appoint people without sufficient professional experience, but with political recommendations, to key positions.^{1 3}. Then the supervisory board sided with management and effectively blocked attempts to push through questionable appointments, demonstrating how a system of checks and balances should work.^{1 7 11}.

After the full-scale invasion began, the situation changed: one of the foreign members of the council resigned, the government was in no hurry to fill the vacancy, and the dominance of state representatives, along with the controversial foreign member Roman Pionkovsky, allowed the politically motivated dismissal of Kudrytsky to be delayed.^{1 3 12}Two other foreign council members protested and also left, publicly calling the decision politically motivated — a signal not only to Ukrainian civil society but also to donors who are already nervously watching every move in critical infrastructure.^{1 4 7}.

Defense Procurement Agency: New Nameplate, Old Habits

After high-profile scandals with inflated prices for food and equipment for the army, the West effectively issued an ultimatum: either Ukraine creates a civilized defense procurement system with transparent oversight, or risks losing some of its support.^{1 13 6}. Thus, the Defense Procurement Agency was born, which was to become the place where a transparent tender weighs more than a call from the minister's office.^{1 6 13}In practice, as described by the NYT and Ukrainian media, since 2024 the institution has been put into a regime where significant European funds have been spent either without a supervisory board or with a board deprived of a quorum.^{1 13 9}.

The agency's first head, Maryna Bezrukova, told Western and Ukrainian journalists that the lack of a working council made her defenseless against pressure from the Ministry of Defense and the President's Office: she was forced to approve contracts where the quality of ammunition was at least surprising - in particular, it involved mortar shells that often did not explode on the battlefield.^{1 13}When donors insisted on creating a full-fledged supervisory board, the ministry rewrote the charter the night before the first meeting, regaining control over the appointment of the head, and then fired two of its representatives to deprive the board of a quorum — a subtle way for those who want to have “institutions” only on paper.^{1 6 9}.

Why were donors silent for so long?

A separate nerve of this story is the role of Western governments, which for years knew about the problems with political pressure and corruption risks, but preferred to talk about it not publicly, but in whispers in the corridors of Brussels and Washington.^{1 4 7}. European officials, in conversations with the NYT, admitted that the fear of undermining unity during the war forced them to turn a blind eye to many signals: the main priority was to prevent Ukraine's military defeat, not to polish every corporate governance norm.^{1 7}. Moreover, the refusal or reduction of aid always risked being interpreted as a “betrayal of Ukraine” — a perfect gift for Russian propaganda.^{4 10}.

But the limit of patience turned out to be not infinite: confidential EU reports, which journalists have reviewed, directly speak of "continuous political interference" in the energy sector and the paralysis of supervisory boards as a structural problem, not a coincidence.^{1 4}In private conversations, Western diplomats warn that if Ukraine fails to demonstrate convincing progress in strengthening oversight, it will hit not only current support but also future reconstruction funding, where the bill will run into hundreds of billions of euros.^{4 7}.

Political consequences for the Zelenskyy government

The NYT investigation hit the Ukrainian authorities at a particularly inconvenient moment: Kyiv is simultaneously negotiating further military aid packages, discussing next steps on the path to the EU and NATO, and trying to maintain the trust of a society exhausted by war.^{1 4 7}. The corruption scandals surrounding Mindichgate, Energoatom, defense procurement, and the dismissal of Ukrenergo management form an extremely unpleasant puzzle: the image of a team that declared a “breakdown of the system,” but in practice reproduces it in a more sophisticated form.^{3 11}It is no coincidence that the question is increasingly being raised in European media and expert circles: is corruption becoming a more real threat to European integration than individual military risks?^{4 7}.

The President's Office is trying to distance itself, emphasizing that supervisory boards are not formally within the sphere of responsibility of the head of state, and that the government and ministers are responsible for specific management decisions.¹But in the logic of Western donors, this is more of a play on words: if the political vertical systematically puts pressure on the management of state-owned companies, blocks independent supervision and actually protects those involved in scandals, then the questions are addressed primarily to the political leadership of the country.^{4 7}.

Ukrainian society: from "everything for the sake of Victory" to "where are my taxes?"

Domestically, such stories are perceived even more painfully than abroad: a society that donates monthly to drones, pickup trucks, and thermal imagers is not ready to calmly watch as someone earns more on government contracts than those who risk their lives on the front lines.^{3 11}. Volunteer communities and anti-corruption organizations have been warning for years that old schemes in a new guise are not a minor deviation, but a direct threat to defense capability, because every low-quality projectile or overpriced contract is someone's unclaimed weapon or unwarmed position.^{6 13}The only difference between 2014 and 2025 is that now these remarks are reinforced not only by the Ukrainian civil sector, but also by the New York Times, along with the BBC, European media and institutions.^{1 4 7}.

The political price for the authorities is not only potential restrictions from donors, but also the erosion of the trust of voters who still remember the promises of "the end of the era of poverty and corruption" and compare them with current stories about "kickbacks" in the nuclear sector or unexploded mortar shells.^{3 11 6}For the opposition, this is a ready-made set of plots for any election campaign, and for society, it is another reminder that war does not cancel the demand for justice, but only makes it tougher.^{4 7}.

What needs to change so that Ukraine does not lose its chance for reconstruction?

Despite the harshness of public criticism, the West's message is not reduced to "we are tired and leaving": rather, to "we will continue to help, but we will demand responsible governance."^{1 4 7}This means not only completing the formation of supervisory boards with the participation of reputable foreign experts, but also changing the political culture - abandoning the practice of overnight changes to charters, informal pressure on management, and the use of state-owned companies as a loyalty tool.^{4 7}Ukraine has already shown that it is capable of taking drastic anti-corruption steps: the creation of NABU, SAPO, VAKS, the launch of electronic court services and transparent procurement systems once seemed like fantasy, but now they have become the norm.^{7 11}.

Now Kyiv is expected to implement the second generation of reforms — not a formal “tick-box” implementation of EU recommendations, but a real separation of politics from money in state-owned companies and the security sector.^{4 7 6}If this test fails, the risk is not just bad headlines in the NYT, but very concrete things: less grant funding, tighter loan conditions, delayed investment in reconstruction, and delayed EU and NATO membership negotiations.^{4 5 7 10}.

The final nerve: war as an excuse or as a reason to restore order

The main trap that is easy to fall into is the temptation to explain any failure with the phrase "we are at war, no time for procedures", although it is the war that makes control over public money critically important, not secondary.^{3 7 6}When the front is on a thin line of resources, every "scheme" on a state contract is not abstract corruption, but minus specific drones, electronic warfare equipment, evacuation vehicles or shells that were not enough somewhere near Pokrovskoye or Kupyanskoye^{5 6 13}And if Ukraine wants to see itself not in textbooks on political corruption, but in stories of successful post-war reconstruction, it will have to treat supervisory boards and transparent governance not as a “donor requirement,” but as a matter of its own interest to survive and win.^{4 7 10}.

Sources

1. BBC News Ukraine: "How Zelensky's government created conditions for corruption in state-owned companies — NYT investigation"
2. The New York Times: "Zelensky's Government Sabotaged Oversight, Allowing Corruption to Fester"
3. BBC News Ukraine: materials about "Mindichgate" and corruption scandals surrounding Zelensky
4. EU reports and publications and European media analytics on political interference in Ukraine's energy sector
5. IMF and European Commission: conditions for macro-financial assistance to Ukraine regarding corporate governance of state-owned companies
6. Official notifications from NABU, SAPO and internal audits regarding corruption risks in defense procurement
7. Analytics of European think tanks (Bruegel, CEPS and others) on the impact of corruption on Ukraine's European integration prospects
8. International energy reviews and media materials on the project to purchase reactors from Bulgaria by Energoatom
9. Investigative materials by Ukrainian media about schemes in the nuclear sector and around Energoatom
10. Reviews of leading economic publications (Politico Europe, Financial Times, bne IntelliNews) on risks to Ukraine's reconstruction funds due to corruption
11. Reports from Ukrainian anti-corruption organizations and think tanks on political pressure on supervisory boards and dismissal of heads of state-owned companies
12. Public statements by former Ukrenergo management and members of its supervisory board regarding political interference
13. Materials from DW, Forbes Ukraine and Suspilny about the Defense Procurement Agency and the conflict around Marina Bezrukova