Ukraine lost at least 1.2 billion dollars due to corruption in the field of defense procurement
The key information that The New York Times journalists learned from the classified results of the government audit.
Ukraine has lost at least $1.2 billion due to corruption in defense procurement
The activities of the Defense Procurement Agency were audited by the State Audit Service and the Internal Audit Department of the Ministry of Defense of Ukraine. Prior to this, the audit findings had not been disclosed. It was revealed that in 2024 alone, Ukraine lost nearly $1.2 billion as a result of fraud, waste, and inefficient management in defense procurement.
According to the audit documents, the Ukrainian government is ignoring warning signs in the procurement process. Consequences rarely arise for contractors who inflate prices or fail to fulfill delivery obligations.
Companies received contracts without proving their ability to deliver weapons. In some cases, the contractor did not even possess a license for such deliveries.
Seven of Ukraine's ten largest military contractors received new orders despite having criminal cases opened against them for fraud, failure to fulfill previous agreements, or the arrest of their leaders for corruption.
For example, in 2024, the Pavlograd Chemical Plant delivered thousands of unusable artillery mines to the military. Even after its head, Leonid Shiman, became a figure in a corruption case, the Defense Procurement Agency continued to sign contracts worth hundreds of millions of dollars with this enterprise.
Auditors identified 18 companies with which the Ukrainian government signed new agreements despite previous contracts not being fulfilled. Six of these companies did not fulfill a single contract at all.
One of the companies failed to deliver any of the 600 promised special drones, and then received a new contract to deliver another 1,950 drones. The company delivered only 50 of them on time.
Nearly $126 million was lost because more favorable offers were rejected and more expensive ones were accepted. Contracts were concluded without sufficient legal basis. In one case, companies are still disputing the fate of at least $100 million in advance payments on a failed deal.