KYIV — Ukraine was roiled this week by the most damaging corruption scandal of Volodymyr Zelenskyy’s presidency. 

Ukrainian anti-corruption agencies revealed Monday that some of Zelenskyy’s close associates were allegedly involved in a plot to skim around $100 million from Ukraine’s energy sector.

The scandal erupted as Ukrainians suffer blackouts caused by Russian bombing. The state said it had spent tens of millions of euros to protect energy infrastructure from drones and missiles.

“Any effective action against corruption is very necessary,” Zelenskyy warned Monday night. “The inevitability of punishment is necessary.”

We explain below what’s at stake as the corruption probe snowballs to implicate key allies of Zelenskyy. 

Who cracked the case?

Ukraine’s state anti-corruption watchdogs — the National Anti-Corruption Bureau of Ukraine, or NABU, and the Special Anti-Corruption Prosecutor’s Office, or SAP — dismantled an alleged criminal organization that consisted of current and former energy officials, a noted businessman, government ministers and a former deputy prime minister.

The probe, which lasted 15 months and was called “Operation Midas,” involved 1,000 hours of wiretapping and resulted in the seizure of bags of cash.

The agency said five of the seven alleged participants in the scheme have been detained. The group is accused of manipulating contracts at Energoatom, Ukraine’s state nuclear energy company, to extract kickbacks worth 10-15 percent of contract values. Investigators say the network laundered roughly $100 million through a secret Kyiv-based office.

Who’s in the frame?

Over the last few days, some names of high-profile suspects were revealed to the public during online court sessions.

Businessman Timur Mindich, a close ally of Zelenskyy, might be the most interesting name in the crosshairs of prosecutors — but more on him later.  

The most prominent is current Justice Minister German Galushchenko, who was suspended from his post Wednesday morning. He was energy minister until July before Zelenskyy reshuffled his government.

Prosecutors said Galushchenko assisted Mindich in his money-laundering schemes and was influenced by the businessman. Although he has not been charged, the accusations triggered his suspension. Galushchenko said he supports the suspension, but added he will defend himself in court if needed.

Oleksiy Chernyshov, former deputy prime minister of Ukraine and a close ally of Zelenskyy, was identified in NABU recordings under the codename “Che Guevara.” NABU charged him with illicit enrichment, alleging he received about $1.2 million and nearly €100,000 through the money-laundering network. 

Chernyshov, who has been under investigation in a separate corruption case since the summer, could not be reached for comment. He has largely stayed out of the public eye after being recalled from a work trip abroad earlier this year to face questioning.

Another top official named was Ihor Myroniuk, an ex-adviser to Galushchenko and former deputy head of the State Property Fund. Myroniuk’s lawyer called accusations that his client illicitly enriched himself and was a member of criminal organization baseless.

Dmytro Basov, former head of the Energoatom security department and identified as “Tenor” on the tapes, was also named. Basov’s lawyer said his client did not cause any financial harm to the state and that investigators have no case. Basov denied any wrongdoing during a court session Wednesday.

Is there just a single investigation?

NABU and SAP actually have at least two major probes underway. 

The new one, as noted above, focuses on the state nuclear power company, Energoatom.

But there’s also another ongoing investigation into alleged graft involving inflated military procurement contracts, and more NABU raids on the defense ministry are expected in the coming days. 

According to prosecutors, Rustem Umerov, former defense minister and current secretary of Ukraine’s State Security and Defense Council, was pressured to agree to buy cheaply made Chinese bulletproof vests for inflated prices in another case investigated by NABU. The state did not pay for the vests after poor performance in military testing. Umerov has not been charged and said he is innocent of any wrongdoing.

Umerov admitted in a Facebook post that he met Mindich (yep, him again) to discuss the body armor contract, but it was terminated due to the product’s failure to meet requirements, no items were ever delivered, and he denied any pressure. 

“Any attempts to link my work at the ministry of defense with the ‘influence’ of certain individuals are unfounded,” Umerov added.

Tell me more about Zelenskyy’s business partner.

According to NABU, the alleged ringleader in the purported energy sector kickbacks plot is Mindich, a co-owner of the president’s Kvartal 95 film production company. 

Since Zelenskyy was elected in 2019 as president, Mindich has developed financial interests in several industries. 

The 46-year-old is from the city of Dnipro and was a former business partner of Ukrainian oligarch Ihor Kolomoisky, who helped fund Zelenskyy’s successful presidential election campaign. 

Mindich introduced Zelenskyy to Kolomoisky, who’s now in jail in Kyiv awaiting trial on embezzlement and fraud charges after being arrested by the Security Service of Ukraine in 2023.

According to NABU, Mindich was tipped off and fled to Israel prior to being charged in the energy case. The agency is now investigating who might have alerted him. 

Mindich could not be reached for comment.

Is Zelenskyy implicated?

Not directly. 

Zelenskyy welcomed the latest probes this week, saying in his regular nightly address to the nation that action against corruption is good. 

In the summer, Zelenskyy’s office and the parliament in Kyiv tried to strip the independence of NABU and SAP and place them under the supervision of Ukraine’s prosecutor general, a political appointee. 

The move, which coincided with signs that the watchdogs were probing presidential insiders, prompted the first major anti-government street protests since Russia’s full-scale invasion began in 2022.

With the EU also urging a rethink, Zelenskyy reversed course.