Ukraine’s prolonged efforts to wash up its weapons procurement are at risk of being unwound because the Protection Ministry strangleholds the Protection Procurement Company, say anti-corruption activists and lawmakers.
Protection Minister Rustem Umerov introduced on Jan. 24 that he wouldn’t renew the contract of Maryna Bezrukova, the top of the Protection Procurement Company (DPA), the physique in command of shopping for weapons for the Ukrainian navy. He cited unsatisfactory outcomes as the rationale.
Umerov’s choice comes days after the DPA’s supervisory board voted to increase the contract with Bezrukova after a yr of reforming on this position. In keeping with Ukrainian legislation, supervisory boards have the authority to unilaterally rent and hearth the heads of state enterprises. Because of this legally, after the board’s vote, Bezrukova ought to take the reins of the Protection Procurement Company (DPA) for an additional yr.
However resulting from amendments lately made to the company’s constitution by the Protection Ministry, which oversees the DPA, this, or another choice of the supervisory board may very well be reversed by the ministry.
Anti-corruption activists and lawmakers say that the amendments and Umerov’s choice are “illegal.”
“It looks like a violation of laws, violation of the reform course of, and violation of the independence of the company that was promised personally by the protection minister and his deputies to our society, to our companions,” Bezrukova informed the Kyiv Impartial after Umerov’s announcement.
“Umerov is attempting to assault the reform,” she added.
Bezrukova informed the Kyiv Impartial that she wouldn’t go away the company as she was legally chosen by the DPA’s supervisory board.
“I'm not going to give up. I’ll stand in my place till the tip,” she mentioned.
“I’ve a imaginative and prescient for the institutional growth of the company. I’ve over 25 years of expertise in procurement,” she added.
Umerov additionally eliminated the board’s two state representatives, Taras Chmut and Yuriy Dzhygyr, claiming that they ignored the ministry’s suggestion to not prolong the contract with Bezrukova. He added that the board can be “relaunched” sooner or later, upending almost a yr of labor forming the board.
Umerov desires to exchange Bezrukova with Arsen Zhumadilov, the director of the State Rear Operator (identified underneath its Ukrainian acronym DOT) which buys meals and garments for the navy. Beforehand, Umerov tried to merge the DPA with DOT into one unified physique underneath Zhumadilov's management. Umerov and Zhumadilov are shut, sources informed the Kyiv Impartial.
Umerov claimed the rationale for the substitute was that DOT delivered higher outcomes.
Following Umerov’s announcement, Ukrainian anti-corruption activists have referred to as for his dismissal, saying that he’s disrupting the important thing reform for wartime Ukraine.
“These choices of the minister are a transparent sabotage and undermining of the nation's protection functionality,” Vitaliy Shabunin, the co-founder of the Anti-Corruption Motion Middle (ANTAC), wrote on Fb.
Moreover, Umerov proposed to fireside Deputy Protection Minister Dmytro Klimenkov, who he mentioned “failed” the duty of protection procurement.
The ministry got down to reform protection procurement after a number of high-profile corruption scandals emerged in 2023. Umerov introduced Bezrukova on board in January 2024 to guide the transformation of the DPA.
Her important aim was to maneuver to direct contracting with weapons producers that minimize out middlemen who mark up costs and even fail to ship on offers. One of many central items of the reform was the creation of an impartial supervisory board that would shield the company from political stress and assist guarantee honest procurement.
Nonetheless, Bezrukova has locked horns with the ministry a number of occasions whereas trying to vary the DPA’s practices. In July, the Kyiv Impartial reported that she was going through stress from arms sellers who have been sad along with her reforms.
The Kyiv IndependentDominic Culverwell
Dud mines and dodgy offers
Bezrukova took over the DPA amid reforms within the protection procurement sector which was affected by scandals.
Underneath the company’s earlier head, Volodymyr Pikuzo, almost all protection procurement contracts have been by means of intermediaries, and dodgy contracts value Ukraine tens of billions of hryvnia, based on Bezrukova, in addition to delays of important battlefield provides.
Bezrukova sees the company as “a platform” between the military and protection firms. Within the final yr, she has secured over 50 direct contracts from 13 international locations for ammunition, missiles, radars, drones, and artillery methods underneath a complete annual funds of Hr 306 billion ($7.3 billion).
Of the contracts final yr, 61% have been signed with Ukrainian firms, 27% with overseas firms, together with main protection companies like Rheinmetall and KNDS, and 12% with Ukrainian intermediaries.
Each the DPA and the DOT, the company in command of meals and garments purchases, are performing “significantly better” than when the Protection Ministry was in command of procurement, mentioned Anastasia Radina, lawmaker and head of the parliament's anti-corruption committee.
Bezrukova took the position with the understanding {that a} supervisory board could be launched, as is commonplace follow throughout state establishments. After going through stress early on, she hoped the board would shield her, but it surely took almost a yr into her employment for it to be shaped.
Within the meantime, whereas the DPA was being overseen by the Protection Ministry, Bezrukova and the ministry repeatedly butted heads.
Initially of her job, Bezrukova mentioned Deputy Protection Minister Klimenkov insisted she signal a contract for a big provide of shells regardless of her considerations concerning the producer, owned by the Strategic Industries Ministry. (Editor’s Notice: The producer’s identify shouldn’t be talked about for safety causes.)
The corporate’s capacities have been too restricted to supply the proposed 500,000 shells, resulting from a scarcity of employees and a gunpowder deficit, Bezrukova mentioned. Moreover, on the time when the contract was being thought-about in February 2024, the corporate’s director and a supervisor have been underneath two separate investigations for inflating costs, the Nationwide Anti-corruption Bureau (NABU) informed the Kyiv Impartial.
An preliminary ministry inspection of the producer confirmed Bezrukova’s fears, noting that its manufacturing capability was seemingly round 300-350,000 shells. However a couple of weeks later, the ministry inspector modified their thoughts, claiming that the corporate had sufficient capability, based on Bezrukova. Regardless of considerations, Bezrukova signed the contract.
In the summertime, the corporate was not on time. Bezrukova informed Ukrainska Pravda, a Ukrainian media outlet, that Klimenkov requested her to increase the deadline for deliveries however she refused, insisting they need to begin in search of options. It was at this level that her relationship with the ministry’s high brass went bitter, she mentioned.
The Kyiv Impartial requested a remark from the Protection Ministry however hasn’t obtained a response.
By November, the shells have been on the entrance line however many have been failing to blow up. Round 24,000 duds have been withdrawn in December, leaving authorities clambering to search out options.
On Nov. 26, the Protection Ministry mentioned it was investigating the incident and would ship imported shells as a substitute.
In one other more moderen conflict, the ministry abruptly transferred Hr 23 billion ($546 million) from the DPA’s funds to the State Border Guard Service on Nov. 29, with out forewarning Bezrukova.
The Protection Ministry and Armed Forces Common Workers claimed that the DPA had over Hr 100 billion in unused funds that wanted to be spent earlier than the tip of the yr. Nonetheless, the company mentioned that this blurred the reality. On Nov. 25, the alleged unused funds consisted of Hr 45 billion out there for contracting and Hr 57 billion put aside for pre-agreed contracts.
However by Nov. 29, the company had lined up extra contracts for 2025 and the remaining funds dropped to Hr 21.8 billion. That very same day, the federal government adopted the order to redistribute the Hr 23 billion and the DPA needed to take Hr 1.2 billion from already concluded contracts to fulfill it.
A livid Bezrukova referred to as for the cash to be returned but it surely hasn’t been, based on the DPA.
The State Border Guard Service deliberate to spend the cash on a contract with a reportedly dodgy Polish middleman firm PHU Lechmar for mines and shells for the military. The middleman requested for a 100% prepayment, sounding alarm bells for Bezrukova who says she by no means pays greater than 50% upfront.
“That is extraordinarily dangerous,” mentioned Bezrukova, including that if Lechmar fails to ship on the contract, there is no such thing as a technique to get the cash again.
Undermining the board
Assembling the supervisory board — which is now to be “relaunched” — has been a protracted course of, marked by rigidity between Umerov and Klimenkov on one aspect, and Bezrukova and anti-corruption activists, supported by Ukraine’s Western companions, on the opposite. The board was alleged to strengthen the company and defend its head from illicit stress.
Whereas the ministry introduced the shortlist of the DPA’s supervisory board candidates in June, it took nearly six months for the board to come back collectively. Bezrukova sees the delay as a deliberate try by the Protection Ministry to undermine the method, or an incapability to do its job effectively.
Two board members, Taras Chmut and Kateryna Kuznetsova, informed the Kyiv Impartial that the method was fraught with bureaucratic hurdles, though they didn’t discover it uncommon. Chmut, who leads the Come Again Alive NGO that raises funds and buys weapons for the military, famous that Ukrainian forms is commonly a tedious course of with infinite paperwork.
However based on Radina, a lawmaker, the holdup was not justified.
Whereas the method was dragging on, Umerov all of the sudden introduced he wished to merge the DPA with DOT in September 2024. The merger would see one company coping with each non-lethal and deadly support underneath one supervisory board. Had it been profitable, the supervisory board course of would have been dragged out once more, losing money and time to rebuild your complete bureaucratic system just like the monetary funds and workflow.
Umerov was attempting to “destroy” the DPA, mentioned Shabunin, the co-founder of ANTAC. As an alternative of Bezrukova, Umerov wished the director of DOT, Zhumadilov, to move the unified company as the 2 males have a better relationship, a number of sources informed the Kyiv Impartial.
DOT operates with a a lot smaller funds and employees and doesn’t cope with import contracts whereas the DPA does. Merging the 2 businesses for them to be led by DOT “doesn’t make sense,” Shabunin mentioned.
“It's an enormous distinction to purchase meals, which DOT does, and to purchase weapons. The weapons market is way more difficult,” he added.
Umerov initially mentioned the merger would carry Ukraine consistent with NATO requirements. Nonetheless, the plan was swiftly rebuked by the Alliance who backed retaining the 2 businesses separate. Umerov U-turned on his proposal, saying the 2 businesses would stay impartial through the battle.
“It was not logical,” Bezrukova mentioned. “In NATO suggestions, it clearly mentions that there are two businesses and that the Protection Ministry ought to develop and help the capability of those two businesses, particularly of the DPA.”
Only a day earlier than the supervisory board was lastly alleged to be formally shaped on Dec. 17, the ministry made amendments to the DPA’s constitution, undermining its authority.
In keeping with Radina, the timing seems suspicious. The ministry additionally modified DOT’s constitution however did so months prior.
“It positively appears related to the choice to lastly type a supervisory board, to right away render its powers questionable,” she mentioned.
Shortly after the ministry’s choice, the board members revealed an announcement that the adjustments “limit the board's independence and create preconditions for interference in its actions.”
Way forward for the company
Bezrukova was eager to remain on on the company, planning to zero in on the standard and reliability of suppliers. She additionally hoped to carry the DPA nearer consistent with NATO businesses and have extra autonomy from the Protection Ministry.
The supervisory board wished Bezrukova to remain too. The board voted to increase Bezrukova’s contract for an additional yr “based mostly on the necessity to guarantee stability and effectivity in procurement administration in wartime.” Moreover, the board additionally instructed NATO’s auditing board (IBAN) perform an impartial audit.
“The state should transfer to clear guidelines of the sport: buying what the military actually wants, when it’s wanted, and at honest costs,” Chmut wrote on Fb after the announcement on Jan. 20.
In keeping with the amended DPA constitution, the ministry can “disagree” with the board’s choices and push again.
In the long term, Radina is anxious concerning the broad wording of the amendments, which can enable the ministry to offer compulsory orders to the DPA’s staff and even intervene within the procurement course of, circumventing the company’s management and procurement procedures.
Shabunin agrees with Radina, including that this goes towards NATO’s suggestions to divide the roles between the ministry and the supervisory board.
“(Umerov) modified the constitution which supplies him the likelihood to do no matter he desires to do,” Shabunin informed the Kyiv Impartial.
In keeping with Radina, “that’s a really harmful precedent.”
“Any minister may determine to make use of this as a possibility to affect decision-making on who will get a contract.”
The Kyiv IndependentAndrea Januta