Bags of cash and a gold toilet: the corruption crisis engulfing Zelenskyy’s government – Financial Times

Report on Corruption Allegations in Ukraine and Implications for Sustainable Development Goals

A significant corruption scandal has emerged within the Ukrainian administration, presenting profound challenges to the nation’s progress towards key Sustainable Development Goals (SDGs), particularly during a critical period of conflict. Investigations have revealed extensive graft schemes, implicating senior officials and associates of the President’s inner circle. This report analyzes the events and their direct impact on SDG 16 (Peace, Justice and Strong Institutions), SDG 7 (Affordable and Clean Energy), and SDG 11 (Sustainable Cities and Communities).

Impact on SDG 16: Peace, Justice and Strong Institutions

The scandal directly contravenes the principles of SDG 16, which calls for the promotion of peaceful and inclusive societies, access to justice for all, and the building of effective, accountable, and inclusive institutions at all levels.

Undermining Institutional Integrity and Accountability (Target 16.6)

The allegations represent a severe breach of public trust and a failure to develop effective, accountable, and transparent institutions. Key issues include:

• Initial attempts by the administration to weaken independent anti-corruption agencies, namely the National Anti-Corruption Bureau (Nabu) and the Special Anti-Corruption Prosecutor’s Office (Sapo).
• This effort was reportedly abandoned only after significant public protest and pressure from international partners, highlighting a tension between political interests and institutional independence.
• The subsequent resignations of the justice minister and energy minister underscore the gravity of the institutional crisis.

Corruption and Bribery in Critical Sectors (Target 16.5)

The investigation has exposed a large-scale scheme that substantially undermines efforts to reduce corruption and bribery as mandated by Target 16.5.

1. Nabu and Sapo conducted a 15-month investigation involving over 70 searches and 1,000 hours of wiretap evidence.
2. The core allegation involves officials and business figures conspiring to solicit kickbacks, valued at 10-15% of contract values, from suppliers to Energoatom, the state nuclear power company.
3. A central figure, a former business partner of the President, is accused of co-organizing the scheme and laundering approximately $100 million in illicit funds.

Implications for Energy and Infrastructure Resilience (SDG 7 & SDG 11)

The corruption scheme has direct and severe consequences for Ukraine’s energy security and the safety of its communities, undermining progress on SDG 7 (Affordable and Clean Energy) and SDG 11 (Sustainable Cities and Communities).

Jeopardizing Energy Security (Target 7.b)

The alleged graft directly threatens the reliability and resilience of Ukraine’s energy infrastructure. Investigators revealed that kickbacks were taken from contracts specifically intended to build protective structures for power substations against Russian missile and drone attacks. This corruption compromises the nation’s ability to ensure access to affordable, reliable, and modern energy services for its citizens, especially during wartime when the energy grid is under constant threat.

Compromising Critical Infrastructure Protection (Target 11.5)

By siphoning funds from projects designed to safeguard critical infrastructure, the alleged actions increase the vulnerability of cities and communities. This directly conflicts with Target 11.5, which aims to significantly reduce losses caused by disasters, including man-made crises. The failure to properly fortify energy infrastructure due to corruption places the civilian population at greater risk of power outages and related hardships.

Governmental Response and International Perspective (SDG 17)

The response to the scandal from domestic authorities and international partners is critical for reaffirming commitments to good governance, a key component of SDG 17 (Partnerships for the Goals).

Domestic Actions and Public Response

The government’s reaction has evolved under public and institutional pressure:

• Initial response was criticized as hesitant and weak.
• Following public outrage, President Zelenskyy demanded the resignations of two ministers.
• Sanctions were imposed on a key business partner implicated in the case.
• The Prime Minister has ordered a comprehensive audit of major state energy and defence companies.

International Partnerships and Accountability

The international community’s role has been significant. The EU Ambassador to Kyiv noted that the investigation and the authorities’ response were a “strong signal that Ukraine’s independent institutions are working.” This perspective reinforces the importance of global partnerships (SDG 17) in supporting and demanding accountability, transparency, and the rule of law, which are foundational for sustainable development and post-conflict recovery.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 16: Peace, Justice and Strong Institutions

  This is the most prominent SDG addressed in the article. The text revolves around a major corruption scandal, the functioning of anti-corruption institutions, money laundering, and the public’s demand for accountability and justice. The entire narrative focuses on the struggle to build effective, accountable, and transparent institutions in Ukraine, especially during a time of war.

• SDG 7: Affordable and Clean Energy

  The article directly links the corruption scandal to the energy sector. The alleged kickbacks were taken on construction projects designed to protect power stations from Russian missile attacks. This directly impacts the reliability and resilience of the energy infrastructure, which is critical for providing energy services to the population, especially when they are already experiencing “daily rolling blackouts.”

• SDG 9: Industry, Innovation and Infrastructure

  The corruption described involves “construction projects to protect power stations.” This pertains to the development of resilient infrastructure. The graft undermines the quality and effectiveness of these critical infrastructure projects, jeopardizing their ability to withstand attacks and support the well-being of the Ukrainian people.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Under SDG 16: Peace, Justice and Strong Institutions

   • Target 16.5: Substantially reduce corruption and bribery in all their forms.

     The article is centered on a “biggest corruption scandal,” detailing allegations of officials and business figures taking “kickbacks worth 10 to 15 per cent of each contract’s value” and engaging in “illegal enrichment.” The work of the National Anti-Corruption Bureau (Nabu) to “expose graft in the energy sector” directly addresses this target.

   • Target 16.6: Develop effective, accountable and transparent institutions at all levels.

     The article highlights the critical role and challenges of Ukraine’s “independent anti-corruption agencies” like Nabu and the Special Anti-Corruption Prosecutor’s Office (Sapo). It mentions attempts by the administration to “neuter” these agencies, the “pressure that Nabu and Sapo have faced,” and the public protests demanding their independence. The fact that these institutions were able to conduct a “large-scale investigation targeting senior government officials” is presented as a sign of their resilience and a step towards accountability.

   • Target 16.4: By 2030, significantly reduce illicit financial flows… and combat all forms of organized crime.

     The investigation uncovered a sophisticated scheme for laundering money. The article mentions “audio recordings of officials discussing money laundering strategies” and a “so-called ‘laundry room’, where criminally-obtained funds were laundered.” It also quantifies the scale, stating that “some $100mn of illicit funds passed through his office,” which directly relates to reducing illicit financial flows.

2. Under SDG 7: Affordable and Clean Energy

   • Target 7.1: By 2030, ensure universal access to affordable, reliable and modern energy services.

     The corruption directly threatens the reliability of Ukraine’s energy supply. The article notes that kickbacks were taken from contractors hired to “build structures to protect substations from Russian drone and missile attacks.” The failure to properly implement these projects due to corruption jeopardizes the energy infrastructure at a time when Ukrainians are already “living with daily rolling blackouts,” thus hindering progress towards ensuring reliable energy access.

3. Under SDG 9: Industry, Innovation and Infrastructure

   • Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure.

     The article discusses corruption in “construction projects to protect power stations.” This infrastructure is vital for national resilience, especially during wartime. The alleged graft compromises the quality and integrity of these protective structures, directly conflicting with the goal of developing resilient infrastructure.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicators for SDG 16 Targets

   • Prevalence of bribery (Implied): The article provides a specific metric for bribery, stating that officials forced suppliers to pay “kickbacks worth 10 to 15 per cent of each contract’s value.” This percentage serves as a direct indicator of the level of corruption in public contracts.
   • Number of persons brought to justice for corruption (Implied): The article mentions that law enforcement “arrested five people” and that specific individuals have been “charged in the case” with crimes like “illegal enrichment.” Tracking the number of arrests, charges, and convictions for corruption is a key indicator of progress.
   • Value of illicit financial flows (Implied): The investigation quantified a portion of the laundered money, stating that “some $100mn of illicit funds passed through his office.” This monetary value is an indicator for Target 16.4.
   • Public perception of institutional independence (Implied): The article describes “mass protests and outrage” when the government tried to control anti-corruption agencies. It also quotes civil society figures blasting the government’s initial response as “inadequate.” This public reaction serves as a qualitative indicator of the perceived independence and effectiveness of state institutions.

2. Indicators for SDG 7 & 9 Targets

   • Reliability of energy supply (Implied): The mention of “daily rolling blackouts” is a direct indicator of the lack of reliable energy services and infrastructure. The success or failure of the projects meant to protect power stations would directly impact this indicator.

4. Summary Table of SDGs, Targets, and Indicators

Source: ft.com