What the NABU–SAPO Energoatom Kickback Investigation Reveals

Where the roots of this criminal scheme lie — and what can be done about it.

The scandal surrounding the criminal organization accused of running kickback schemes in the procurement of Energoatom has eclipsed even the 2023 Ministry of Defense corruption episode known as “eggs for 17.” It allegedly involves siphoning off about USD 100 million that should have gone toward protecting Ukraine’s energy infrastructure. This is one of the most critical sectors today, and one that enjoys substantial support from international partners.

Yet the Government’s initial response amounted to suspending only one of the two ministers named in the investigation and sending the State Audit Service to inspect Energoatom’s procurement. Later came news that Energoatom’s supervisory board had been dismissed as well. Only two days later did the President call for the dismissal of Herman Halushchenko and Svitlana Hrynchuk, both named in the investigation, and speak about the need for sanctions against the suspects.

Meanwhile, a wave of Telegram channels began spreading claims that the investigation supposedly serves Russian interests. 

I will be frank: such messages are discouraging and provoke pessimistic thoughts. But not because of the investigation itself — it is the facts uncovered that are troubling.

Investigations and suspicions are good things

The first point worth emphasizing is that the investigation (and its expected outcomes) is definitely positive. Despite the scandal and intense media attention, including internationally, the key takeaway is that the scheme will stop, and the money will no longer be stolen. This is precisely why we fought to safeguard the independence of the NABU and the SAPO this summer. 

Of course, beyond the investigation and suspicion notices, we expect concrete verdicts and accountability for those involved. That will not happen overnight. We live in a rule-of-law state, where pre-trial investigations and court proceedings must run their course. But accountability for corruption is essential and expected.

The Government’s response

The President initially voiced only general support for the investigation and the need to hold the guilty accountable. Two days later, he finally called for the dismissal of the ministers named in the case and spoke of sanctions against the suspects. These were minimal steps — and delayed ones. The Government first suspended only the Justice Minister, Herman Halushchenko, and sent the State Audit Service to inspect Energoatom’s procurement transactions, mentioned in the investigation. This clearly looked like an attempt to shield “close friends and family.” 

As for the State Audit Service’s inspections, we doubt auditors can do much. They can verify whether the physical state of the construction sites matches the paperwork — whether what was declared was actually built. That may assist investigators. But auditors have no authority to trace or confirm kickbacks. They cannot even formally identify overpayments. Their role is limited to ensuring procurement procedures comply with the law.

Are procurement rules to blame?

A natural first reaction is to assume the problem lies in procurement itself. The leaked recordings reference procurement of protective structures for energy facilities. They are allowed to bypass Prozorro and be made directly — a wartime exception introduced to speed up the fortification of critical infrastructure. Yet, according to the recordings, the criminal organization actively slowed construction to extract kickbacks.

Still, an identical scheme could have worked through competitive tenders. Prozorro is not an anti-corruption system. It is an e-procurement platform that makes procurement more efficient and transparent. Transparency, in turn, means a higher chance of spotting corruption. But what we typically see are indirect signs: discriminatory conditions, inflated prices concealing margins for kickbacks. Criminal organizations, unfortunately, do not send their kickbacks through the e-procurement system.

Would there have been a greater chance of spotting the problem if these procurements had gone through Prozorro? Yes. Would it have allowed us to detect kickbacks with certainty? No. 

System and people 

Corruption arises where imperfect systems meet individuals willing to exploit them. There are no perfect systems, no matter how detailed or well-designed the rules. Rules cannot absolve people of responsibility. Ultimately, decisions are made by specific individuals.

To reduce these risks, meritocracy must guide appointments to public office. People should receive positions because of their qualifications and achievements, especially in managerial roles. Unfortunately, what we see now more closely resembles nepotism. 

We must accept that the war will not end soon and stop using it as an excuse to avoid necessary decisions. Leadership positions in state institutions should be filled through open competitions, not direct appointments. We see the results of this approach in the NABU and the SAPO — institutions that have demonstrated capacity largely because their leadership was selected through transparent competitions. The same competitive approach should be used to choose heads of state-owned enterprises and oversight bodies like the State Audit Service and the Accounting Chamber. And these competitions must be not only open, but rigorous, with realistic criteria and proper assessment of qualifications and skills. 

These positions must also come with competitive market level salaries. Otherwise, attracting qualified professionals will remain impossible. A senior public-sector position is a job comparable to management roles in the private sector — only with higher responsibility and risk. It must be compensated accordingly.

Most government positions, however, are still filled by direct appointment, and public-sector pay remains far below market standards. This must change.

Ministerial appointments, of course, are inherently political; open competitions cannot apply. But we must recognize that “moving the deckchairs” is not a real government reset in critical moments. The responsibility for appointing capable, ethical ministers lies with the Parliament — and indirectly with the Prime Minister and the President. This choice, too, must be rooted in meritocracy, not personal loyalty. 

Uncovering corruption is only the first step

The exposure of the Energoatom kickback scheme unleashed a torrent of emotions. The story dominates media and social networks, with headlines appearing in international outlets.

But once the emotions recede, we must think clearly about what this actually means — and what must happen next. 

Yes, the first steps after exposing corruption are investigations, suspicion notices, convictions, and accountability. But such cases always point to the need for systemic change. The “eggs for 17” scandal brought about defense procurement reform. Was that reform perfect? No. Did it improve the situation? Absolutely. 

This scandal should be seen as a signal: we can no longer tolerate nepotism. Public service, especially in key leadership positions, requires political and economic independence. Without it, efficiency is impossible. 

Should this investigation prompt reconsideration of the wartime exceptions that allow direct procurement of protective structures for critical infrastructure? Or do national-security considerations still justify them?

Could stronger internal or external oversight have prevented the scheme? We are left with many questions that require serious, deliberate reflection.