Operation Midas revealed a systemic management failure at Energoatom, one of Ukraine’s largest state companies. But things can get much, much worse. 

How the government responds will determine if this scandal only affects the nuclear operator, or every other state company, destroying years of hard-won reforms that tried to lift Ukraine out of its Soviet past. For now, the government is not off to a great start. 

Prime Minister Yuliia Svyrydenko announced three decisions after news of the corruption scandal broke:

• Energoatom’s supervisory board was fired without following the legal framework
• The Ministry of Economy was told to find new board members in just a week
• An urgent audit of Energoatom was launched

However, it later emerged that another decision was adopted on the same day, without being announced — effectively nullifying independent performance evaluation for supervisory boards of all strategic state-owned enterprises (SOEs), not just Energoatom.

These steps, in combination, raise serious concerns that a reform rollback is possible. If that happens, it can lead to more political meddling at SOEs, paving the way for a new wave of systemic scandals in the future. 

This can weaken the greatest pillars of Ukraine’s economy during a time of war, compromise the country’s future recovery, erode its integration into the EU, and make it more like Russia, something that thousands of volunteers fought tooth and nail to prevent. 

Corporate governance reform is meant to fix Ukraine’s post-Soviet dysfunction

Energoatom runs the nuclear plants and is responsible for more than half of the country’s power generation. 

Like other strategic SOEs, Energoatom went through corporate governance reform in 2023 and 2024, to establish efficiency and transparency. Part of this reform involved creating a supervisory board — the first one Energoatom had in history. 

This was supposed to break Ukraine's Soviet legacy of state enterprises where ministers acted as owner, manager, and controller simultaneously — a system where only 15% of Ukraine's 3,100 state enterprises turned a profit, while the rest accumulated $16.7 billion in debt between 2018 and 2023. 

The 2024 reform, a prerequisite for EU membership and IMF funding, aimed to replace political appointments and extraction schemes with independent boards selected through transparent competition. It was meant to finally complete what reformers started in 2014.

The failures of Energoatom’s supervisory board

For Energoatom, proving Ukraine could manage strategic assets to OECD standards is essential for attracting the billions in reconstruction investment the country desperately needs.

In theory, the system should work as follows: the state sets strategic goals and appoints a supervisory board to ensure their implementation. The board hires and oversees management. The state then evaluates whether the board has fulfilled its mandate.

In practice, however, the board’s independence was compromised from the start. 

Despite official statements denying political interference, real events suggested otherwise. A six-month delay in signing contracts with newly elected board members — which prevented the board from starting its work — led to the resignation of independent member Timothy Stone. 

As a result, the supervisory board never obtained the legally required majority of independent members. And it subsequently failed in its responsibilities: 

• Controlling management activities: Regular reporting, risk assessment, and personnel decisions are basic tools the board should have applied.
• Establishing an effective internal control system: Compliance, risk management, and internal audit mechanisms at Energoatom proved ineffective. For example, if the whistleblowing mechanism had functioned properly, the so-called “bar gate scheme,” in which officials stole $100M of state money through kickbacks, could likely have been detected much earlier.
• Ensuring transparency: The suspension of financial and non-financial reporting during wartime — although justified as protection from external threats — effectively facilitated internal abuse by corrupt officials.

Members of supervisory boards at SOEs must fully understand their fiduciary duties.

If a board cannot explain what it has done over the past year to prevent or detect corruption schemes in a company long associated with scandals — and provides only vague general statements — this indicates a lack of due care.

As such, the Ministry of Economy’s position that the supervisory board “was not involved” in the actions under investigation seems unclear. While board members were not beneficiaries or perpetrators of the corrupt schemes, their core responsibility was precisely to ensure such schemes could not occur.

Even more contradictory is the Ministry’s claim that this board “helped establish modern corporate governance processes.” If large-scale corruption was allowed to flourish, it is difficult to describe the system as modern or effective.

A comparison with the banking sector is instructive: managers and board members whose banks collapse lose their impeccable business reputation and are barred from similar positions. At Energoatom, however, the board under whose watch corruption thrived was essentially thanked for “building modern corporate governance.”

Throwing the baby out with the bathwater

One of the government’s first reactions to the scandal was to prematurely terminate the powers of this board. 

At first glance, this may seem logical: the board is the key element of the corporate governance system and is accountable to the state as the owner.

However, the way the government went about it — firing from the hip while ignoring legal procedures —may suggest that it’s more interested in sweeping the problem under the rug than solving it.

1. The premature dismissal of the board

The Law On the Management of State Property Objects contains an exhaustive list of grounds for early dismissal of supervisory board members.

Nothing on that list says you can fire the board based on a subjective assessment of ineffectiveness. 

The decision must rely on a formalized performance evaluation. Since no proper evaluation was conducted, the government likely lacked legal grounds for the dismissal.

Even the government’s amendments adopted on 11 November, allowing evaluations to be conducted solely by Energoatom’s owner (the Cabinet of Ministers through the Ministry of Economy) — without independent consultants — do not eliminate the requirement to actually perform the evaluation.

Under the legally-mandated procedure:

• All board members must complete questionnaires
• Company data must be analyzed
• Each element within the scope of evaluation must be given a score
• An action plan to fill identified gaps must be prepared
• Board members must be allowed to give their explanations

None of this could reasonably have been completed in a single day. The absence of a published evaluation report, which is explicitly required by law, further indicates that the evaluation did not take place.

If this violation of a core reform safeguard is ignored, protection of SOE supervisory boards from political interference will collapse. If Energoatom’s board can be dismissed in this manner, any SOE board could be dismissed next, regardless of objective justification.

2. Appointment of a new supervisory board in one week

The Ministry of Economy stated that, in coordination with G7 partners, it would propose a new board composition within a week.

However, the procedures established by law and Cabinet resolutions 142, 143, and 777 require:

• a formal decision to launch the selection;
• competitive selection of a recruiter;
• publication of candidate requirements;
• acceptance and evaluation of applications;
• shortlisting by a nomination committee;
• Cabinet approval.

This process typically takes at least three months. Completing it in seven days is not realistic under current rules.

Some stages may be accelerated in exceptional circumstances, but bypassing transparency and competition is not flexibility — it is regression. Transparent, merit-based selection is a cornerstone of sound corporate governance. Any informal or opaque approach will further erode trust.

The inconsistency is striking: the government can amend resolutions overnight when it seeks to weaken transparency (as with the evaluation procedure), yet has failed for months to approve reforms aimed at strengthening selection rules — despite these being legal obligations and long-overdue IMF benchmarks. 

This explains why official claims of “commitment to reform” now face skepticism.

3. Dismantling the supervisory board performance evaluation mechanism

A key win of the 2024 reform was the introduction of regular performance evaluations of SOE supervisory boards. The law required the Cabinet to define procedures and specify cases where an independent consultant is mandatory.

The core principle was clear: board effectiveness must be assessed based on objective evaluation, not political judgment.

However, on 11 November, the government decided that, during martial law, evaluations will be conducted solely by the ministry that owns the SOE. 

This enables ministries to unilaterally determine supervisory board effectiveness without independent oversight.

This marks a return to direct state control over these companies. Any supervisory board can now be dismissed at a ministry’s discretion — a practice common before the 2024 reform.

Also, the legality of the amendment is highly questionable. The 2024 reform law clearly defines the list of exceptions allowed during martial law — and none of them involve evaluating a supervisory board’s performance.

Reform on the brink

Corporate governance cannot be strengthened by methods that undermine its core principles: procedural integrity, transparency, and independence.

Operation Midas demonstrated that Ukraine still operates within a framework of simulated corporate governance.

The reform will become real only when:

• Supervisory boards are held personally accountable for their actions and inaction;
• Transparency and accountability of SOEs and managerial decisions are ensured;
• The government refrains from political interference in corporate processes.

Violating established rules in pursuit of a “quick result” is not reform — it is dismantlement. Unless these decisions are reversed, Operation Midas will be only the first in many similar scandals to come. 

Oleksandr Lysenko

Oleksandr Lysenko is an independent corporate governance and legal consultant, who co-authored the 2024 corporate governance reform for Ukraine's state-owned enterprises.

An escalating corruption scandal at Ukraine's state nuclear operator Energoatom and the ongoing prosecution of former Ukrenergo chief Volodymyr Kudrytskyi are converging into a crisis that threatens Ukraine's ability to weather Russian attacks on its grid.

With Kyiv residents now enduring blackouts lasting 12 to 16 hours, the political turmoil has exposed gaping holes in protection for key energy sites—failures that current and former officials attribute to corruption and political interference, rather than Russian firepower alone.

The political crisis triggered a cascade: Western donors withdrew, protective construction stalled at critical energy facilities, and Ukraine's most vulnerable infrastructure faced Russian strikes without proper defenses.

Why this matters

The combined effect of corruption and political persecution deepened Ukraine's energy crisis by shutting down the main channel of Western financial support. International aid through Ukrenergo dropped to just 5-10% of previous levels after Kudrytskyi's September 2024 dismissal—from €1.5 billion over 18 months to a trickle.

Meanwhile, zero protective shelters were built for transformers at Energoatom, thermal power plants, and regional energy companies until autumn 2024, despite Ukrenergo completing approximately 60 such structures at its own facilities by September.

Oleksandr Kharchenko, director of the Energy Industry Research Center, told Suspilne that this loss of international backing is directly responsible for the severity of current blackouts—a consequence of institutional breakdown rather than Russian missiles alone.

When protection worked—and when it didn't

The protection systems built at Ukrenergo, Ukraine's national electricity transmission system operator, and Energoatom, Ukraine’s nuclear operator, tell a tale of two radically different management systems.

Under Kudrytskyi's leadership, Ukrenergo partnered with the government's Agency for Restoration and Development of Infrastructure to construct approximately 60 anti-drone shelters for critical transformers by September 2024. These massive concrete structures—up to 25 meters tall—were designed specifically to withstand mass Iranian Shahed drone strikes.

The effectiveness proved remarkable. According to the Verkhovna Rada's temporary investigative commission cited by Kharchenko, out of 74 protected objects built by Ukrenergo and the Agency, only one autotransformer was destroyed by a direct hit from a heavy missile. The rest survived repeated attacks.

Kudrytskyi explained to Espreso that Ukrenergo secured several billion euros in aid—significantly more than Ukraine's entire Energy Ministry obtained. Western partners trusted the company's management and saw results. Between 2020 and 2024, Ukrenergo attracted $1.5 billion in grants and loans, becoming the second-largest recipient of international aid in Ukraine after the state itself.

But outside Ukrenergo's network, the picture was bleak. At the time of Kudrytskyi's dismissal in September 2024, zero protective shelters had been built for transformers at non-Ukrenergo sites—including Energoatom facilities, thermal power plants, and regional energy companies, according to Kudrytskyi in his interview with the BBC.

Kharchenko confirmed that Energoatom didn't even begin tendering for protective construction until late summer or early autumn 2024. The unprotected Energoatom substations and open switchgears became priority targets, he explained, and current blackouts stem directly from this failure to protect key generation facilities.

The delayed protection had a simple reason, Kharchenko suggested: some officials questioned whether such expensive fortifications were necessary at all.

The $100 million corruption scheme

On 10 November 2025, Ukraine's National Anti-Corruption Bureau unveiled Operation Midas—a 15-month investigation documenting systematic corruption at Energoatom. Over 1,000 hours of surveillance recordings captured contractors openly discussing "Shlagbaum" (bar gate)—slang for the 10-15% kickbacks demanded from anyone wanting to work with the nuclear operator.

The scheme operated from a Kyiv office tied to Andrii Derkach, a former Ukrainian MP whom the US Treasury sanctioned in 2020 as "an active Russian agent" for election interference, and who now serves as a Russian senator.

Investigators identified businessman Tymur Mindich—President Volodymyr Zelenskyy's former comedy studio partner—as "Carlson," coordinating the money-laundering network.

Justice Minister Herman Halushchenko, who previously served as Energy Minister, appeared in recordings under the codename "Professor."

Mindich crossed Ukraine's border at 02:09 on 10 November—hours before NABU detectives arrived at his residence, raising immediate questions about information leaks. He's now believed to be hiding in Israel or Austria.

When asked about the $100 million NABU alleges was stolen through the Energoatom kickback scheme, Kharchenko was skeptical: "100 million—this is, well, maybe, 10%." The implication: the full corruption scale could reach $1 billion.

Explore further

Zelenskyy tried to kill NABU. Then it exposed his friend’s $100M scheme.

Political prosecution and collapsing Western trust

Between 2020 and 2024, Ukrenergo chief Kudrytskyi secured $1.5 billion for Ukrenergo from Western partners—triple what Ukraine’s entire Energy Ministry obtained. He ensured shelters were built from donor funds: "We didn't spend a single budget kopeck on those shelters that Ukrenergo built," he told Espreso.

He was dismissed in September 2024—and the money flow stopped. Western partners noticed: Two Western board members—Daniel Dobbeni and Peder Andreasen—quit Ukrenergo, calling the firing "politically motivated."

The dismissal triggered a financial crisis. While talking to Suspilne, Kharchenko explained that Ukrenergo failed to restructure its Eurobonds in coordination with Ukraine's sovereign debt restructuring, pushing the company into technical default. International lenders won't provide new credits to an entity in default, and grant-makers grew cautious.

This funding flow, built around trust for Kudrytskyi, collapsed. "When Kudrytskyi was dismissed, the main channel of Western support through Ukrenergo was effectively closed," Kharchenko explained. "We lost international support for Ukrainian energy. We've lost at least 80% of what we could have received."

The aid flow plummeted from €1.5 billion over 18 months to just 5-10% of previous capacity. Naftogaz now maintains Western trust with quality corporate governance, but can only support gas infrastructure—not the devastated electricity sector.

Kudrytskyi now faces fraud charges stemming from a 2018 fence reconstruction project. The case centers on bank guarantees that Ukrenergo properly collected when a contractor failed to complete work—a standard commercial transaction where the state suffered no losses.

The charges materialized 14 months after his dismissal, following his public criticism of infrastructure protection failures by Energy Minister Herman Halushchenko—who was exposed in the Mindich tapes under the code name "Professor" within the criminal organization, according to information from the NABU investigation and reports from lawmakers.

For international donors—whether financial institutions or government aid agencies—trust and reputation of recipients matter fundamentally.

"When these donors see corruption scandals, or political interference in corporate governance, or political cases not backed by facts and made in half a day, this creates additional obstacles," Kudrytskyi told Espreso. "We don't have time to heroically overcome obstacles we create for ourselves."

Explore further

A tribute to blackout Kyiv: Top 15 photos

Information monopoly and presidential isolation

Kudrytskyi has been accused of failing to ensure energy security, despite having left his position 14 months earlier. The disconnect puzzled observers.

Kharchenko offered an explanation. He sees that people in Zelenskyy's circle are exclusively friendly to Halushchenko—the former Energy Minister now serving as Justice Minister. "Herman Valeriyovych knows how to communicate with people—I assure you, in person he's very pleasant, charismatic, professional, and convincing," Kharchenko said. Most people surrounding the president evidently receive information through one channel.

"I don't see the president, in the energy sphere, inviting people who broadcast any alternative thoughts and assessments, and listening to what's wrong," Kharchenko told Novyi Vidlik.

The monopolized information flow means alternative assessments of infrastructure failures and protection gaps never reach decision-makers. "When you have energy being attacked and negative things happening, and people around you point fingers at each other or say everything's fine, but it's evidently not fine—a manager in such a situation would invite an alternative viewpoint," Kharchenko said. "I don't observe this situation."

Ukraine energy crisis winter forecast: Attack, collapse, recover, repeat

Kharchenko predicted a predictable winter pattern: major Russian attack, followed by three to four days of severe disruption with 12-16-hour blackouts, then a gradual recovery until the next strike.

Three cities face the worst schedules: Kyiv, Odesa, and Kharkiv—massive consumption centers with insufficient internal generation. Kyiv and Odesa each face roughly one gigawatt power deficits. These cities will consistently endure the longest outages.

"I'm not an adherent of winter armageddon," Kudrytskyi told Espreso. "I don't think the energy system will collapse or there will be catastrophic consequences. We'll still survive the next winter. But of course, the question is the duration of outages and the degree of damage Russians can achieve to our facilities."

The strategic solution, both Kudrytskyi and Kharchenko emphasized, is accelerating distributed generation: replacing 15-20 large Soviet-era power plants vulnerable to missile strikes with hundreds of small gas, solar, and battery storage facilities scattered across Ukraine. Such a network would be exponentially harder for Russia to destroy and provide crucial regional resilience.

But distributed generation requires coordination, funding, and institutional trust—precisely what corruption and political persecution have destroyed.

The institutional breakdown

The failure wasn't technical or financial. In summer 2023, authorities identified several hundred critical infrastructure objects requiring protection—not just Ukrenergo substations, but power plants, gas infrastructure, and other essential facilities.

From summer 2023, Ukrenergo and the restoration agency built protection for Ukrenergo substations. But what happened at other facilities?

In his Espreso interview, Kudrytskyi posed the critical questions:

• Why didn't the Energy Ministry coordinate protection for all other objects at the same time Ukrenergo was building shelters?
• Why didn't it determine budget sources for such protection?
• And if there were no budget funds, why didn't it approach donors who were ready to help Ukrainian energy?

The answer emerged in November 2025 surveillance recordings: some officials were too busy organizing kickback schemes to focus on infrastructure protection.

Anti-corruption lawyer Daria Kaleniuk wrote that persecution of government critics through fabricated criminal cases had become a trend. Western board members Daniel Dobbeni and Peder Andreasen quit Ukrenergo in September 2024, calling Kudrytskyi's dismissal "politically motivated."

Now Ukrainians endure 12-16 hour blackouts at the heart of this energy crisis—not because Russia attacks, though it does, but because institutions failed to build protection systems, maintain donor trust, or prioritize infrastructure over personal enrichment.

"Any effective action against corruption is very much needed," Zelenskyy said after the NABU raids. But the damage was done. The coordination failure between protection, prosecution, and politics left Ukraine's grid more vulnerable than Russian missiles alone could have achieved.

Maxim Volovich

Trained in international relations, Maxim Volovich spent two decades as a diplomat and now covers regional and foreign policy issues as a journalist at Euromaidan Press.

Courts have detained five suspects while President Zelenskyy sanctioned two businessmen who fled Ukraine hours before raids in the expanding $100 million Energoatom corruption probe.

The scandal strikes at a particularly vulnerable moment. Ukraine generates over half its electricity from nuclear power after Russia seized the Zaporizhzhia plant, while citizens endure 12-hour blackouts from systematic Russian infrastructure strikes. The alleged theft—equivalent to 27 Patriot missiles or 40,000 interceptor drones—occurred while contractors built defenses for facilities under active bombardment, raising questions whether corruption functioned as simple enrichment or deliberate sabotage benefiting Moscow.

Ukraine’s National Anti-Corruption Bureau (NABU) 10 November revelations based on 15 months of surveillance, two cabinet ministers have resigned, the government has dissolved Energoatom's supervisory board, and authorities have announced comprehensive audits of all state enterprises.

Courts detain five suspects as investigation expands

Ukraine's High Anti-Corruption Court has ordered pre-trial detention for five individuals connected to the scheme, with bail options ranging from UAH12 million ($285.5K) to UAH126 million ($3.0M).

The court detained:

Ihor Myroniuk, former adviser to Energy Minister Herman Halushchenko, with bail set at $3 million. Prosecutors identified Myroniuk, codenamed "Rocket" in surveillance recordings, as having taken control of Energoatom's procurement processes alongside the company's security director.

Dmytro Basov, Energoatom's former executive director for physical protection, faces 60 days detention with $951.7K bail.

The court also detained three back office employees allegedly involved in money laundering: Liudmyla Zorina $285.5K Lesia Ustymenko $594.8K, and Ihor Fursenko.

Zelenskyy imposes sanctions on fleeing suspects

On 13 November, Volodymyr Zelenskyy also signed a decree imposing sanctions on two individuals implicated in the NABU case concerning Energoatom. As of the latest reports, these two individuals are:

Timur Mindich: A businessman and close associate of President Zelenskyy, as well as a co-owner of the president's former production company, Kvartal 95. NABU investigators allege he was the main organizer of the corruption scheme.

Oleksandr Tsukerman: A businessman alleged to have led the "back office" used for laundering the illicit funds (reportedly around $100 million).

Reportedly, both are citizens of Israel and fled Ukraine just hours before NABU detectives arrived to search.

The sanctions, in force for three years, include:

• Revocation of state awards of Ukraine
• Asset blocking in Ukraine
• Restrictions on trade operations
• Prevention of capital withdrawal from Ukraine
• Suspension of economic and financial obligations
• Termination or suspension of licenses and permits

Presidential Commissioner for Sanctions Policy Vladyslav Vlasiuk clarified the decision "provides for a full standard package, including the blocking of assets on the territory of Ukraine, regardless of the citizenship of the persons to whom they are applied," Interfax noted.

Energoatom supervisory board sacked, ministers announce resignation

The immediate political fallout has been swift, as President Zelenskyy in his address called for the dismissal of two ministers linked to the energy portfolio. Justice Minister Herman Halushchenko, who previously served as Energy Minister, and current Energy Minister Svitlana Hrynchuk both tendered their resignations on 12 November. The Ukrainian Parliament is expected to vote on their dismissal on Tuesday, 18 November.

The Ministry of Economy, Environment, and Agriculture will submit proposals for a new Energoatom Supervisory Board within one week, working in cooperation with G7 partner countries, Ukrinform reported. The previous board was dissolved on 11 November after the Cabinet of Ministers deemed its work unsatisfactory.

"At the direction of Prime Minister Yuliia Svyrydenko, the Ministry of Economy, Environment and Agriculture, in cooperation with G7 partners, will submit proposals to the government within the week for the new composition of the Supervisory Board," the ministry announced. An international advisory firm has been appointed to assist the selection process.

The State Audit Service has launched a comprehensive audit of Energoatom, with procurement review to be completed within 15 working days and a full company audit within 90 days. The findings will be forwarded to law enforcement and anti-corruption agencies.

Prime Minister Svyrydenko on 13 November announced Ukraine will conduct audits of all state-owned companies. "Eradicating corruption is a matter of honor and, most importantly, dignity. We bear responsibility before our defenders," she commented.

Ukraine Energoatom scandal investigation expands to examine Russian links

Some Ukrainian analysts view the scandal through a different lens—as potential evidence of Russian penetration rather than simple enrichment.

Olena Tregub, a prominent anti-corruption advocate, argued that the money-laundering schemes in the energy sector lead back to Andriy Derkach—an officially designated Russian agent and former Ukrainian politician now serving in Russia's parliament. Members of his network were employed inside Energoatom and participated in the alleged corruption scheme.

"This raises an uncomfortable but necessary question: were these officials stealing money simply to enrich themselves and buy luxury properties abroad—or were they intentionally weakening Ukraine?" Tregub wrote. The consequences include increased blackout risks and degraded defense capabilities, which would directly benefit Russia.

The Security Service of Ukraine has opened a separate investigation into Mindich for "assistance to an aggressor state" based on allegations about operations in Russia during the full-scale invasion.

Ukraine's National Agency on Corruption Prevention (NAZK) announced on 10 November it launched a service inspection after being mentioned in NABU's published materials. The agency sent an official request to NABU for relevant information and confirmed readiness for "maximum cooperation with the public, media, law enforcement, and other parties."

"No room for corruption": the view from Brussels and Berlin

The scandal has sent shockwaves to Ukraine's Western partners, who are pumping billions of dollars in financial and military aid into the country. The reaction from European capitals has been one of severe consternation.

Speaking to Reuters on the sidelines of a Group of Seven foreign ministers meeting in Canada, EU foreign policy chief Kaja Kallas stressed the urgency of the situation around the Energoatom scandal. "There is no room for corruption, especially now. I mean, it is literally the people's money that should go to the front lines," Kallas said. "I think what is very important that they really proceed with this very fast and take it very seriously," she added.

The European Commission, which is overseeing Ukraine's complex EU accession process, is reportedly monitoring the government's response closely.

This is particularly true for Germany, which has been a major supporter of Ukraine's energy sector. German government spokesman Stefan Kornelius told DW that Berlin is concerned about reports involving "a sector that receives considerable support from Germany." The government will "very closely monitor developments," he said.

While expressing concern, Kornelius also offered a guarded note of trust: "at the moment we have confidence in the Ukrainian government that it will ensure this be cleared up... and in the anti-corruption authority that it will lay bare this case and it will be brought to a transparent conclusion."

Members of Ukraine’s EU-backed anti-corruption agency and the FBI are coordinating actions in the 2025 top energy investigation, which involves the alleged laundering of $100 million, ZN.UA reports, citing its own sources. 

Recently, representatives from both agencies met in connection with the case of Energoatom, Ukraine's sole nuclear operator.

According to investigators, the perpetrators demanded kickbacks amounting to 10–15% of Energoatom contract values. Contractors had to pay to avoid blocked payments or the loss of supplier status. Timyr Mindich, one of President Volodymyr Zelenskyy's closest associates, oversaw the operation of a so-called “laundromat”, where funds obtained through illegal means were laundered.

In the embezzlement case, five individuals have been detained, and seven alleged members of the criminal organization have already been formally charged. Among those searched were Justice Minister Herman Halushchenko, who has since resigned, and Mindich, who is hiding abroad.

FBI returns to Ukrainian investigations 

A new FBI officer has recently arrived in Kyiv, and one of his first meetings was specifically focused on the Mindich case. The FBI representative works within the National Anti-Corruption Bureau of Ukraine under an interagency memorandum originally signed during the bureau’s founding.

The case highlights Ukraine’s commitment, with strong European Union support, to eradicating corruption at the highest levels of government. However, the investigation must yield results and lead to the arrest of jail officials involved in the scheme. The case is especially painful to ordinary Ukrainians, who continue to endure up to 12-hour blackouts following Russian missile attacks.

For comparison, the stolen $100 million could have purchased 27 Patriot missiles or 40,000 Sting interceptor drones. 

After a brief technical pause that coincided with the US President Donald Trump administration, the document was re-signed following NABU Director Semen Kryvonos’s visit to the US. Since then, constant operational cooperation between NABU and the FBI has been restored for cases involving high-level corruption.

Ukraine's National Anti-Corruption Bureau (NABU) released audio evidence from Operation Midas capturing suspects plotting 10–15% kickbacks on Ukraine's nuclear operator protection contracts.

Businessman Tymur Mindich, allegedly one of the key suspects, remains fugitive as parliament prepares dismissal votes for high-ranking officials and the opposition European Solidarity party, led by former president Petro Poroshenko, pushes to disband the entire Cabinet of Ministers.

The 15-month investigation exposed a $100 million kickback scheme on contracts for nuclear facility protection—infrastructure Russia has systematically targeted throughout the war. With parliament now considering dismissal of top energy officials and Ukraine seeking Western funds for energy infrastructure, the case demonstrates whether anti-corruption institutions can deliver the accountability Western partners require.

NABU tapes reveal protection racket at nuclear operator

NABU published recordings capturing suspects discussing systematic extortion from Energoatom contractors. The suspects used codenames throughout the 15-month investigation.

According to MP Yaroslav Zhelezniak, the recordings feature individuals identified by the following nicknames, Novynarnia reported:

• "Carlson" – Tymur Mindich, businessman and co-owner of Kvartal 95 studio, associate of President Volodymyr Zelenskyy
• "Professor" – Herman Halushchenko, Justice Minister and former Energy Minister
• "Tenor" – Dmytro Basov, executive director for physical protection and security at Energoatom
• "Rocket" – Ihor Myroniuk, former advisor to Halushchenko during his tenure as Energy Minister

While NABU has not officially confirmed all identities, Hromadske reported that law enforcement confirmed Myroniuk as a former energy minister advisor and Basov as Energoatom's executive director for physical protection.

The recordings reveal how contractors faced what investigators call the "Shlagbaum" (boom barrier) system: pay the percentage or watch payments freeze and supplier status vanish. One company allegedly received a 435 million UAH ($10.5 million) contract in 2025 after agreeing to the higher 15% rate, NV confirmed.

The tapes also capture suspects' awareness of investigative risks. In a June 2025 exchange, "Carlson" expressed concern: "I don't want to end up being served with suspicion," Ukrainska Pravda noted. A month later, "Tenor" discussed building protective structures with "Rocket," mentioning colossal figures and asking whether to continue. "Rocket" replied: "I'd wait. But, f***, honestly, it's a shame to waste the money," Hromadske transcribed.

Money laundering through Derkach family office

NABU investigators uncovered a dedicated money-laundering office in central Kyiv belonging to the family of Andriy Derkach, a former Ukrainian MP now serving as a Russian senator, that processed approximately $100 million.

The scheme operated like a bank—with its own "cash discipline," accounting, currency operations, and geography stretching from Kyiv to Atlanta, Georgia, and Moscow, Ekonomichna Pravda noted. "Through this office, strict accounting of received funds was carried out, a "black ledger" was maintained, and money laundering was organized through a network of non-resident companies," the bureau stated.

In intercepted conversations, "Rocket" and "Tenor" discussed transferring tens of thousands of dollars while inventing new transfer routes. The operational part of the "laundry" was headed by someone nicknamed "Sugarman"—presumably one of the Tsukerman brothers, Mykhailo or Oleksandr, Ekonomichna Pravda noted.

Investigators discovered the scheme used cryptocurrency for money laundering and collected cash at at least 30 different locations across Kyiv to avoid financial monitoring detection, Suspilne reported. A significant part of the transactions, including cash disbursements, took place outside Ukraine.

During searches, NABU officers found an item labeled "Federal Protective Service of the Russian Federation" at the office of one scheme co-organizer, which the bureau called an "interesting artifact," NV highlighted.

Opposition escalates pressure with dismissal motions

Draft resolutions have been registered in the Verkhovna Rada to dismiss Justice Minister Herman Halushchenko and Energy Minister Svitlana Hrynchuk, Ukrinform documented. The documents are listed under registration numbers 14200 and 14201 on the parliament's website. The initiatives were submitted by MP Yaroslav Zhelezniak.

Neither resolution has been added to the parliamentary agenda. Both motions are registered but not scheduled for consideration, and no date has been confirmed for votes on either the ministerial dismissals or a broader Cabinet resignation procedure.

Hrynchuk responded to the dismissal motion during a briefing: "I will not react to this because I do not understand the claims," UNN quoted. She emphasized continuing her duties: "I am doing my job."

Halushchenko has not publicly addressed the searches or dismissal motion. The Justice Ministry did not issue statements responding to the allegations.

European Solidarity party escalated the political response by initiating a procedure to dismiss the entire Cabinet of Ministers. "We are beginning the procedure for the resignation of the government—unprofessional and corrupt. Our goal is state governance, the unity of society, and the trust of partners. We call on all colleagues in parliament who are aware of the threats to the state to sign the resignation of the Cabinet of Ministers for the sake of forming a government of national salvation," the party stated on 10 November, Interfax Ukraine reported.

The party statement emphasized the wartime context: "When millions of Ukrainians were left without electricity during shelling, when the best were dying every day at the front, another 'battery' was working in the rear—the one that charged the pockets of the chosen ones. One hundred million dollars that could have gone to protect the energy infrastructure turned up in Energoatom's schemes," Interfax Ukraine quoted.

Zelenskyy's broad condemnation avoids names

President Zelenskyy addressed the investigation in his evening address on 10 November, hours after the raids. "Any effective action against corruption is very much needed. The inevitability of punishment is essential," he stated, Ukrainska Pravda reported. "Energoatom currently provides Ukraine with the largest share of power generation. Integrity within the company is a priority."

The president neither mentioned Mindich nor addressed the searches at Halushchenko's residence. "The energy sector and every branch, everyone who has constructed corrupt schemes, must face a clear procedural response. There must be convictions," Zelenskyy continued. "And government officials must work together with NABU and law enforcement bodies—and do it in a way that delivers real results."

The statement marks a careful position for Zelenskyy, whose administration faced July protests after attempting to subordinate NABU to the Prosecutor General. Parliament reversed that law after mass demonstrations, restoring the bureau's independence.

Mindich's flight hours before searches

Mindich crossed Ukraine's border at 02:09 on 10 November—hours before NABU detectives arrived at his residence, LIGA.net confirmed citing law enforcement sources. Zhelezniak stated Mindich "will be hiding in Israel and Austria." The timing raised immediate questions about information leaks, prompting SAPO head Oleksandr Klymenko to create a commission investigating the possible data breach, UNN reported.

Separately, the Security Service of Ukraine opened criminal proceedings on 6 November under Article 111-2 (aiding an aggressor state) based on allegations that Mindich maintained business operations in Russia during the full-scale invasion, specifically diamond extraction and sales, Interfax Ukraine detailed. The FBI is investigating Mindich for possible money laundering connected to the Odesa Port Plant, NV noted.

Operational implications for wartime energy security

The alleged corruption occurred while Russia conducted systematic strikes against Ukraine's energy infrastructure. Energoatom, which generates over half of Ukraine's electricity after the occupation of Zaporizhzhia Nuclear Power Plant, manages procurement for nuclear safety and protective construction.

Diverting funds from nuclear safety projects creates vulnerabilities that could compromise defense readiness. The investigation reveals a pattern where contracts meant to protect critical infrastructure instead enriched middlemen operating outside official authority—turning wartime security needs into profit opportunities.

With Ukraine requesting additional Western financial support for energy infrastructure protection, according to the European Commission website, the investigation tests whether Kyiv can demonstrate effective governance over reconstruction investments. The scheme's exposure comes as the EU has already warned that failures in anti-corruption enforcement could jeopardize €50 billion in assistance, Euromaidan Press reported.

Ukraine's National Anti-Corruption Bureau (NABU) revealed on 10 November 2025 an intricate corruption scheme at Energoatom: unvetted operatives wielding control over the country's state nuclear company through systematic bribery. Over 1,000 hours of surveillance recordings and 70 nationwide raids documented how these external actors, without formal positions, made critical decisions affecting the strategic enterprise.

The investigation, dubbed Operation Midas, targeted businessman Timur Mindich, co-owner of President Volodymyr Zelenskyy's former comedy studio Kvartal 95, along with Justice Minister Herman Halushchenko, who previously served as energy minister, and several Energoatom executives, according to Ukrainian outlet NV.

MP Yaroslav Zhelezniak said Mindich left Ukraine hours before NABU officers arrived and "will be hiding in Israel and Austria," Interfax Ukraine reported.

How the scheme operated: kickbacks and shadow control

The evidence is stark: video and audio recordings show Energoatom contractors openly discussing bribe percentages—10 to 15 percent of contract values, investigators found. They call it "Shlagbaum," or boom barrier, slang for an obstacle designed to extract payments.

The scheme was ruthlessly systematic: prosecutors say bribes were demanded in exchange for avoiding blocked payments or loss of supplier status."In fact, management of the strategic enterprise with annual revenue of over $4.7 billion was carried out not by official employees, but by outsiders who had no formal authority, yet took on the role of 'watchers,'" NABU specialists said.

The recordings capture conversations about halting critical infrastructure protection projects—not for engineering reasons, but over monetary disputes about kickback rates.

Who investigators targeted in nationwide raids

The operation zeroed in on a network of officials and businessmen, including:

• Timur Mindich: Businessman and Kvartal 95 co-owner whose interests reportedly span defense (drone manufacturer Fire Point) and energy sectors. Media reports claim the FBI is investigating him for money laundering in cooperation with NABU.
• Herman Halushchenko: Current Justice Minister who served as Energy Minister during the period under investigation. Zheleznyak submitted a formal request for his dismissal.
• Ihor Myroniuk: Former advisor to Halushchenko whom sources describe as an "overseer" who met with contractors in back-office negotiations. NABU conducted searches at his residence.
• Zukerman brothers (Mykhailo and Oleksandr): Financiers who allegedly handled Mindich's business operations. Zhelezniak reported both fled Ukraine, though NABU officers intercepted one brother during a summer escape attempt.

Energy Minister Svitlana Hrynchuk also faces dismissal calls over alleged connections to the scheme.

Political fallout and parallel investigations

The scandal has triggered immediate fallout. Parliament member Zheleznyak branded it "systemic corruption" demanding action, and dismissal requests for Galushchenko and Hrynchuk face Parliamentary vote.

Ukraine's Security Service (SBU) is separately investigating Mindich for "assistance to an aggressor state" based on allegations about diamond extraction and sales operations in Russia during the full-scale invasion, Interfax Ukraine reported. SBU's Main Investigation Department confirmed on 6 November 2025 that it opened criminal proceedings under Article 111-2 of Ukraine's Criminal Code.

Wartime vulnerability: what this means for Ukraine's energy security

The alleged corruption occurred while Ukraine's energy infrastructure faced systematic Russian missile and drone attacks. As a state enterprise managing nuclear power operations with annual revenues exceeding $4.7 billion, Energoatom's procurement and staffing processes offered lucrative opportunities for corrupt actors.

"Corruption in the energy sector, money laundering, illegal enrichment," Oleksandr Abakumov, head of NABU's detective unit, outlined as the main directions of the large-scale investigation, NV reported.

Diverting funds meant for nuclear safety and infrastructure projects creates vulnerabilities that could compromise defense readiness and undermine public trust in government accountability during wartime.

What happens next

NABU has not publicly identified all participants in the alleged criminal organization. Prosecutors say audio and video evidence will support further prosecutions as the investigation expands.

The case is seen as a critical test for Ukraine's anti-corruption infrastructure. Western governments have previously defended NABU's independence, viewing such enforcement as essential to Ukraine's European integration path and its ability to maintain international support.

The investigation also raises serious governance questions for Energoatom. Before the full-scale invasion, the company generated approximately half of Ukraine's electricity. With the six-reactor Zaporizhzhia Nuclear Power Plant under Russian occupation since March 2022, the integrity of the company's remaining operations is paramount.

Read also:

Flamingo does combat trials as Ukraine inches towards wider use