Corruption in Ukraine’s Defense Sector Leads to the Initiation of Impeachment Proceedings

Posted By:
Kreller Group
March 4, 2019

Ukrainian President Petro Poroshenko (Petro Poroshenko Bloc “Solidarity” / BPP-S Political Party) has been the subject of recent reporting by investigative journalists that identified Poroshenko as allegedly tied to a corrupt defense scheme pertaining to contraband military parts.  As a result, the initiation of impeachment proceedings were announced against Poroshenko in Ukraine’s Parliament.  

On February 25, 2019, investigative journalists published a media report on YouTube that alleged Poroshenko and some of his political allies profited from an embezzlement and smuggling scheme that appears to have started in 2015, pertaining to spare military parts used to repair Ukrainian military vehicles.  Many of the contraband parts were reportedly smuggled into Ukraine from Russia, did not meet quality standards, and were sold to Ukrainian military repair stations for inflated prices.  Some of the contraband parts were reportedly stolen from Ukraine’s own military stores and re-sold, again for inflated prices.

According to investigative journalists, the scheme was reportedly under the direction of Ihor Hladkovskyy, who is the son of Oleh Hladkovskyy.  Oleh Hladkovskyy is a known business partner of Poroshenko, and the current Deputy Secretary of the National Security and Defense Council; however, as a result of recent media reporting, Oleh Hladkovskyy was suspended from his position by Poroshenko on February 26 while the National Anti-Corruption Bureau of Ukraine (NABU) conducts criminal investigations pertaining to the defense-sector scheme.  Notably, both Poroshenko and Oleh Hladkovskyy have previously been the subjects of related media reporting alleging corrupt schemes.

Also as a result of the February 25 media allegations, Ukrainian politician and former Prime Minister Yulia Tymoshenko (All-Ukrainian Union “Fatherland” / Batkivshchyna Political Party) announced plans to initiate impeachment proceedings against Poroshenko.  According to media, Tymoshenko is one of the top 3 candidates favored for Ukraine’s upcoming presidential elections, alongside Poroshenko and comedian Volodymyr Zelensky (Servant of the People Political Party).  

Here at Smith Brandon, we will be closely following the situation in Ukraine, the upcoming elections (on March 31), and any potential effects on the local business environment.

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