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  •   Home > News > International

    The gold toilet, the bags of cash and the corruption still stalking Ukraine

    Ukraine has a history of corruption issues, but the latest allegations include close confidants of the president and many people want answers from Volodymyr Zelenskyy.


    Under the cover of cold and gloomy darkness in Western Ukraine, Tymur Mindich, one of the country's most influential men, entered a black Mercedes S Class bound for Poland.

    Detectives were closing in, and this wealthy business magnate wanted out.

    By November 10 — the night of his escape — Mr Mindich had realised he was being recorded by anti-corruption spies, who had also discovered his code name: Carson.

    The investigators from Ukraine's National Anti-Corruption Bureau (NABU) believed he and some high-powered accomplices, including cabinet ministers, were embezzling money from the state's biggest energy company in a lucrative kickback scheme that saw them pocket millions.

    Hours after Mr Mindich slipped over the border, anti-corruption cops began raiding properties linked to the alleged graft.

    Kyiv newspapers reported that in an apartment connected to Mr Mindich, officers discovered a lavishly decorated bathroom. Its opulent centrepiece? A golden toilet.

    This glittering commode has become synonymous with the investigation, which some analysts believe is the greatest threat to Mr Zelenskyy's administration since Russia launched its full-scale invasion of Ukraine more than three and a half years ago.

    Mr Mindich, the alleged ringleader of the scam, was a longtime business associate of the president and co-owned a film production company with Mr Zelenskyy, who was once a popular actor.

    He was one of the driving forces behind the hit Ukrainian TV series Servant of the People, where Mr Zelenskyy played a thespian thrust into the presidency.

    When life imitated art and Mr Zelenskyy was elected to Ukraine's top office in 2019, Mr Mindich was seen as an important backer and ally.

    Andriy Yermak, who resigned late last week from his role as the president's chief of staff after his property was searched by detectives, was also a long-time friend of Mr Zelenskyy. Like the president, he spent his career prior to politics in show business.

    Mr Yermak acted as Mr Zelenskyy's most trusted fix-it man and was intimately involved in drafting and negotiating peace proposals on behalf of Kyiv.

    Only days before he stood down, Mr Yermak sat in a Geneva boardroom with US Secretary of State Marco Rubio and thrashed out a revised plan to end the war.

    Ukrainian Justice Minister Herman Halushchenko, as well as former deputy prime minister Oleksiy Chernyshov, are alleged to have either facilitated or taken a cut of the $US100 million ($151 million) embezzled from the state-owned energy company Energoatom, the largest electricity provider in the country.

    The anti-corruption watchdog has said the money was made through illegal 10–15 per cent kickbacks on contracts connected to the company.

    The contracts were lucrative construction deals, signed by Energoatam as it looked to build defences to its energy infrastructure during constant bombardment from Russian aerial attacks.

    The 15-month NABU investigation, titled Operation Midas, uncovered money trails to Moscow and luxury villas in Kyiv, as well as huge amounts of Ukrainian cash stuffed in duffel bags.

    In one wire-tapped conversation, one suspect reportedly complained of bad back pain from lugging wads of notes around.

    Six people have been arrested. Energy minister Svitlana Hrinchuk has resigned, Mr Halushchenko has been sacked and although Mr Yermak's house was raided, NABU is yet to reveal whether they believe he was involved.

    Mr Mindich remains on the lam, with reports the businessman is hiding out in Israel.

    Mr Zelenskyy has publicly praised the work of the detectives who carried out the investigation and expressed shock that some personal allies were allegedly involved.

    Nevertheless, the scandal involving the country's main energy supplier has angered many in Ukraine, where power outages have been regular during the war.

    It has led many Ukrainians to question Mr Zelenskyy's leadership, and whether his pre-election pledge to end corruption in the country was just lip service.

    "Mr Zelenskyy entered politics on that ticket of fighting corruption in the country, so the recent scandal has caused public outcry … certainly his political credibility is in peril," said Jaroslava Barbieri, a research fellow at Chatham House, an independent policy institute based in London.

    "There are more and more voices calling for accountability because of this sense of indignation that during a war there are people in government allegedly siphoning off money to build luxury mansions, that's meant to protect people from Russian attacks."

    'Corruption has been an endemic problem in Ukraine'

    Since gaining independence after the Soviet Union collapsed in 1991, Ukraine's halls of power have been marred by endemic graft.

    Crooked deals often went to the very top of the country's government.

    Pavlo Lazarenko, who was Ukraine's prime minister between 1996 and 1997, was accused of embezzling $US200 million during his years as a politician, much of it through the country's gas sector. In 1999, he fled Europe to the United States, where he spent time in prison for fraud and money laundering.

    Leonid Kuchma, who was Ukraine's president for almost a decade from 1994, was accused by US diplomats of leading a "kleptocracy", after privatising state assets and lining the pockets of the country's oligarchs.

    Other presidents have been accused of having links to organised crime, including the Russian mafia.

    In 2012, Transparency International declared Ukraine the most corrupt country in Europe. Globally, it ranked 144th in a survey of 176 countries.

    Even after Russia's full-scale invasion in February 2022, allegations of corruption continued.

    In January 2023, Ukraine's then-infrastructure minister was sacked after he was accused of stealing $US400,000 from the country's winter aid budget.

    Ms Barbieri said Ukraine's corruption problem had been a major factor in it not being able to join the European Union — something it's been trying to do for about 30 years.

    "Corruption has been an endemic problem in Ukraine and it certainly does not have a good record in uncovering corruption in the past," she said.

    "This type of corruption is seen to undermine international support, and Ukraine is in desperate need of international aid at the moment."

    Despite Mr Zelenskyy's pre-election anti-corruption crusade, he, with Mr Yermak's help, has controversially tried to dilute the powers of the country's watchdogs.

    In July, he signed a bill that granted the country's top prosecutor, a staunch loyalist to Mr Zelenskyy, full control over NABU.

    It meant the president's political pal could reassign certain cases to "favourable" investigators.

    Mr Zelenskyy backflipped and scrapped the bill after massive protests across Ukraine.

    The BBC reported that at one protest in Kyiv, a demonstrator held a placard stating "my father did not die for this".

    While opinion polls show Mr Zelenskyy remains popular among Ukrainians, the scandal has sparked some agitation for elections in the country.

    Ukraine has been under martial law since Russia's full-scale invasion, and the country's constitution forbids elections being held while that's in effect.

    While a national vote is not a possibility, there are calls for Mr Zelenskyy and his government to show more accountability.

    Kyiv Independent reporter Francis Farrell says there are also questions surrounding the president's decision to install Mr Yermak, a former TV producer with limited foreign policy experience and a notoriously brash personality, as the country's top negotiator abroad.

    "He's not very good at English and he's an abrasive personality," the Australian-born journalist told the ABC from Kyiv.

    "It raised questions from foreign delegations, shouldn't we be talking to the foreign minister, not the president's head honcho?

    "Yermak was the guy with his hand in every pot; there was a concentration of power within the government where personal loyalty seemed to be more important than being good at your job.

    "When it comes to the old Ukrainian practice of helping out your mates and putting them in places of power, overall centralisation of power, Volodymyr Zelenskyy has been guilty of that and it's really all embodied in the figure of Andriy Yermak."

    Oleksandr Merezhko, a Ukrainian MP and a member of Mr Zelenskyy's party, doesn't believe the scandal will result in the president's demise.

    "Right now I don't see any threat to president Zelenskyy's power," he said, speaking to the ABC after a scheduled power outage in Kyiv.

    "People in Ukraine have rallied around the president, he's a symbol of our resistance and if you take a look at the polls, his popularity went down but not dramatically.

    "Many people guessed something was going on when there were rolling blackouts but it is extremely unpleasant, to put it lightly, when you don't have power for most of the day and people are profiteering off it."

    Mr Merezhko says the scandal also shows Mr Zelenskyy's attempts to rid the country of corruption are working.

    "If you look at corrupt countries, they don't have these scandals because they are covered up," he said.

    "The reaction of the president proves he will choose national interest over his friends."

    NABU is continuing its investigation into the energy scandal, the details of which read like the plot of a spy novel.

    In addition to discovering Mr Mindich's "Carson" pseudonym, the detectives uncovered other code names.

    "Professor" was reportedly the moniker given to Mr Halushchenko and Mr Chernyshov was allegedly referred to as the Argentine revolutionary Che Guevara.

    Police are yet to reveal the identity of an "Ali Baba" who is frequently mentioned in the more than 1,000 hours of recorded conversations.

    In Kyiv, there is significant speculation as to who Ali Baba is, and growing calls for their identity to be revealed, so war-weary Ukrainians can see how far the alleged corruption runs in their government.


    ABC




    © 2025 ABC Australian Broadcasting Corporation. All rights reserved

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