Shabunin Says That Cabinet Gives Yermak's Man And Corrupt Officials Right To Manage UAH 355 Billion Allocated For Purchase Of Weapons

The Cabinet of Ministers gave the newly created Defense Procurement Agency with a staff of 50 employees, to manage UAH 355 billion allocated for the purchase of weapons and military equipment.

This was stated by the head of the Anti-Corruption Action Center Vitalii Shabunin, Ukrainian News Agency reports.

According to him, on May 16, the Cabinet of Ministers adopted a resolution according to which it gave the newly created SE Defense Procurement Agency the opportunity to manage all the funds of the Ministry of Defense intended for the purchase of weapons and military equipment.

At the beginning of the year, this amount was UAH 355 billion of budget funds.

The decree stipulates that the agency will receive up to 2.75% of the amount of each arms import contract for its maintenance.

"That is, to maintain a maximum of 150 employees, of which 50 are working today, the agency can potentially receive UAH 9.7 billion per year. This is UAH 65 million per person, provided that the state-owned enterprise can recruit a full staff. For comparison, UAH 9.7 billion is almost three times more than the budget of the city of Chernihiv. The regional center with a population of 200,000 people will be able to live for three years with the money that the arms agency with 150 clerks will receive for one year," Shabunin notes.

According to the decision of the Cabinet of Ministers, if the expected cost of procurement for expensive contracts in civil agencies is no more than UAH 100 million, the procurement organization receives 1% of the amount of such a contract, and if the amount of procurement exceeds UAH 100 million, then it is only 0.5%.

"The Defense Procurement Agency, a state-owned enterprise created under the Ministry of Defense, is becoming the main importer of weapons to Ukraine. That is, on how this agency will work depends, firstly, will the needed Western weapons be in Ukraine today and in the years to come, and secondly, how one of the largest chunks of taxpayers' money will be used," Shabunin added.

The state enterprise was officially registered on June 17, 2022.

Then Defense Minister Oleksii Reznikov reported that thanks to the agency, "Ukraine will purchase weapons according to NATO standards."

Already in November, the Minister called the agency a "military Amazon."

According to mass media, the agency already has unfulfilled contracts (that is, overdue receivables) for UAH 131.5 million.

The Ministry of Defense has already begun suing the agency for non-fulfilment of these contracts.

Two such cases are currently in court.

The main task of the agency is to conclude contracts with foreign and Ukrainian suppliers for the purchase of weapons.

"At the Ministry of Defense, the agency is in the hands of Andrii Yermak's ex-business partner Denys Sharapov. The latter had a joint business with Yermak's father Borys and the Russian Emanuilov, who is connected to the KGB and is one of the experts of Putin's "Valdai club". Later, this business - Media Group of European Partnership LLC - was joined Andriy Yermak himself," Shabunin emphasizes.

He noted that during Yanukovych's time, Sharapov became the deputy director of the state-owned enterprise Ukroboronservice, from where he left after the election of Zelenskyy as President, having a significant corruption trail and not the best reputation as an arms dealer.

In August, Volodymyr Pikuzo was appointed head of the state-owned enterprise.

Before that, he managed another state enterprise - Bezpeka, which was supposed to be engaged in the modernization of factories producing weapons.

Shabunin stated that according to the audit of this enterprise by the Ministry of Strategy and Industry, a number of violations, including corruption ones, were discovered at Bezpeka state enterprise under Pikuzo's leadership.

In particular, Pikuzo illegally credited himself with financial aid and bonuses worth UAH 380,000.

Oleksandr Kovalenko, who was notified of suspicion by the Main Military Prosecutor's Office in 2016, was appointed Pikuzo's first deputy.

At that time, he held the position of deputy director of Ukrspecexport.

According to the investigation, in 2005-2009, Kovalenko committed official falsification of additions to the agreement with the companies of the United States and Great Britain.

Then USD 7.5 million were transferred to intermediary companies. for fictitious consulting services.

As Ukrainian News Agency earlier reported, the Agency, which is being sued by the Ministry of Defense, can receive a reward of up to EUR 230 million for conducting import contracts.

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