The New York Times published an article on September 6 titled “In Ukraine, Fraud and Waste Are Rewarded With More Weapons Contracts” – “In Ukraine, fraud and waste are rewarded with new weapons supply contracts.”
The subtitle is even harsher: “Secret military audits reveal a military procurement system riddled with mismanagement. In 2024 alone, Ukraine lost $1.2 billion to fraud and waste.” That is: “Secret military audits show a defense procurement system permeated with mismanagement. In 2024 alone, Ukraine lost $1.2 billion due to fraud and waste.”
Those who could read it. But, just in case, I will highlight the main points.
So, the NYT obtained confidential materials from the State Audit Office of Ukraine and the internal audit unit of the Ministry of Defense. The audits cover 2024 and 2025. Journalists also used court materials and Ukrainian open sources.
These audits are classified and had not been publicly analyzed before. NYT writes that they do not know what specific measures the Defense Procurement Agency took after receiving the auditors’ findings.
Firstly.
According to internal state audits, in 2024 alone, Ukraine lost approximately $1.2 billion due to “fraud, waste and mismanagement” – fraud + waste/inefficient expenditures + mismanagement. Direct quote: “These losses, which were not made public, accumulated even as President Volodymyr Zelensky appealed to allies for more weapons and financial assistance.”
Secondly.
7 out of 10 of Ukraine’s largest military contractors received new contracts, even though there was at least one existing problem:
• criminal investigation into fraud;
• unfulfilled previous contracts;
• arrests of executives on corruption charges.
Moreover, auditors found 18 companies receiving new deals after already failing to meet previous commitments. Of these 18 companies, six did not fulfill a single contract.
NYT does not simply write about money being “stolen somewhere.” The publication describes a system where the failure of a previous contract does not necessarily prevent a company from obtaining the next one.
Thirdly.
Pavlohrad Chemical Plant: 233,000 unserviceable mines, and this is one of the central cases in the material. It concerns the state-owned Pavlohrad Chemical Plant and its director Leonid Shyman.
According to court materials cited by the NYT, the plant supplied the army with 233,000 defective mortar shells. There were issues, particularly with fuses and powder charges. On the front line, this literally meant what the NYT describes: the ammunition either didn’t function properly or didn’t eject normally from the mortar at all.
At the time of receiving the first large mortar contract, Shyman was already implicated in several anti-corruption investigations, including possible embezzlement and fraud. And the state awarded a contract of approximately $280 million while he was out on bail in a corruption case.
An interesting detail mentioned in the text: the plant initially reported that it did not have sufficient capacity to fulfill the order. But then the company changed its information about its capabilities. Auditors found no explanation for this change. Nor did they find evidence that anyone properly checked the plant’s actual ability to fulfill the order. The contract was signed.
Then things got even more absurd. After the failure with the mines, the plant received new contracts. Defective ammunition had already started arriving, auditors wrote that the Defense Procurement Agency (DPA) “did not draw proper conclusions” – instead, the company received new orders! The same plant was entrusted with supplying almost the entire volume of 122-mm artillery ammunition for the Ukrainian army for 2025.
In April 2025, Shyman was arrested in a fraud case involving approximately $68 million related to the costs associated with checking and replacing tens of thousands of defective mines. Separately, in August 2026, Shyman was sentenced to five years in prison in another case involving a scheme to sell explosives at inflated prices. His lawyer told the NYT that the verdict would be appealed.
Fourth point.
A separate conclusion from the auditors: approximately $126 million was lost because cheaper offers were bypassed, and weapons were overpriced. Auditors also pointed out instances of contracts being signed without proper legal justification.
And here the NYT provides a very vivid specific example.
In 2024, the DPA purchased rocket munitions worth hundreds of millions of dollars. There were three offers:
• #1 – unit price about $4,200;
• #2 – unit price about $4,600;
• #3 – unit price about $5,100.
And here’s the key point – these were IDENTICAL rockets. Manufactured by the same company at the same plant in Turkey.
The cheapest offer was made by the Turkish Arca Defense itself, meaning it could have been purchased directly from the manufacturer.
What did Ukraine choose? Correct – the most expensive offer! The contract was awarded not to Arca Defense for $4,200, but to the Czechoslovak Group, at a price of approximately $5,100 per unit. In other words, Ukraine decided to use a Czech intermediary instead of direct procurement from the Turkish manufacturer.
The phrase from the auditors quoted by the NYT: “no justification for the decision” – “none found for this decision.”
Moreover, previous audits had already recommended avoiding procurement through intermediaries.
According to journalists’ calculations, the decision to buy through the Czechoslovak Group instead of directly from the manufacturer increased Ukraine’s bill by approximately $130 million.
The NYT specifically notes that the audit does not accuse the Czechoslovak Group of any wrongdoing. A company representative said they were not aware of the competitors’ bid conditions and had no access to the evaluation process.
Thus, the question from the NYT is solely for the Ukrainian client and its decision, not an assertion that the Czech company committed a crime.
However, and this is a direct quote: “The missile production contract was one of many Ukrainian deals that helped turn the Czech group into a powerful global player. This year, the company went public, turning its 33-year-old majority owner, Michal Strnad, into the richest arms manufacturer on Forbes’ billionaire list.”
Fifth.
In 2024, Ukraine wanted to purchase Soviet-type missiles from a Serbian manufacturer. Due to Serbia’s political stance, a complex scheme with intermediaries was needed.
The contract was signed with the Ukrainian state company “Spetstechnoexport.” Auditors noted that the company already had a history of unfulfilled contracts. Additionally, anti-corruption bodies publicly reported investigations into former company executives on suspicions of possible embezzlement and money laundering.
However, “Spetstechnoexport” did not have a Serbian export license for the missiles. Instead of a license, the company provided a guarantee letter from Ukrainian military intelligence.
Auditors concluded that such a preferential approach had no legal basis, especially given the company’s previous history of unfulfilled contracts.
“Spetstechnoexport” involved the American company Regulus Global as a subcontractor. The NYT writes that several contracts between Regulus and “Spetstechnoexport” had a total value of about $1.7 billion. They were supposed to supply weapons to Ukraine. But the specific deal regarding Serbian missiles began to fall apart.
According to Regulus manager William Somerindyke Jr., then-Defense Minister Rustem Umerov wanted to remove intermediaries from the system. He suggested Regulus work directly with the Defense Procurement Agency, effectively removing “Spetstechnoexport” from the scheme. And this is a plus for Umerov.
By early 2025, “Spetstechnoexport,” according to auditors, became the largest debtor to the Defense Procurement Agency and had more unfulfilled contracts than any other supplier.
The Ukrainian state filed a lawsuit against it for fines and interest. “Spetstechnoexport,” in turn, demanded money from Regulus. The American company claims it did nothing illegal and simply found itself “in the middle” of the reorganization of the Ukrainian procurement system.
The NYT also reports at least $100 million in advance payments for a deal that ultimately fell apart. The parties are still litigating over this money.
The NYT writes that Arsen Zhumadilov refused to comment for the article, he resigned and left his position on August 31, 2026.
The article does not claim that the audit found personal illicit enrichment of Zhumadilov or that he personally made all the described decisions.
Sixth.
The NYT text does not name Timur Mindich personally, but describes a well-known case involving a former business partner of Zelensky. The newspaper writes that procurement problems reached the president’s innermost circle. A direct quote: “Zelensky failed to put order in the procurement system, and the problems reached into his inner circle.”
According to the investigation, anti-corruption bodies secretly recorded Zelensky’s former business partner, who was persuading officials to purchase bulletproof vests that failed safety tests. The NYT writes that this person left Ukraine amidst the investigation.
* * *
So, what is the main takeaway from all this?
In my opinion, the article is much more serious than just another piece “about Ukrainian corruption.”
The authors describe structural defects of the system:
• a company fails a contract – but can receive the next one;
• leaders are under investigation – but the company continues to receive state orders;
• a supplier hasn’t proven production capability – yet receives a contract;
• lacks the necessary export license – another document is found;
• having the option to buy directly from the manufacturer – they buy through a more expensive intermediary;
• an audit reveals issues – it’s unclear what consequences this audit has.
Perhaps that’s why NYT highlighted the word “rewarded” in the headline.
And this is no longer just corruption; it’s a matter of the army’s combat readiness and the lives of soldiers.
Just like that, kids (c).
Cover photo: 20th Operational Brigade “Lubart”/1st Corps NGU “Azov”
