NABU, an independent law-enforcement agency formed at the behest of the United States and European Union, and partly trained by the FBI, is investigating into possible wrongdoings by UkrOboronProm, a sprawling concern with 80,000 employees, Foreign Policy reports.
A 2017 NABU report provided to Foreign Policy alleges that officials at UkrOboronProm siphoned off funds from a $39 million contract to supply parts for Antonov AN-32 aircraft to the Iraqi defense ministry.
The documents show that the anti-corruption bureau was looking into two executives at UkrSpecExport, the concern's export arm, and an Indian citizen living in Ukraine's capital, Kyiv, who allegedly transferred around $6 million to the bank account of a company, called Paramount General Trading, in the United Arab Emirates. The UAE-based company was supposed to acquire the spare parts, however, an investigation found that the company did not supply anything, and the parts were furnished from existing UkrOboronProm stock.
The bureau concludes the "bank accounts were used… by UkrSpecExport officials for acts of corruption in connection with laundering of criminally obtained money."
Read alsoUkraine ranks 77th in SIPRI Top 100 arms producersEfforts to reach the individuals implicated in the fraud allegations were unsuccessful. Questions relayed through UkrOboronProm's press office went unanswered.
The anti-corruption bureau's report states that detectives discovered some of the money from Paramount General Trading's account was transferred to various other companies and bank accounts. For instance, a $140,000 payment was made to a Wells Fargo bank account belonging to a company called Aragon International Petroleum, whose beneficial owner was the daughter of one of the UkrSpecExport executives, according to the documents.
FP contacted five companies operating under the name Paramount General Trading in the UAE; all denied any connection to the executives named in the documents, or to the contract.
Read alsoUkrainian lawmakers vote to clear the way for new bill on anti-corruption courtThe report states the daughter had another account at ABN AMRO Bank in the Netherlands, which also received $140,000. The anti-corruption bureau's detectives suspected that funds were also transferred to another of the executive's daughters, who is a U.S. citizen.
FP was not able to reach the daughters for comment.
The anti-corruption bureau earlier this year wrote to the criminal division of the Office of International Affairs of the U.S. Department of Justice requesting assistance in the investigation, according to documents reviewed by FP.
A spokesperson for the Department of Justice declined to comment.
UkrOboronProm spokeswoman Roksolana Sheiko said many of the corruption allegations are part of the Kremlin's hybrid war propaganda offensive against Ukraine. She admitted that the Iraqi spare parts contract was investigated by police and the prosecutor general's office but said "there was no violation detected by the company or its officials."
Read alsoKholodnytsky on possible 'war' between NABU and PGO: "Entire country will fall victim"The presidential administration did not respond to a list of questions FP submitted but replied with a general statement. "The accusations you mention are the part of a hybrid/information warfare against Ukraine and, in the vast majority, are not true," the administration replied in a written statement. "The spreading of these accusations is beneficial for the critics of the President in Ukraine and for Ukroboronprom's competitors in foreign markets."