(Bloomberg) -- Ukraine’s anti-graft bodies are investigating senior government officials they suspect of purchasing food for war-hit regions at inflated prices as President Volodymyr Zelenskiy’s administration intensifies a crackdown on corruption.
The procurement contracts under scrutiny led to 62.5 million hryvnia ($1.7 million) in losses to the state, Ukraine’s Special Anti-Corruption Prosecution Office and the National Anti-Corruption Bureau said in a statement. The purchases involved humanitarian aid for regions most affected by the war including Donetsk and Zaporizhzhia in the east and south as well as the capital Kyiv.
The investigation underscores a stepped-up effort to tackle corruption in Ukraine, which has been a contentious issue for major foreign donors including the International Monetary Fund and the European Union. Zelenskiy this month dismissed all region heads of military recruitment following widespread accusations of graft.
The investigators zeroed in on two officials who allegedly arranged purchases via the state-owned JSC Ukrainian Railway — accusing them of intentionally making inflated purchases through a “selected company,” which then procured food through an intermediary abroad at market prices. The officials were aware of potential alternative bidders at lower prices, including Ukrainian producers, investigators said.
The Agriculture Ministry in Kyiv denied the charges, saying in a statement that investigators had misread pricing schemes. The ministry confirmed that the probe targeted a first deputy minister, Taras Vysotskyi, who it said was cooperating with the probe and denied any wrongdoing. It also pointed to the “fast pace of decision-making” during the initial phase of Russia’s invasion.
The ministry cited what it called an “arithmetic mistake” in looking at purchases of pasta. The probe locked onto purchases of 500-gram packages, while the procurements had involved kilogram allotments, it said.
Investigators said that in one of the cases it was looking at, overpaid funds were transferred to a “foreign company with signs of fictitiousness.”
The IMF has made fighting graft a central condition for its $15.6 billion financial package to Kyiv.
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