This week, I had the privilege of attending “War in Ukraine: The battleground for the future of Europe” at Chatham House in London. The event, as always, brought together leading Ukrainian and British experts, who spent the day sharing insights on Russia’s war against Ukraine and its wider implications for the country, for Europe, and for the world. One message came through clearly from our international partners: only a strong Ukraine can force Russia to end the war.
Achieving that strength, they stressed, depends on a delicate balance — holding the front line while maintaining economic and energy stability. That triangle, consistently supported by Ukraine’s international partners, is the foundation for peace on terms Ukraine can accept.
In wartime, the margin for error is vanishingly small: a nation fighting for survival cannot afford internal sabotage. So news of Operation “Midas” hit Ukrainian and international observers like a bolt from the blue.
The “Midas” case, currently under investigation by NABU and the SAPO, is about far more than simple mismanagement in a state-owned company. Its scale and timing make it a threat to the country’s very functioning amid a full-scale invasion. Given its potential impact on the stability of Ukraine’s defence industry, those implicated could potentially face charges of treason.
More than $100 million flowed through the scheme operating within Energoatom — Ukraine’s main electricity producer — and that represents just a fraction of the funds NABU detectives have documented as stolen. According to the investigation, several contractors were forced to hand over 10 to 15% of their contract value as a “guarantee” that their deals wouldn’t be blocked. Recordings released during the probe expose the company’s internal decision-making hierarchy, opaque supplier selection processes, and the tight control over cash flows within the enterprise.
The cynicism at the heart of this story is staggering: the scheme struck directly at the core of Ukraine’s national security. Energoatom alone produces up to half of the country’s electricity and holds a monopoly-like position as the backbone supplier. If the company’s operations were destabilised, there is no other energy producer that could make up the shortfall in real time. Internal disruptions have therefore consequences far beyond the civilian sector — they hit the defence industry too. With limited hydro and thermal reserves, Energoatom became the foundation of the energy system during the invasion. Its uninterrupted operation is not an abstract benefit — it is a basic precondition for the functioning of Ukraine’s defence economy.
Despite widespread infrastructure damage, Energoatom has remained the mainstay of Ukraine’s energy system. Factories producing equipment and drones, repair workshops, warehouses, logistics hubs, backup power units and mobile service centres all rely on a steady power supply. This isn’t a theoretical concern — it’s a basic necessity for keeping production running.
Ukroboronprom, now reorganised as Ukrainian Defence Industry, encompasses more than 130 enterprises. Reports suggest that over 40 of these have already been relocated to safer regions or shifted into high-intensity production.
These facilities are where equipment is assembled, armour repaired, and new technologies tested. Reliable electricity is central to all of it. Voennoe delo observes that “every industrial enterprise, including military factories, depends on electricity to run machines and production lines,” a point confirmed by international analysts. Experts at CSIS highlight how the defence industry’s reliance on a fragile energy infrastructure leaves it exposed. In practice, any disruption — whether technical, financial or organisational — can slow production, push up costs, and increase downtime.
What good is it that Ukraine can now produce mines, shells, armoured vehicles, and UAVs locally if scaling up production isn’t possible without a reliable power supply? Take the Nammo project, for example, which aims to manufacture artillery shells under a Norwegian licence. While it is being launched in partnership with the state, its success depends entirely on the resilience of Ukraine’s industrial infrastructure — energy included.
The company’s press service has claimed that the corruption scheme had no impact on production. But that assertion misses the deeper problem. When suppliers factor kickbacks into their contracts, the result is always the same: the project ends up with less, receives it later, or gets lower-quality materials — sometimes all three. In wartime, this isn’t a question of budget efficiency; it’s about maintaining the stability of the defensive line.
Testimonies submitted to NABU reveal that the scheme operated for over a year and a half, touching not just procurement but also personnel decisions across the company. Particularly revealing are recordings in which participants discuss funds earmarked for protective structures at power plants.
In one exchange, a figure refers to the planned spending as “insane money” that “needs to be pumped through.” Investigators have not disclosed full details, but it’s clear that the very facilities meant to strengthen nuclear plants against attack were exploited for personal gain.
In practice, every extra percentage in costs from kickbacks, every day of delayed equipment delivery or upgrades, every postponed decision directly slows weapons production. When the energy system wavers, defence industry plants are forced onto backup power or must cut output. When corruption inflates contracts, the cost of the final product rises. When management focuses on diverting funds instead of modernising production, the whole system grinds to a halt. The result: the front receives less, later, or of lower quality.
Electricity isn’t just about running factories — it powers the entire logistics network supporting the front: repair workshops, mobile service units, warehouses, medical facilities, and backup generators. If Energoatom operates amid constant resource leaks, a portion of funds that could be mobilised for the army is siphoned off elsewhere. The consequences aren’t always immediately visible, but they ripple through every aspect of defence readiness.
The direct impact on the state budget is a story in itself. According to NABU director Semen Kryvonis, an organised criminal group connected to figures close to the Presidential Office set up its own shadow system to control the company’s decision-making, funneling dozens of contracts through it. On paper, all participants acted within their official roles — but in practice, this informal centre of power had more influence than the company’s own departments. One telling detail: businessman Tymur Mindich, a key figure in the scheme, left the country just hours before the raids began. Zelenskyy has threatened sanctions against him, but such a move appears fraught — it would prevent his deportation from Israel to Ukraine.
Another question looms, unspoken but unavoidable: how many similar schemes could be operating in other strategic state-owned companies? Energoatom may be the first, but it is unlikely to be the last example of this scale. If even some of the corruption patterns exposed there are repeated elsewhere in the state sector, it suggests that Ukraine’s entire system of production, repair, modernisation, logistics, and rear support could be running with serious inefficiencies. For the economy, that’s a problem. For the army, a delayed delivery of armoured vehicles or postponed modernisation could be catastrophic.
Undermining a country’s defence during wartime is far more than a managerial lapse or technical oversight. When funds intended to protect critical infrastructure end up in private hands, leaving those sites vulnerable to attack, it crosses into criminal territory under Article 111 of Ukraine’s Criminal Code — high treason. This covers deliberate actions that harm the state’s sovereignty, territorial integrity, inviolability, defence, or national security. The effect of such abuses has been a tangible weakening of Ukraine’s ability to fight and protect its citizens.
It is now vital to ensure that the actions of all officials — including current government members who systematically weakened key links in national security by allowing schemes that disrupted the timely supply of electricity to weapons manufacturers — are investigated not just as abuses of power, but as acts of sabotage and high treason. Criminal cases by the SBU are therefore expected. Incidentally, the SBU’s (in)action on this case will reveal whether the recordings suggesting that the perpetrators allegedly shared stolen funds with the SBU and the State Bureau of Investigation are true. If they are, the situation is far graver than currently understood.
And finally, perhaps the most painful conclusion: in light of these events, and the clear toll the perpetrators have taken on Ukraine’s defence capability and energy resilience, it becomes much easier to understand why Russia refuses to negotiate an end to the war.
