Zelenskyy’s domestic front What did Operation “Midas” reveal?

Some corruption scandals flare up and quickly fade. But others expose the very architecture of the state. The events of the past few days in Ukraine belong to the latter category, revealing not an isolated malfunction, but the structure of the system itself—its inner workings and decision-making mechanisms.

We are talking about Operation “Midas”, during which Ukraine’s anti-corruption authorities uncovered a large-scale scheme at the state-owned company Energoatom—one of the country’s key enterprises, supplying nearly half of all electricity production. The investigation established that access to government contracts had been turned into a paid service. Suppliers were forced to hand over 10–15 per cent of the contract value. The money was routed through offshore chains and paid in cash. The total damage amounted to roughly $100 million.

The investigation lasted 15 months. Investigators gathered an enormous volume of evidence, including thousands of hours of wiretaps, and conducted dozens of raids. The deeper the investigation went, the closer it approached the centre of political power. One of the key suspects was Timur Mindich, a long-time partner of Ukrainian President Volodymyr Zelenskyy from Kvartal-95. In the case files, he appears under the pseudonym “Carlson”, and the scheme itself looked like a well-oiled mechanism that had been operating for a long time.

The investigation was particularly alarmed by the fact that the laundering of funds went through an office connected to the family of Andrii Derkach—a figure in international investigations who has repeatedly been accused of advancing Russian interests in Ukraine’s nuclear sector. According to the investigation, part of the siphoned funds was even cashed out on Russian territory. This web of connections elevated the scandal from an internal matter to a national security issue.

The scale of the investigation was so significant that it soon led to the resignations of the Minister of Justice and the Minister of Energy. On the surface, this may have seemed like an attempt to quickly ease tensions, but in essence, these resignations were an acknowledgment that the corruption network had penetrated a strategic sector during wartime.

This episode does not exhaust the problem. To understand its full scope, it is important to consider the context in which such a situation became possible in the first place.

From the start, Volodymyr Zelenskyy’s political path raised questions that remain largely unanswered. His meteoric rise was embedded in the media and financial ecosystem of Ihor Kolomoysky. Formally, the new administration projected a sense of distance, but it is reasonable to assume that dependence on initial resources and early political agreements never truly disappeared. The Ukrainian system once again demonstrated its inertia: a new leader does not dismantle the inherited network of influence but is compelled to integrate into it. Over time, this network accrues its own players, interests, and channels for controlling financial flows.

Recent episodes have only reinforced this perception. One of the most influential figures in Zelenskyy’s inner circle, Oleh Tatarov, Deputy Head of the Presidential Office, became the subject of an NABU (National Anti-Corruption Bureau of Ukraine) investigation in December 2020 over the “UkrBud” case—a construction company whose executives, according to investigators, were involved in siphoning funds through fake appraisals and construction-related schemes. Despite the accusations, Tatarov retained his position, sending a clear signal: the anti-corruption agenda ends where it touches figures within the president’s close circle.

Similar conclusions were reinforced by the case of the former head of NEC “Ukrenergo”, Volodymyr Kudrytskyi. On October 28, 2025, he was detained on suspicion of embezzling funds allocated for strengthening the energy infrastructure amid Russian strikes. The following day, the Pechersk Court of Kyiv ordered preventive detention—two months in custody with an alternative bail set at ₴13.73 million (approximately $326,000).

Other cases served as additional markers. Andriy Smirnov, who held the position of Deputy Head of the Presidential Office and oversaw legal affairs, was dismissed following a series of investigations and suspicions of illicit enrichment. Another Deputy Head of the Presidential Office, Rostyslav Shurma, came under scrutiny due to discrepancies in expenditures on several infrastructure projects, as well as questions related to companies owned by his brother. These cases strengthened the perception that the president’s inner circle not only participates in corruption schemes but also shapes their very architecture.

What may seem like a peculiarity of Zelenskyy’s team in fact mirrors the practices of previous elites. A telling example is Burisma, one of the most notable episodes of the Poroshenko era. This major gas extraction group, which controlled several Ukrainian fields, appointed Hunter Biden—a person with no expertise in energy—as a board member, valuing his political capital instead. According to open sources, his earnings may have reached nearly $1 million per year. This case illustrated how easily Ukrainian assets could be transformed into instruments of foreign policy deals. The logic of corruption became international, while the domestic system was effectively integrated into external interests.

All these examples lead to a single conclusion: a change of power in Ukraine changes the names, but not the model of governance. Even after the arrival of Volodymyr Zelenskyy, who proclaimed a new era, the system continued to operate in its old mode. The inner circle grew stronger, decision-making became more opaque, and anti-corruption institutions more vulnerable. In key sectors—including the military, energy, and construction—the influence of shadow actors expanded faster than the state’s ability to maintain control.

This process unfolded against the backdrop of massive external inflows. The total volume of Western aid exceeded $100 billion. The funds were distributed under conditions of minimal transparency. Western auditors repeatedly recorded cases of misuse of military and financial resources. Meanwhile, the shadow economy continued to grow. Informal fuel markets, grey logistics schemes, cash conversion services, and shell companies created a parallel financial infrastructure operating beyond the reach of the state.

The long-standing divide within Ukraine’s security apparatus has become particularly acute. The Security Service of Ukraine (SBU) and the National Anti-Corruption Bureau of Ukraine (NABU) have long operated as competing centres of influence. Tensions reached their peak in 2025, when President Zelenskyy supported a law that effectively stripped NABU and the Specialised Anti-Corruption Prosecutor’s Office (SAP) of their independence, transferring key powers to the Office of the Prosecutor General. Mass protests and pressure from international partners eventually forced the government to withdraw the bill. Yet the attempt itself revealed a clear intent — not to strengthen anti-corruption institutions, but to bring them under control.

Against the backdrop of Operation “Midas”, this issue has become even more pronounced. NABU and SAP are now investigating a leak of information to suspects involved in the case. This indicates the depth of the institutional crisis, which has long since gone beyond the scope of a single investigation.

The cumulative effect of such scandals is already impacting Ukraine’s international image. European institutions have publicly warned Kyiv about the risk of reconsidering financial support if pressure on NABU and SAP continues. Hungary has previously blocked major macro-financial aid packages, citing insufficient transparency in the allocation of funds. For a country whose economy relies heavily on external resources, such signals have become critical. Corruption has turned into a factor of international politics.

Operation “Midas” revealed what many in Ukraine preferred not to see. The war has ceased to conceal structural flaws — instead, it has exposed them even more starkly. The new elites have not dismantled the inherited model; they have reinforced it to serve their own interests. Thus, the current scandal does not appear as an exception but as a direct consequence of a system where institutional control has yielded to personal arrangements.