The Bankova Problem: Corruption, Power and the Ukrainian Presidency

By Matthew Parish, Associate Editor

Sunday 23 August 2026

There are two mistakes that foreigners commonly make when discussing corruption in Ukraine. The first is to imagine that Ukraine is uniquely corrupt — a hopeless post-Soviet kleptocracy in which every public institution is for sale and nothing has changed since independence in 1991. The second, increasingly fashionable since February 2022, is almost the reverse: to suppose that because Ukraine is fighting a heroic war of national survival, discussion of corruption is somehow disloyal, exaggerated or a product of Russian propaganda. Both propositions are false. Ukraine has made extraordinary progress in constructing institutions capable of exposing corruption. Yet corruption remains serious, and the concentration of political authority in the Office of the President on Bankova Street has created precisely the sort of opaque environment in which corruption, patronage and conflicts of interest flourish.

The distinction matters because corruption in contemporary Ukraine is not simply a matter of officials accepting envelopes stuffed with banknotes. The more important question is one of political architecture — who controls appointments, who has access to the President, who influences state enterprises, who decides which businessmen receive political protection and whether institutions investigating politically connected people are genuinely free to follow the evidence wherever it leads.

Measured nationally, Ukraine remains a country with a substantial corruption problem. Transparency International’s 2025 Corruption Perceptions Index gave Ukraine 36 points out of 100 and ranked it 104th of 182 countries. Yet this represented a one-point improvement over the previous year. This combination — a poor absolute position but gradual improvement — captures the Ukrainian paradox rather well. Corruption is still widespread but the Ukrainian state is increasingly capable of investigating it.

That distinction becomes particularly important when considering President Volodymyr Zelenskyy’s administration. There is presently no public evidence establishing that Zelenskyy himself has committed corruption offences. Indeed, in May 2026 the head of the National Anti-Corruption Bureau of Ukraine, NABU, said that Zelenskyy was not the subject of any of its investigations. Allegations against associates cannot simply be converted into allegations against the President. Criminal responsibility is personal, and people accused of offences are entitled to the presumption of innocence.

Nevertheless the corruption problem surrounding the presidential apparatus has become impossible to dismiss as a collection of unrelated embarrassments.

The rise of the presidential court

The origins of the problem lie partly in the extraordinary centralisation of Ukrainian government after Zelenskyy’s election in 2019 and, still more, after the full-scale Russian invasion in February 2022. Wartime necessarily concentrates authority. Decisions must be made quickly; secrecy becomes essential; parliamentary politics contracts; ministers acquire less freedom of manoeuvre and presidential advisers become more powerful. None of this is peculiarly Ukrainian.

But Ukraine’s version of presidential government developed an additional characteristic. The Office of the President became not merely the President’s staff but, in practice, an alternative centre of executive government. At the centre of this system for years stood Andriy Yermak — an unelected official whose responsibilities extended across diplomacy, security policy, appointments, negotiations with foreign governments and the management of domestic politics. Reuters described him as widely regarded as the second most powerful person in Ukraine and recorded longstanding criticism of the extraordinary influence exercised by an unelected presidential adviser.

This is institutionally dangerous even where everyone involved is entirely honest. Constitutional democracies divide authority because concentrated informal power is intrinsically difficult to scrutinise. Ministers can be questioned in parliament. Government departments have formal responsibilities. Civil servants operate within administrative hierarchies. An enormously powerful presidential court — consisting of advisers whose authority ultimately derives from proximity to one man — is considerably harder to police.

The Bankova system therefore created fertile soil for accusations of favouritism and patronage long before investigators began arriving at the doors of people close to the President.

The scandals move closer

The decisive change came with the investigations that began to penetrate Zelenskyy’s personal and political circle.

Operation Midas, the sprawling investigation publicly revealed in November 2025, concerned allegations of approximately $100 million in kickbacks connected with procurement at the state nuclear energy company Energoatom. NABU said its investigation had lasted some fifteen months and involved more than seventy searches. Seven people were initially charged. The alleged principal organiser was identified by a source familiar with the investigation as Timur Mindich — a former business associate of Zelenskyy from his entertainment career. Mindich has denied wrongdoing.

The political symbolism was disastrous. Ukrainians were enduring blackouts while Russian missiles and drones attacked their energy infrastructure. Western taxpayers were providing billions to keep the Ukrainian state and economy functioning. Soldiers and civilians were dying. Against this background, allegations that politically connected figures were extracting enormous kickbacks from the energy system could scarcely have been more incendiary.

The scandal expanded. Two ministers were dismissed amid the political crisis in November 2025, although both denied wrongdoing. Reuters described the affair at the time as Ukraine’s biggest wartime political crisis and reported demands — including from within Zelenskyy’s own Servant of the People party — for a more transparent presidential administration.

Then the investigation reached Yermak.

Anti-corruption investigators searched his home on 28 November 2025. He resigned as head of the Presidential Office that day. At that stage he had not been named as a suspect. The legal distinction is important because searches do not establish guilt.

Events subsequently became more serious. In May 2026 Ukrainian anti-corruption authorities named Yermak as a suspect in an alleged criminal organisation said to have laundered approximately $10.5 million through a luxury residential development outside Kyiv. He denied the allegations. An anti-corruption court subsequently ordered him into custody while setting bail at about $3.2 million.

This transformed the political meaning of the corruption debate. Yermak had not been some obscure deputy minister whom Zelenskyy happened once to have appointed. He had been the President’s closest political lieutenant and for years one of the most powerful men in Ukraine.

Nor has the controversy ended there. In August 2026 Zelenskyy dismissed deputy presidential chief of staff Iryna Mudra following reports that her home had been searched in connection with a money-laundering investigation involving senior officials. She had not at the time been publicly identified as a suspect. Again, the distinction between investigation and guilt must be maintained. Nevertheless, by this stage it was increasingly difficult to argue that Bankova’s corruption difficulties were merely peripheral.

The gravest mistake

Arguably the most damaging episode was not any allegation of personal enrichment at all. It was the attempt in July 2025 to subordinate Ukraine’s principal independent anti-corruption institutions.

Parliament passed legislation giving the Prosecutor General substantially greater authority over NABU and the Specialised Anti-Corruption Prosecutor’s Office, SAPO. Zelenskyy signed it. Critics feared that the arrangement would permit political interference with investigations precisely when investigators were moving towards increasingly powerful interests.

The reaction was immediate. Thousands of Ukrainians protested in Kyiv, Lviv, Kharkiv and elsewhere — the first substantial nationwide anti-government demonstrations of the full-scale war. European partners expressed alarm.

The government retreated. Zelenskyy introduced legislation restoring the institutions’ procedural independence and parliament passed it on 31 July.

This reversal deserves credit. Democracies should be judged partly by their capacity to correct mistakes and Ukrainian civil society demonstrated formidable resilience. Yet the original decision remains extraordinarily difficult to explain away. An administration genuinely confident in the integrity of its immediate political environment should ordinarily have an interest in strengthening independent investigators, not placing them beneath institutions vulnerable to political influence.

The episode therefore created a poisonous suspicion: that Bankova had become frightened of where independent investigations might lead. Suspicion is not proof. But governments create political judgments by their conduct, and attempting to weaken the detectives while those detectives are approaching one’s associates is inevitably liable to generate such a judgment.

How corrupt was the President’s Office?

The answer depends upon what we mean by corruption.

If the allegation is that the Presidential Office itself was a gigantic criminal organisation, or that Zelenskyy personally directed a system of theft, the available public evidence does not justify that conclusion. Such assertions go materially beyond what investigators have established publicly.

If instead corruption is understood more broadly — as a political culture in which personal connections, informal influence, concentrated authority, opaque appointments and relationships with favoured businessmen acquire excessive importance — then the criticism becomes much stronger.

Bankova’s fundamental vice was excessive personalisation of government. Zelenskyy arrived in office promising to break Ukraine’s oligarchic political culture. Paradoxically, his administration developed its own intensely personal network of authority. Old associates from the entertainment world entered politics. Trusted friends became extraordinarily powerful. Yermak accumulated responsibilities extending far beyond the conventional conception of a presidential chief of staff. Political loyalty frequently appeared more important than institutional independence.

Such arrangements do not prove theft. They create opportunities for it.

That is why modern anti-corruption policy concentrates not merely upon catching thieves but upon constructing institutions in which stealing is difficult — transparent procurement, declarations of assets, competitive appointments, independent prosecutors, independent courts, parliamentary scrutiny and investigative journalism. Ukraine has built many of these mechanisms, frequently under pressure from Ukrainian civil society and its European partners.

Indeed there is an irony at the centre of the entire affair. We know so much about alleged corruption near the presidency precisely because Ukrainian institutions are working.

A genuinely consolidated kleptocracy does not have independent investigators searching the home of the President’s chief of staff. It does not have an anti-corruption court placing the former chief of staff in custody. It does not have thousands of citizens demonstrating during wartime against interference with prosecutors. Nor does its government retreat within days when those demonstrations erupt.

Ukraine’s corruption scandals are therefore simultaneously evidence of institutional failure and institutional success.

War makes corruption worse — and less forgivable

Russia’s invasion enormously magnifies the consequences.

Wartime government necessarily spends immense sums quickly. Procurement becomes secret. Normal tender procedures may be abbreviated. Defence contracts proliferate. Foreign assistance pours into the country. State enterprises acquire strategic importance. Officials can plausibly invoke national security when refusing disclosure.

Every one of these conditions creates opportunities for corruption.

Yet precisely because Ukraine is at war, corruption becomes morally more serious. A stolen million dollars is not merely money missing from a municipal budget. It might represent drones not purchased, fortifications not constructed, generators not installed or soldiers inadequately equipped.

This explains the particular fury generated by allegations surrounding the energy sector. Russia has deliberately attempted to destroy Ukraine’s electricity system. Ukrainians have spent winters without reliable heat and power. If officials or politically connected businessmen exploit expenditure intended to protect that infrastructure, the public is unlikely to regard this as ordinary white-collar crime. It approaches betrayal.

It is also strategically dangerous. Ukraine cannot defeat Russia using its domestic resources alone. European and American support remains indispensable. Every major corruption scandal supplies ammunition to foreign politicians who argue that assistance to Ukraine is being wasted. Moscow enthusiastically amplifies every allegation for precisely this reason.

Ukraine therefore has a strategic as well as moral interest in becoming one of Europe’s least corrupt states.

Zelenskyy’s responsibility

There is an important distinction between criminal responsibility and political responsibility.

Nothing presently disclosed establishes that Zelenskyy participated personally in the alleged schemes surrounding Yermak, Mindich or other figures. That should be stated without qualification.

Political responsibility is different.

A President chooses the people around him. If a single adviser turns out to be corrupt, the President may have been deceived. If allegations repeatedly engulf people occupying the innermost circles of power, questions about judgment become unavoidable. If the President then supports legislation weakening the institutions investigating high-level corruption, those questions become more serious still.

Zelenskyy’s great political strength has always been loyalty. It helped hold together an administration under conditions in which assassination, invasion and national collapse were genuine possibilities. But loyalty becomes a liability when it prevents a leader from removing associates soon enough.

The lesson of Yermak ought therefore to extend beyond Yermak. The President of Ukraine does not need another immensely powerful alter ego. He needs a presidential office that is smaller, more transparent, more administrative and less political — an institution rather than a court.

Ukraine is not Russia

This distinction should never disappear from the discussion.

Russian propaganda delights in Ukrainian corruption because Moscow wishes western audiences to conclude that Ukraine and Russia are essentially the same — two corrupt post-Soviet states quarrelling over territory.

They are not.

In Russia, corruption is integrated into the structure of authoritarian government. Political loyalty provides access to wealth and wealth reinforces political loyalty. Independent investigative institutions capable of pursuing Vladimir Putin’s closest associates do not meaningfully exist. Independent media have largely been destroyed or driven abroad and political opposition has been suppressed.

Ukraine’s situation is fundamentally different. Its corruption is contested. Journalists expose it. Civil society campaigns against it. NABU investigates it. SAPO prosecutes it. The High Anti-Corruption Court adjudicates it. Citizens demonstrate against political interference and European integration supplies continuing external pressure for reform.

That is an enormous difference.

Transparency International’s figures nevertheless provide a useful warning. Ukraine’s 2025 score of 36 remains poor even after its improvement. EU institutions continue to treat strengthening anti-corruption institutions as central to Ukraine’s accession process. The country has travelled a considerable distance from the political culture of the 1990s but it has not completed the journey.

The opportunity hidden inside the scandal

The temptation for supporters of Ukraine abroad is to suppress discussion of corruption because the country is fighting Russia. That instinct is understandable but mistaken. Ukraine is not defending itself merely so that the Ukrainian flag may fly over Kyiv. It is fighting for the proposition that Ukraine belongs politically and culturally within democratic Europe.

That makes the quality of Ukrainian government part of the war.

The correct response to the Bankova scandals is therefore neither despair nor denial. It is institutional reform. The Presidential Office should surrender much of the informal authority accumulated during wartime. Ministers should govern ministries. Parliament should recover meaningful scrutiny. Senior appointments should become more transparent. State enterprises must be insulated from political networks. NABU and SAPO must remain genuinely independent and the High Anti-Corruption Court must be allowed to decide cases without political interference.

Above all, nobody should be indispensable.

The most dangerous political sentence in any democracy is that a particular adviser, businessman, general or minister is too important to investigate. Ukraine’s anti-corruption institutions have demonstrated the opposite principle — that even people standing immediately beside the President may eventually have investigators at their doors.

This may prove one of the more hopeful conclusions to an otherwise ugly story.

The corruption surrounding Ukraine’s presidential establishment has been serious. The allegations now reaching former members of Zelenskyy’s innermost circle make attempts to minimise it increasingly implausible. The July 2025 assault upon the independence of NABU and SAPO was a grave political error and the extraordinary concentration of authority in Bankova created conditions in which patronage and abuse could prosper.

But Ukraine’s response also reveals something profoundly different from the corrupt post-Soviet state it once was. Investigators investigated. Journalists published. Citizens protested. Parliament reversed itself. Powerful men resigned and courts began hearing cases.

The ultimate test of Ukraine’s political maturity will not be whether corruption scandals occur. They occur in every democracy. It will be whether proximity to the President protects people when credible evidence of wrongdoing emerges.

For decades in Ukraine, the answer to that question was too often yes.

The emerging answer — painfully, inconsistently and amid the greatest war in Europe since 1945 — may finally be no.