Ukraine's missing millions: Arms contracts gone awry
Documents obtained by the "Financial Times" reveal that Ukraine spent hundreds of millions of dollars on weapons it never received. Ammunition shops from Arizona, arms companies with a past in Syria, and start-ups from Virginia Beach secured contracts worth millions of dollars.
Ukraine, fighting for survival, was forced to suspend standard procedures and take risks with million-dollar transactions involving intermediaries. These intermediaries were lesser-known entities, often lacking proper backing or certifications. As a result, Ukraine lost $770 million in deposits, with the weapons never arriving at the frontline, reports the "Financial Times".
One example is the case of 28-year-old American Tanner Cook from Arizona. Until recently, he was running a small ammunition shop. In 2022, he signed a contract with Ukraine worth approximately CAD 71 million, promising deliveries of shells and mortar mines. He received an advance of roughly CAD 24 million. The equipment was not delivered, and the money was not returned.
Chaos in Ukraine's armaments
A similar situation involves the American company Regulus Global. In 2022, it was supposed to supply Ukraine with 155 mm calibre ammunition worth up to approximately CAD 2.3 billion. Spetstechnoexport, the state-owned Ukrainian intermediary, delivered over CAD 220 million to Regulus. The company claims it invested in the supply chain, but according to Kyiv, some money was used contrary to the agreement. The case has been taken to arbitration in London.
Traders dictated terms in a market where every month's delay could mean defeat on the frontline. Former Defence Minister Oleksii Reznikov recalls their approach as: if something was in stock, buyers were pressured to act immediately or risk it being sold to their enemies. The price increases resembled the chaos seen during the early days of the COVID-19 pandemic. Within a few months, the cost of Soviet-calibre ammunition had quadrupled.
As the "Financial Times" noted, the chaos was compounded by corruption and poor coordination on the Ukrainian side. Dozens of contracts are under investigation, and several former officials have already been charged. The new head of the Defence Procurement Agency, Maryna Bezrukova, attempted to improve the process but was dismissed—allegedly for disclosing excessive tender data.
