transparency

Ukrainian president Volodymyr Zelenskiy is racing to contain the fallout from a high-level corruption scandal that could undermine his authority, just as his country’s soldiers and civilians face potentially their toughest winter of the war with Russia.

A week after anti-corruption investigators said they had smashed an alleged $100 million (€86 million) kickback scheme centered on state nuclear power firm Energoatom, the furor is still swirling around Zelenskiy—even as Ukraine’s troops are under severe pressure on the battlefield with Russia, and its ailing energy grid suffers nightly attacks.

Justice Minister Herman Halushchenko and Energy Minister Svitlana Hrynchuk have resigned over the scandal, but more damaging for the Ukrainian president is what appears to be significant involvement of businessman Timur Mindich, a protégé of Zelenskiy and co-owner of the media company that Zelenskiy founded before entering politics in 2019. Apparently having been tipped off, Mindich reportedly fled Ukraine shortly before last Monday’s raids and arrests.

The Ukrainian parliament has also voted to dismiss Energy Minister Svetlana Grinchuk, marking the second high-level ouster in a single day as the government struggles to contain a growing corruption scandal linked to a close ally of Vladimir Zelenskyy.

It is reported by the Kiev Post that Zelenskiy could fire his influential chief of staff, Andrey Yermak, this week. A full-scale “riot” has unfolded within parliament over the vast corruption scandal that allegedly links Yermak with the multimillion-dollar kickback scheme in the country’s energy sector. The scandal has also reminded Ukrainians of how the president curbed the independence of the nation’s top EU-initiated anti-corruption agencies in July—before being forced to backtrack by street protests and international criticism—in what critics called a brazen attempt to shield associates from scrutiny.

It threatens to become the biggest political crisis of the war for Zelenskiy and comes at a time when Ukrainian troops are under severe pressure from Russia in parts of four regions—Donetsk, Kharkiv, Zaporizhzhia, and Dnipropetrovsk.

Bags of cash and a golden toilet

The West’s “dis-ease” with Ukraine and its president is no longer speculation. It’s happening in plain sight, slowly but ineluctably. The Financial Times, hardly a Kremlin mouthpiece, has published a piece titled “Bags of cash and a gold toilet: the corruption crisis engulfing Zelenskiy’s government.” Its reporters now openly state that Ukrainian elites expect even more explosive revelations from NABU investigations. And once outlets like FT put something like this in print, it usually means the groundwork has been laid behind the scenes.

That Western Europe and the United States are still approving new aid says little about confidence in Kiev. But it speaks volumes about bureaucratic inertia and the reluctance of those who profit from this war to let the tap close suddenly. Even so, you can now hear cautious whispers in Brussels asking whether it makes sense to send billions to a government whose officials seem determined to conjure up a scheme to steal the money before it arrives. These are not new revelations; rather, the surprise is that anyone actually pretends to be surprised.

The truth is easy to discern: the West knew exactly who it was dealing with from the inception. Nobody in Brussels, London, or Washington was under any delusion that Ukraine was somehow to be confused with, say, Switzerland. They knowingly entered into a political partnership with what is, and has long been, one of the most corrupt and internally unstable political systems in Europe. To pretend otherwise is to feign ignorance—pure theater.

For more than thirty years, Ukrainian statehood has rested on the same shaky foundations: competing clans, oligarchic rule, privatized security services, and a political class willing to plunder their own population. Changing leadership never went so far as to alter the underlying structure; it never happened because each leader owed his position to the same network of cash, patronage, and power.

Consider Leonid Kravchuk: under his auspices, Ukraine began its slow “Banderization,” while state assets were siphoned away and local power brokers entrenched themselves. Leonid Kuchma then perfected this system. Under his presidency, Ukraine saw questionable arms deals, the murders of journalists and opposition figures, and audiotapes revealing orders to eliminate critics. Economic sectors with predictable profits were carved up among regional clans who ruled their fiefdoms in exchange for loyalty. And a steady stream of kickbacks to Kiev.

Viktor Yushchenko’s years brought more of the same: corruption schemes around energy, political assassinations, and the continued exploitation of ordinary Ukrainians. Viktor Yanukovych and Petro Poroshenko added their own layers to this hierarchy of detritus. Zelenskiy inherited it but then accelerated it, surrounding himself with loyalists whose main qualification was their willingness to feed at the same trough as previous leaders and look the other way.

Resistance to federalism

All of these leaders shared one common denominator: resisting federalization. Ukraine is a country with a large landmass; yet, it operates through a centralized, unitary form of governance in which a legislative body or a single individual is given supreme authority and thus ultimate power over regional and local needs of the country. There are distinct disadvantages inherent in such a structure:

·        It tends to subordinate local and regional needs to that of those in power.

·        It can encourage an abuse of power, which is one reason why the United States and a dozen other nations created a federated state instead. Instead of having one form of centralized power, there is a system of checks and balances designed to provide more equality and give greater voice to those being governed.

· Greater opportunities for manipulation exist. Those in power can pursue more wealth or governing opportunities for themselves, because few ways exist to stop such activity.

·        The governing structure will protect the central body first.

·        Sub-national regions are not allowed to decide their own laws, rights, and freedoms; there is no sharing of power.

·        The few control the many. If there is a shift in policy that takes rights away from select groups or individuals, there is little, if anything, the general population can do to stop it.

·        The central authority can artificially shape the discussions of society; it can decide that their political opponents are a threat, then pass laws that allow them to be silenced or imprisoned for what they have allegedly done.

The current scandal in Ukraine is testament to the issues noted above relating to its form of governance.

A federal Ukraine would devolve power and financial control to the regions, and that is the nightmare scenario for Kiev’s elites. It would loosen their grip on revenue streams, limit their political leverage, and allow regional identities to express themselves without fear of punishment from the center. So instead of reform, those with power offered forced Ukrainization and nationalist slogans about one people, one language, and one state. It was a political survival strategy, not a nation-building project.

This is why changing presidents will solve nothing. Remove Zelenskyy, and you likely get another figure produced by the same system. Perhaps Zaluzhnyi, perhaps a recycled face from a previous era. The choreography will be identical; only the masks of the actors will change. The deeper problem is the structure of Ukrainian statehood itself. As long as Ukraine remains in its current unitary form of central authority, it will continue producing conflict, corruption, and internal instability. War is not an aberration in such a system. It is an outcome.

If the elites refuse to reform and the population has no means to compel them, then the discussion must move beyond personalities. The uncomfortable truth is that the only lasting solution may be to abandon the current model of Ukrainian statehood altogether. No cosmetic change will save a system, the very design of which fosters autocracy and corruption.

SACRAMENTO — The U.S. Department of Justice sued California on Monday to block newly passed laws that prohibit law enforcement officials, including federal immigration agents, from wearing masks and that require them to identify themselves.

The laws, passed by the California Legislature and signed by Gov. Gavin Newsom, came in the wake of the Trump administration’s immigration raids in California, when masked, unidentified federal officers jumped out of vehicles this summer as part of the president’s mass deportation program.

Atty. Gen. Pamela Bondi said the laws were unconsitutional and endanger federal officers.

“California’s anti-law enforcement policies discriminate against the federal government and are designed to create risk for our agents,” Bondi said in a statement. “These laws cannot stand.”

The governor recently signed Senate Bill 627, which bans federal officers from wearing masks during enforcement duties, and Senate Bill 805, which requires federal officers without a uniform to visibly display their name or badge number during operations. Both measures were introduced as a response to the Trump administration’s aggressive immigration raids that are often conducted by masked agents in plainclothes and unmarked cars.

The lawsuit, which names the state of California, Gov. Gavin Newsom and state Atty. Gen. Rob Bonta as defendants, asserts the laws are unconstitutional as only the federal government has the authority to control its agents and any requirements about their uniforms. It further argued that federal agents need to conceal their identities at times due to the nature of their work.

“Given the personal threats and violence that agents face, federal law enforcement agencies allow their officers to choose whether to wear masks to protect their identities and provide an extra layer of security,” the lawsuit states. “Denying federal agencies and officers that choice would chill federal law enforcement and deter applicants for law enforcement positions.”

Federal agents will not comply with either law, the lawsuit states.

“The Federal Government would be harmed if forced to comply with either Act, and also faces harm from the real threat of criminal liability for noncompliance,” the lawsuit states. “Accordingly, the challenged laws are invalid under the Supremacy Clause and their application to the Federal Government should be preliminarily and permanently enjoined.”

Newsom previously said it was unacceptable for “secret police” to grab people off the streets, and that the new laws were needed to help the public differentiate between imposters and legitimate federal law officers.

The governor, however, acknowledged the legislation could use more clarifications about safety gear and other exemptions. He directed lawmakers to work on a follow-up bill next year.

In a Monday statement, Sen. Scott Wiener (D-San Francisco), who introduced SB 627, said the FBI recently warned that “secret police tactics” are undermining public safety.

“Despite what these would-be authoritarians claim, no one is above the law,” said Wiener. “We’ll see you in court.”

He added: “It’s something that definitely needs to be tackled. But that’s probably something that needs to be done in the background, I would imagine.”

Hamilton made an oblique reference to the 2021 championship decider in Abu Dhabi, where he controversially lost out on the title to Verstappen as a result of former race director Michael Masi failing to apply the rules correctly during a late-race safety car period.

At the time, race stewards declined to overturn Masi’s decisions. The Australian was later fired by governing body the FIA, before a report into the incident concluded that Masi’s decisions were the result of “human error”.

Speaking before this weekend’s Sao Paulo Grand Prix, Hamilton said: “I don’t know if they’re aware of the weight of their decisions. They ultimately steer careers. Can decide results of championships, as you’ve seen in the past. Some work needs to be done there, I’m sure.”

The FIA does not comment on stewards’ decisions as they are meant to operate independently from the governing body.

Meta anticipated earning about 10% of its total annual revenue, or $16 billion, from advertising for scams and banned items, according to internal documents reviewed by Reuters. The documents reveal that for at least three years, the company failed to stop a significant number of ads exposing its billions of users on Facebook, Instagram, and WhatsApp to fraudulent schemes, illegal casinos, and banned medical products. On average, around 15 billion “higher risk” scam ads, showing clear signs of fraud, were displayed daily on these platforms. Meta reportedly generates about $7 billion annually from these scam ads.

Many of these ads were linked to marketers flagged by Meta’s internal systems. However, the company only bans advertisers if fraud is at least 95% certain according to its systems. If less certain but still suspect, Meta imposes higher ad rates as a penalty instead of outright banning them. This approach aims to deter dubious advertisers without fully eliminating them. The company’s ad-personalization system also ensures that users who click on scam ads see more of them based on their interests.

The documents create an image of Meta grappling with the extent of abuse on its platforms while hesitating to take stronger actions that could impact its revenue. The acceptance of revenue from suspicious sources highlights a lack of oversight in the advertising industry, as noted by fraud expert Sandeep Abraham. Meta’s spokesperson, Andy Stone, counters that the documents provide a biased view and argues that the actual share of revenue from scam ads would be lower than estimated. He claimed the plan aimed to validate investments in combating fraud.

Stone mentioned that Meta has significantly reduced user reports of scam ads globally and removed millions of scam ad content in recent efforts. The company aims for major reductions in scam ads in the upcoming year. Despite this, internal research indicates that Meta’s platforms are central to the global fraud economy, with one presentation estimating they contribute to a third of all successful fraud in the U. S. Competitors were noted to have better systems to combat fraud.

As regulators step up pressure for stronger consumer protections, the documents reveal the U. S. Securities and Exchange Commission is investigating Meta for financial scam ads. In Britain, regulators identified Meta as the source of over half of the payment-related scam losses in 2023. The company has acknowledged that addressing illicit advertising may hurt its revenue.

Meta is investing heavily in technology and has plans for extensive capital expenditures in AI. CEO Mark Zuckerberg reassured investors that their advertising revenue can support these projects. The internal documents suggest a careful consideration of the financial impact of increasing measures against scam ads, indicating that while the company intends to reduce illicit revenue, it is wary of the potential business implications.

Despite planning to diminish scam ads’ revenue share, Meta is bracing for regulatory fines, estimating penalties that could reach up to $1 billion. However, these fines are viewed as comparatively minor against the income from scam ads, which already generates significant revenue. The leadership’s strategy shows a tendency to react to regulatory pressure rather than implementing proactive measures to vet advertisers effectively. Stone disputed claims that Meta’s policy is to act only under regulatory threat.

Meta has set limits on how much revenue it can afford to lose from actions against suspect advertisers. In early 2025, a document revealed that the team reviewing questionable ads was restricted to a loss of no more than 0.15% of company revenue, which equated to around $135 million from Meta’s total of $90 billion in the same period. A manager noted that this revenue cap included both scam ads and harmless ads that might be mistakenly blocked, indicating strict financial boundaries in their approach.

Under increasing pressure to manage scams more effectively, Meta’s executives proposed a moderate strategy to CEO Mark Zuckerberg in October 2024. Instead of a drastic approach, they suggested targeting countries where they anticipated regulatory action. Their goal was to reduce the revenue lost to scams, illegal gambling, and prohibited goods from approximately 10.1% in 2024 to 7.3% by the end of 2025, with further reductions planned for subsequent years.

A surge in online fraud was noted in 2022, when Meta uncovered a network of accounts pretending to be U. S. military members trying to scam Facebook users. Other scams, such as sextortion, were also rising. Yet, at that time, Meta invested little in automated systems to detect such scams and categorized them as a low-priority issue. Internal documents showed efforts were mainly focused on fraudsters impersonating celebrities, which threatened to alienate advertisers and users alike. However, layoffs at Meta affected the enforcement team, as many working on advertiser rights were let go, and resources shifted heavily toward virtual reality and AI projects.

Despite layoffs, Meta claimed to have increased its staff handling scam advertising. However, data from 2023 revealed that Meta was ignoring about 96% of valid scam reports filed by users, suggesting a significant gap in their response to customer concerns. The safety staff aimed to improve this by reducing the number of dismissed reports to no more than 75% in the future.

Instances of user frustration were evident, such as a recruiter for the Royal Canadian Air Force who lost access to her account after being hacked. Despite multiple reports to Meta, her account remained active, even sharing false cryptocurrency investment opportunities that defrauded her connections. Reports indicated that she had many people flag her account, but it took about a month before Meta finally removed it.

Meta refers to scams that do not involve paid ads as “organic,” which include free classified ads, fake dating profiles, and fraudulent medical claims. A report from December 2024 stated that users face approximately 22 billion organic scam attempts each day, alongside 15 billion scam ads, highlighting the company’s ongoing struggle to manage fraud effectively. Internal documents suggest that Meta’s efforts to police fraud are not capturing much of the scam activity occurring across its platforms.

In Singapore, police shared a list of 146 scams targeting local users, but Meta staff found that only 23% of these scams broke the platform’s policies. The remaining 77% went against the spirit of the rules but not the exact wording. Examples of unchecked scams included fake offers on designer clothes, false concert tickets, and job ads pretending to be from major tech firms. In one case, Meta discovered scam ads claiming to belong to the Canadian prime minister, yet the existing rules wouldn’t flag the account.

Even when advertisers are found to be scamming, the rules can be lenient. Small advertisers need to be flagged for scams eight times before being blocked, while larger ones can have over 500 complaints without being shut down. Some scams generated significant revenue; for example, four removed ads were linked to $67 million monthly.

An employee initiated reports highlighting the “Scammiest Scammer” each week to raise awareness, but some flagged accounts remained active for months. Meta tried to deter scammers by charging them more in ad auctions, labeling this practice “penalty bids. ” Advertisers suspected of fraud would have to bid higher amounts, thus reducing competition for legitimate advertisers. Meta aimed to decrease scam ads from this approach, which showed some success, resulting in fewer scam reports and a slight dip in overall ad revenue.

With information from Reuters