Reconstruction Official Resigns, Highlighting Tensions in Ukraine

A Ukrainian official with a long record of anti-corruption advocacy resigned on Monday from a government agency overseeing mostly Western-financed reconstruction work in Ukraine, citing poor management of funds. His departure highlights the tension inside the government of President Volodymyr Zelensky over the allocation of wartime aid.

The official, Mustafa Nayyem, who had been director of the State Agency for Restoring Ukraine, did not allege any outright embezzlement. But his claims of abuse and mismanagement risked setting back efforts by the government to assuage concerns among the United States and other allies about providing billions in aid to Ukraine’s war effort.

He was the second top official involved in Ukraine’s reconstruction effort to depart in the last month, following the firing in May of Oleksandr Kubrakov, the minister of infrastructure. Mr. Kubrakov’s ministry oversaw the agency Mr. Nayyem headed.

Mr. Kubrakov was perceived in Kyiv political circles as a figure aligned with the United States on spending priorities for rebuilding aid — a stance that grated on other leaders in the government who resented what they viewed as intrusive American oversight. Both he and Mr. Nayyem had spoken out against bribery in the construction business.

The Agency for Restoring Ukraine was established during the war to streamline and safeguard funding for reconstruction, which is expected to eventually draw in tens of billions of dollars in foreign aid, given the scale of destruction during the war. Ukraine and some allies are promoting the seizure of Russian assets to finance the work.

Preventing abuse has been a priority of American policymakers, and it was a concern raised by members of Congress while a $61 billion military and financial aid package was debated earlier this year. That package was eventually approved in late April.

The reconstruction agency that Mr. Nayyem had headed oversaw a budget last year of 100 billion hryvnia, the Ukrainian currency, or about $2.5 billion, largely financed, like most nonmilitary spending in Ukraine, by foreign aid.

Its projects were wide-ranging. The agency financed efforts to construct physical barriers to protect vulnerable electrical equipment at power plants, in cases when air defense systems failed to protect sites. The agency repaired water mains, bridges and roads.

In a telephone interview, and a letter explaining his resignation posted on Facebook, Mr. Nayyem cited no specific instance of corruption. Instead, he listed what he claimed were a slew of bureaucratic obstacles thrown in the way of the agency’s work, delaying project approvals and payments of contractors. Salaries for the agency’s staff were cut, he said, in what he called an effort to undermine the organization’s work.

“Since November last year, the agency team faced constant confrontation, resistance and artificial obstacles,” he wrote in his Facebook post.

The office of Mr. Zelensky did not immediately respond to a query about the resignation or Mr. Nayyem’s allegations of mismanagement.

Despite setbacks, Mr. Nayyem said, most projects were completed.

Last fall, Mr. Nayyem reported two members of Parliament to anti-corruption authorities over accusations they had attempted to pay a bribe. Those cases are in court now.

Foreign aid has been a fraught issue in Ukraine for years, predating the war, with Ukrainian leaders pushing back on Western efforts to leverage aid as a way to steer personnel policies or back overhauls in government that threaten vested interests.

Mr. Nayyem described bureaucratic foot-dragging seemingly intended to sideline the work of the reconstruction agency.

“Transparency and predictability on this issue is crucial because the money is from taxpayers,” Mr. Nayyem said in the interview. “The biggest asset we have now is trust. And at this moment, those who tried to make this system transparent and accountable had to leave.”

Mr. Nayyem’s resignation made for awkward timing, coming a day before a major donor conference on reconstruction in Berlin. Ukrainian authorities had excluded him from the delegation, upending meetings he said he had scheduled with foreign officials about donations for Ukrainian reconstruction.

By evening on Monday, Mr. Nayyem and the government were in open disagreement about why he had been excluded from the delegation. Government officials told the Ukrainian media that the prime minister had scheduled a meeting with Mr. Nayyem for Wednesday, while Mr. Nayyem said he had never received such an invitation.

Despite the urgent need to repair damage to electrical plants, roads, bridges and waterworks damaged by Russian missile attacks, contractors went unpaid for months, Mr. Nayyem said in the interview. Some projects bogged down because of nonpayment, he said.

The agency had financed some military fortification works in the Sumy region, in northeastern Ukraine, and the Donetsk region, in eastern Ukraine. Mr. Nayyem wrote in a letter explaining his resignation that payments for these contracts and others had been “delayed for months.”

“All of this negatively affects the country’s defense capability,” he wrote.

The projects that were completed, he said, included building protective barriers around electrical equipment at 103 sites, to safeguard machinery from shrapnel. The barriers helped protect against missile strikes in three regions, he said, allowing engineers to more quickly restore electricity.

Given the tangle of government permits and deals with construction companies needed to repair war damage, some setback are inevitable, said Tymofiy Mylovanov, a former Ukrainian economy minister. “It’s a wartime environment so not everything is working smoothly. You are troubleshooting all the time.”