Eggs, ammo and underwear: Inside Ukraine’s new push against military graft

At the same time, a quieter operation is being waged by a new team of professionals including a former energy executive called Maryna Bezrukova. From her office in a gleaming business center in Kyiv, she is on a quest to save money and ensure new arms contracts are untainted.

“We need to change the system," said Bezrukova, who became head of Ukraine’s Defense Procurement Agency earlier this year. “Unless we change the system, nothing will happen."

As Ukraine faces setbacks on the battlefield in the third year of Russia’s invasion, attention has turned to corruption that is corroding support for the war effort at home and abroad.

Allegations of graft have helped galvanize Republican opponents of military aid to Kyiv, who are holding a $60 billion package hostage to their demands for tighter border control. Short of munitions and men, Ukrainian forces are struggling to hold the line against a much larger enemy. Corruption is also denting morale and making it harder to persuade more Ukrainians to risk their lives.

Ukrainian anticorruption activists say the steely-eyed Bezrukova has what it takes to challenge entrenched interests and shady middlemen while negotiating arms deals worth billions of dollars. Her efforts to clean up arms procurement could prove more meaningful than the recent spate of arrests, they say. But the scale of the challenge is huge. “Of course, it’s not easy," said Bezrukova, likening her mission to sewing a parachute while in freefall.

The appointment of Bezrukova follows a series of procurement scandals that erupted after Ukrainian investigative journalists revealed the Defense Ministry had purchased eggs at more than twice their market price. President Volodymyr Zelensky fired the country’s defense minister in an effort to quell a furor in Ukraine and disquiet among Western allies.

Since then, law enforcement has carried out a number of corruption-related arrests. Among the most high-profile cases is that of businessman Ihor Hrynkevych, whose companies won contracts to supply clothing and underwear to the armed forces despite previously being involved in construction.

The companies weren’t able to meet the standards outlined in the contracts, resulting in losses of more than $30 million, according to Ukrainian law enforcement. Hrynkevych was detained in December while trying to pay a $500,000 bribe to a security official. His lawyer didn’t respond to a request for comment.

A separate investigation by Ukrainian law enforcement implicated senior defense ministry officials in embezzling $40 million meant to purchase artillery shells for the army.

The new defense minister, Rustem Umerov, has made fixing procurement a priority. “Every stolen hryvnia costs the life and safety of our soldiers," he told parliament when he was sworn in last fall, equating corrupt officials with terrorists.

Corruption has been deeply ingrained in Ukraine’s defense sector since Soviet times, with manufacturers routinely bribing officials to purchase equipment at inflated prices. Changing those practices would be hard enough in peacetime, let alone in the midst of war.

Beyond meeting the immediate needs of Ukrainian soldiers, cleaning up the defense sector is key to Kyiv’s longer-term goal of integration with the West. U.S. officials say there is no evidence that any of the $113 billion it has provided Ukraine in military and economic assistance since the start of the war has been diverted. But they have urged Kyiv to reform defense procurement in line with North Atlantic Treaty Organization standards.

Umerov has put two state-owned enterprises at the forefront of the Defense Ministry’s reform efforts. The State Rear Operator is responsible for procuring fuel, clothing, food and all other “nonlethal" supplies for the armed forces. Weapons procurement is handled by the Defense Procurement Agency.

When Bezrukova was approached about leading the agency last fall, she was an executive board member of national energy company Ukrenergo, where she is credited with developing and implementing a procurement policy that led to significant savings. Reports of procurement fraud in the defense sector had made her feel “disgusted and very upset," she said.

In her new role, Bezrukova began by vetting staff using polygraph testing. “We check employees for cooperation with the enemy and committing corrupt acts," she said. “It is important for us to be 100% confident in our team." If the results suggest someone is lying the team conducts a further investigation, she said.

The agency receives a list of the arms the military needs based on planned operations. It is Bezrukova’s job to purchase them on the best possible terms.

One of her first proposals was to amend legislation so that Ukraine can negotiate three-year contracts instead of one-year deals. “Our system did not allow us to work on a long-term contract basis," she said. “It means that we are buying from stock or short-term production at high prices."

Another problem she identified is “unhealthy" competition between different branches of Ukraine’s security apparatus. With multiple agencies vying for contracts, arms manufacturers can demand higher prices.

The vast majority of Ukraine’s existing arms contracts are with intermediaries, Bezrukova said. That increases the risk of overpaying, and gives Ukraine less visibility and control over supply.

“It’s not always possible, but we’re trying to get rid of the middlemen and go directly to the manufacturer," she said. “Nobody will give you a better price than the manufacturer himself."

That is likely to be met with fierce resistance.

The State Rear Operator was hit with lawsuits and smear campaigns after introducing measures that undercut the position of the Defense Ministry’s traditional food suppliers. “It would be surprising if the beneficiaries of the schemes welcomed the reform," said the head of the agency, Arsen Zhumadilov, in a briefing last month.

Despite the challenges, Zhumadilov, who previously reformed medical procurement for Ukraine’s Health Ministry, last month said the agency had already saved approximately 3 billion hryvnia, the equivalent of about $77 million. In a slick video, the State Rear Operator announced it had purchased eggs for an average of less than 5 hryvnia, or 13 cents, apiece—less than a third of the price that led to the former defense minister’s demise.

Bureaucracy also poses a major obstacle, Bezrukova said. The machinery of government is too slow to keep up with rapidly changing needs on the battlefield, she said. “It’s not only corruption," she said. “It’s inefficiency."

Despite their resolve, activists question whether the reformists have sufficient resources. “There is more political will [to tackle corruption] but probably there is a problem with capacity," said Olena Tregub, who sits on the Defense Ministry’s 15-member anticorruption council, a publicly elected civilian body formed in response to the growing outcry over procurement fraud last year.

The drive for transparency is also at odds with the need for heightened secrecy, making it difficult for anticorruption activists to exercise oversight.

“Obviously we are at war and most of the information has to be hidden," said Daria Kaleniuk, executive director of the Kyiv-based nonprofit Anticorruption Action Center. “However, there must be policies to ensure that we are not just buying weapons from middlemen who can’t deliver them."

And it remains to be seen whether the government will back them when they inevitably run up against more deeply entrenched interests, said Tetyana Nikolaienko, another member of the anticorruption council . “They will have a lot of enemies now."

Write to Isabel Coles at isabel.coles@wsj.com