January 11, 2025: The 2022 Russian invasion of Ukraine failed as a military effort but was successful at creating many new opportunities for corruption. This included Russians of all types. At the high end, senior officials at the Defense ministry were outrageously corrupt and did little to hide it. These men were safe in the knowledge that if any of them were prosecuted, they could bribe their way out and still have a lot of money left.

The current round of corruption scandals began in mid-2024 with the arrest of a Russian deputy defense minister. Then the head of the ministry’s personnel directorate was hauled into court. Within weeks more arrests were made. All those detained faced charges of corruption, which were usually denied. The arrests started shortly before President Vladimir Putin began his fifth term on May 7. 2024 as a longtime ally, longtime Defense Minister Sergei Shoigu, was demoted.

This immediately raised questions about whether Putin was reasserting control over the Defense Ministry amid the war in Ukraine, whether a turf battle had broken out between the military and the security services, or whether some other scenario was playing out in Moscow. To many this seemed to be a return to the Russian government long described as a riddle, wrapped in a mystery, inside an enigma.

Corruption scandals are not new and officials and top officials have been accused of profiting from their positions for decades. Corruption in Russia is used to encourage some officials, while prosecutions punish those who do not collaborate. Corruption is used to encourage officials to remain loyal to Vladimir Putin or one of Putin’s associates.

Then there is the blackmail technique. Putin prefers officials with embarrassing secrets. When selecting key officials in his government Putin selects the ones most vulnerable to blackmail. Putin wants subordinates who have a secret they want kept secret. The Russian government constantly searches for such secrets so it can threaten to publicize them if the officials do not do as they are told. This hidden secret policy and tolerance for corruption are the key elements in running the current Russian government.

Since 2022 the Ukraine War has led to much larger defense spending that has increased opportunities for graft. In 2021 the Russian defense budget was 2.7 percent of GDP but in 2024 it was six percent. Over the next few years the government plans to spend 30 percent of the government budget on the military.

Earlier in 2024 the first official arrested for corruption was a former Deputy Defense Minister who presided over military-related construction projects that had high priority, access to lots of money and few financial controls. One of the projects was the reconstruction of the devastated Ukrainian port city of Mariupol. The Ukrainians held out for a long time and the Russians had to fight hard to capture a city of ruins and unusable factories and port facilities.

The recent arrests are not described as part of an anti-corruption campaign but rather ongoing activities throughout the Russian government. That’s another way of admitting that corruption was everywhere and ongoing as an essential element of making the government work.

Key officials make little effort to hide their new wealth. They do this through ostentatious displays ranging from hundred million dollar yachts to new wrist watches that cost several times their official annual salaries. These displays of stolen wealth by senior government and military officials and their family members were so extensive and obvious that it enraged Russians who were suffering economically because of the cost of the war.

There were more personal costs because nearly a million Russian soldiers have been killed, disabled or disappeared in Ukraine since early 2022, and their families and friends blame the Russian government because it was Russia that invaded Ukraine, not the other way around. During World War II, the last time Russia was invaded, there was little corruption in part because 13 percent of Russians died in that war. Most of them were killed by the Germans but many were killed by the Russian government in order to maintain loyalty.

After 1941 prompt obedience to orders was a matter of life or death for Russian soldiers and civilians because military officers and NKVD secret police personnel could kill any Russian displaying reluctance or refusal to carry out orders. The desperate situation during World War II limited opportunities for corruption. The war in Ukraine is different but as many corrupt officials are discovering, not different enough to keep them out of prison or an early grave.

The recent arrests, prosecutions and imprisonment of senior officials who were corrupt, or too obviously corrupt, has sent a message to all senior officials in jobs giving them access to the swollen defense budget that is now 6.7 percent of GDP. Before the invasion it was 2.7 percent. Putin thought the invasion would quickly overthrow the Ukrainian government. That did not happen and the costs of that war are more than Russia can afford. This is nothing new, it was decades of spending 15 percent of GDP on defense, and tolerating a lot of corruption by senior officials, that caused the Soviet Union to collapse in 1991. Many Russian economists and bankers believe another economic collapse, similar to what destroyed the Soviet Union, is possible unless the increased defense spending is restrained along with the growing corruption.