‘No End in Sight, Billions Are Stolen’: Russia Investigates Fraud in Space Program

Prosecutors have reportedly uncovered almost $1.6 billion rubles ($24.6 million) lost to corruption in the Russian space program over the past five years. “There’s no end in sight, billions are stolen,” chief investigator Alexander Bastrykin ruefully declared on Wednesday.

According to Bastrykin, this corruption was not elegant or well-hidden. “It’s a very simple scheme: The money is first moved abroad, then the family leaves, and then the defendant follows,” he said.

“Bastrykin’s scathing comments came as news emerged that the head of a Roscosmos subsidiary in charge of satellite and ballistic-missile research had fled Russia in April and tendered his resignation from abroad after his institute fell target to at least 14 separate audits and investigations,” the Moscow Times reported.

Roscosmos is the Russian space agency. The incident referenced by the Moscow Times involved Yury Yaskin, director general of the Space Device Engineering Research Institute, a division of an aerospace company controlled by Roscosmos. Yaskin became aware Roscosmos was auditing his operation and decided to take a business trip out of the country. When Russia’s feared FSB state security service began auditing Yaskin personally, he decided not to come back. His current whereabouts are unknown, but Russian media sources say he has been spotted in Greece.

Investigators are reportedly uncertain what Yaskin was afraid the auditors would find, but charges of corruption have been swirling around Roscosmos for years.

Three top executives from rocket manufacturer Energia were charged with fraud last summer, a month after an executive from a spacecraft construction firm was charged with embezzling almost $5 million in U.S. dollars from his company. Another executive connected to the Russian space program, former Tekhnomash CEO Dmitry Panov, was arrested in April after the results of a company audit were forwarded to Russian prosecutors.

“Procurement procedures are bad, prices are too high, many projects are unfinished or halted, and funds stand unused for months, and several billion have been lost – stolen – and investigations are ongoing,” top auditor and former finance minister Alexei Kudrin said in November.

Hundreds of irregularities have been discovered in accounts linked to the Russian space program, even as it suffered a string of embarrassing setbacks on the launch pad and in orbit aboard the International Space Station. Corruption and political squabbles have been blamed for many of Roscosmos’ quality control issues.

Russian President Vladimir Putin attempted to rein in Roscosmos by appointing his close ally Dmitry Rogozin, formerly deputy prime minister, to direct the space agency.

Rogozin is a hardline Russian nationalist sanctioned by the United States in 2014 over Russia’s activities in Ukraine, making it difficult for him to attend some meetings with American and European space officials, and his own personal finances are a bit suspicious. Rogozin has no background in space science and little in the way of diplomatic sensibility. When a problem cropped up with Russian equipment aboard the International Space Station in September, he responded by accusing American astronauts of deliberate sabotage.

Some veteran Russian engineers and cosmonauts believe the space program has been hollowed out by political interference and corruption, and will soon fall hopelessly behind American and European efforts.