Russia’s Ministry of Defense has a spending problem. That’s not just because the country started a war of choice against Ukraine, at a staggering human and economic cost; it’s also because the military system is riddled with corruption, and no one has been able to get a grip on it.
Of course, it’s true that Vladimir Putin’s Russia — like many post-Soviet authoritarian systems — is built on dense patronage networks that allow members of the president’s inner circle to steal money. This form of corruption is watched and, when the moment is right, the targeted individual can be “caught” doing what the regime has known they were doing all along. The message is: Behave as expected, or your crimes will be revealed, and you will be disgraced.
But there are limits. The Russian budget is under huge pressure. Whatever the results of the US-Israeli war on Iran — Washington has, for example, temporarily eased sanctions on Russian oil — any relief can’t come soon enough. The Kremlin is now in serious talks about slashing the 2026 budget by 10%. Any cuts would fall mainly on the civilian side of the economy, while military spending remains untouched.
Even so, the Defense Ministry remains under significant political pressure, something demonstrated by the continuing campaign against graft. Early in March, the regime announced the arrest on corruption charges of yet another former deputy defense minister: Ruslan Tsalikov, a close, long-time associate of Sergey Shoigu, who led the ministry until 2024. He was a much-decorated official — a full Knight of the Merit to the Fatherland Order who had been rewarded “for impeccable service.”
Tsalikov is accused of creating a criminal group to steal from the state budget from 2017-24, and of bribery and money laundering.
The Russia of 2026 is saying that the Russia of 2024 and before was corrupt at the highest levels. That is one reason why Shoigu was replaced by Andrei Belousov, an economist with no military background two years ago. The Kremlin’s public explanation, echoed by analysts, was simple: impose discipline on the war budget’s exponential growth.
This has not worked. Every Russian budget since 2022 has promised to cut military spending in two or three years — and none has done so.
Unable to reduce outlays, the Kremlin has nonetheless made efforts to spend more efficiently. At least, that is one way to read parallel processes that have been unfolding inside the defense ministry over the past two years.
The first involved arguably the most sweeping internal officials purge in the history of modern Russia.
Shoigu’s removal as minister in May 2024 was preceded by the arrest of several close associates, including another deputy minister. But the purge didn’t stop when the leadership changed.
It has now lasted two years, and more than 70 individuals have been detained so far. Nearly half are officials from the Defense Ministry or its subordinate organizations, the other half are their suppliers and contractors (see chart). By comparison, the previous Defense Ministry purge, which also accompanied a change of minister in 2012, swept up fewer than 20 people and barely touched senior officials.
In autocracies, high-profile anti-corruption cases are usually a tool for redistributing rents. But sometimes, given the right incentives at the top, something closer to performance-driven anti-corruption emerges. The Kremlin clearly has those incentives now: Putin wants his war machine to be more effective.
The relentlessly expanding purge at the Defense Ministry may well serve that goal. The FSB-led security services are dismantling the rent-extraction networks built up under Shoigu’s team, clearing the way for new leadership to restructure the ministry more quickly.
The identity of the targets supports this argument. Roughly 85% of defendants come from the logistics side of the military machine — construction, food supply, and ammunition. All four arrested deputy ministers oversaw this domain. The armament side has barely been touched during the purges.
Yet there is every reason to think corruption is as deeply embedded across the Russian military system. The asymmetry in the purge may reflect a deliberate priority: to squeeze costs in logistics and support, so that spending on armament can keep growing.
The classified-versus-open military spending ratio offers indirect confirmation. Until 2023, the split was roughly equal. By 2024–2025, the share of classified expenditure, which primarily covers armament procurement, had risen to nearly 70%.
The purge is only half the story. Alongside it, a second process has been unfolding inside the Defense Ministry — one that points to a different kind of transformation.
Until 2024, the ministry, like much of the Russian federal bureaucracy, was run as the private fiefdom of a single elite faction. Even if the General Staff reported directly to Putin, Shoigu controlled the “business” side of the ministry and used it to cultivate his patronage network.
His successor, Belousov, likely commands a smaller network of his own — although Dossier has published documents about his private life, including an Italian villa. Despite the fact that he begins official meetings with a prayer, it is likely Belousov has built new rent-extraction chains given the sheer scale of the defense budget. But the Kremlin changed strategy — rather than handing the ministry to a single faction, it shifted it to collective management. At least, that is what the biography of the new deputy minister lineup suggests.
Belousov himself managed to place only one close ally among his 10 deputies: Oleg Savelyev, a colleague from his years at the Economics Ministry. Pavel Fradkov was another appointee – he is a figure with security service ties, son of a former SVR chief, and brother of the head of the state-controlled bank financing military procurement.
The first deputy minister slot went to Leonid Gornin, a senior Finance Ministry technocrat. Despite a superficially similar background to Belousov’s, Gornin represents a different wing of the economic bureaucracy — he is closer to the tight-money faction around the finance minister and central bank head, and considerably more skeptical of the large-scale state investment agenda that Belousov has long championed.
Another deputy minister is Anna Tsiviliova — Putin’s niece and head of the Defenders of the Fatherland foundation, the state veterans’ fund that functions, in practice, as a political control mechanism over that constituency.
Two more deputies — Alexei Krivoruchko and Vasily Osmakov, who oversee the armament sector — are close to Sergei Chemezov, the powerful head of the state-owned defense conglomerate Rostec, and one of Putin’s longest-standing allies.
The remaining four deputies, including Chief of the General Staff Valery Gerasimov, come from the military. Three held their posts through the 2024 reshuffle. The fourth, Alexander Sanchik, a career officer who commanded major Russian formations in Ukraine, was personally introduced to his new role by Putin in November. Sanchik will oversee most logistics departments.
Two years after Shoigu’s removal, both the purge and the shift to collective management appear to be structural rather than temporary changes. Together they point to a system designed not to reduce war spending, but to make Russia’s war machine run more efficiently under tighter political control.
That much is clear. It is less clear whether the changes are actually achieving the efficiencies that Putin seeks or whether Russia’s old boy system has pioneered new methods to rob the taxpayer, and short-change the soldiers at the front.
Mikhail Komin is a fellow with the Democratic Resilience program at the Center for European Policy Analysis (CEPA). He is a political scientist and Russia expert focusing on elites, the bureaucracy, government data, and the policymaking process.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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