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Corruption Watch: April 3, 2003

3 April 2003, Volume 3, Number 11
By Roman Kupchinsky

State Department official Brenda Greenberg told CNN on 23 March that senior U.S. officials had made a series of requests to Russian officials concerning a halt to sales of antitank missiles and jamming equipment to the Iraqi military. Greenberg was quoted by the "Financial Times" on 24 March as having told CNN: "We...have raised the issue with the Russian government a number of times, including at senior levels and particularly in the last two weeks."

According to the "Financial Times" U.S. intelligence discovered that "employees of Aviaconversia, the company reported to have been providing equipment to Baghdad, were still providing assistance in Iraq."

A story in "The Washington Post" on 23 March reported that Russian officials in Moscow and Washington had been given names, addresses, telephone numbers "and in some cases, shipping dates and ports of exit."

Moscow denied the charges on 24 March. Citing Aleksei Volin, deputy head of the Russian government apparatus, Interfax wrote: "The Russian Federation is not delivering weapons or weapons systems to Iraq and strictly observes all UN Security Council resolutions passed with regard to Iraq."

AP on 24 March quoted a number of Russian officials denying the charges, including the director of Aviaconversiya, Oleg Antonov, who said, "We have never delivered anything to Iraq."

Reports that Russia has been selling arms to Iraq have surfaced repeatedly in recent months. On 23 February, "The Sacramento Bee" reported that Russian-made S-300P missiles had been sold by a Russian-Belarusian company (see "RFE/RL Organized Crime and Terrorism Watch," 13 March 2003). On 8 February, the "Financial Times" reported that Russian suppliers had attempted to sell Igla surface-to-air missiles "where the ultimate destination of Iraq was concealed by using 'cover' purchasers in neighboring countries such as Syria."

Writing in "The Moscow Times" of 27 March, Pavel Felgenhauer, a Russian military specialist, said: "Andrei Kokoshin, who was in charge of arms-export control inside the [Russian] Defense Ministry for several years, is clearly guarded in the wording of his denial. Maybe this can be partially explained by the fact that in 1997 I told Kokoshin I had evidence Moscow was constantly and massively breaching the arms sanctions regime on Iraq. (In 1997 Kokoshin did not confirm, comment on or deny the allegations.)

"In September 1990, after Saddam Hussein's invasion of Kuwait, the Soviet government issued executive Order 1422, which banned all arms and military technology trade with Iraq 'in accordance with the UN Security Council resolution.' Some 80 percent of the hardware of the Iraqi military is Soviet-made. If sanctions had indeed been watertight since September 1990, today there would not be a single Iraqi jet or helicopter flying, tank rolling, or radar or SAM battery operating due to a lack of spare parts and adequate maintenance. Hussein's army and Republican Guard would long ago have disintegrated.

"There have been large-scale breaches of the sanctions regime all these years. These violations are the main reason that today so much force is needed to dislodge Hussein."

Felgenhauer wrote that in January 1997 he received reliable information that, in 1995 and 1996, Iraq acquired 20 Mi-24 Hind attack helicopters in violation of the arms embargo. A Bulgarian trading company called Kintex was reported to have shipped the Hinds in containers into Iraq.

Felgenhauer wrote in "The Moscow Times" that, "The country of origin of the Hinds may have been Russia or Ukraine."

Robert Goldberg, a writer specializing in bioterrorism and medical innovation, provided the following information in "The Wall Street Journal Europe" on 27 March: "In 1999 Russia agreed to sell Saddam Hussein $100 million worth of military hardware. The deal involved Ahmed Murtada Ahmed Khalil, the transport and communications minister, who ran the biological weapons program at the Salman Pak facility outside Baghdad, and who knew exactly what Iraq would need in order to rebuild its WMD [weapons of mass destruction] program after the Gulf War."


According to "Jane's Intelligence Digest" of 28 March, Lebanese intelligence officers in January were tipped off by their Western counterparts that a large consignment of innocently labeled cargo at Beirut airport that had arrived from Belarus in fact contained military equipment. The 12 tons of equipment included 600 helmets, army uniforms, 240 wireless communication sets for tank crews and other military items that had arrived aboard a flight from Minsk on 12 January (see "Jane's Intelligence Digest," 12 January 2003). Investigations revealed that the military equipment was destined for Iraq and was being shipped via Syrian middlemen. Belarusian officials denied that the material had originated in Belarus but accepted that Minsk, just like Syria, could be a transit country for them. Belarusian President Alyaksandr Lukashenka, Russia's closest ally in the Commonwealth of Independent States, described the Lebanese accusations as "thoughtless and senseless statements."

"Jane's Intelligence Digest" wrote: "Between 1996-2000, Belarus ranked tenth in the world's arms exporters, not far behind Ukraine which was in seventh place, although Ukraine is a far larger and more populous state. Belarusian arms deals, in common with arms exports from Russia and Ukraine, are highly secret and the details are not open to public scrutiny. Funds earned from Belarusian arms exports go directly into secret funds controlled by the country's controversial president...Lukashenka. These accounts are handled internally by the presidential administration and are used to help prop up the authoritarian regime ruled over by the former Soviet-era collective farm director." RK

Khalid Shaykh Mohammad, the Al-Qaeda chief of operations captured in Rawalpindi, Pakistan, on 1 March, has reportedly been telling interrogators of planned attacks by Al-Qaeda on targets in a number of countries. Reporting on this development, "The New York Times" of 20 March wrote: "According to a source knowledgeable about his interrogation, Mohammed has told captors that Al-Qaeda has planned attacks on U.S. convoys in Afghanistan; nightclubs in Dubai, United Arab Emirates; and targets in Turkey. In addition, Mohammed has said Al-Qaeda's link to extremist groups in South Asia, Riduan Isamuddin, also known as Hambali, has planned attacks on oil interests and an Israeli embassy in the region."

U.S. officials have stated that they are checking on his story. "The New York Times" added: "'He's talked about a whole gamut of attacks in the works,' a senior FBI counter terrorism official said. 'We're trying to run everything down to see if he's telling the truth.' Mohammed is being questioned at an undisclosed location abroad."

As this information was being verified, a number of clashes took place between U.S. forces and unidentified gunmen.

"The Boston Globe" on 26 March reported that a firefight occurred on 24 March, when U.S. special forces patrolling a stretch of road from Gardez to Khost in southeastern Afghanistan came under fire from 10 to 20 unknown assailants, prompting the Americans to call in Apache helicopter gunships, according to U.S. military spokesman Colonel Roger King.

On 25 March, U.S. forces found a weapons cache which "The Boston Globe" described as "one of the biggest weapons caches found since the war on terror began." It contained 170-millimeter rockets, two 82-millimeter mortars, and 400 mortar rounds. There were also two antiaircraft cannons, thousands of rocket-propelled grenades with eight launchers, and thousands of machinegun rounds.

Meanwhile, the "Turkish Daily News" reported on 24 March that Afghan authorities had dispatched a mediation team to a remote northern village to resolve a dispute between two warring factions involving the theft of 250 sheep, a UN spokesman said. RK

The ruling Social Democratic Party (CSSD) accepted a gift of 5 million Czech crowns ($167,700) in 2002 from a Czech company, B.H. Centrum, with management links to the Housing & Construction (H&C) consortium that was awarded a controversial government contract to build and manage highway D47, according to the CTK press agency on 25 March.

CSSD Deputy Chairman Karel Kobes, who is in charge of party finances, denied any link between the gift and the highway contract. The contract was awarded to H&C without a tender. The deal subsequently came under media scrutiny, and the new prime minister, Vladimir Spidla, asked police to conduct an investigation that is still ongoing (also see "RFE/RL Organized Crime and Terrorism Watch," 27 March 2003). Minister for Transportation and Communications Milan Simonovsky on 20 March recommended that the contract be annulled, according to CTK.

Then, on 31 March, cabinet ministers backed out of the multibillion-dollar commitment, instead opting for financing the construction through bond issues and other means, the daily "Hospodarske noviny" reported the next day. The paper cited the Transportation Ministry as saying the move is likely to lower the price tag on the project from more than $4 billion to about $2.6 billion. The D47 highway will also be ready one year earlier, in 2008 rather than 2009, ministry sources said. A "Hospodarske noviny" commentary on 1 April pointed out that the cabinet move came just one day after Premier Spidla defeated the "Zeman wing" at a Social Democratic Party conference (see "RFE/RL Newsline," 31 March 2003). RK/Andy Heil

The body of journalist Iosif Costina, who disappeared last June, was identified by Costina's dentist, who was able to recognize dental work he had performed on Costina, Mediafax reported on 26 March. Costina's remains were found in late March near a railway track in a village in the vicinity of Timisoara. Near the body were also found some tranquilizers, in what the media speculated was an attempt to disguise a murder as a suicide. Costina was an active participant in the 1989 Timisoara uprising, was active in attempts to expose former Securitate informers, and was working on a book on the Timisoara underworld. Michael Shafir

Boris Berezovskii, the self-exiled Russian billionaire and former media mogul, was arrested by British police in London on 24 March. According to "The New York Times" of 26 March, the detention signals the start of legal proceedings that could lead to his eventual extradition to Moscow to stand trial on fraud charges. Extradition proceedings in Britain can take years.

Berezovskii, 57, was arrested along with Yuli Dubov, 54 a former chief executive of the Logovaz car company, on charges of fraud brought by Russian authorities. "The New York Times" wrote that: "'The charge alleges that between Jan. 1, 1994, and Dec. 31, 1995, they defrauded the administration of the Samara region of 60 billion rubles whilst being directors of Logovaz,' the police said. At the average exchange rate for that period, 60 billion rubles was equal to about $18 million."

Both men were released and ordered to appear in court for preliminary hearings on 2 April. Berezovskii's lawyer, Andrew Stephenson, told "The New York Times" that the arrest had taken place "by appointment" at a prearranged meeting with the police.

In a telephone interview with the Russian newspaper "Vremya novostei" on 26 March, Berezovskii reportedly said he and Dubov had each been required to post $155,000 bail.

Berezovskii arrived in Britain in 2001, seeking permanent residence which thus far has not been granted to him by the British authorities. Berezovskyii has accused President Vladimir Putin of knowing that the Federal Security Service (FBS) in Russia carried out bombings of apartment buildings in Russia in 1999, contrary to official allegations that Chechen separatists were responsible.

"The Times" of London commented on the case in its 26 March edition: "Russia's extradition request for [Berezovskii] presents Britain with a dilemma. President Putin is sure to put personal pressure on [British Prime Minister] Tony Blair to deliver the man whom the Kremlin sees as its most insidious enemy. Mr Blair, however important it is to keep close links with Moscow during the Iraq war, cannot afford any suggestion that the courts will be influenced by political considerations." RK

The Ukrainian Prosecutor-General's Office announced on 23 March that it had arrested former Deputy Prime Minister Leonid Kozachenko on charges of abusing his position and tax evasion, according to the weekly "Eastern Economist" of 27 March.

Kozachenko, a deputy prime minister in charge of agriculture in the government of Anatoliy Kinakh that was replaced last year by the new government headed by Viktor Yanukovich, was accused by prosecutors of having artificially lowered prices for corn in the interests of corn traders, a move that is alleged to have cost the Ukrainian economy 1.5 billion hryvnyas ($28 million).

The tax-evasion charge relates to the year 2000, when Kozachenko headed a company called Ukragrobusiness. According to prosecutors, Kozachenko received shares of stock worth more than 1.5 million hryvnyas ($283,000) as a gift from two foreign companies that he failed to declare, thus saving a total of 584,940 hryvnyasin taxes.

If convicted, Kozachenko could face prison sentences of up to eight years for abuse of power and 10 years for tax evasion.

According to the "Eastern Economist" of 27 March, "accusations against Kozachenko for tax evasion and abuse of power while in office were political and intended to aid current Vice Premier for Agricultural Policy Ivan Kyrylenko gain substantial influence in the Agrarian Party ahead of the 2004 presidential election."

The Ukrainian Union of Industrialists and Entrepreneurs, a group headed by former Prime Minister Kinakh, described the criminal case against Kozachenko as a "trumped-up case launched as part of the heated political struggle in the country," Interfax Ukraine press agency reported on 25 March. RK