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Corruption Watch: March 28, 2002

28 March 2002, Volume 2, Number 12
In a 21 March interview with Deutsche Welle that was reproduced by the Turkmen opposition website, a former Turkmen political prisoner claimed that Turkmen President Saparmurat Niyazov condones large-scale drug smuggling from Afghanistan via Ashgabat's international airport, part of which is organized by the Turkmen National Security Ministry, "RFE/RL Newsline" reported on 22 March. Those accusations were based on information reportedly received from the former head of customs at Ashgabat airport, Major Vitalii Usachev, who was arrested in early 1997 after he discovered hundreds of kilograms of heroin in a cargo container guarded by National Security Committee personnel. Usachev was subsequently framed on drug charges and executed. A Deutsche Welle correspondent also claimed that Niyazov established close ties with both the Taliban and Osama bin Laden, and that the money received from drug trafficking is laundered in the United Arab Emirates.

Some of this information seems to confirm what was reported by the U.S. State Department in their annual report on narcotics worldwide. In their report on Turkmenistan for the year 2000, the State Department writes:

"Turkmenistan is not a major producer or source country for illegal drugs or precursor chemicals, but it remains a transit country for the smuggling of narcotics and precursor chemicals. The flow of Afghan opiates destined for markets in Turkey, Russia and Europe, including drugs such as heroin, opium and other opiates enters Turkmenistan directly from Afghanistan, and also indirectly from Iran, Pakistan, Tajikistan and Uzbekistan. The bulk of Turkmen counternarcotics resources and manpower is located on the borders with Afghanistan and Iran. Turkmen crossing points on the Uzbek border, where law enforcement efforts are primarily directed at interdicting smuggled commercial goods, is a potentially attractive route for narcotics traffickers. Caspian Sea ferryboat traffic from Turkmenistan to Azerbaijan and Russia also continues to be a viable smuggling route. In addition, Turkmenistan Airlines operates international flights connecting Ashgabat with Abu Dhabi, Bangkok, Birmingham, England, Frankfurt, Istanbul, London, Moscow, New Delhi and Tehran, all of which could potentially be used by traffickers."

The domestic market in Turkmenistan for narcotics was described in an article written by Shanazar Berdiyev, a member of Radio Free Europe/Radio Liberty's Turkmen Service on the website on 25 January:

"The scale of drug addiction in Turkmenistan is reaching menacing levels. In 1989 there were 124 drug addicts per 100,000 inhabitants of the republic. For comparison: On average, in the USSR this parameter was 28 persons.

Today, according to international experts, the number of registered drug addicts in the country has reached 13,000. According to official data of the Turkmen Ministry of Public Health, in 1996 there were registered 4,087 drug addicts in the country; in 1997, 5,809; in 1998, 8,000. According to data on two-year prescriptions, only in the Mary Region were there 2,000 registered drug addicts. It is noteworthy that this only concerns those addicts registered by medical establishments or drug clinics. Long-term observations show that this is one-tenth of all drug addicts. The number of addicts continues to grow, Turkmen narcotics experts are compelled to state. At the same time, during the last two to three years there have been measures to limit access to official information on the number of addicts. Most likely, this is connected to the severity of the situation and the tendency to avoid the real situation, which darkens the picture of general well-being artificially created by the authorities.

Opium, the traditional drug in Turkmenistan, is used by 80 percent of addicts. According to addicts, heroin has recently become more available than opium everywhere.

Today, Turkmenistan is becoming a transit country for delivery of Afghan heroin to Uzbekistan, Kazakhstan, Russia, and Europe. Turkmenistan shares an 800-kilometer border with Afghanistan. The activity of smugglers on the Turkmen-Afghan border was highlighted four years ago, when more than 40 tons of drugs -- about 2 tons of heroin, 1.5 tons of opium, and 38 tons of hashish -- were smuggled out. The largest quantity of narcotics was seized by customs officers in 1998: 10,558 kilograms of hashish routed from Afghanistan to Russia.

In comparing volumes of intercepted narcotics in Tajikistan, Uzbekistan, and Turkmenistan, the official information coming out of Ashgabat is amazing. According to official data from 2000, 2,900 kilograms of opium and 220 kilograms of heroin were seized. That is much less than in Tajikistan, even though the Turkmen border is more accessible for smuggling because of the flat terrain. Probably, these figures show that the Turkmen authorities deliberately underestimate the volumes in order not to spoil the image of the country. Turkmenbashi (the title by which President Niyazov is called, meaning 'Father of the Turkmen') does not want his country to be called a heroin republic." RK

A recent poll of 1,600 students at Tbilisi State University showed that corruption apparently is not that widespread at the university. During the survey, each student included the five last names of their lecturers in the survey-book. Professionalism, organizational skills, culture of working with students, reputation, honesty, and corruption of lecturers were evaluated through the questions in the survey. As a result of this survey, the last names of lecturers whom students judged to be corrupt were made public. The students stated that corruption is not a common problem but is an issue with specific people. Surveyors concluded from the students' responses that, "It is time to stop talking in the abstract about corruption. Active steps should be taken to revive the university's traditions."

A sample of the results shows that most lecturers are not considered corrupt [names are intentionally left incomplete]:

V. M. (Law Faculty)

Takes bribes/presents: 72 percent "yes"

Forces students to buy his own books: 58 percent "yes"

Forces students to take extra (private) classes with him: 24 percent "yes"

Gives credits (marks) to students unfairly: 81 percent "yes"

Is he corrupt? 75 percent "yes"

S. C. (Law Faculty)

Takes bribes/presents: 69 percent "yes"

Is he corrupt? 70 percent "yes"

G. D. (Law Faculty)

Takes bribes/presents: 92 percent "no"

Is he corrupt? 85 percent "no"

G. T. (Economics)

Takes bribes/presents: 78 percent "no"

Is he corrupt? 61 percent "no"

T. D. (History)

Takes bribes/presents: 94 percent "no"

Is he corrupt? 90 percent "no"

S. D. (History)

Takes bribes/presents: 70 percent "no"

Is he corrupt? 52 percent "no"

Furthermore, the students demanded that the following steps be taken by the university:

1. The formation of a joint working group including experts, university administrators, and students to examine the problems raised by the survey.

2. For the purpose of investigating the accusations made toward corrupt lecturers, establish an independent investigative committee which will consist of an anticorruption council, experts, social organizations, university administrators, and student representatives.

3. Lecturers blamed for corruption should be dismissed from the university until the investigation procedure is completed. RK

At a news conference held on 19 March at the Freedom Institute in Tbilisi, state Anticorruption Council member Givi Targamadze accused Kvemo Kartli Region Governor Levan Mamaladze of money laundering and called on the president to bring Mamaladze to account, Georgian news agency Kavkasia Press reported. Targamadze alleges that Mamaladze and close relatives have interests in businesses located in the Kvemo Kartli Region. Three of Mamaladze's relatives are shareholders along with Australian partners in Madneuli, a Georgian-Australian joint venture.

Targamadze also presented documentation on bank transfers effected by Quartzite Limited, a Georgian company, and Madneuli Limited to various organizations' accounts, which show money being transferred to Kvemo Kartli's TV-4 at a time when it was not functioning. Money was also transferred to finance Mamaladze's business trips. Significant allocations were made to purchase cars. Payments were made to the Martve Rowing Club, which, according to Targamadze, does not exist, and to a non-governmental organization called Sea and run by Mamaladze. Targamadze said Mamaladze made the transfers to launder money. RK

A contraband shipment of 22 military aircraft engines and spare parts was seized by the Russian Customs Service at Kurshskaya Kosa, Kaliningrad Region, ITAR-TASS reported on 20 March. Criminal proceedings have been launched against the Russian and Lithuanian nationals allegedly behind the contraband operation. Two days later, on 22 March, the Baltic News Service reported that these were spare engine parts for SU-24, MiG-23, and MiG -25 combat aircraft. They were all in their manufacturer's packaging.

Kaliningrad's "Komsomolskaya pravda" newspaper reported on 22 March that -- together with the Mercedes truck in which the spare parts for the aircraft engines were found -- the Russian driver was detained. He is a 30-year-old resident of the Lithuanian town of Klaipeda and a Latvian citizen with a Kaliningrad Region residency permit. The paper said the organizers of the channel for transporting weapons are located in Moscow and that the shipments were sent directly to their intermediary. "Aircraft spare parts were sent from Moscow to Kaliningrad (probably by railway). There they were received by a member of the criminal group and then sent on to Lithuania. From there on, they were supposed to be taken to a country in the Persian Gulf region," the paper reported.

The spare parts bear a Russian manufacturer's identification numbers. The investigation team will have to find out where and when the seized equipment was manufactured and to which military unit it was supposed to be delivered.

Investigators say the driver of the Mercedes truck carrying the spare parts was sure that he was transporting ordinary cargo. He was involved in cross-border trade, taking Iceberg mineral water into neighboring Lithuania and was a permanent client of Iceberg's. RK

Russian Interior Minister Boris Gryzlov held a meeting with Israeli Minister of Interior Security Uzi Landau on 19 March in Moscow at which the two ministers agreed to cooperate in fighting organized crime, ITAR-TASS reported on 19 March. Gryzlov and Landau signed a protocol envisaging information exchange through Interpol on illegal drugs, arms trafficking, and money laundering. The ministers also discussed the fight against international terrorism and extremism. Russia plans to send an Interior Ministry group of experts who deal with illegal-drug trafficking to Israel. Specialists from Israel will also come to Russia to study that country's experience fighting illegal migration. RK

A 50-year-old homeless man has been arrested in the western Siberian city of Novosibirsk on suspicion of eating a rare Japanese bird belonging to the local zoo, RIA-Novosti reported on 18 March. The male Japanese crane, worth around $7,000, disappeared in mid-March shortly after it was transferred with its mate to a summer cage, local authorities told the agency. The vagrant is accused of breaking into the cage and stealing the Japanese crane, with its distinctive white body and red head, one of only 200 such birds held in European zoos. RK

RIA news agency reported on 18 March that a gunfight broke out on the Tajik-Afghan border between Russian border guards and drug traffickers. Four kilograms of heroin was found. RK

Russian border guards seized 3 kilograms of raw opium and 7.5 kilograms of hashish on the Tajik-Afghan border on 19 March, Tajik news agency Asia Plus reported on 20 March. RK

Officers of the Tajik Drug Control Agency thwarted seven attempts to smuggle drugs from Tajikistan on 17 March. As a result, they confiscated 27 kilograms of heroin and hashish, Tajik Radio reported on 18 March. RK

Uzbek police detained a young woman earlier this month for attempting to sell 4 kilograms of heroin in the capital, Tashkent, Uzbek TV reported on 17 March. RK


By Roman Kupchinsky

Over the past two weeks, a number of highly placed Ukrainian officials, including President Leonid Kuchma, have again publicly denied charges that Ukraine was selling arms to rogue regimes. The latest accusation centers around indications that it sold sophisticated weapons to Iraq in 2000. On 14 March, the head of the State Committee for Export Controls of the Military, Leonid Rozen, the head of the State Service for Export Controls, Oleksandr Legenda, and the first deputy director of Ukrspetseksport, Viktor Korenkov, all told the UkrInform press agency that, "Ukraine, in all its years of independence, never had any intentions to develop military-technical cooperation with Iraq." Korenkov had to make the denial on behalf of his company, since the head of Ukrspetseksport, Malev, died in a car accident on 6 March.

Later, that same day, President Kuchma denied Zhyr's claims, as did Prime Minister Anatoliy Kinakh. Kuchma said these were lies concocted by "competitors in the arms sales business, in order to push Ukraine out of the market."

Volodymyr Horbulin, the former national security adviser and presently the head of a state commission on the military-industrial complex, stated on 20 March in Donetsk that once Ukraine reached the level of $400-500 million in arms sales, others began accusing the country of "arms sins." He went on to say, "For the past 10 years, no illegal contracts were signed by Ukraine. Ukraine as a state, is not involved in these deals."

Since no figures (aside from the $400-500 million figure cited by Horbulin) or facts were quoted to back these allegations, it is worthwhile to examine the Ukrainian arms sales business to see the true state of affairs.

In the November 2001 issue of "Jane's Intelligence Review," Viktor Zaborsky, from the Center for International Trade and Security at the University of Georgia, wrote:

"According to the Stockholm International Peace Research Institute (SIPRI) report, made available in mid-August [2001], Ukraine's arms sales dropped in 2000 84.8 per cent to $67 million against $446 million in 1999. The report concludes that Ukraine had fallen from the 7th to 16th position in the list of world leading weapons traders, being left behind by such countries as Belarus, Israel, Holland, Sweden, Georgia, Slovakia, Canada, Czech Republic, and even Indonesia. At about the same time, the German news agency dpa published a report entitled "Ukraine Gunning For Arms Sales �- Not So Picky About Customers, Though." The report alleges that Ukraine sells tanks, armored personnel carriers, assault helicopters, and surface-to-surface missiles to UNITA rebels; small arms and ammunitions to Afghanistan's Taliban regime and Chechen rebels; Kalashnikov rifles, guided missiles and ammunitions to Eritrea."

The dpa report was shown to be untrue. No Ukrainian weapons were ever sold to Eritrea, the Taliban, or Chechen fighters by Ukrainian state companies, and it seems that the sources for these stories were individual Russian arms dealers who did in fact want to push their Ukrainian competitors out of these markets.

Zaborsky goes on to show that there was some confusion as to the actual figures cited by the Stockholm report:

"It did not take long for Ukrainian officials to respond to western media reports. At a press conference on August 20, 2001, Valeriy Malev, director-general of Ukraine's major arms trading company 'Ukrspetsexport,' denied SIPRI figures. Moreover, he denied the mere fact of a decrease in Ukraine�s arms sales. According to Malev, in 1998 Ukrainian arms exports increased by 125% compared to 1997, in 1999 by 145% compared to 1998, and in 2000 by 103% compared to 1999. The expected increase in 2001 is 7-8%. ("Ukrainian Arms Export Chief Denies Drop In Sales," Arms Trade Newswire, August 21, 2001, Arms Trade Oversight Project, Council for a Livable World, online:

"Experts at the [Kyiv]-based Center for Army, Conversion, and Disarmament Studies believe that the lack of transparency on Ukraine�s arms sales is the major reason for discrepancy between SIPRI figures and Ukrainian estimates. SIPRI analysts use mostly open source information when totaling the arms exports revenue. Ukraine has not overcome an old tradition of secrecy with respect to 'military and technical cooperation with foreign countries' and does not maintain any publicly available records."

Malev's figures -- if correct, and his death in a suspicious car accident makes them more difficult to verify -- indicate that Ukrainian arms sales were growing at a healthy pace and managing to compete with other countries.

It is also important to note that Ukraine's main competitor in arms sales is Russia. Both countries have billions of dollars' worth of former Soviet weapons which the USSR sold to the third world. Only Ukraine, Russia, and Bulgaria are in a position to upgrade and service these weapons, and their prices are more than competitive with those offered by British, American, French, or Israeli arms dealers.

The hey-day for Ukrainian uncontrolled arms sales was from 1994-97, when the Ukrainian State Service for Export Control granted 6,500 licenses for the export of arms and military equipment. Over 114 firms, organizations, and companies took part in foreign arms trade, military and special technology sales. According to an article by Valentin Badrak for the Center for Analysis of Strategies and Technologies ( in the July/August issue of 2001: "products were exported to 40 countries around the world for a total of about $760 million, with sales often at less than market value." Many of these licenses were issued during the tenure of then-Prime Minister Pavlo Lazarenko, under whose jurisdiction the Service for Export Control worked. Lazarenko himself has stated that he took 10% from every deal, which went through his office, when he was prime minister.

It was then that Ukraine's reputation suffered most. Many criminal arms dealers would present fake end-user certificates to Ukrainian companies and buy whatever they had in stock. Much of this was going to Africa and the former Yugoslavia. But there is no hard evidence implicating the Ukrainian government in these sales. At the same time, numerous Ukrainian officials were party to these deals by taking bribes from arms dealers. They were never prosecuted, although the government knew who they were. The result of such official protection of friends from justice did not improve Ukraine's image abroad.

An ad hoc inquiry commission was formed within the Ukrainian parliament to look into charges of illegal arms sales by the government, submitting its report on 14 April 1998. However, the government accused the commission of being politically motivated (the report came out prior to the presidential election campaign and was critical of President Kuchma, who had announced that he would run for re-election), and nobody was made to answer for possible abuses. In particular, the case of selling four SU-17 (NATO-Fitter) aircraft to Yemen in 1994 for $500,000 per unit was never revealed to the public.

By 1998, export controls had been tightened considerably. The United States' Nunn-Lugar program provided Ukraine with money to install automated export-control systems; and by 1999, Ukraine had received about $13 million for this system, which greatly helped enforce export controls. In February 1999, a new agency, the Ukrainian State Commission on Export Control Policy and Military-Technical Cooperation with Foreign States, came into being by presidential decree. The decree included the provision that, in case of interdepartmental disputes on arms export cases, the issue was deferred for consideration to the head of state -� President Kuchma. In practice, this meant that the automated export controls provided to Ukraine through Nunn-Lugar could be bypassed if the head of state signed off on a sale. In certain cases, deals could be carried out within 10-12 days, Malev said in an interview published by the newspaper "Zerkalo nedeli" on 30 September 2000.

By 2001, reports began circulating that Ukraine had sold sensitive military technology to Iraq. "The New York Times" on 18 June wrote that two American arms-control experts found evidence that Iraq bought weapons or parts of weapons after UN sanctions were imposed in 1990. The experts, identified by the newspaper as Gary Milhollin and Kelly Motz, said they had found documents concerning illegal sales or potential sales by companies in Ukraine, Belarus, and Romania. Among the purchases made by the government of Saddam Hussein were missile components and high-technology machine tools.

In an article in the U.S. journal "Commentary" (July/August 2001), Milhollin and Motz described their findings regarding Ukrainian deals with Iraq:

"In Ukraine, the Iraqi focus was more specific: missile components. In September 1993, a Ukrainian trader with a Ph.D. in electronics named Yuri Orshansky arrived in Baghdad. He was accompanied by Dr. Yuri Ayzenberg from a Ukrainian firm, Khartron, well known for its ability to design missile-guidance systems. Within two months, an Iraqi delegation would travel to Ukraine to follow up.

"The Iraqi delegation was led by Brigadier General Naim Bakr Ali, head of Iraq's Scud missile-guidance program. With him were two officials from Iraq's Missile Research and Development Center, and rounding out the team were Brigadier General Safa from Ibn Al-Haytham, Iraq's largest missile-manufacturing site, and Major Raad from Al-Karama State Establishment, another such site. Their mission was clear: to negotiate agreements for as much help as they could get. As General Naim would himself tell the UN inspectors, his instructions were simple: 'If you find something good, sign; if you do not find something good, then don't sign.'

"He signed. In Ukraine, Orshansky, Ayzenberg, and Naim executed a 'protocol' -- amounting to an outline of future cooperation -- that promised Iraq the keys to a trove of missile technology. Ukraine would sell guidance components for surface-to-surface missiles, help Iraq develop batteries of the latest anti-aircraft missiles, provide equipment for missile research, and even establish a college to train missile experts. To get things started, Iraq asked for price quotes on a test stand for rocket motors, a series of gyroscopes, and accelerometers for missile-guidance systems, and high-precision machine tools for making missile parts.

"Under questioning, General Naim later claimed the deal was supposed to take effect only after the embargo was lifted and hence did not violate UN resolutions. As the inspectors pointed out to him, however, the agreement expressly stipulated that it would come into effect 'from the moment it is adopted by the governments of Ukraine and Iraq' -- that is to say, almost immediately. (Both Naim's superior and the Ukrainian cabinet approved the deal in 1994.) General Naim also claimed that Iraq intended to work only on missiles that could fly under 150 kilometers, permitted under certain UN resolutions. But an appendix to the agreement described a system for 'separating the warhead from the bus.' Only long-range missiles, which Iraq is not permitted to possess under international sanctions, have warheads that are separated during flight from the rocket engine (or bus) that carries them aloft. In short, Saddam Hussein was aiming to project his power as far as possible.

In November 1994, General Naim led another Iraqi delegation to Ukraine. Aided by many of the same experts, he signed a second protocol as ambitious as the first. Khartron was now to provide four different types of missile guidance, two of them for separable warheads. According to the protocol, Iraq had already given Khartron the data needed to build the first type, and a schedule was included for receiving the data for the other three. Khartron also helped the Iraqis work on missile-guidance problems during the visit itself."

The evidence shows that despite the protests of leading Ukrainian arms dealers, Ukraine did harbor the intent of selling weapons to Iraq. Did they? This has not been proven.

All available evidence indicates that no sales were completed at this time, despite the readiness of both sides to do business. However, the Ukrainian authorities never conducted an investigation into the activities of their citizen, Yuri Orshansky, who in fact was the "honorary counsel" of Iraq in Kharkiv. Was Orshansky conducting his own freelance "foreign policy," or was he doing so with the wink of approval from the president of Ukraine? Orshansky was interviewed a number of times by RFE/RL's Ukrainian Service and was found to be a member of the Communist Party of Ukraine and a rather staunch enemy of the West. At the time this article was being prepared, Orshansky was the still the honorary counsel.

Ukrainian officials at that time responded more or less in the same manner as they are currently responding to renewed charges of selling weapons to Iraq. Anatoliy Gritsenko, the president of the Razumkov Center for Economic and Political Studies stated on 20 June 2001 that the charges were related to the stepping up of Ukrainian-Iraqi collaboration in non-military spheres, which is not to the liking of Ukraine's Western competitors.

A more revealing example of the attitude which is widespread in the military and arms export business in Ukraine was provided in "Jane's Intelligence Report" from November 2001:

"The Ukrainian government has also joined Russia in claiming legitimacy of arms trade with Iran. Although Iran has traditionally been a Russian customer, Ukrainian defense companies have managed to enter that market...full of intent to expand [their] presence. Like their Russian colleagues, Ukrainian arms manufacturers claim their legitimate right to sell weapons to Iran and resist western, mainly U.S., pressure to halt arms transfers to a 'terrorist' state.' 'Do not make big eyes when you hear about our military cooperation with Iran,' says Grigoriy Malyuk, former director general of a tank and armor producing 'Malyshev' plant in Kharkiv. 'We have carried out delivery on a couple of contracts already and now are delivering on other contracts. Those are the contracts which were signed before the Wassenaar Arrangements came into force (July 1996) and we have to deliver on them. Otherwise, our reputation will be damaged.' Government and 'Malyshev' officials, however, would not disclose specifics of the contracts with Tehran."

On 5 February 2000, Volodymyr Horbulin told Infobank news service that, "Ukraine may also successfully compete on world armaments markets selling aviation equipment and planes, anti-missile systems, radar, radar-jamming equipment and other military electronic equipment."

They have, apparently. Oleksandr Zhyr, a parliamentarian, made the stunning announcement that he possessed the transcript of a conversation between President Kuchma and Valeriy Malev concerning the sale of sophisticated anti-aircraft systems to Iraq for $100 million. In that conversation, according to Zhyr, Kuchma gave his approval for the sale.

In his appearance on 20 March in Donetsk, Horbulin stated: "I don't contradict the fact that a conversation might have taken place between the president and Malev. I do, however, insist that Ukraine never sold Iraq $100 million worth of weapons." Perhaps it was just $90 million, after commissions?