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Corruption Watch: April 25, 2002

25 April 2002, Volume 2, Number 16
By Roman Kupchinsky

On 11 April, seven additional countries ratified the treaty on the International Criminal Court (ICC), thus exceeding the 60 needed for the ICC to be formed. The court will formally come into existence on 1 July 2002 and will be based in The Hague. Those convicted by the ICC can be jailed in any of the signatory states.

Among the treaty's signatories are Britain, Canada, Cambodia, the Republic of the Congo, Germany, France, Denmark, Spain, Italy, Slovakia, Poland, Tajikistan, and Estonia. Notably missing are Russia, China, the Czech Republic, Belarus, Iraq, Iran, Israel, Ukraine, and the United States.

The powers of the court will not be retroactive. It will be able to act only with regard to human-rights abuses committed after 1 July 2002. For the ICC to consider a case, it will have to have been committed in one of the ratifying countries or by a citizen of one of these countries. Some crimes, such as rape and torture, will qualify for consideration by the ICC, but only as part of a broader attack on civilians in that country.

Writing in the "International Herald Tribune" of 11 April, Javier Solana, the European Union's representative for foreign and security policy, noted that: "The International Criminal Court will complement existing national judicial systems but can exercise its jurisdiction if national courts are unwilling or unable to investigate or prosecute such crimes. International criminal justice is not about revenge but about implementing justice where there was only silence." British Foreign Secretary Jack Straw told "The Guardian" of London, "Today, we are working to establish the principle that the global rule of law is greater than the rule of tyrants."

According to the U.S.-based Human Rights Watch, the ICC will have the following prerogatives:

"The treaty gives the ICC jurisdiction that is complementary to national jurisdictions. This 'principle of complementarity,' as it is known, gives states the primary responsibility and duty to prosecute the most serious international crimes, while allowing the ICC to step in only as a last resort if the states fail to implement their duty -- that is, only if investigations and, if appropriate, prosecutions are not carried out in good faith. Bona fide efforts to discover the truth and to hold accountable those responsible for any acts of genocide, crimes against humanity, or war crimes will bar the ICC from proceeding."

A number of countries that participated in the 15 June-17 July Rome Statute meeting aimed at adopting a convention on the establishment of the ICC, but they have still not ratified the treaty on the court. These include, among others, the United States, Iran, Iraq, Ukraine and Russia. Why have they failed to ratify the treaty? The answers are, of course, different for each state, but they do have something in common.

The United States was strongly opposed to the treaty, fearing that U.S. servicemen would be forced to stand trial on politically motivated charges. British Foreign Secretary Straw has tried to allay U.S. concerns by arguing that the ICC prosecutor can only intervene in cases where the national court system is judged to be suspect. The U.S. court system has never been accused of such obstruction of justice.

Russian, Iranian, Iraqi, and Ukrainian arguments on why they have thus far failed to ratify the ICC treaty have not been publicized.

Violent protests flared up across Afghanistan in early April as farmers resisted the efforts of Hamid Karzai's interim administration to eradicate poppy crops that could be processed and eventually supply tons of heroin to Western Europe. Farmers blocked roads on the border with Pakistan and hurled rocks at vehicles after gun battles with security forces left scores of people dead and injured.

In the south and east of the country, farmers fired on officials tasked with eradicating the opium crops on the eve of harvesting, reportedly killing one official and injuring four.

The government offered compensation for destroyed crops, but the farmers complained that the cash would not cover their costs, let alone match the market value.

According to "The Guardian" on 10 April, officials did not rule out the possibility that "Monday's unsuccessful assassination attempt against the Afghan defense minister, Mohammed Fahim, during a visit to Jalalabad, was the work of angry farmers rather than Islamist guerrillas. The bomb killed four bystanders and forced the closure yesterday of an aid centre for refugees, compounding unrest in the city."

Afghanistan is the main supplier of heroin to Western Europe, especially to Britain. The Taliban had banned poppy cultivation last year, but existing stockpiles kept the market supplied.

The Afghan poppy harvest of 2002 might break the record set in 1999, when 4.6 tons of raw opium were gathered. This prognosis was given by the Russian Federal Border Service, as the deputy chairman of the State Duma Committee for Security, Yurii Shchekochikin told ITAR-TASS on 22 April.

Ukrainian customs authorities seized 204 kilograms of smuggled heroin on 16 April at the southern port city of Odesa, the UkrInform news agency reported. Customs officials said it was the largest-ever seizure of heroin in Ukraine. The value of the heroin on the international market was estimated at some $20 million.

After inspecting a truck, customs officers discovered the heroin concealed in a fake wall inside the vehicle. The truck arrived in Odesa by ferry from Turkey, and was en route to Western countries through Poland.

A spokesman for Russia's Interior Ministry told ITAR-TASS on 11 April that Russian police had confiscated as much as 37 kilograms of drugs in the previous 24 hours. Police in the Sverdlovsk Oblast seized more than a kilogram of heroin.

According to the Interior Ministry, there were 108 different drug seizures in 33 Russian regions on 10-11 April. A total of 32 kilograms of marijuana, 5 kilograms of heroin, and 155 grams of hashish oil were seized.

Russian border guards seized about 15 kilograms of heroin from an armed smuggler on the Afghan-Tajik border on 13 April, the Russian Federal Border Service told Interfax on 14 April.

The heroin, in 15 1-kilogram plastic bags, was found on a smuggler who was armed with an assault rifle after he was wounded in a shootout. Several other smugglers escaped.

The press service of the Russian Border Guard Service in Tajikistan reported that since the beginning of the year, Russian border guards have seized more than 550 kilograms of drugs, including more than 400 kilograms of heroin, on the Afghan-Tajik border.

Branko Mandic, head of the crime department at the Serbian Interior Ministry in Banja Luka, told the Bosnian Serb news agency on 19 April that a laboratory that produces synthetic drugs has been discovered in the vicinity of Mostar, in Bosnia-Herzegovina, from where drugs are being supplied to the Serbia and Bosnia-Herzegovina.

Mandic told a news conference in Banja Luka that synthetic drugs reach Serbia and Bosnia-Herzegovina as tablets under the trade names "kornjaca" (tortoise) or "srce" (heart).

The commander of the police department in Fars Province, Iran, Colonel Hossein Zolqadr said on 20 April that more than 690 kilograms of various narcotics were seized from a group of armed bandits in late March. He added that the haul included 670 kilograms of opium and 20 kilograms of heroin, IRNA reported the same day.

"Corruption has become the norm in our lives. It is pointless to hope that 'honest men' will someday come to power and that there will be no corruption after that. Of course, there are honest people even in our country, but they are too few to place any hope in them." So wrote Armen Movsisyan in an article titled "Do we really need an 'anti-mafia'?" in the Armenian newspaper "Ayots Ashkar" on 20 April.

"In countries like ours, an effective struggle against corruption is necessary. For this we need very detailed laws and uncompromising law-enforcement structures. We need a strict control system of state functionaries."

The author points to the establishment of "anti-mafia" groups in other countries fighting corruption and sees such a solution being useful for Armenia.

"Only top officials should be targets of checks by the anti-mafia. Moreover, any appointment to the upper echelon of authorities should go through the anti-mafia."

Corruption continues to be a big problem for the Czech Republic even after four years of Social Democratic rule, according to a report Interior Minister Stanislav Gross was to present to the government on 17 April, the daily "Mlada fronta Dnes" wrote on 16 April.

The document titled, "Report on corruption in the Czech Republic for the year 2001," claims that the number of bribes is not decreasing, and not only civil servants but even representatives of political parties are engaging in corruption.

According to the daily, the report says that qualitatively the situation has grown worse. The paper says that the police have a more difficult task in proving corruption. The report also says that this is because corruption is spilling over into the state administration.

The report says that corruption has become "highly organized" in recent years and that "representatives of political parties" are engaging in corruption by deciding on public-works contracts from their elected posts.

"Mlada fronta Dnes" says that the report deals with the possibility of using agent provocateurs in fighting corruption. The report does not say, however, whether the Social Democrats will attempt to implement the use of agents. The possibility of using directed provocation -- sting operations -- in the fight against corruption was discussed recently by Supreme State Attorney Marie Benesova (see "RFE/RL Crime and Corruption Watch," 11 April 2002).

Kazakhstan President Nursultan Nazarbaev has denied accusations that his government misused a secret $1 billion foreign-reserve fund set up six years ago and only recently revealed to the public.

In his first remarks since the information was made public, Nazarbaev told the "Financial Times" on 16 April that he saw nothing wrong in the creation of the fund and that no money had disappeared

Kazakh Prime Minister Imanghali Tasmaghambetov told parliament at the beginning of April that the government had secreted abroad some $1 billion in profits from the sale of 20 percent of the Tengiz oil field to the U.S. company Chevron in 1996.

Some Western critics of Nazarbaev are welcoming his admission of the creation of this fund as a beginning of transparency in Kazakhstan.

Russia will continue to pursue individuals allegedly involved in a money-laundering case that stripped the national treasury of several billion dollars, said Sergei Stepashin, head of Russia's Audit Chamber, UPI reported on 20 April. Stepashin said a recent probe into the government's financial dealings had revealed misappropriations of funds received four years ago, just months ahead of the August 1998 economic crash that saw the ruble plunge fourfold.

In an interview with the state-controlled Mayak radio station, Stepashin said the funds had been received through International Monetary Fund loans as part of the global effort to help lift Russia's staggering economy. However, significant chunks of the loans ended up in private hands whose owners are still unknown.

Stepashin said a criminal investigation, which is expected to be completed by year's end, is looking into the theft of $4 billion in IMF loans.

Accusations that the IMF funds had been embezzled first surfaced in Western and Russian media in the wake of the August 1998 devaluation, and were confirmed by a parliamentary investigative commission appointed by then-Chairman of the Federation Council Yegor Stroev in 1999. However, the commission's report was never made public (see "RFE/RL Security and Terrorism Watch," 23 April 2002).

Daniil Galeev, the deputy head of the Anti-Organized-Crime Department of Tatarstan's Interior Ministry, told the "Vostochnyi ekspress" weekly on 5 April that there are 122 criminal groups with roughly 7,000 members in Tatarstan.

According to Galeev, the leaders of such criminal groups have recently moved away from the traditional crimes of murder and extortion in favor of attempts to take over controlling interests in the republic's leading companies. For example, the Drakon criminal community, which unites several gangs operating in Kazan and Moscow, is currently trying to take over one of Tatarstan's largest chemical companies following its recent failure to gain a controlling interest in the Minnibaevskii gas-processing plant.

Galeev added that one of the leaders of the Kazan-based Tukaevskaya criminal group is a board member at one of the republic's leading joint-stock companies and that members of the Kazan-based Zhilka criminal group, which is closely connected to authorities in Sevastopol, took part in the sale of navy property there (see "RFE/RL Tatar-Bashkir Report," 8 April 2002).


By Roman Kupchinsky

The United Nations sanctions imposed on Iraq after the Gulf War, as well as the embargo on arms sales to the Saddam Hussein regime, were codified by UN Security Council Resolution 661 of 1990. As soon as the resolution passed, Iraq went to the international arms marketplace with the full intent of breaking the embargo. According to an article called "Iraq's Arsenal of Terror," by David Rose, in the May 2002 issue of "Vanity Fair," Iraq began using its secret security and intelligence agency, the Mukhabarat, and established front companies in Jordan and the United Arab Emirates. Some of these were located in the free-trade zone of Aqaba and served only one purpose, to ship arms and military goods secretly to Iraq. Another base of illegal activity was via Dubai, through which many shipments from Ukraine arrived.

The Iraqi organization responsible for purchasing and developing arms is the Military Industrial Commission. In January 2000, more than a year after Saddam expelled the UNSCOM arms inspectors, the head of the Military Industrial Commission, General Amir al-Saadi, gathered 13 officials from various government ministries and gave them marching orders. According to an interview in the "Vanity Fair" article with an Iraqi defector who was present at this meeting, al-Saadi told them: "We can do whatever we wish. We want you to work with full force, and you'll be in a race against time.... Everything you need, materials or logistics, is available to you."

The Iraqis had also been active prior to 2000. According to a report in "The Wall Street Journal" on 11 December 2001, in 1997, Czech intelligence officials, working on a tip from Turkey, warned against the sale of Tamara radar systems they said were intended for Iraq. The deal did not go through. The producers, Pardubice-based Tesla, denied the allegations. Nonetheless, former Premier Vaclav Klaus had to explain the situation to then-U.S. Vice President Al Gore during an official U.S. visit.

The Tamara was similar to the Ukrainian-made Kolchuga passive radar system in that it was effective against stealth aircraft, which had inflicted great damage on Iraq during the Gulf War. The Iraqis were willing to pay the Czechs $300 million for Tamara.

On 15 January 2002, the World news service reported that U.S. officials feared that Saddam had somehow acquired "two Tamara radar systems which have been reported missing in the Czech Republic." These officials said that Saddam had been "conducting negotiations with companies in Eastern Europe to procure a system that could detect and respond to U.S. stealth bombers�the Bush administration is concerned that Baghdad might have smuggled a radar system from Eastern Europe in what could mark a surprise in any U.S. military campaign against Iraq." It now is clear that the radar was not the Tamara but the Kolchuga (see "RFE/RL Crime and Corruption Watch," 19 April 2002).

According to Charles Duelfer, former deputy chairman of the UNSCOM mission in Iraq, presently a visiting scholar at the Center for Strategic and International Studies in Washington, all the claims by the defector interviewed by "Vanity Fair" seem credible.

In an interview on 16 April with Michael Mihalisko, chief correspondent of RFE/RL's Ukrainian Service in Washington, Dr. Hamza Khidhir, a former adviser to Saddam Hussein, said that, in his opinion, the reasons for the close cooperation between the Iraqis and the Russians and Ukrainians was their past history. "We all knew each other, we traded together and this created the bonds of trust." He went on to say that the methods used for smuggling such items as the Kolchuga radar system had been perfected back in the early 1990s.

The head of Ukraine's arms-exporting company, Ukrspetzexport, Valeriy Malev, led the Ukrainian delegation to the Amman, Jordan, SOFEX 2000 arms show. It now seems that Ukrspetzexport's representative in Jordan spoke to Malev at that time.

A taped conversation between Malev and Ukrainian President Leonid Kuchma has revealed that when the Jordanian representative of an Iraqi front company made a firm offer to Malev to buy the Kolchuga system, the response from Kuchma on 10 July 2000 was positive. The deal was to be a secret made in secret. Thus the payment of $100 million was also to be kept secret. Leonid Derkach, chief of Ukraine's security service (SBU), knew how to handle this it seems and the deal was done, (see "RFE.RL Crime and Corruption Watch," 19 April 2002).

Official Ukrainian responses denying the incident have been very confused and contradictory. Some have stated that it would be impossible to get anything into Iraq because of tight controls. But in 2000, when the Kolchugas allegedly were shipped, Saddam had already expelled the inspectors. Most Ukrainian officials agree that Kuchma and Malev spoke about this matter, but, they claim, nothing ever came of it. Most denials point to the export control system in place in Ukraine to prevent the sale of arms to rouge regimes. But they do not address the question of a secret sale authorized by the president himself.

Recently, the Ukrainian side decided to present Malev as somewhat of a loose cannon. In the Kyiv newspaper "2000" on 19 April, a representative of the SBU said that Malev tried to sell the Kolchuga to Iraq "a week prior to his death," but that the SBU convinced him that this was a bad idea. Malev died in a somewhat mysterious car accident four days after President Kuchma was informed of the existence of a recording where he told Malev to go ahead with selling the Kolchuga to Iraq.

It is not clear if the deal involved placing the Kolchuga assembly parts in Kremaz truck containers. This was Malev's suggestion as heard on the recording, but he was not an expert in these matters. Derkach knew better how to run a sub-rosa operation. He also knew that nothing of this sort went directly to Iraq, but went either through Jordan or to Dubai and from there to Iraq.

In the RFE/RL interview in Washington, Khidhir said that UNSCOM inspectors had uncovered illegal Ukrainian exports of gyroscopes as early as 1993. They were found buried under the Tigris River, but the mandate of the UNSCOM team did not cover gyroscopes, only weapons of mass destruction. The UN seems not to have taken into account the fact that gyroscopes are essential for missile guidance systems used to deliver nuclear warheads.

In 2000 and during most of 2001, Ukrspetzexport employees did not receive their salaries on time. They had arranged for legitimate sales of Ukrainian-made armaments worth hundreds of millions of dollars, yet money was not available to pay their salaries. Where was it going? Could it possibly have been put back into the country's treasury or was it perhaps sent to offshore accounts held by high government officials? The answer is total silence.