The investigation has already led to criminal charges against a number of individuals, including a Russian citizen presently being held in prison in the Czech Republic awaiting extradition to Ukraine.
Complementing the seriousness of the investigation's findings are claims that former President Leonid Kuchma was aware of the sales when they were carried out.
A former member of Kuchma's security staff, Mykola Melnychenko, addressed his claims in an interview with RFE/RL on 1 February. Melnychenko, who has been at the center of a scandal surrounding secret audio recordings he made of conversations that allegedly took place in Kuchma's office, although Kuchma has denied the veracity of the tapes.
Melnychenko said he provided the U.S. Federal Bureau of Investigation (FBI) with a recorded conversation purportedly between Kuchma and the then head of the SBU, Leonid Derkach, in which a voice alleged to be Derkach's is heard saying that the sale of the missiles to Iran was conducted with the help of the Russian Security Service (FSB).
Cruising For A Scandal
The Soviet-made cruise missiles in question, the KH-55 (NATO classification AS-15 Kent) and KH-55SM (NATO classification AS-15B), are capable of delivering a 200-kiloton nuclear warhead, although Omelchenko told RFE/RL on 2 February that they were not equipped with nuclear warheads when exported to Iran. The KH-55 has a range of 2,400 kilometers, and the KH-55SM has range of 2,990 kilometers. Both are designed to be launched from heavy bombers.
The cruise missiles were part of the large arsenal of Soviet arms that remained in Ukraine after the collapse of the USSR. According to Omelchenko, 20 cruise missiles were falsely listed as having been destroyed by the leadership of the Ukrainian armed forces, and then 12 were covertly sold to Iran and China after end-user certificates falsely naming Russia as the end user were presented to the SBU. The SBU approved the sale of the missiles and allowed for their export through the state export control agency.
A series of shell companies and fake contracts were set up in Cyprus and other jurisdictions to facilitate payment for the missiles, according to Omelchenko's letter. The money was then withdrawn by the Ukrainian side and subsequently disappeared. After the missiles arrived in Iran, a group of Ukrainian specialists were sent there to help service the missiles.
Omelchenko's letter went on to say that an Iranian company identified as SATAK Ltd. concluded a false contract with the Cypriot-registered company S.H. Heritage Holdings Ltd. to buy gas turbines for the Iranian oil industry. This contract served as a cover for payments for the cruise missiles and related equipment, according to the letter.
In April-May 2002, $12 million was transferred from SATAK to the Heritage Holdings account at the Arab Bank in Cyprus. Soon afterward, the Iranian Defense Ministry transferred another $1.5 million to this same account, the letter went on to say. From the total sum, $7 million was then transferred by Heritage Holdings to the Central European International Bank in Budapest to the account of a U.S. company, SP Trade Inc. which then sent $2.25 million to Aizkraukles Bank in Riga, Latvia, into the account of a U.S. company Interworks LLC. Interworks then transferred $750,000 to an account in an AKB Impeksbank bank in Odesa from where this money was withdrawn as cash in 2002.
Pattern Of Abuse?
In the summer of 2000, recordings made by Melnychenko and authenticated by the FBI had revealed that President Kuchma intended to sell the advanced Kolchuga radar system to Iraq. A subsequent U.S.-British commission of inquiry established that Kuchma did, in fact, have a conversation with UkrSpetzExport head Valeriy Malyev in his office about selling the Kolchuga to Iraq, but Kuchma and SBU officials at that time claimed that the sale never took place. The United States has not found any Kolchugas in Iraq.
In the case of the cruise missiles allegedly sold to Iran, the same officials from UkrSpetzExport who claimed that the Kolchugas were not sold and could never have left the country due to strict export controls, have now been implicated in the sale of the cruise missiles to Iran and criminal cases have been instituted against them.
According to Omelchenko's letter, on 22 October the SBU formally opened a criminal case and charged a number of high officials of UkrSpetzExport with embezzling $13 million from the sale of these cruise missiles.
Omelchenko and SBU investigators claim that Malyev, who headed UkrSpetzExport at the time of the alleged sales to Iran, knew that the sales were illegal and were destined for Iran. Malyev died in a suspicious car accident in March 2002.
Ukrainian citizens, acting on their own behalf, have been involved in illegal arms sales to Africa and Croatia since the fall of communism, but the alleged sale of cruise missiles to Iran in 2002 would be the first recorded instance in which Ukrainian governmental structures acted with the apparent knowledge of the president and the secret services of the country in carrying out such an operation.
Such a scenario would also make the purported sale of the Kolchuga radar system to Iraq seem more probable.
Ukraine Accused Of Selling Weapons To Iran