Corruption Watch: August 5, 2003

By Roman Kupchinsky

The Senate Select Committee on Intelligence and the House Permanent Select Committee on Intelligence's joint inquiry on the 11 September 2001 attacks on the United States concluded that the "Intelligence Community failed to fully capitalize on available, and potentially important, information," according to a copy of the report on the U.S. Library of Congress's Thomas website (http://thomas.loc.gov).

According to "The New York Times" of 24 July, for instance, the report found that the CIA knew the terrorist affiliations of two men, Khalid al-Midhar and Nawaq Alhazmi, who moved to San Diego in 2000 and were known to frequent Islamic circles that had been infiltrated by the FBI. However, the CIA did not bother to inform the FBI of its information, and the FBI was thus unable to guide its informant in those circles to report on the two suspects. According to "The New York Times," Senate and House investigators have not been able to question the FBI informant.

Appearing on CNN on 23 July, Admiral Bobby Inman, a former deputy director of the CIA, expressed his critical views of CIA preparedness prior to the 11 September attacks. Inman noted that the CIA had been well-aware of Al-Qaeda's interest in attacking the United States since the bombing of the World Trade Center in 1993. The agency, according to Inman, did not make an effort to hire more language specialists or focus on human intelligence. Instead, according to Inman, the CIA underwent a downsizing and was unprepared for the 11 September attacks.

A section of the report states: "Moreover, the process of setting intelligence priorities was often confusing. [Richard Clarke, the former national coordinator for security, infrastructure and counterterrorism at the National Security Council] noted that the White House 'never really gave good systematic, timely guidance to the Intelligence Community about what the priorities were at the national level.' [Deputy national security adviser Steven] Hadley stated that Bush Administration officials were told during the transition that 'this priority-setting process [PDD-35]...was not effective for communicating changing priorities over time.' Joint Inquiry interviews with Intelligence Community officials suggest that many felt that the prioritization process was so broad as to be meaningless. There was also bureaucratic confusion about responsibility for counterterrorism. Despite efforts by the [National Security Council's] Counterterrorism Security Group to streamline the process, agencies often did not coordinate their counterterrorism efforts. [Former Assistant Secretary of State for South Asia Karl] Inderfurth noted that the State Department had different elements working on counterterrorism in regard to Afghanistan, Saudi Arabia, embassy security, and other matters. [Former Deputy Secretary of Defense John] Hamre noted in an interview that several different components of the Defense Department were involved in counterterrorism, often with little coordination."

A deleted section of the report allegedly describes Saudi Arabian funding that went to different charities and that might ultimately have been used by Al-Qaeda operatives in preparation for the 11 September attacks. According to "The New York Times" of 26 July, "Some people who have read the classified chapter said it represented a searing indictment of how Saudi Arabia's ruling elite have, under the guise of support for Islamic charities, distributed millions of dollars to terrorists through an informal network of Saudi nationals, including some in the United States." This section of the report has reportedly upset the Saudi leadership, which has called the information "ludicrous" and asked that it be published in order to allow them to clear their name.

Members of Congress have also requested that the White House declassify much of the chapter, but the executive branch has refused to do so, claiming that such a move might compromise intelligence sources.

(The congressional report was also critical of the intelligence community for its failure to rely more on human intelligence sources. That aspect of the report will be discussed in the next issue of "RFE/RL Organized Crime and Terrorism Watch.")

The Russian Prosecutor-General's Office announced on 18 July that it had reopened three murder and one attempted murder investigations which it claims might be linked to oil giant Yukos and its president, Mikhail Khodorkovskii. According to "The Moscow Times" of 21 July, all of the investigations concern homicides and an attempted homicide committed in 1998. "The Moscow Times" reported, "A source at the prosecutor's office said the cases are united by 'property disputes between the victims' official and private entities and the Yukos oil company,' Interfax reported."

Prosecutors said they are investigating whether Yukos played a role in the 26 June 1998, slaying of Vladimir Petukhov, the mayor of Yukos's production capital, Nefteyugansk in Tyumen Oblast. Petukhov had been leading a public campaign against Yukos over tax arrears, and many Nefteyugansk residents blamed the oil company for his death. Yukos offered a reward for information leading to the arrest of the killer at the time, and the offer still stands. According to a Yukos spokesman, the police closed the case some time ago due to lack of evidence.

According to "The Moscow Times," investigators said they also were trying to establish a link between Yukos and the attempted murder of Yevgenii Rybin, an executive of Austrian-based oil company East Petroleum. Yukos acquired East Petroleum in November 1998.

The third investigation is into the October 1998 slaying of Aleksandr Berlyand, the general director of Tomsk-Neft-Vostok Ltd., an East Petroleum trading partner before the acquisition.

The fourth investigation reportedly involves the December 1998 killing of a Nefteyugansk businessman identified by prosecutors only as N. Filippov.

On 18 July, Yukos issued a statement saying: "Given that it has no evidence on the basis of which to incriminate Yukos oil company in any economic wrongdoing, the prosecutor-general is attempting to save face by causing maximum damage to the company's reputation. It is this cynical calculation that is behind the attempt to associate Yukos oil company with the felonies committed several years ago against the persons indicated in the prosecutor-general's announcement."

On 24 July, Prime Minister Mikhail Kasyanov said the Yukos scandal, which began with the arrest of Menatep Chairman Platon Lebedev in early July, "is not to the advantage of the country's image and is negatively influencing the mood of investors," according to Interfax. Kasyanov reiterated his belief that those suspected of economic crimes should not be kept in jail while their cases are being investigated. Lebedev was denied bail on 23 July and remains in Lefortovo Prison. RK

Oleh Yeltsov, editor of the Internet publication "Criminal Ukraine" (http://www.cripo.com), was attacked and severely beaten by two unknown assailants on 24 July in the hallway of his apartment building, according to Interfax. Yeltsov was reportedly taken to the hospital for treatment of severe blows to the head -- apparently inflicted with a metal pipe carried by one of the assailants -- and burns on his arm from an electric-shock device. Yeltsov said he suspects the attack was provoked by articles he published on his website exposing corruption among government officials and police in Ukraine, according to Interfax. In an interview published on 25 July by "Ukrayinska Pravda" (http://www.pravda.com), Yeltsov said he suspects the attack might have been a warning to him not to publish compromising articles rather than a random criminal attack. Yeltsov was released from the hospital on 25 June. RK