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Corruption Watch: October 2, 2003

2 October 2003, Volume 3, Number 34
By Roman Kupchinsky

It is rare for a country's intelligence service to present a public report on its activities. Yet, to its credit, the Czech Security Information Service (BIS) does so every year.

The BIS, like all postcommunist intelligence services, has seen its share of problems and public mistrust due to the legacy of its predecessor, the State Security (StB) service. Like the Soviet Committee for State Security (KGB), the Polish Security Department (UB), the East German State Security (Stasi) and its other counterparts, the StB was the "sword and shield" of the party in addition to its duties of gathering foreign intelligence. It was particularly renowned among Western counterintelligence agencies for its "disinformation department," which ran elaborate forgery operations against the West and played a crucial role in the Soviet bloc's anti-NATO campaign in the 1980s.

The StB played a horrific role in the persecution of Czech and Slovak intellectuals after the 1968 Prague Spring, as well as in the first years of communist rule in Czechoslovakia (CSSR) when Stalinist anti-Semitic hysteria was sweeping the Soviet bloc and manifested itself in the CSSR during the show trials and sweeping purge of Rudolf Slansky and "comrades."

With the fall of communism in the CSSR, the slow process of democratization of the security apparatus began and the BIS was formed. Now under government supervision -- and despite a few isolated scandals -- the BIS is widely seen as a professional and capable service; its 2002 report provides a realistic overview of the threat from terrorism and organized crime, which falls within its purview.

Organized crime in the Czech Republic continues to be dominated by Russian and Ukrainian gangs, including such organizations as the "Lviv Brigade" from Western Ukraine and the Solntsevo organization based in Moscow, according to the BIS. The Ukrainians tend to be involved in protection rackets, it says, while the Russians are active in different business enterprises. Among the Asian crime gangs, the Vietnamese dominate and are mainly engaged in blackmail and extortion. The report mentions that such groups are trying to establish alliances so as to consolidate their forces.

The terrorist threat to the Czech Republic, according to the report, comes mainly from individuals arriving from Eastern Europe, the Middle East, and West Africa. Their targets are foreign embassies and other facilities (mainly of NATO member states) as well as military targets, nuclear-power plants, and dams and reservoirs.

The BIS report also deals at length with the important role it played in providing security for the NATO Summit held in Prague in late 2002.

One of the more revealing sections of the BIS report concerns the Russian Foreign Intelligence Service (SVR) and the Russian Military Intelligence (GRU). As an introduction to the Russian intelligence services, the BIS analysts present a political picture: "The [Russian] special services influence both domestic and foreign policy of the Russian Federation, as they systematically plant their members in Russian power bodies, the presidential administration, the government, and ministries. At the beginning of President [Vladimir] Putin's career, special-service officers were installed in positions of lower rank, so that outwardly the staffing of these structures did not change. But gradually they began to be appointed to higher, more 'visible' posts -- those of deputy ministers, chiefs of government authorities and departments, directors of important state companies, and later even that of minister [Sergei Ivanov]."

Then the authors of the BIS report write: "The BIS develops activities to counteract such actions by foreign intelligence services which pose a threat to the interests of not only the Czech Republic.... SVR and GRU officers are known to be active on the territory of the Czech Republic." The report does not specify which type of activities these SVR and GRU agents are involved in, but later hints that they are engaged in furthering the interests of Russian commercial firms and reporting on the enlargement of NATO and the European Union.

Chapter 10 of the report might prove controversial: "Intelligence Gathering." Since the BIS's charter allows for domestic intelligence gathering against "designs and activities aimed against the democratic foundations, the sovereignty and territorial integrity of the Czech Republic," it arguably follows that the BIS has the right to conduct surveillance of domestic groups that might be engaged in such activities.

The report states: "The right-wing extremist groupings have also stepped up their opposition against the membership of the Czech Republic in the European Union. Thus, for instance, the Patriotic Front, the Action for National Reconstruction, the Citizens against the EU...organized a protest rally on the anniversary of the constitution of the Czech Republic as a separate state."

It would appear that a citizen of the Czech Republic, because of his or her negative views on EU membership, might easily become a target of BIS surveillance. How this squares with freedom of speech and the right to peaceful demonstrations is not mentioned. The same might apply to a passage in the report noting that the "Communist Union of Youth organized a campaign against the [NATO] summit under the motto 'Stop NATO.'"

The International Monetary Fund (IMF) called for the destruction of the poppy crop in Afghanistan in order to keep powerful drug traffickers from excessive influence over the country, according to "The New York Times" of 23 September. According to IMF experts, opium presently accounts for 40-50 percent of the country's economy. The article makes no mention of the method to be used for such destruction, and experts have pointed out in the past that many Afghan farmers plant poppies amid rows of vegetables and other crops in order to prevent spraying from airplanes.

On 23 September, U.S. President George W. Bush was to meet with Afghan Transitional Administration Chairman Hamid Karzai to discuss the recent upsurge of Taliban -- or neo-Taliban -- activity and the continued hunt for remnants of Al-Qaeda in that country. Prior to the meeting, U.S.-based Human Rights Watch (HRW) urged Bush to end U.S. military support to Afghan warlords, according to a press release issued by HRW on 23 September.

Describing the role played by warlords in Afghanistan and their partial dependence on the drug trade, "The New York Times" on 25 September reported that, in some regions, military leaders take their cut of the opium trade, "which in some cases is so empowering midlevel commanders that they are no longer accountable to their factional leaders."

The impact of the rapidly expanding Afghan narcotics trade is particularly severe in Central Asia, where the United States is spending about $22 million a year on interdiction programs, according to a 24 September report by "Eurasia View." Citing a "general lack of cooperation" among the governments of the region in interdiction operations, "Eurasia View" quoted one expert as saying: "If you want to get rid of the perniciousness of the drugs trade in economies, you need to go after the source.... If we don't do it in Afghanistan, it won't matter what we do elsewhere." RK

An oil-bribery scandal in Azerbaijan implicating top Azerbaijani officials has not receded and is being used by the political opposition against ailing President Heidar Aliyev in order to win support in the countryside prior to the 15 October election, "Eurasia View" reported on 17 September. Aliev's son, Prime Minister Ilham Aliev, is running for president. He is a former deputy head of the state-owned oil company Socar, and is believed by some to have been implicated (although not by name) in an indictment handed down by the U.S. District Court for the Southern District of New York in September. The indictment charges Swiss lawyer Hans Bodmer with paying bribes to "senior officials" in Azerbaijan in order to influence the privatization of Socar. Azerbaijani officials have denied the charges.

According to the website, the other two individuals alluded to in the indictment are Nadir Nasybov, the former head of the State Property Committee, and his former deputy, Barat Nuriev. RK

Meeting with American journalists on 20 September prior to his visit to the United States for talks with President Bush, Russian President Putin made his first public comment about the ongoing case against Yukos oil company. According to the 22 September edition of "The Moscow Times," Putin said: "The case is about Yukos and the possible links of individuals to murders in the course of the merging and expansion of this company."

Putin called "complete rubbish" widespread speculation that the case was instigated by the Kremlin, which was displeased with Yukos chief Mikhail Khodorkovskii's funding of an opposition political party. The Russian president was quoted by Interfax saying, "What I'm trying to do is warn both sides not to make the affair political."

The Russian website discovered subsequently -- on 24 September -- that Putin's reference to Yukos had been deleted from the transcript of his remarks as posted on the presidential website. This in turn led to more speculation, as Russian journalists began asking for an explanation to which they received no answers.

Yukos in the meantime repeated its requested for the release from detention of Platon Lebedev, the head of Yukos financial arm Menatep; Lebedev has been held without bail since July. Moreover, he has not been charged with murder but with fraud in the 1994 privatization of state-owned fertilizer company Apatit.

During his interview with the American correspondents, wrote, "Putin admitted that he had discussed Platon Lebedev's arrest with [Prosecutor-General] Vladimir Ustinov. Asked why Lebedev would be held in jail without bail during an investigation involving economic crimes rather than be issued a summons, Putin said Ustinov told him that Platon Lebedev had gone into hiding when first informed of the investigation. He was arrested in a military hospital near Moscow. Such a person must be held in a cell, not under a travel ban." RK

Ukrainian prosecutors announced on 26 September that they have solved the 7 July 2001 slaying of journalist and television moderator Ihor Aleksandrov, adding that they have arrested the suspected killers and the individual who is believed to have solicited Aleksandrov's murder, the "Ukrayinska Pravda" website ( reported on 26 September.

In a reported statement by Deputy Prosecutor-General Viktor Shokin, the suspected contract killers were identified by their last names, "Onysjhko" and "Tursunov," while the man suspected of ordering the killing was identified as Oleksandr Rybak, a businessman from the city of Kramatorsk in eastern Ukraine.

According to Shokin, Aleksandrov was targeted after he played a tape on his television program that was made by two former members of the police unit on organized crime in Kramatorsk. The cassette contained conversations by purported members of an organized-crime group, who were heard discussing killings they had committed on behalf of Rybak, who is described as the "brain thrust" in the recording.

"Ukrayinska Pravda" also reported that the "Zerkalo tyzhnia" newspaper had suggested two years ago that Rybak ordered the killing of Aleksandrov. At the time, the Prosecutor-General's Office arrested Oleksandr Veredyuk and charged him with the crime. Veredyuk was subsequently found innocent of the charges. RK

When does clean money turn dirty? In the ongoing case of funding for Hamas, a terrorist/social organization (see "RFE/RL Organized Crime and Terrorism Watch," 11 July 2003), that line has never been very clear. "The New York Times" on 17 September reported that "at least 50 percent of Hamas' current operating budget of about $10 million a year comes from people in Saudi Arabia." Other analysts claim the budget is $40 million-70 million. Saudi officials deny that Saudi government money goes to Hamas and say Saudi government collusion with Hamas "are trash."

According to an article in "The Wall Street Journal" on 15 September, prosecutors are investigating Soliman Biheiri, who ran an investment firm called BMI Inc. that was based in Secaucus, New Jersey. BMI Inc. foundered in 1999, according to the U.S.-based daily, after about $2.3 million went missing. Prosecutors reportedly are seeking to charge Biheiri "with respect to providing money to designated [terrorist] individuals." "The Wall Street Journal" identified other investors in BMI Inc.: Saudi businessman Yassin Qadi and Hamas leader Mousa Abu Marzook, both of whom the U.S. Treasury has listed as "specially designated global terrorists." A third investor was Abdullah Awad bin Laden, a nephew of Osama bin Laden. Abdullah Awad bin Laden ran the U.S. branch of a Saudi charity called the World Assembly of Muslim Youth. The U.S. Federal Bureau of Investigation and private analysts have labeled it a suspected terrorist organization; the group insists it does not support terrorism.

"The New York Times" reported on 17 September that the World Assembly of Muslim Youth is "a Saudi charitable organization based here. The charity's American branch was incorporated in Virginia in 1992 by Abdullah bin Laden, a relative of Osama bin Laden. Members of the Saudi royal family have contributed large sums to the charity, which has publicly stated that one of its educational goals is to 'arm the Muslim youth with full confidence in the supremacy of the Islamic system over other systems.'" RK

The U.S. administration has announced that a comprehensive list of individuals suspected of terrorism will soon replace the dozen such lists currently in use by different law-enforcement and security agencies. The new "complete" list will have some 100,000 names. According to "The New York Times" of 17 September: "The plan announced today [16 September] would create a new screening center, to be led by the FBI in conjunction with the CIA, the Justice Department, the Department of Homeland Security and the State Department. Officials said they expected the center to be operating by December. It will track, they said, not only suspected foreign terrorists but also Americans tied to domestic events like violence at abortion clinics."

The problem of a unified "watch list" has often been the subject of investigation by U.S. Congressional committees and figured in the December 2002 report by the Joint House-Senate Joint Inquiry into the terrorist attacks on 11 September 2001 ( As the final report of that joint committee noted, the "most glaring examples" of incomplete information-sharing with the State Department -- which is responsible for the "watch list" -- was when the CIA did not request that the names of two 11 September hijackers, Khalid al-Mihdhar and Nawaf al-Hazmi, be placed on the list.

Director of Central Intelligence George Tenet testified about this failure at a Joint Committee hearing. He said: "The fact that we did not recommend al-Hazmi and al-Mihdhar for watchlisting is not attributable to a single point of failure. There were opportunities, both in the field and at headquarters, to act on developing information. The fact that this did not happen -- aside from questions of [Counterterrorism Center, or CTC] workload, particularly around the period of the disrupted Millennium plots -- pointed out that a whole new system, rather than a fix at a single point in the system, was needed."

The scope of such a watch list is immense. As the final report of the joint inquiry pointed out: "Some improvements have been made since September 11. For example, Ambassador Francis Taylor told the Joint Inquiry that, in August, 2002, the entire TIPOFF database, including full biographic records on nearly 85,000 terrorist names, photographs, fingerprints, and online documentation, was made available to the authorized users from five Intelligence Community and law enforcement agencies. 'In August 2002, the State Department added over 7 million names from FBI indices to a State watch list, augmenting the 5.8 million names already uploaded.'"

The newly created screening center was described in "The New York Times" by Attorney General John Ashcroft, who said it "will provide one-stop shopping so that every federal antiterrorist screener is working off the same page -- whether it's an airport screener, an embassy official issuing visas overseas or an FBI agent on the street." RK


By Roman Kupchinsky

On 16 September 2000, 31-year-old investigative journalist Heorhiy Gongadze left the Kyiv apartment of Olena Prytula -- a coworker at the "Ukrayinska Pravda" Internet paper ( that he headed. His coworkers, family, or friends would never see him alive again: In November of that year, his decomposed, decapitated remains were found buried in a shallow trench outside of Kyiv. A few weeks after this grisly discovery, Socialist Party leader Oleksandr Moroz announced to a session of parliament that he had in his possession recordings made in the office of the Ukrainian President Leonid Kuchma that directly implicated Kuchma and domestic security forces in Gongadze's disappearance. The so-called Kuchmagate affair had begun.

Three years later, the case remains unsolved. Three DNA tests were conducted on the remains of the body, and all proved beyond a reasonable doubt that the remains were Gongadze's. The body still has not been buried. At the request of the Ukrainian government in 2002, a team of FBI experts was invited to come to Kyiv to advise the investigators. Those experts were sent home shortly afterward, reportedly having been denied access to any evidence in the case by the Prosecutor-General's Office. The recordings made in the president's office that Moroz insisted implicated Kuchma and top law-enforcement officials in the disappearance were authenticated by BEK TEK, a Virginia company that in the past has done such verifications for the U.S. Supreme Court, the FBI, and many other law-enforcement agencies in the United States and around the world. The Ukrainian side rejected BEK TEK's findings and claimed it had conducted its own verification (without access to the original recordings) and found them to be fake. Portions of the recordings (although not the segments dealing with Gongadze) were also authenticated by the FBI laboratory and found to be genuine. Kyiv rejected those findings as well.

President Kuchma has consistently denied any involvement in the affair and has claimed that he did not know Gongadze -- despite videotape of a televised debate in Kyiv in which Gongadze was shown asking the president pointed questions about alleged corruption within his government during which Kuchma appeared to know very well who was asking him the questions and even addressed Gongadze as "Heorhiy."

Prosecutor-General Vyacheslav Piskun vowed during his confirmation hearing in parliament in November 2002 that he would solve the Gongadze case within six months. Almost a year has passed, and the latest development in the case is that the Prosecutor-General's Office is now investigating a member of the parliamentary anticorruption committee over that individual's having named purported suspects in the Gongadze killing. This, the prosecutor-general appears to feel, is unethical and hinders prosecutors' efforts to solve the case.

Skeptics in Ukraine believe the case will not be solved as long as the current president is in office, which is another year. Like the case of Galina Starovoitova, the Russian State Duma deputy from St. Petersburg who was slain in November 1998 and whose killers have not been apprehended, the Gongadze case continues to haunt Ukraine not because it is such a mystery -- but because many people see no mystery in it at all.