14 March 2002, Volume 2, Number 10
BORODIN FOUND GUILTY OF MONEY LAUNDERING.On 5 March the Russian press agency Interfax, quoting the press secretary to Pavel Borodin, the state secretary of the Union of Belarus and Russia, announced that Swiss prosecutors have "dropped the case" against Borodin for money laundering. Borodin was under investigation for his possible role in laundering millions of dollars in bribes he allegedly received from the Mabetex corporation in return for handing out lucrative construction contracts in Russia.
But on 6 March, Swiss news agency ATI reported that Borodin had been found guilty of laundering $22 million and fined $175,000 by a Swiss court. Borodin's lawyer, Genrikh Padva, previously confirmed that a magistrate in Geneva stopped criminal proceedings against Borodin. However, the defense did not know why the case was dropped. Padva said an appeal against this decision might be submitted.
According to ATI, Borodin was found guilty of receiving millions of dollars as a commission for contracts with Swiss contractors for restoration work on the Kremlin in the mid-1990s, when he was Kremlin chief property manager.
The money-laundering charge was the only one remaining against Borodin after a Swiss court dismissed a charge of membership of a criminal organization last year. When asked to comment by "The Moscow Times," Geneva prosecutor Bernard Bertossa declined to comment on any of the verdicts or fines made as a result of his office's investigation. "If I pronounce him guilty, it's because I have evidence," Bertossa said. Geneva prosecutors allege that Borodin took kickbacks from Mercata Trading and Mabetex, two Swiss construction companies that worked on the multimillion-dollar reconstruction of the Kremlin in the 1990s. They say that Borodin, his family, and associates received more than $22 million from the firms and that this money passed through Swiss banks.
Russian investigators have not assisted the Swiss investigation. More than a year ago, Moscow police said their investigation had uncovered no evidence to substantiate the Swiss allegations. Borodin was arrested on a Swiss warrant at New York's Kennedy Airport in January 2001 upon his arrival to attend U.S. President George W. Bush's inauguration.
After a New York judge denied him bail, he agreed in April to be flown to Switzerland rather than face a lengthy extradition battle. He spent six days in Swiss custody before being freed on a 5 million franc ($3 million) bail bond paid by the Russian government. He returned to Russia on the condition that he return to Switzerland when requested. He has flown to Geneva several times for questioning and each time exercised his right to remain silent. Prosecutor Bertossa said the bail bond will not be returned for the moment, adding that it could be used toward a possible fine.
Asked why he had made the ruling when he did, Bertossa said a statute of limitations applies to some aspects of the case and he wanted to close the case before he retires in two months. Asked if a guilty verdict will restrict the activities of those involved in the case in Switzerland, Bertossa told "The Moscow Times": "My decision is not that they cannot have dealings in Switzerland, but I presume that now these people are enough known for every kind of financial operator to be prudent." RK
OFFICERS CHALLENGE POLITICIANS' CLAIMS OVER CRIME BATTLE IN KABUL.The interim authority may have brought peace to the people of the capital, Kabul, but they have not yet delivered security. A daily fear of kidnapping, murder, and harassment from armed gangs hangs over the city, the Institute for War and Peace Reporting (IWPR) wrote on 7 March. The violence is such that a money-changer who was robbed of 500,000 afghanis (around $105) in February said he felt lucky to be alive. "The criminals usually murder their targets first and then rob them," he said, recounting his abduction by three armed men. Interior Minister Yonus Qanuni says security has been a problem for the past decade, but insists that many of the hundreds of former mujehedin-filled criminal networks that were active in Kabul before the interim authority was formed have now been broken up.
Deputy Defense Minister Saleh Mohammed Regestani said authorities have succeeded in forcing hundreds of armed men to withdraw beyond the city limits. The few who remain are being drafted into the local police force, he said, but he is confident they will not pose a threat. "Like the army, the police force was destroyed when the mujahedin took control of Kabul in 1992. So until a new police force is formed, we must rely on these men for security," he said. "They will be under a great deal of scrutiny to ensure that they don't get involved in crime."
But several officers contacted by IWPR insisted that crime is still flourishing -- and they question their superior's commitment to tackling the problem. "For some reason, the interim authority is reluctant to take decisive action against the criminal gangs," said one policeman. But other police officers say the reason some criminals are not pursued is that certain elements in the Interior Ministry are themselves involved in criminal networks. A number of senior officials within the department are, for example, suspected of conducting a trade in captured Taliban and Al-Qaeda fighters.
At the same time, the efficacy and motivation of local security forces is constantly undermined by their ongoing financial problems. Many policemen have not received their salaries for months. "I am having a terrible time. My family is going hungry, and so am I," said Ahmad, a lower-ranking officer in Kabul's fourth precinct. "How can you expect an officer who is going to bed on an empty stomach to worry about the security of the well off?"
While local police officers have serious doubts about the force's capability, they acknowledge that the British-led International Security Assistance Force (ISAF), with which they conduct joint patrols, has helped them restore some degree of law and order to the city. The area the two cover was recently extended to a radius of 25 kilometers around Kabul, which may help to tackle criminal groups based just outside the city.
The Interior Ministry has promised an extra 29,000 officers for this and other tasks -- such as patrolling badly damaged parts of the capital to which people have not returned because they feel unsafe -- but no indication has been given as to when they will be available.
POLICE FREEZE DRUG ACCOUNTS, DETAIN FIVE.The director of the country's National Drug Center, Jiri Komorous, recently said authorities have managed for the first time to freeze bank accounts belonging to "the drug mafia," CTK reported. Operation Olgoj focused on heroin distributors, and police froze financial assets totaling more than 25,000 euros, Komorous said. Five perpetrators from the former Soviet Union, including Daghestan, were detained during more than two years of police work. "For the first time we managed to block financial transactions," Komorous said, according to the 26 February report. He stressed the closure of two channels along which money flowed abroad, but he declined to identify the destination. The group distributed heroin in the Czech capital, Prague, he said. Police have been working on Operation Olgoj since 1999, the agency said. In 2000 they arrested three individuals from Daghestan. Two organizers were detained on 21 and 22 February, and Komorous claimed the operation paralyzed the illegal drug ring. RK
FORMER AGENTS CLAIM TO HAVE WARNED SLAIN JOURNALIST.Two former secret service agents said in an interview published 6 March in "Parlamentskaya gazeta" that they informed popular television journalist Vladislav Listyev that he was the target of a murder contract a week before his murder in March 1995, "The Moscow Times" reported on 7 March.
Listyev was shot to death in the entrance to his apartment building as he returned from work. The killing sparked an outpouring of public grief and anger. Despite repeated promises, investigators have failed to solve the case. The two former agents told "Parlamentskaya gazeta" that they had guessed Listyev was the target of a hit by piecing together public information. "We didn't have any concrete evidence, only logical conclusions," one of the former agents said. "We would have been laughed at [if we had informed the police]." The agents said they warned Listyev through a colleague at broadcaster ORT.
The agents were identified only as colonels with law degrees. Neither their names nor the name of their agency was given. In the interview, they said they believed media magnate Boris Berezovsky was behind Listyev's murder. Numerous reports over the years have linked Berezovsky with the murder. He denies involvement and has never been charged. RK
WWF CONDEMNS ILLEGAL LOGGING IN FAR EAST.The World Wide Fund for Nature (WWF) warned that Russia's illegal logging could destroy Russia's Far Eastern forests within five years. The WWF estimated at least 20 percent of timber logged in Russia is cut illegally or in violation of legislation due to bribery and a lack of funds to enforce controls. It urged the Group of Seven nations, China, and South Korea to stop the purchase of illegal timber. It called on Russia to tighten controls on timber crossing its frontiers and take other steps to enforce the rules. Illegal timber sales were worth some $450 million a year, and two-thirds of this was earned abroad. The illegal logging in the Russian Far East makes up approximately 1.5 million cubic meters of wood annually. "It is a highly profitable activity for smugglers and the local mafia," the Swiss-based group quoted its Russian project manager, Anatolii Kotlobay, as saying. The destruction of the forest area also poses a threat to a number of endangered species -- including the Siberian Tiger and the Amur Leopard -- which could lose their natural habitat, the WWF said. ("RFE/RL Business Watch," 5 March)
HEROIN HAULS INCREASING ON TAJIK-AFGHAN BORDER...On 27 February, Troops from the Russian Border Service on 27 February arrested smugglers at Khatlon along the Panj River carrying almost 10 kilograms of heroin, making a total of 155 kilograms of heroin seized in the last two months, Asia-Plus reported. According to the press department of the Russian Border Service, the service has intercepted more than 180 kilograms of narcotics this year. Afghan heroin is the main narcotics problem facing Tajikistan, Tajik Drug Control Agency Director Rustam Nazarov said the same day at a press conference in Dushanbe, noting that 85 percent of the heroin seized in Central Asia has been intercepted in Tajikistan. Nazarov said that some 237 kilograms of drugs was seized in the country in January. ("RFE/RL Newsline," 28 February)
....AS RUSSIAN GUARDS CAN TESTIFY.Russian border guards reported finding a large cache of heroin on 9 March, ITAR-TASS reported on 10 March. The authorities said the seizure comprised 45 packages weighing a combined 47 kilograms. RK
PRESIDENT KUCHMA SOLD ARMS TO IRAQ, CLAIMS PARLIAMENTARY COMMITTEE HEAD.On 12 March, the head of the parliamentary commission investigating the murder of Heorhiy Gongadze, Oleksandr Zhyr, announced that his committee has evidence that President Leonid Kuchma sold weapons to Iraq. The details of those sales were recorded by Major Mykola Melnychenko in the president's office and involved discussions between Valeriy Malev (the head of the Ukrainian state arms trading company Ukrspetsexport) and President Kuchma. According to an interview given to the Internet publication "Ukrainska Pravda," Zhyr said the deal involved some $100 million and added that Kuchma gave direct approval to Malev to sell arms to Iraq despite an international embargo on such sales, according to RFE/RL's Ukrainian Service. Zhyr also said Kuchma was told about this information on 3 March -- three days before Malev died in a car accident. Zhyr called the accident suspicious.
Malev, 63, was driving when his car collided with a truck on 6 March near the village of Sviatylivka about 300 kilometers southeast of the capital, Kyiv, AP reported, citing the Interior Ministry department in Poltava. The truck driver and a passenger in Malev's car survived the crash, according to the Interfax news agency. Citing a police source, Interfax said Malev may have fallen asleep while driving, sending his car veering into oncoming traffic. Police could not immediately confirm the details of the accident.
Malev had headed Ukrspetsexport, the state monopoly weapons exporter, since 1998. He was traveling to Kyiv after business meetings with regional officials, Interfax said. Before his appointment to Ukrspetsexport, Malev served as minister for machine-building and the military-industrial complex in 1995-97, and later as a presidential adviser.
On 8 March, the Ministry of Internal Affairs responded to Zhyr's allegation that Malev might have been the victim of a "planned accident" by saying this was "out of the question." RK
PROSECUTOR-GENERAL DISMISSES 'KUCHMAGATE' TAPE.The Ukrainian Prosecutor-General's Office is not planning to question former presidential bodyguard Major Mykola Melnychenko in the United States. Prosecutor-General Mykhaylo Potebenko made the announcement in Odesa, where he is campaigning for parliament on the Communist Party ticket, according to Ukrainian television on 7 March. The prosecutor-general also said his office would not trust the results of an examination of Melnychenko's tapes -- allegedly recorded in President Leonid Kuchma's office and implicating Kuchma and his team in the murder of a journalist -- by a private American organization. Potebenko said the investigation into the murder of journalist Heorhiy Gongadze is continuing and the case will definitely be solved in the near future.
At the same time, the prosecutor-general is not going to consider the findings of a U.S. probe into the Melnychenko tapes, saying they cannot be accepted as evidence in this case. "They are trying to foist on us findings from a commercial organization [BEK TEK, see next item] widely unknown in the USA. Meanwhile, when I ask the USA to confirm these findings through their official expert bodies, they tell me, 'Oh, no, we don't know these people and don't want anything to do with them,'" Potebenko said. He said he is not going to question Melnychenko in the United States, describing such demands by the opposition as "adventurism."
Neither does the prosecutor-general regard National Security and Defense Council Secretary Yevhen Marchuk as guilty of illegal arms exports. Potebenko said he has received case files from Italian law-enforcement bodies in Turin, where an arms dealer testified on his dealings with Ukrainian officials in the early 1990s. Potebenko said there are no grounds allegations that Marchuk was involved in arms trafficking. RK
IS BEK TEK REALLY UNKNOWN?The record of the U.S.-based company BEK TEK, which authenticated the Melnychenko tape fragments in which Ukrainian President Leonid Kuchma allegedly discusses with his closest advisers ways to remove Heorhiy Gongadze and found these segments to be unedited. According to information provided by BEK TEK, founder Bruce E. Koenig, who conducted the examination of the Melnychenko tapes, from 1974-95 was a supervisory special agent in the engineering section of the U.S. Federal Bureau of Investigations (FBI) who conducted examinations of audio and video recordings collected by federal, state, local, and foreign law-enforcement and judicial agencies. Since leaving the FBI, his clients have included the FBI, the U.S. Department of Justice, the U.S. Congress, the Office of Independent Counsel, the United Nations Criminal Tribunal, and the U.S. Department of Defense. He has testified as an expert in the field of audio- and video-signal analysis on over 330 occasions in 42 states within the United States. RK
ITALIAN PROSECUTOR SAYS GLOBAL CRIME REQUIRES GLOBAL POLICE COOPERATION.An Italian prosecutor with expertise in fighting corruption says the Italian judicial system was able to convict corrupt politicians with solid evidence only because it received international judicial cooperation. Dr. Paolo Ielo, Deputy Prosecutor of Milan and an active member of the "Clean Hands" group of prosecutors and judges, told an RFE/RL Washington office audience on 28 February that today's "globalized criminal activities require globalized police efforts." Ielo said every government should sign the treaties which allow for interstate judicial cooperation, otherwise prosecutors in one country will be hampered when tracing the transnational flow of illegal money used to corrupt native politicians. "Technology can make the difference, too," said Ielo, explaining that prosecutors need to respond in a timely manner by having "technology as good as the criminals'" in this age of electronic wire transfers. Based on his experience, Ielo has seen that at the "highest levels of corruption, prosecutors need the most sophisticated tools of investigation."
Ielo said another "fundamental element in the fight against corruption is the press," which generated public support for the judicial system in Italy during the "Clean Hands" campaign. He acknowledged that not enough has been done to sustain the anticorruption campaign over time. Ielo suggested that in order to "win the battle [against corruption], all governmental institutions need to see it in the nation's interest" and not rely on swings in public opinion. (RFE/RL Press Briefing, 8 March)