Corruption Watch: May 12, 2004

The trial of two Russian intelligence officers -- identified in Arabic media as Anatolii Belashkov and Vasilii Bokchov -- in connection with the February killing of former acting Chechen President Zelimkhan Yandarbiev began in Doha, Qatar on 11 April. The suspects are facing 10 charges, the most serious of which is the murder of the 51-year-old, self-exiled Chechen. Lesser charges include the attempted murder of Yandarbiev's 13-year-old son Daud and the smuggling of arms into Qatar.

The two men entered not guilty pleas on the first day of proceedings, which was closed to the media and public. The official Qatari news agency, QNA, reported that one of the men confessed to being guilty of "deception and forgery."

Yandarbiev, who was on Moscow's most-wanted list, was acting president of Chechnya in 1996-97. A poet and the author of a children's book, Yandarbiev was widely regarded as holding radical Islamic views. He died when the automobile in which he and his son were riding exploded, apparently after a bomb planted in the vehicle was detonated. The assassination took place six days after the Moscow subway bombing and led some observers to link the two events. Russian authorities also believed Yandarbiev was involved in the hostage taking at Moscow's Dubrovka theater in October 2002. In 2003, Yandarbiev's name was placed on a United Nations list of terrorists for his alleged links to Al-Qaeda. In Qatar, he openly raised money for the Chechen cause but denied any links to terrorism.

Qatari authorities arrested the two Russian suspects in the killing on the night of 18-19 February. Russian Foreign Minister Igor Ivanov immediately protested at the arrests, but he admitted that the arrested men are officers of the Russian secret services who are active in counterterrorism. Russian Embassy First Secretary Aleksandr Fetisov was also arrested, but subsequently released and expelled.

On the first day of the trial, AFP reported that a Qatari prosecutor read out the charges and quoted "confessions by the accused." The prosecution also charged that the materials used in the killing were transported across the Saudi Arabian-Qatari border in a "diplomatic car."

The Case Against The Accused

According to the 31 March edition of "Kommersant," U.S. intelligence services helped Qatar track down the two alleged assassins by monitoring their cell-phone conversations. That unverified report was augmented by reports that the two suspects were observed by two witnesses in the parking lot outside the mosque at which Yandarbiev was praying on 13 February before the explosion.

One of the witnesses, according to "Kommersant," was an off-duty policeman who wrote down the license-plate number of the rental car used by the suspects. A forensic examination of the car found insulation and electrical wires identical to those used in the bomb that killed Yandarbiev.

Almost immediately after the arrests of the two suspects, former Russian Federal Security Service (FSB) chief Nikolai Kovalyev suggested that Yandarbiev had been killed by fellow Chechens, the BBC reported on 26 February. "Taking national traditions into consideration, I'm inclined to believe this was the result of a blood feud," Kovalyev was quoted as saying.

The BBC also mentioned yet another version that they claimed was "Russia's chief official theory": that Yandarbiev had been killed in a dispute over money that he was collecting for rebels in Chechnya.

After Qatar became independent in 1971, British jurisdiction over non-Muslim foreigners ended in the country and a Shari'a (Islamic law) court regained jurisdiction over all civil and criminal cases in the country. At that time, the emir issued a royal decree establishing the adlia (civil) court, along with a petty and a grand penal court. The grand penal court has jurisdiction over serious crimes, such as homicide; only the petty and grand penal courts have jurisdiction over non-Muslims.

In the country's new provisional constitution adopted in 1972, the Shari'a court was given jurisdiction in all disputes involving Qatar residents and Muslims from other countries. However, over time, most serious cases were transferred to the adlia courts for adjudication. That practice has transformed the Shari'a court into a "family court" dealing mostly with family law and personal status, and legal observer A. Nizar Hamzeh has written that it is "a viable source of moral guidance to many Qataris."

The adlia court is based on Romano-Germanic legal traditions. Judges issue verdicts in accordance with precepts of civil law, and the law requires that both the plaintiff and defendant be represented by counsel in the court. Qatari law only allows for Arab lawyers to plead before the court, but in those countries that have a reciprocal agreement with Qatar, foreign lawyers may go before the court.

The two Russian defendants have a Qatari defense lawyer, Mohsan al-Suwaidi, as well as Russian, British, and American lawyers who are advising him. According to a report in the "Sunday Telegraph" of 11 April, one of the Russian lawyers, Dmitrii Afanasiev, said the defense team had not been shown the full file detailing the charges. "A bad copy of a small portion of the file, in handwritten Arabic, was recently provided to our local counsel in Qatar, but I am yet to see these papers," Afanasiev said.

As the trial got under way, Russian Defense Minister Sergey Ivanov angrily denied reports in the Russian media that suggested that Qatari prosecutors would name him as having played a role in the Yandarbiev killing, Interfax reported on 12 April. "I cannot call these reports anything other than absurd," Ivanov was quoted as saying.

"Kommersant" reported in its 12 April edition that President Vladimir Putin had placed a phone call to the emir of Qatar to discuss the trial, commenting, "Our leadership is not in the habit of immediately telephoning the leaders of other countries on special lines and trying to save its errant sons and daughters."

"Kommersant" speculated that the two men "will be convicted, then they will be pardoned."

One potential problem facing the Qatari emir is the possibility of alienating Qatari fundamentalists during the trial. Modern legal systems, such as the adlia court, are alien to the Muslim Brotherhood, Hizb al-Da'wah al-Islamiah, and Hizb ut-Tahrir al-Jazeera -- underground organizations known to be active in Qatar who believe that only Shari'a courts effect God's law. With the role of the Shari'a courts declining, such a trial could have unpredictable consequences for that tiny country. RK

In what appears to be a follow-up to a message sent by the terrorist cell responsible for the 11 March train bombings in Madrid, a voice message purportedly from Osama bin Laden was broadcast on both the Al-Arabiya and Al-Jazeera television stations on 15 April. The last purported bin Laden tape had been broadcast by Al-Jazeera on 4 January.

In the taped message, passages of which were published on the Al-Jazeera website (http://english.aljazeera.net), the Al-Qaeda leader offers an effective truce with European states if they "stop attacking Muslims or interfere [sic] in their affairs." There is no similar offer for the United States.

Referring to the Madrid bombings, the message contained the following passage: "What happened on 11 September and 11 March are your goods returned to you so that you know security is a necessity for all.... For those who want peace, we offer it to them. Stop spilling our blood to protect yours.... The solution is in your hands."

The importance of this latest message is difficult to judge, as is the offer of a "truce" with Europe. Coming more than one month after the 11 March attacks in Madrid, it is conceivable that bin Laden is riding the coattails of events and seeking to portray himself as still in control of an international movement.

It is likely that bin Laden is no longer in a position to offer a truce, given his isolation from terrorist cells that appear to be operating largely on their own initiative and choosing their own targets, rather than following orders from a central authority in hiding. RK

U.S. COURT DROPS MANY CHARGES AGAINST UKRAINIAN EX-PREMIER

By Roman Kupchinsky

The trial of former Ukrainian Prime Minister Pavlo Lazarenko, which began on 15 March and is continuing in a Northern District federal court in San Francisco, is the second case in history of a former foreign leader being put on trial in the United States. (The first was that of deposed Panamanian leader Manuel Noriega in 1990.) Lazarenko is accused by U.S. prosecutors of money laundering to the tune of some $114 million and mail fraud, which could carry a maximum sentence of 370 years' imprisonment.

The case could have significant implications for politics in Ukraine, in general, and for the presidential election in October, in particular.

The trial, which has received scant coverage in the Ukrainian media, took a sharp turn on 7 May when Judge Martin Jenkins tossed out 23 of 53 counts against Lazarenko. The judge concluded that the government was unable to establish proof of violations of existing Ukrainian law and sufficient evidence of fraud to sustain a conviction related to those specific charges.

The move hints at the difficulty the prosecution is likely to have securing a conviction of Lazarenko, who served as Ukraine's prime minister from October 1996 to July 1997.

Presidential hopeful Yuliya Tymoshenko, one of Lazarenko's former political allies and an outspoken critic of Ukrainian President Leonid Kuchma, stands to benefit from the court's decision. Her alleged ties to Lazarenko contained in the federal indictment have now been thrown out, and future attempts by the Ukrainian Prosecutor-General's Office to implicate her in the Lazarenko case will be more difficult to prove and less credible on their surface.

The judge's move might also allow the Ukrainian political opposition as a whole to press the argument -- put forth by Lazarenko's defense lawyers -- that their client is a victim of persecution by Kuchma.

Justin Kane of the Center for Investigative Journalism in San Francisco filed the following report with RFE/RL's Ukrainian Service:

"All charges related to [Unified] Energy Systems of Ukraine and opposition leader...Tymoshenko were dismissed. The judge also dismissed all charges connected to the energy company Itera, the alleged extortion of businessman Oleksiy Dydyatkovskyy, and the sale of prefabricated homes to the Ukrainian government.

"Lazarenko's acquittal on the charges of wire fraud and transportation of stolen property leaves 28 counts in the indictment, all related to Lazarenko's alleged extortion of his former partner, Petro Kirichenko, and the alleged fraud at Naukovy State Farm. Prosecutors had already dropped two additional charges.

"The ruling substantially undermined what remains of the prosecutors' case against Lazarenko, casting doubt on whether they can convince jurors that Lazarenko violated both U.S. and Ukrainian law. In his order, Judge...Jenkins agreed with the defense's arguments that the prosecutors had not established a violation of Ukrainian law for the charges he dismissed. 'No reasonable trier of fact could find that it has,' the judge wrote.

"The judge consistently rejected the government's theories that Lazarenko had defrauded the Ukrainian government and had deprived Ukrainian citizens of his honest services. 'The government has utterly failed to establish material harm' to the Ukrainian people or government, Jenkins wrote. He also dismissed a government claim that Lazarenko had defrauded RAO Gazprom in the course of his actions during the restructuring of the Ukrainian gas industry."

Writing in his response to a request by the defense to acquit their client under rule 29(a) of the Federal Rule of Criminal Procedure, however, Judge Jenkins rejected a defense request to drop an extortion charge. The government had presented sufficient evidence "that a reasonable juror could find beyond a reasonable doubt that Mr. Lazarenko committed extortion with respect to Mr. Kirichenko," Jenkins concluded.

Lazarenko's former partner, Kirichenko, testified on behalf of the government at the trial.

Lazarenko, born on a collective farm in the Dnipropetrovsk Oblast of Ukraine, became prime minister on 21 October 1996. He was removed from the post on 1 July 1997. He was detained by the U.S. Immigration and Naturalization Service (INS) at New York's JFK Airport in February 1999 as he disembarked from a flight from Greece, and subsequently charged with attempting to enter the United States on an invalid visa. Lazarenko then applied for political asylum, claiming he was "being persecuted" by the Kuchma administration. The asylum application was never ruled upon, and, shortly afterward, Lazarenko was arrested on charges of money laundering and mail fraud. Lazarenko has since spent nearly five years in federal detention in the San Francisco area, where he had previously purchased a house in Marin County for approximately $7 million in cash.

Widespread Corruption?

Tales of pervasive corruption at the highest levels of government in Ukraine have been heard throughout the depositions in this trial, both videotaped and in the courtroom. Testimony has also arguably been damaging to the Swiss and Caribbean banking systems, which have been accused of allowing opaque transactions and taken minimal steps to check the origins of funds entering their banking systems.

Swiss banks have been accused of laxity in their dealings in the past, including some high-profile cases of allegedly illicit funds being funneled or diverted by Russian and Ukrainian officials. In the early 1990s, Kremlin property manager in the Yeltsin administration Pavel Borodin was accused of using Swiss accounts to launder some $30 million in connection with the Mabatex-Kremlin reconstruction scandal. Borodin was found guilty by a Swiss court in 2003 and ordered to pay a fine of $700,000, which he has so far refused to do. In December 2003, Russian State Duma deputy and popular singer Josef Kobzon had $743,000 confiscated from a Swiss account by Swiss police who claimed the money stemmed from illicit activities.

Witnesses at the Lazarenko trial suggested that managers at Credit Suisse, a bank initially used by Lazarenko, might have been negligent in their due-diligence duties or, on the other hand, genuinely believed the funds were clean.

Other witnesses testified that Lazarenko later withdrew his funds from Credit Suisse and deposited them with the Federal European Credit Bank in Antigua, which he and former business partner Kirichenko had bought. The Caribbean connection in this alleged money-laundering scheme played a significant role in future money transfers to the United States.

Ukrainian Media Coverage

The proceedings in San Francisco are taking place during a presidential election year in Ukraine; as such, they could have some impact on Ukraine's future leadership if unbiased information about the hearings was being made available to the electorate. That has not been the case so far, however.

As Lazarenko's trial was about to commence, RFE/RL, one of the few sources of information on the case available to Ukrainian voters, saw its programs dropped from a nationwide FM radio network in Ukraine. Some commentators have linked those events with the Lazarenko trial and its accompanying coverage.

RFE/RL President Thomas A. Dine called the move "a deeply disturbing political development and serious setback to freedom of expression in Ukraine." President Kuchma has denied that his administration had anything to do with RFE/RL's predicament, but members of the Ukrainian opposition have expressed a different view.

Stepan Khmara, a leading member of the opposition in Ukraine who spent seven years in a labor camp for his dissident activities in the 1970s, told RFE/RL, " Unfortunately, our undemocratic state and its undemocratic regime cannot bear independent media."

But it is worth noting that there are no Ukrainian television crews or correspondents from Ukraine attending the Lazarenko trial. As far as the Ukrainian media is concerned, this trial might as well not be taking place at all.