Procurator general investigates Lazarenko (01/04/98)

Procurator general investigates Lazarenko

by Roman Woronowycz
Kyiv Press Bureau

KYIV - The business and personal dealings of Pavlo Lazarenko, the leading critic of Ukraine's President Leonid Kuchma and a potential presidential candidate in the 1999 elections, are being investigated by Ukraine's procurator general as counter-charges fly that revelations of possible criminal wrongdoing are part of a plan developed by the president's administration to discredit the former prime minister and his Hromada Party.

Acting Procurator General Oleh Lytvak announced on December 26, 1997, that his department is investigating former Prime Minister Lazarenko on charges of unlawful use and concealment of currency earnings. The announcement came in connection with documents the procuracy had obtained, which indicate that Mr. Lazarenko holds foreign currency accounts in a Swiss bank into which he has transferred money earned in his business dealings in this country.

The procurator's office is trying to determine whether a bank account opened at the Swiss bank UBS in the name of a firm registered as LTP HANDEL AG actually belongs to Mr. Lazarenko.

Because the investigation is ongoing, the Procurator General's Office would not comment on the details.

However, because Mr. Lazarenko, as a national deputy in the Verkhovna Rada, has criminal immunity and is not subject to prosecution, the Procurator General's Office took pains to explain that the point of the investigation is to determine the facts, not to indict Mr. Lazarenko.

"The investigation is not against Lazarenko. It is simply an investigation to determine the facts," said press spokesperson Maksym Krechetov. "Should the facts reveal that there is cause for prosecution, a request could be made to have the Verkhovna Rada vote on whether to lift criminal immunity."

Mr. Lazarenko replied to the public announcement of the investigation in a strongly worded statement that was published in a leading Ukrainian daily, Vseukrainskie Viedomosti. He denied having a Swiss bank account or that he has ever been involved with LTP HANDEL AG. "I want to make it clear that I do not have any kind of foreign currency accounts and that I have absolutely no relations with the corporation LTP HANDEL AG," stated Mr. Lazarenko.

The question of who owns the Swiss bank account alleged to be in Mr. Lazarenko's name is not the only problem that the former prime minister has with the Procurator General's Office. Two days prior to the announcement by Procurator General Lytvak, a formal criminal investigation also was begun into the financial source for a questionable 5 million hrv renovation of a country estate after it was given to Mr. Lazarenko by the government when he assumed the post of prime minister. Olga Kolinko, deputy procurator general, said the former head of government has been accused of unauthorized use of budgetary funds for the repairs of two country houses at the Puscha Vodytsia estate, located on the outskirts of Kyiv.

Ms. Kolinko said the charges are not "politically motivated." She explained that the investigation was begun after an inquiry by National Deputy Anatolii Yermak begun in early September revealed possible financial improprieties.

However, in his rebuttal in the newspaper Vseukrainskie Viedomosti, Mr. Lazarenko said the investigations are part of a concerted attack against himself and the Hromada Party that he leads to discredit them before the elections. "The campaign of persecution against me and the Hromada party that is being coordinated by high government officials associated with the president on the eve of elections to the Parliament has the goal of destroying the centrist political opposition, which has become their No. 1 enemy," stated Mr. Lazarenko.

Coincidentally or not, the same day (and on the same page) that the Lazarenko rebuttal was published, an allegedly confidential document from the offices of the presidential administration also appeared. Originally printed in the Russian newspaper Nezavisimaya Gazeta on December 24, the document outlines a seven-point plan, allegedly formulated by members of the Kuchma administration and signed by a "high-ranking official in the Kuchma government," to discredit Mr. Lazarenko and the Hromada Party in the eyes of the electorate.

The document describes a scenario that the Procurator General's Office seems to be playing out: that it should begin investigations in conjunction with the Verkhovna Rada against both Mr. Lazarenko and Yulia Tymoshenko, who is a close associate of Mr. Lazarenko, as well as the prime minister of Hromada's shadow government. The goal, as the document states, is "to instill the following stereotypes in society: Hromada - bandits; leaders of Hromada - leading criminal figures; if Hromada wins, criminals will run the country; Lazarenko has started a criminal war; there are no victors in disputes among criminals."

Other points of the alleged plan to discredit Mr. Lazarenko and his political party include investigations by the Security Service, tax authorities and the Internal Affairs Ministry into the dealings of companies and organizations associated with Hromada and Mr. Lazarenko, and the distribution of information among the Odesa, Kyiv, Donetsk, Crimean and Russian criminal organizations about Mr. Lazarenko's alleged ties to the Odesa mob, the ramifications of electoral success of Lazarenko's political organizations for the other criminal organizations and the need to take "preventive measures."

Volodymyr Horbulin, secretary of the National Security and Defense Council in the Kuchma administration, on December 25 denied that a document like the one printed in Nesavisimaya Gazeta exists. "In the first place, with full responsibility, I must state that the document does not exist, much less that it has been submitted to the president," said Mr. Horbulin. "We have carried out the necessary investigations, and I have every reason to make such a statement."

Mr. Horbulin added that he believes the "fabrications" to be Ukraine-based. "It is far simpler to publish such nonsense in the Ukrainian mass media by quoting foreign publications, thus shunning direct responsibility," said Mr. Horbulin.

He said the government would request that Nezavisimaya Gazeta give it the original documents. "If there are such materials, they will help us to track down the forgers and stave off fresh provocations."

Mr. Lazarenko, once a close political crony of President Kuchma and prime minister until his dismissal in July after much criticism by the president for his inability to get a 1997 budget approved and his lackluster effort in fighting corruption, is considered among the wealthiest people in Ukraine. Most political observers agree that he earned large sums of money trading in gas and oil with Russia. His close business partner is said to be Ms. Tymoshenko, president of United Energy Systems, considered the largest privately owned company in Ukraine before it ran into financial problems several months back. Mr. Lazarenko has denied that the two are business partners.

Ms. Tymoshenko, like Mr. Lazarenko, is a national deputy in the Verkhovna Rada. The Procurator General's Office has recently requested that the Verkhovna Rada lift her immunity from prosecution so that charges could proceed against her for illegally attempting to transfer money out of the country. She is accused of carrying $26,000 in undeclared cash onto a flight bound for Moscow from Zaporizhia.

When the charges were announced in early December, Ms. Tymoshenko called the action a political effort by the president's administration to muzzle her.