Katya Gorchinskaya   Kyiv Post   17-Jun-1999   Top officials accused of corruption
Among the seized vehicles, the article lists an Audi ($35,000), a BMW M5 ($77,000), a Mercedes 600 ($135,000), a Mercedes 500 ($105,000), a Rolls-Royce Silver Seraph ($262,000) and a Bentley Azure ($349,000).
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Top officials accused of corruption

Post Staff Writer

17 June 1999

A new corruption scandal appears to be on the brink of breaking out in parliament, as several sources said that two deputies and one senior government official were under investigation by the Swiss for hiding dirty money in Swiss bank accounts.

Several sources in parliament said that the Office of the Ukrainian Prosecutor General received a request from their colleagues in Switzerland for information on the business activities and foreign bank accounts of deputies Oleksandr Volkov, Hryhory Surkis and Prime Minister Valery Pustovoitenko.

The Post could not officially confirm the allegations with either the Swiss or the Ukrainian prosecutor's office.

"If they did anything, it would be a criminal matter and therefore secret," said Mykola Obykhod, head of the Especially Important Crimes Department in the General Prosecutor's Office, in a telephone interview on June 15.

He suggested that somebody had set the Post on the wrong track.

Oleksandr Omelchenko, a parliament deputy well-known for digging up corruption charges on public officials, confirmed only that Volkov is involved in a foreign criminal investigation.

At Omelchenko's request, parliament approved on June 16 the creation of a special temporary investigative commission to look into the foreign bank accounts of Volkov and other officials.

Omelchenko's based his request for the commission on a preliminary investigation conducted in partnership with deputy Anatoly Yermak.  The investigation found that Volkov's bank accounts, worth 135 million Belgian francs ($3.5 million), had been frozen in Belgium, and that the local prosecutor's office is pursuing a money-laundering case against them.

The Post obtained a copy of La Derniere Heure newspaper, which had reported on the case on Feb. 25.  The same article said a number of luxury cars and other property belonging to Volkov had been seized.

Among the seized vehicles, the article lists an Audi ($35,000), a BMW M5 ($77,000), a Mercedes 600 ($135,000), a Mercedes 500 ($105,000), a Rolls-Royce Silver Seraph ($262,000) and a Bentley Azure ($349,000).

The article said that the Belgian judges had many questions for Volkov about his off-shore companies in the Channel Islands, the Bahamas and Southeast Asia.

Omelchenko's note to parliament said that although the Belgian investigative agencies had requested assistance, their Ukrainian partners are "blocking an objective and timely investigation of the foreign financial activity of Volkov."

"The deputies' commission has received information and materials concerning other officials, including parliament deputies, who opened foreign bank accounts without the permission of the National Bank of Ukraine, and who hid hard-currency profits, registered businesses, and obtained real estate," the note said.

In another development concerning Surkis, a Vyshhorod court on June 15 annulled all votes received by Surkis in the May 30 Kyiv mayoral election when it found that the wealthy businessman had filed a false 1998 income declaration during the registration process for that election.

"According to the declaration, Surkis had no securities, bank accounts or real estate.  However, the State Tax Inspection proved that this was not true," the Unian news agency quoted the State Tax Administration as stating in a press release.

Analysts say that all criminal and other allegations of people close to the president might be pieces of the same puzzle.

Several analysts in parliament said that the president's opponents are trying to organize a parliamentary hearing and leak information about the president's allies to undermine his chances to get re-elected.

"They are trying to repeat the situation that happened in 1994 when a corruption hearing had taken place in parliament against Blasco [Black Sea Shipping Company] just weeks before the election," said Vyacheslav Pikhovshek, director of Ukrainian Center for Independent Political Research.  "For two weeks the whole country was listening to Leonid Kravchuk's alleged involvement in the case, and he lost the election."

Another analyst suggested that broadcast of parliamentary sessions on the state radio had been cut off in May partly because Omelchenko had been trying to organize a similar hearing against the president's friends.

One deputy said that it was also possible that former Prime Minister Pavlo Lazarenko, a fierce enemy of Kuchma's, leaked the damning information on the president's friends to the Belgian authorities.  Lazarenko is now in the United States awaiting a decision on whether he will be granted political asylum there or be extradited to Switzerland on money-laundering charges.  He promised to leak damning information on several officials before fleeing Ukraine in advance of having his parliamentary immunity stripped in February.

That same deputy suggested that Swiss authorities may be pursuing the corruption and money-laundering investigation against big names from the former Soviet Union because it would compensate for their failure to imprison Sergei Mikhailov, a reputed Russian Mafia boss, on similar charges last year.

(Post staff writers Marko Levytsky and Stefan Korshak contributed to this report.)