"Central European Media now owns 60 percent of Studio 1+1, and Mr. Fuchsmann owns at least 30 percent." — Raymond Bonner
21 June 2001
Leonid Kuchma, President
vul. Bankivska 11
The New York Times excerpts below give the impression that not long after George Soros bought you the Presidency in 1994, you permitted Ronald Lauder, Vadim Rabinovich, and Boris Fuchsmann to acquire ownership of leading mass media outlets in Ukraine.
As some of this ownership appears to have been acquired illegally — as by bribes paid to members of your administration — I wonder if the damage to Ukrainian democracy and Ukrainian independence should not today be at least partly repaired by nullifying all acquisitions based on illegal transactions?
Hard copies of letters to Leonid Kuchma go out in envelopes such as the following, to which graphic material from Gongadze photo for envelopes is taped:
Sara Krulwich/The New York Times
Ronald S. Lauder, head of Central European Media Enterprises.
ASHINGTON, June 10 — A company owned by Ronald S. Lauder, the cosmetics heir and former New York City mayoral candidate, is under investigation over allegations that it paid at least $1 million in bribes to Ukrainian officials for a valuable television license, according to lawyers and Justice Department documents.
The United States attorney in Manhattan, Mary Jo White, has empaneled a grand jury and issued subpoenas, and prosecutors are studying some 6,000 pages of documents from Central European Media Enterprises, which Mr. Lauder founded in 1991 as part of a plan to build a media empire in Europe. It now owns television stations in several Central and Eastern European countries.
In a Federal District Court filing in New York last year, Ms. White sought the corporate documents, saying they were needed for a criminal investigation into whether Mr. Lauder's Central European Media had "made corrupt and unlawful payments to Ukrainian officials" in violation of the Foreign Corrupt Practices Act, the federal law which prohibits American companies from paying bribes abroad. Mr. Lauder and the company did not challenge the request and turned over the documents, a lawyer said.
The payments being examined took place in 1996 after Ukraine's licensing body granted a potentially lucrative license to Mr. Lauder's company despite the fact that the Ukrainian Parliament had imposed a moratorium on new licenses. [...]
Mr. Lauder, a major Republican fund-raiser who gave $100,000 to President George W. Bush's inauguration, lives in New York and is chairman of the Museum of Modern Art. He was ambassador to Austria and a senior official in the Defense Department under President Ronald Reagan. He was until recently the chairman of the Conference of Presidents of Major American Jewish Organizations, which seeks to influence Middle East policy.
Mr. Lauder has been an active philanthropist and businessman in Central Europe since the fall of Communism. He is the chairman and controlling shareholder of Central European Media, which is registered in Bermuda and has its corporate headquarters in London.
In Ukraine, Central European Media controls the most popular station through its majority-owned subsidiary Studio 1+1.
Prosecutors are studying two transactions related to Central European Media's Ukraine investment, according to documents and persons close to the investigation. In one, prosecutors are trying to determine if Mr. Lauder's company paid $1.2 million to two Lebanese businessmen living in Ukraine, who then distributed it to some members of Ukraine's television licensing board. [...]
Mr. Lauder's bid to gain the license in Ukraine began in 1995. That year, he met in New York with Oleksandr Volkov, a top adviser to Ukraine President Leonid D. Kuchma, to discuss business opportunities. [...]
Mr. Volkov suggested that Mr. Lauder team up with a new Ukrainian television broadcasting company, Studio 1+1, in Kiev, and he did. The principal owners were Vadim Rabinovich and Boris Fuchsmann, well known around Kiev for their influence and wealth. Less well known were their ties to Russian organized crime, according to reports by the F.B.I. and European law enforcement agencies.
Mr. Rabinovich, who no longer has an interest in 1+1, has denied any links to Russian organized crime. Mr. Fuchsmann did not respond to e-mail inquiries seeking comment on the licensing deal and the F.B.I.'s claim of his ties to organized crime, although an assistant confirmed that he had received the inquiries.
A 1994 F.B.I. report on Russian organized crime in the United States described Mr. Fuchsmann as a gold smuggler and embezzler, whose company in Germany was part of an international organized crime network. He is barred from entering the United States.
Mr. Volkov is under investigation in Belgium and Ukraine over accusations of money laundering and corruption, and is barred from entering the United States partly because he is believed to have handled transactions for Russian organized crime, American officials said.
Mr. Volkov, who is now a member of the Ukraine Parliament and therefore immune from prosecution there, has denied any wrongdoing and said that the investigations were politically motivated. In an interview, he brushed off any notion that he profited from the broadcast license, saying, "What, am I stupid?"
Besides Mr. Fuchsmann and Mr. Rabinovich, there were other, silent owners of Studio 1+1. In one internal fax, in April 1996, Ms. Jensen described the Studio 1+1 shareholders as "extremely powerful" people whom, she added, "I will not mention on this fax."
Central European Media now owns 60 percent of Studio 1+1, and Mr. Fuchsmann owns at least 30 percent, according to public statements. [...]
The Ukraine's television licensing board issued a broadcast license to Studio 1+1 not only in spite of Parliament's moratorium, but with only four of the board's eight members present; the law required at least six members for a vote.
A few days after the license was issued, Central European Media transferred $1.4 million to International Teleservices of Belize, according to a C.M.E. Wire Transfer Request. That is the second transaction being looked at by prosecutors.
The Belize company was indirectly owned by "many high Ukrainian officials," according to a second C.M.E. document, which did not name them. A third document shows that International Teleservices had paid this amount to a company in Germany owned by Mr. Fuchsmann, Innova, and that Innova had paid the license fees on behalf of Studio 1+1. Innova is part of a Russian organized crime network, according to U.S. and German law enforcement reports.
It is not clear why such a circuitous route was used, and a person involved in the transaction, with inside knowledge of the owners of International Teleservices, said the $1.4 million payment was not for a license fee. He would not say what it was for. [...]