ANOTHER EMBEZZLER IN UKRAINIAN PARLIAMENT?

On October 11, the Ukrainian MP Viktor Zherdytsky was arrested in Germany on charges of fraud and abuse of office. Zherdytsky, suspected of embezzling 86 million deutschmarks intended for Nazi-era slave laborers, denied any wrongdoing. Ukraine’s international image and the popular image of people’s deputy suffered again: Zherdytsky is Ukraine’s third MP detained for embezzlement over less than two years and the second one arrested abroad. Zherdytsky’s affair again puts in question the ability of the domestic prosecution to deal with official corruption.

In 1994-1995, Hradobank, then headed by Zherdytsky, received some 100 million deutschmarks from Germany for distribution among former slave laborers. In 1997, the bank went bankrupt and the money never reached the people it was intended for. In March 1997, Zherdytsky was arrested in Ukraine on suspicion of fraud. But, in 1998, Zherdytsky, from behind bars, was elected to the Rada, where he joined pro-presidential forces. It is interesting that Zherdytsky was among the few MPs who in February 1999 abstained in the vote to lift former Premier Pavlo Lazarenko’s immunity from prosecution.

The Ukrainian media reported Zherdytsky’s arrest in Hanover on October 13. Ukrainian Prosecutor General Mykhaylo Potebenko reacted only after that, asking the Verkhovna Rada (parliament) to lift Zherdytsky’s immunity from prosecution. According to Potebenko, Zherdytsky forged documents to transfer 86 million deutchmarks from Hradobank to a company in Hong Kong and then to a Swiss account. Zherdytsky may be extradited to Ukraine, as soon as the Rada lifts his immunity. This may happen soon: On October 19 the Rada committee for ethics proposed to Speaker Ivan Plyushch to appeal to Germany to extradite Zherdytsky. This committee also recommended that the Rada lift the immunity and allow the Ukrainian prosecution to bring criminal charges against Zherdytsky.

Zherdytsky’s misdeeds have apparently long been known to Ukrainian law enforcement agencies. Deputy Prosecutor General Mykola Obikhod claimed on October 20 that the German police launched the investigation last year after they received information about Zherdytsky from the Ukrainian police. If this is so, it is not clear why Potebenko began to speak about the case and asked the Rada to lift Zherdytsky’s immunity only after he had been arrested abroad. Quite probably, the Ukrainian prosecution feared that Zherdytsky could follow Lazarenko’s example and escape–before any lifting of his immunity–into a country with which Ukraine has no extradition treaty. Potebenko himself explained that he has just recently brought from Switzerland convincing proof of the fraud.

The opposition jumped at the opportunity to accuse the government of complicity. “Kievskie vedomosti,” a tabloid highly critical of the government, recalled two things. First, that Premier Viktor Yushchenko was the central bank head when Hradobank received the German money. Second, that the leader of the right-wing parliament faction Reforms and Order, Viktor Pynzenyk, then deputy premier, chose Hradobank to accumulate the money allotted to the former slave laborers. Yushchenko and Pynzenyk denied flatly denied any wrongdoing. Yushchenko said that he was against placing the funds in Hradobank from the beginning. Pynzenyk defended his choice. He explained that Hradobank had been one of the most respectful domestic financial institutions before the court declared it–in Pynzenyk’s opinion, without grounds–bankrupt in 1997.

To all appearances, the affair with the German money may spoil life for yet more Ukrainians in high posts. On October 17, Potebenko, somewhat sensationally, claimed that the former acting director of the national oil and gas monopoly Naftogaz Ukrainy, Ihor Didenko, has admitted his guilt as an accomplice in Zherdytsky’s case. Didenko was apparently detained by the police in late 1999, but then released under a written obligation not to leave Kyiv (Studio 1+1 TV, October 13, 15; Ukrainska pravda, October 17-21; New Channel TV, October 20; UNIAN, October 21).

STRONG ECONOMIC GROWTH CONTINUES IN UKRAINE…