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David Kravets, AP Legal Affairs Writer
San Francisco, CA, Tuesday, March 16, 2004
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SAN FRANCISCO -- A United States prosecutor painted former
Ukrainian Prime Minister Pavlo Lazarenko as a politician out to "further
his own interests" and "to line his own pockets."
Lazarenko, 51, stands accused in federal court on suspicion of
laundering at least $114 million of an illegally obtained fortune
through banks in the United States. Prosecutor Martha Boersch told a
12-member jury during her opening statement Monday that
Lazarenko "was using his official power to force people to pay a
percentage of their profits they were making."
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Pavlo Lazarenko
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According to the 53-count indictment filed by U.S. prosecutors,
Lazarenko used his political clout to set up an international
underground network of bank accounts to launder profits made through
clandestine schemes involving natural gas, agribusiness, housing and
other businesses in Ukraine.
Counsel for Lazarenko, Doron Weinberg, told jurors his client was the
victim of overzealous prosecutors in the United States who were
perhaps doing the dirty work for Lazarenko's opponents back home,
including President Leonid Kuchma, who is up for re-election in
October.
Weinberg said Lazarenko's millions were made legitimately and that he
put them in overseas bank accounts so they would not be confiscated
by Kuchma, once Lazarenko's ally who became his nemesis after
Lazarenko began making a bid for the presidency in 1999.
"He moved money in order to protect it from the Kuchma regime,"
Weinberg said.
Lazarenko was released from jail on $86 million bail last year and
remains under 24-hour surveillance.
Jurors listened intently and some took notes as a trial began
featuring extortion, fraud, bribery, graft and even assassination
attempts to the backdrop of millions of dollars of bank accounts
hidden throughout the world.
Testimony begins Wednesday, and the trial that is expected to last
several months. Dozens of witnesses are expected to testify in
several languages that will be translated into English for the jury
and Russian for Lazarenko. Lazarenko is accused of violating United
States law by using the country as a repository for allegedly ill-
gotten money from Ukraine, and prosecutors must prove he violated
Ukrainian law to earn his fortune.
Lazarenko, the first former head of government to be tried in the
United States since Manuel Noriega of Panama, contends he neither
siphoned funds from his government nor accepted bribes from big
business in exchange for government contracts and favors.
Lazarenko claims he earned the fortune legitimately, in a burgeoning
and nearly lawless free-market economy left to fend for itself after
the Soviet Union's collapse. He also says that he planned to use the
money in a campaign to unseat Kuchma, the man who anointed him as
prime minister in 1996 and then fired him a year later.
After Lazarenko was appointed by Kuchma to be Ukraine's top energy
official in 1995, he awarded natural gas contracts to the United
Energy System of Ukraine, and in turn the company funneled more than
$120 million into Lazarenko's accounts, according to the indictment.
Weinberg said Lazarenko was paid by the company, but as political
donation in a bid to unseat Kuchma.
Lazarenko, 51, fled to the United States in 1999, in the midst of his
country's presidential election campaign, and sought asylum, claiming
there had been three failed attempts to assassinate him.
The case is United States v. Lazarenko, 00-0248.
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