Former PM Sentenced In States Looks Forward To Early Release

KIEV, Ukraine -- Although former Ukrainian Prime Minister Pavlo Lazarenko was sentenced by a U.S. court just two weeks ago to nine years in prison for money laundering, his lawyers have already reiterated that he intends to return to Ukraine and will not serve more than two months of his sentence, calling into question whether justice really has been served.

Former Ukraine Prime Minister Pavlo Lazarenko leaves a federal court house in San Francisco, California, after being sentenced to nine years in prison and fined $10 million.

After a six-year investigation, 10-week trial, and repeated sentencing delays, U.S. Federal Court Judge Martin J. Jenkins finally sentenced Lazarenko on Aug. 25 to nine years in jail, a fine of $10 million and three years of supervised release. The 53-year-old, who was prime minister of Ukraine from 1996 to 1997, maintained that his fortune had been amassed through legal business operations.

Lazarenko now has the infamy of being the first former head of a foreign government to be tried and convicted in the U.S. since Panama’s Manuel Noriega in 1992.

Most of the allegations of embezzlement of state funds and abuse of office against Lazarenko were related to the fight for gas profits between rival political and business groups in Ukraine in the 1990s. Lazarenko had earlier held the post of energy minister.

Lazarenko sentenced

Lazarenko initially faced a 53-count indictment levied by the U.S. Attorney’s Office in March 2004, which charged that he abused his position of power in Ukraine, especially as prime minister, to make about $114 million in the mid-90s.

A federal jury convicted Lazarenko on 29 of these counts on June 3, 2004.

Judge Jenkins threw out 15 of these counts, confirming the remaining 14 counts of money laundering, wire fraud and interstate transportation of stolen property in a May 20, 2005 decision.

Just prior to Lazarenko’s Aug. 26 sentencing, the U.S. Attorney’s Office submitted a strongly worded sentencing (memo) to the court, which contended that Lazarenko “engaged in massive abuse of both his public office [when prime minister] and the United States financial system,” by enriching himself at the expense of the Ukrainian people through extortion and fraud, concealing $44 million in laundered money in a “maze of offshore accounts.”

The Attorney’s Office added that Lazarenko had violated both Ukrainian and federal law by laundering money through U.S. banks (in addition to banks in Switzerland and other countries) and demanded a stringent sentence of “220 months in custody, forfeiture of $22,846,000, a fine of $43,392,000 … and a three-year term of supervised release.”

Judge Jenkins settled on a much lighter sentence and fine, given the fact that much of the money allegedly laundered by Lazarenko was “commingled” with legitimately acquired funds, and that the illegitimate funds were, therefore, hard to identify.

Even so, the sentencing was heralded as a victory for justice and, according to U.S. Attorney Kevin Ryan, who tried the case, illustrated that “[the U.S. Attorney’s Office] will persevere and obtain convictions and lengthy sentences for corrupt public officials – even if they are from foreign countries…”

Lazarenko’s legal team is already gearing up to challenge the verdict in California’s 9th District Court of Appeals on Sept. 29, the same day the Court plans to consider the U.S. Attorney’s Office’s forfeiture request. The request calls for Lazarenko to turn over another $23 million in property and assets held in the U.S., which could include his $6 million mansion, formerly owned by U.S. comedian Eddie Murphy.

His lawyers have already taken to making their case for overturning the verdict public, as evidenced by recent press statements. Lazarenko, a former Ukrainian prime minister, said he fled to the U.S. in 1999 seeking political asylum during Leonid Kuchma’s presidency after receiving death threats.

Lazarenko’s legal “dream team,” which includes high-profile American lawyers Doron Weinberg, Dennis Riordan and Don Horgan, has said that even if their client loses the Sept. 29 appeal, he will still serve far less than the nine-year sentence imposed by Judge Jenkins.

Yevheniya Kolodiy, one of Lazarenko’s Ukrainian lawyers, spelled out the logic to Ukrainian journalists earlier this week.

“According to [Lazarenko’s] American lawyers, normally 85 percent of federal court sentences are served, which in our case means a subtraction of 16.2 months,” she said, adding that “Pavlo Lazarenko spent 52 months under arrest [in prison], which the court has also included… Of the 40 remaining months our client has already spent 38 under house arrest.”

Confident of early release

As a result, Pavlo Lazarenko stated confidently in a Sept. 2 interview with the Komsomolskaya Pravda – Ukrayina newspaper that “the suggestion that I’ll sit five years in jail, as Ukrainian mass media controlled by my political opponents has reported over the last couple of days, won’t happen even in their wildest dreams.”

With their calculation, Lazarenko’s lawyers have not only shortened his jail term to just two months, but seriously called into question whether justice was really served by the U.S. court system – especially as another high-profile case involving former governor of Ukraine’s northeastern Sumy region, Volodymyr Shcherban, who has also been accused of abuse of office and financial fraud, looms on the horizon in the U.S.

Luke Macaulay, spokesman for the U.S. Attorney’s Office in California, countered in comments to the Post that the time Lazarenko spent under house arrest would not be factored in, and that the former prime minister “will have to serve at least 85 percent [of his jail term, or 91.8 months].”

There is also the matter of the three years of Lazarenko’s supervised release that follow his jail term, the details of which must be hashed out by Judge Jenkins and Lazarenko’s parole officer, according to Macaulay, who added that it’s unclear whether Lazarenko will have to remain in the U.S. upon his release or can travel freely to Ukraine.

In the meantime, Lazarenko has been gearing up for a return to the Ukrainian political scene, where his alleged insider information about corrupt practices involving a number of current Ukrainian government officials and businessmen from the Kuchma era could shake things up considerably.

During the March 26 general elections this year, Lazarenko used his incredible financial resources to run a campaign that brought his Hromada party and the eponymous Lazarenko Bloc (formed by Hromada in conjunction with the Social-Democratic Party and the Social Democratic Union) a measure of success at the local level.

According to media reports from the March 26 election, Lazarenko openly campaigned against the Donetsk-based Party of Regions, which now controls the government at the national parliamentary level. Moreover, during the election campaign, he conducted several hour-long question and answer sessions with voters on a direct line from San Francisco, where he’s been for the last six years.

Opinions divided

The Lazarenko Bloc won 17 seats on Dnipropetrovsk’s 100-member regional council in the general elections, which BBC World Service correspondent Vadym Ryzhkov said amounts to a “golden share”, or powerful swing vote that set the fate of the coalition-building process at the regional level.

After overtures made by the Lazarenko Bloc to form a coalition with the pro-presidential Our Ukraine and the Yulia Tymoshenko Bloc (named after another former prime minister) on the Dnipropetrovsk regional council proved unsuccessful, the Lazarenko Bloc opted to team up with the Party of Regions, backed by powerful Donetsk businessmen who’ve traditionally rivaled the Dnipropetrovsk clan for influence.

These election results indicate that Lazarenko could be poised to return to Ukraine’s political scene, although Andriy Yermolayev, director of the Sofia Center for Social Research, attributes the election results more to “inertia” and a slick advertising campaign.

“There will be no cataclysmic results from the return of Lazarenko to Ukraine. As a result of the sentencing by the court, Lazarenko has finally lost the battle over his image as a true fighter for fairness against a corrupt regime, as his lawyers have repeatedly tried to portray him. He’s now a criminal who’s been sentenced for corruption…

His last remaining moral arguments now hold no weight,” said Yermolayev, adding that Lazarenko’s return to politics would most likely not be accepted by society.

However, the insider information Lazarenko reportedly has on corrupt business practices during the nearly lawless 1990s could afford him considerable levers of influence over a number of politicians and business clans.

“To date, for capital groups closely tied to Ukraine’s system of corruption, and for quite a large number of Ukrainian politicians who have close ties to Ukraine’s oil and gas industry, the information and the business and political secrets known by Lazarenko are the key to their careers.

This will, without doubt, be a method of influence over their conduct and their political future,” said Yermolayev, adding that Tymoshenko must be especially prepared for the return of Lazarenko, as her businesses have previously factored into investigations regarding corruption in the gas sector.

According to Yermolayev, the fact that Lazarenko was sentenced shows that as far as the U.S. government is concerned, Lazarenko has already played his role.

“For a long time, they [the U.S.] had Lazarenko hanging on a hook, and it’s clear that his sentencing was dependent on certain developments in Ukraine. Note that Lazarenko wasn’t sentenced until after the Kuchma era came to an end … until certain situations arose with the Orange government,” said Yermolayev.

Now it seems that Lazarenko is no longer needed by the U.S. as a way to influence Ukrainian politics – a threat from abroad with significant insider information who could be released at any moment, he added.

“Thus, he could now be sentenced because he, as the maverick, has fulfilled his task. The courts, nonetheless, delivered a negative sentence, which is a signal to political factions and politicians who are tied to the image of Lazarenko,” said Yermolayev.

It is precisely because of Lazarenko’s aims to regain influence in Ukraine – in both political and economic circles – that the U.S. Attorney’s office sought a tough sentence for his money-laundering crimes.

The U.S. Attorney’s office’s sentencing memo noted, “[Lazarenko’s] ongoing claims of innocence and the recent election in Ukraine demonstrate that he continues to pose a danger, and a significant sentence is necessary…”

Source: Kyiv Post