Senate subcommittee focuses on organized crime in Ukraine (05/10/98)

Senate subcommittee focuses on organized crime in Ukraine

by Eugene M. Iwanciw
Special to The Ukrainian Weekly

WASHINGTON - With the words "democracy is under siege from ruthless, well-financed, well-organized criminal organizations," Sen. Mitch McConnell (R-Ky.) convened an April 21 hearing by the Subcommittee on Foreign Operations of the Senate Appropriations Committee to focus on international crime programs.

Referring to the nations of the former Soviet Union, the subcommittee chairman went on to say: "To sustain support for crucial political and economic reforms, individuals and communities must be convinced that their government works well and can protect their property, their assets and their families from crime and the mafia."

The topic of the hearing was on U.S. programs to assist and cooperate with other nations in battling international crime and corruption. Testifying before the subcommittee were FBI Director Louis Freeh and Gen. Ihor Smeshko, director for strategic planning and analysis on the National Security and Defense Council of Ukraine. (Gen. Smeshko was Ukraine's first military attaché in Washington.)

The hearing focused on the Russian mafia operating throughout the new independent states and in the U.S.

In his opening comments, Sen. Patrick Leahy (D-Vt.) said: "I was a prosecutor for eight years and I know how difficult it can be to work together with law enforcement officers of another state, not to mention another country with different languages, different laws and traditions. The United States has a lot to offer, but we also have a lot to learn from countries like Ukraine. This needs to be a partnership. We both have everything to gain by working together."

"One of the hallmarks of your tenure as director is a commitment to improve and expand on the working relationships between the FBI and its foreign counterpart agencies," said Sen. McConnell to Director Freeh. Addressing Gen. Smeshko, the Kentucky senator said: "Your reputation and your portfolio of responsibilities are impressive."

Director Freeh said in his testimony, that "international organized crime is an immediate and increasing concern, not only for United States law enforcement, but also for the worldwide law enforcement community." He went on to state: "International organized crime groups are engaged in myriad criminal activities that include: murder, extortion, corruption of public officials, bribery, drug trafficking, money laundering, financial fraud, kidnaping, prostitution, arms smuggling and alien smuggling."

He noted that Russian authorities report "the existence of over 8,000 Russian/Eastern European/Eurasian criminal groups" of which 25 are active in the U.S. These groups "have shown an ability to work closely with established American criminal elements," including the Cosa Nostra and drug traffickers, he added.

The FBI director pointed out that "there are three key elements to the FBI's international law enforcement initiative," including "an active overseas presence," a program to train foreign law enforcement officers, and an institution-building program to "help establish and foster the rule of law in newly democratic republics."

In comments about Ukraine, Director Freeh said, "Gen. Smeshko and his agency are one of the several organizations in Ukraine that are direct beneficiaries of the training and institution-building programs that are the focus of this hearing ... Their presence here today stands as a testimony to the commitment by the government of Ukraine to develop modern law enforcement agencies that are based upon the rule of law."

Throughout his testimony, the FBI director gave examples of successful cooperation with Ukraine and other nations. He mentioned that "through our office in Kyiv, the FBI has a number of ongoing money laundering and financial fraud cases. In addition, this joint cooperation led to the extradition of a United States federal fugitive, despite the absence of an extradition treaty."

In his testimony, Gen. Smeshko stated that "converting state property to private property created an explosion in organized crime and corruption." He also noted that President Leonid Kuchma has recognized that organized crime and corruption are Ukraine's main national security threat.

The general stated that the new democracies clearly were not prepared for the problems of crime and that organized crime is "like a cancer" that, if unchecked, continues to expand. He noted that Ukraine lacks the resources to effectively battle organized crime on its own and reiterated Ukraine's commitment to this effort.

In questions about the situation in Ukraine, Gen. Smeshko reported that "the level of crime is increasing," pointing to money laundering, which is "like a vacuum cleaner," and the resale of resources such as energy. He also noted that the "level of corruption of some government bodies is very high." He attributed the increase to the struggle for power between the left and right as well as the privatization of enterprises.

The general underlined that Ukraine maintains good security over nuclear materials and that not a single smuggling case has surfaced. In the area of conventional weapons, Ukraine has been successful in stopping much of the smuggling, he added.

In describing the sophistication of criminal elements operating in Ukraine, Gen. Smeshko said that they are "becoming richer and wiser" and are trying to buy state enterprises for money laundering purposes. He noted that they are using more sophisticated equipment including encryption devices for laptop computers.

Accompanying Director Freeh was the FBI agent stationed in Kyiv, who pointed out that there are currently 90 cases on which the U.S. and Ukraine are cooperating. Thirty of the cases were initiated by Ukrainian authorities. He noted that task forces on crime in the U.S. routinely pass leads on clans to Ukrainian government officials. The two FBI agents stationed in Kyiv have responsibility not only for Ukraine, but also Georgia, Azerbajian and Armenia.

Director Freeh explained that the International Law Enforcement Academy (ILEA) in Budapest serves as "a law enforcement training center for officers from Eastern Europe, Russia, Ukraine and the Baltic states." The FBI coordinates activities at the institution, which is funded by the Department of State. It was opened in April 1995, and by the end of May will have graduated 632 students from 20 countries. Thirty of the graduates are from Ukraine. Sen. McConnell noted that he had visited the ILEA and was impressed with its programs.

Director Freeh also pointed out that, in addition to the ILEA, "during the past three years, the FBI has provided training for over 13,000 foreign law enforcement personnel from over 60 countries."

While the hearing was generally complimentary of Ukraine's battle with corruption and organized crime, Gen. Smeshko was asked why there has been no prosecution for corruption of even one Ukrainian government official. He responded that there is a problem in the manner in which the law was written: the chapter on corruption is unclear. Director Freeh added that the U.S. and Ukraine are closely cooperating on gathering evidence against a former high official of Ukraine.

In light of increased tension between the United States and Ukraine regarding business disputes and the slow pace of reform and privatization in Ukraine, the hearing was welcomed by both U.S. and Ukrainian officials as a concrete example of an area of close cooperation between the two countries.