Internet reports link former SBU chief to fuel, cigarette smuggling
Ukrainian lawmakers on July 3 requested that Ukraine’s State Security Service chief and prosecutor general mount a “comprehensive and impartial investigation” into corruption allegations against a former SBU chief and his son that were published last month on a news Web site.
The articles allege that former SBU chief Leonid Derkach and his son, Andry, an influential Labor Ukraine deputy, are linked with powerful businessmen Semen Mogilevich and Vadym Rabinovich.
The story, citing confidential reports, alleges that the elder Derkach, while chief of Ukraine’s Customs Service from 1996 to 1998, knowingly ignored shipments of bootlegged fuel and cigarettes bound for Central Europe. It also reported that Derkach’s son assisted Rabinovich in cutting a deal to sell state‑of‑the‑art Motor Sich engines to the Israeli military for use in spy planes.
Andry Derkach and Rabinovich are believed to control the private TV company Era, whose programmes go out on UT‑1, and at least five newspapers and one news agency.
The articles, written by journalist Oleh Yeltsov, appeared on Kriminalnaya Ukraina, a Kyiv‑based news site.
On June 26 the SBU questioned Yeltsov about his articles and launched a criminal investigation, claiming that he may have published state secrets on his site.
The articles in question, titled “From the lives of the Derkach Family,” contain documents that were allegedly leaked by Ukraine’s Armed Services Intelligence Directorate (ASID) as well as excerpts from reports sent to ASID by foreign intelligence agencies.
The chief of the Interior Ministry’s directorate for fighting organized crime formally asked ASID in 1999 to collect and report “objective, widely sourced information” on the activities of Rabinovich and Mogilevich, according to Yeltsov’s report.
Yeltsov would not say who gave him the documents. According to Ukrainian law, journalists are not legally obligated to disclose their sources.
SBU spokesman Oleksandr Skripnyk has refused to comment on the case. A U.S. Embassy official who Yeltsov said he met with on June 27 also refused to comment.
As a witness in a criminal matter, Yeltsov is under a gag order, which forbids him to divulge details about the case.
Meanwhile, Ukraine’s General Prosecutor’s Office has given no indication whether it plans to act on the Rada’s request for an inquiry, which is a non‑binding request.
Fellow journalist and Svoboda editor Oleh Lyashko, who was present during the three‑hour search of his colleague’s apartment on June 26, said Yeltsov turned over to authorities copies of the documents, including some from a Russian source that were classified as “Top Secret.”
Rabinovich, a dual citizen of Ukraine and Israel, was expelled from Ukraine for five years on June 24, 1999, for “causing especially serious damage to the Ukrainian economy,” according to official documents at the time. Rabinovich last August told the Post in Kyiv that he attributed his expulsion to political intrigue, denying that he had ever been officially banned.
Ukraine’s State Tax Administration says it “posseses no evidence that Rabinovich conducted business and received income in Ukraine” and acting Prosecutor General Mykola Harnyk says “all materials supporting the decision to bar Rabinovich from Ukraine two years ago have been destroyed,” UNIAN news service reported on July 3.
On June 28, in an interview with Radio Liberty, Rabinovich blasted recent reports appearing in Western media linking him to criminal activities and citing reports filed by U.S. federal agents in 1994.
“Again we are hearing cliches; again a person is being marked for life in writing that he is linked to the criminal world, that he is a gold smuggler and is part of a criminal syndicate. This has not been proved in court, but the person has already been smeared,” Rabinovich said.
Semen Mogilevich, who last year gave an exclusive interview in Rabinovich’s newspaper, Stolychnye Novosti, also has denied links to organized crime.
“I’m a simple wheat trader,” Mogilevich was quoted as saying in the article.
Andry Derkach, who was in Moscow on June 25‑28 to attend the “Information: Challenge of the 21st Century” conference, made his views about the bad press against him clear in a report he read titled “Liberal dictatorship is worse that the totalitarian kind.”
In his speech, he argued that recent events in Moscow, Kyiv and Prague demonstrate conclusively that press liberties in Eastern Europe have “been transformed into the freedom of unabashed manipulation.”
