We have not participated in that debate for several good reasons – the most important of which is that we are lawyers and professional investigators, not political pundits.
Our work has no political component. We were hired by clients. In this case, the government of Ukraine retained us to discover and document critical evidence that could be accepted in courts in Ukraine, the United States and the United Kingdom, as well as international tribunals.
A free and open debate about the conduct of present and past government officials in Ukraine should be conducted by its citizens alone, not by foreign commentators. For that reason, we have chosen to avoid injecting ourselves into internal discussions regarding Ukrainian political life.
Plato Cacheris
Recently, however, the Kyiv Post has published commentary by an American lawyer named Askold Lozynskyj (“A failure to indict,” March 17) that sought to question the integrity of our investigation. Lozynskyj, who lives in New York, is a property attorney and is associated with a group called the Ukrainian World Congress. It was unclear to us whether Lozynskyj was writing as a U.S. lawyer or as an American seeking to involve himself in Ukrainian domestic politics. Unfortunately, it seems abundantly clear that Mr. Lozynskyj never actually read our report, and lacks even the most basic understanding of international fraud investigations.
For example, Lozynskyj begins his analysis with the blanket conclusion that “no criminal activity of corruption or self-aggrandizement was even implied.” Really? If Lozynskyj had gone as far as page 6 of the 176 page report, he would have read that: “The investigation revealed evidence of misapplication of state funds and apparent fraud involving the highest levels of the previous administration, specific ministries, and private corporations.”
Mark J MacDougall
If he had continued to the next page of the report, he would have seen the HR 21 million purchase of depreciated emergency vehicles described as, “a sham transaction, using classic international money laundering mechanisms.” That transaction, involving the Ministry of Emergency Situations, is the subject of a case now pending in the High Court of Justice in London.
If Lozynskyj had gone as far as page 9 of the report, he would have read about Hr 350 million in fraudulent vaccine contracts, signed in 2008 and 2009, in which Ukrainian government cash was transferred to Lithuanian and Latvian bank accounts of foreign shell companies. That case is described in the report as one in which “foreign intermediaries performed no work under the contracts and added no value to the transactions but were the ultimate beneficiaries of most of the Hr 350 million in government funds.” Ukraine’s case against some of those foreign beneficiaries is now pending in the U.S. District Court in Portland, Oregon.
Apparently Lozynskyj, a property lawyer, does not believe that fraud, money laundering and the misapplication of government funds suggest any criminal activity. Lozynskyj should have looked in the U.S. criminal code before publicly offering an opinion. Had he read that code, as well as the investigative report, he would have realized that each of those offenses is a felony under U.S. law carrying penalties of up to 20 years in prison.
Where he cannot hide from the plain language of the report, Lozynskyj attempts to mislead. For example, he makes much of the fact that payments under the fraudulent hryvnia sugar purchase contract, entered into by the State Material Reserve, were made “in March 2010 after President Viktor Yanukovych had been sworn in.”
The inconvenient truth is that the fraudulent contracts for Brazilian sugar were actually signed on Feb. 17 and 18, 2010, during the final few days of the previous administration. The money – totaling Hr 243 million – began to flow out of the State Treasury immediately and continued to be paid, as ordered under the contract, after the change in administration. Lozynskyj somehow fails to note the mysterious Israeli/Russian lawyers and the chain of British Virgin Island shell companies that participated in the sugar deal – negotiated, signed and executed while Yushchenko was still in office. He also fails to mention the most important fact – most of the sugar has still never been delivered to the State Material Reserve. The investigation of the sugar scandal continues.
Anyone interested in the investigative report need not rely on newspaper reports or on versions of reality tailored by commentators like Lozynskyj. The full report, along with a collection of original documents, is available online at:http://minfin.kmu.gov.ua/control/uk/publish/article?art_id=274232&cat_id=53608.
A great American academic and politician – Daniel Patrick Moynihan – is credited saying, “You are entitled to your own opinion, but not to your own facts.” Lozynskyj is certainly free to inject himself into the Ukrainian political debate if he so chooses. But if he presents himself as an American lawyer, criticizing the investigative work of U.S. law firms, he should first possess an actual understanding of the facts. Or, maybe, Lozynskyj should just stick to property transactions in New York.
Plato Cacheris is a partner at Trout Cacheris, LLC. Mark J. MacDougall is a partner at Akin Gump Strauss Hauer & Feld LLP.
