Case against Russian UN Official Takes Unexpected Turn


Dmitry Gornostaev 
March 5, 2007
http://www.kommersant.ru \t _blank Kommersant
Original Source: http://www.kommersant.com/p747434/r_530/UN_corruption/


In January 2003, Vladimir Kuznetsov was elected chairman of the United Nations Administrative and Budgetary Committee. On September 1, 2005, FBI agents arrested him in New York on the charge of conspiracy to launder money. http://www.pbs.org/wnet/un/ \t _blank Kofi Annan, secretary general of the UN at the time, waived his diplomatic immunity at the request of U.S. authorities. The Russian did not admit any guilt and was released on $1.5-million bail paid by the Russian government. Kuznetsov is now under house arrest in his apartment in The Bronx. He is under round-the-clock monitoring with an electronic bracelet on his ankle.

Kuznetsov was taken into custody three weeks after the arrested another Russia citizen, Alexander Yakovlev, former employee of the UN Procurement Office. Yakovlev made a deal with investigators and fingered Kuznetsov as an accomplice in laundering money received by them in return for giving assistance to private companies competing in multimillion-dollar UN tenders. According to prosecution accusations, Kuznetsov laundered hundreds of thousands of dollars received by Yakovlev between 2000 and June 2005. The prosecution holds that Kuznetsov knew of the criminal origin of Yakovlev's money but did not inform law enforcement bodies of it, but rather deposited it in an account of an offshore company set up especially for that purpose, Moxyco Ltd., at Antigua Overseas Bank Ltd. in Antigua, and receiving about $300,000 of the money from the offshore company. The money was originally placed in the account of another offshore company, Nikal Ltd., and then in Kuznetsov's personal account. 

Yakovlev agreed to cooperate with investigators after they proposed that, if he did not cooperate, he would receive the maximum sentence – up to 60 years. He then named his associate as accomplice. Soon after that, Yakovlev's lawyer, Arkady Bukh, stated confidently that Yakovlev would receive a light sentence or probation. American diplomats in New York began to hint immediately after the arrest of Yakovlev that he was a small fish and the investigation would lead to more important people. 

Kuznetsov does not deny that he received $300,000 from Yakovlev, as payment for a debt on the construction of a home outside Moscow. He claims that he did not know about the criminal origins of the money and assumed that his associate had made the money on the stock market. That is the only charge against Kuznetsov. Connections with other UN corruption cases, particularly those in the Oil for Food program, were not established, in spite of earlier reports. In essence, Kuznetsov is being accused of borrowing money from his associate and transferring it to his bank account in an unusual fashion.

Jury selection in the trial ended last week. The jury and Judge Deborah Batts heard prosecution witnesses last week. Yakovlev testified that he assisted five companies, two of them Russian, in receiving contracts to provide the UN with services while he was an employee of the UN Procurement Office between 1993 and 2005. However, since he did not take part in the choosing of the companies, his assistance consisted of advising how to submit a UN application and provided them with internal information that allowed the companies to win tenders. Yakovlev emphasized in court that Kuznetsov asked for a loan of $300,000 after he found out that he had a second source of income and that it was illegal.

After Yakovlev, FBI agent Megan Miller gave testimony. She questioned Yakovlev on the day of his detainment, without the participation of the Russian consulate. She stated that Yakovlev confessed that he guessed in the depth of his soul that the money was of criminal origin. At that point, the defense lawyer asked why the FBI agent had written down something completely different in her notes, that Kuznetsov thought that Yakovlev had made the money on the stock market. Miller responded that she compiled the official report from both what she had written down and from her memory. 

Last Thursday, another witness for the defense was supposed to appear. That was Igor Pochigaev, a Russian UN employee. He was planning on testifying that Kuznetsov said that he did not know about the illegal origins of the money in a conversation after the arrest of Yakovlev. That did not happen, however. Lawyers stated later that Pochigaev was contacted by federal prosecutors, who said that they suspected him of planning to give false testimony. They said that he could be charged for it and that his immunity would be waived (although only the UNI general secretary of General Assembly can do that).

Prosecutor's representatives do not deny that they made the call. They said that they wanted to prevent the witness from committing perjury. They added that they did so at the request of Pochigaev's lawyer, although he denied making that request.

Judge Batts has stated that, if it is confirmed that the prosecution applied pressure on the witness, the violation will be serious enough that the case will be dropped. A petition to drop the dismiss the case for lack of convincing evidence was also filed on Thursday. The judge declared a recess until 10:00 a.m. today, Monday, when the case will either proceed or be dismissed.