Prosecutors say that Gaydamak hid his financial activities in collusion with a front man and senior banking officials in the trust-establishing department of the largest bank in Israel, so that he could buy Dutch phosphates company ThermPhos in 2002. (All the alleged accomplices have also been indicted.) Lawyers defending those indicted say that, by definition, a trust acts for the clients who own it. Gaydamak’s lawyer also told Ha’artez that the money laundering charges are baseless, because the charges don’t indicate that Gaydamak obtained his money illegally. Gaydamak has fled the country and is believed to be in Russia.
The ThermPhos case doesn’t mark the first time Gaydamak’s business activities have attracted investigators. (Click here for a detailed look at those business activities, from the Center for Public Integrity.) In the late 1980s, French authorities noticed – Gaydamak had moved to France after finding Israel not to his liking – that the former bricklayer and translator was living a lavish life. His import-export companies were trading in coal, meat, wheat and weapons from the former Soviet Union. And Russian Interpol believed that he was involved with organized crime figures. By late 2000, France had indicted him for allegedly trafficking nearly $800 million in arms to war-wracked Angola from 1993 to 2000, and for allegedly paying off French and Angolan officials as much as $56 million. Gaydamak has denied the charges but has not returned to France since he fled in 2000.
Other Russian News
Russian business was also in the news last week for something else besides webs of companies and shady import-export deals. A new MBA program in Moscow won’t just be drumming paradigms, synergy and pre-planning into the heads of its students; the buzzwords will instead be corruption, flawed legislation, bureaucracy and how ruling parties influence emerging economies. The Skolkovo program aims to teach students what they need to know to operate outside the Western world, reported Businessweek. Director Serge Hayward:
Hayward said that he is considering asking officials in police agencies and private security firms to speak to the business students, and might even invite an organized crime boss to talk about the challenges of management. "We're trying to put them in an environment where they are going to function rather than tell them about this environment," he says.
In the unsolved mysteries department, US authorities still have no idea who shot an intelligence expert specializing in the former USSR outside his Maryland home in March 2007. But Paul Joyal, the victim, thinks it was the Russians. Joyal’s resume, according to the AP: former Senate Intelligence Committee director of security, friend to a former KGB counterintelligence chief, blaster of Russia on the BBC, paid lobbyist for Georgia. Police at the time said the attack was random street crime. But Joyal points out that the two men who attacked him left both his wallet and his car keys (to his car which was parked nearby) at the scene. Four days before the attack, he appeared on the television show Dateline and accused the Russian government of orchestrating the radiation poisoning death of former KGB operative Alexander Litvinenko.
Others aren’t so sure. Joyal’s former KGB friend, Oleg Kalugin, told the Washington Post after the shooting: “It’s hard to believe that a few days (after the broadcast) that some guys would shoot him. It could be just a regular criminal assault.” A Russian embassy spokesman told the AP the Russian-hitmen theory was “absolute nonsense.” “Paul Joyal, hallucinating,” wrote an unnamed blogger on the Russia Today website.
Bulgaria’s Borissov Praised, Trashed
As Western ambassadors last week lavished Bulgarian Prime Minister Boyko Borissov with praise for what he and his new government have done to address organized crime and corruption, the Sofia News Agency ran another interview with the German author of a new book on Bulgarian organized crime (“Dei neuen Daemonen,” or “The New Demons”). Juergen Roth told the agency that Borissov had in fact taken advantage of Bulgarians’ interest in getting rid of crime and corruption by posing as an opposition to both ills.
The citizens of Bulgaria are again and again hoping that the criminal and corrupt networks in Bulgaria could be finally destroyed and the fight against corruption could be successful. His image as a non-standard and successful politician and as the only alternative of the thefts, lies and inefficiency of the triple coalition before that were a danger for the country, has been imposed methodologically and for a long time by the mass media and that leads to the enormous support by the voters. This is how he managed to gain approximately absolute Parliamentary majority. Boyko Borisov promised a lot and many citizens believe he will really act now. It is also sure that he is no new Messiah… There are a lot of decisions which are a clear signal that he really wants to fight against organized crime and their networks in state institutions. There are also a very few signals showing the opposite.
Eastern Europe Roundup
Serbia: After a French fan died from injuries sustained after Serbian football hooligans assaulted him in September, Serbia’s football supporters are coming under more scrutiny and prosecutors are asking for a ban on ultra-natonalist organizations thought to be behind the violence. Belgrade daily Blic wrote last week that thousands of criminals are involved in supporters’ groups for the Red Star, Partizan and Rad clubs, and the police, judiciary and politicians know about it.
A source from the judiciary told the daily that there is "great influence exerted by football clubs on courts and police when it comes to tolerating hooligans" – something that State Secretary with the Ministry of Justice Slobodan Homen spoke about recently.
Serbian football supporters have had a bad name since the early 1990s, when paramilitary leader Zeljko Raznatovic “Arkan” ran the Red Star supporters’ group and drafted some of the group’s more brutal members into his paramilitary unit, the Tigers.
Greece: Greeks at the weekend elected the Socialist PASOK party to a parliamentary majority (160 out of 300 seats), giving them the job of fixing the country’s economy and fighting endemic corruption.
Poland: In Poland, a former lawmaker is on trial for allegedly accepting more than $34,000, alcohol and a diamond-embedded pen in exchange for helping a company acquire a plot of land. Beata Sawicka, 45, says she was framed.
Romania: Two Romanians were extradited to the US last week to face charges of participating in an alleged phishing scheme that targeted Citibank, JP Morgan and Chase, Wells Fargo, eBay and PayPal, reported the FBI. For more on the threat of cybercrime from Eastern Europe, click here.
EU Proposes VAT Measures
The European Commission last week proposed allowing governments more leeway in how they collect value-added tax (VAT), to cut down on VAT fraud that costs taxpayers billions of dollars every year.
The fraud occurs when criminals import goods into a country, VAT free, and then sell them to domestic buyers, charging them VAT. The crooks then disappear with the VAT money and don’t pay the government a dime. Fraudsters usually focus on small but expensive goods – cell phones and computer chips for example – but in August, British authorities arrested nine people for using carbon credits to defraud the government out of $63 million. Similar concerns prompted France to exempt carbon credit sales from VAT in June.
The new proposal would allow countries to exempt some sales – including carbon credits, cell phones and other goods susceptible to VAT fraud – from the tax. The EC would have to approve the measures before they could be enacted.
Report: Mafias Affect 13 Million Italians
More than 13 million Italians live in places where organized crime groups have influence over their daily lives, according to a report commissioned by the Italian parliament’s anti-mafia commission. That number has little to do with grisly murders or with millions of people waking up next to a horse’s severed head; rather it has everything to do with the groups branching out into legitimate businesses and politics.
The Italians living in the 610 districts identified, even if law abiding and not members of clans, "are in some way conditioned by a presence that draws its strength from the ability to exert a capillary control in the area", the report stated.
Giuseppe Pisanu, head of the anti-mafia commission, said the Italian mafia was now "silently prospering, moving on from spectacular crimes and massacres to business and politics, with a prudent dose of intimidation and violence in a bid to take over the fundamental role of the state".
Because organized crime is concentrated in the south – Sicily’s La Cosa Nostra, Naples’s Camorra, Calabria’s ‘Ndrangheta and Puglia’s Sacra Corona – it makes sense that the research group Censis found the influence concentrated there as well. Censis reckons that 95.9 percent of the population of Agrigento in Sicily is living under mafia influence; in Naples that figure is 95 percent.
Interesting Alliance
In news of the weird: Italy, known for its mobsters, and Iraq, where fears of terrorists abound, signed an agreement last week to work together to fight both transnational organized crime and terrorism.
