borys feldman is the brains behind the sloviansky bank.
for a year feldman has languished in jail, awaiting trial on charges of income tax evasion, misuse of office and misappropriation of collective property.
his zaporozhia-based bank, which set record profits among ukrainian commercial banks for 1998 and 1999, began experiencing problems last march when tax authorities arrested five of its managers, including feldman.
since then, the nbu has suspended sloviansky’s licenses to perform key banking operations and the state tax administration confiscated securities constituting a large proportion of the bank’s assets.
last month the sta said they had proof that yulia tymoshenko, former deputy prime minister for the energy sector, conspired with feldman to steal about $1 billion intended to pay for russian gas.
tymoshenko and feldman say none of the numerous investigations into their companies’ operations have uncovered any evidence of wrongdoing.
both say a corrupt regime is attempting to shut them up, a charge backed up by recently released secret recordings of alleged conversations between president leonid kuchma and state tax administration chief mykola azarov.
this q&a was conducted via correspondence with feldman, who has asked the european court for human rights in strasbourg to overturn rulings by the ukrainian courts.
q. why did authorities go after your bank?
a. the motivation for launching the case against the bank is rather complicated. first, many and varied officials initiated the action against the bank and me. secondly, their desires have changed over time, in accordance to both internal and external circumstances, which have changed over time.audio records of conversations recorded [by former security guard mykhola melnychenko reveal part of the reason authorities went after sloviansky, as do recent statements made by public officials.from the beginning, authorities have tried to portray sloviansky as the wallet or financial instrument of tymoshenko.
the spin was simple: it is necessary to destroy sloviansky in order to deprive tymoshenko of her financial empire.
tax agents had a slightly different aim – to show their readiness to carry out any order to demonstrate who rules the roost.
destroying sloviansky enhanced sta’s prestige and provided a lesson to other banks, which the sta could – and would – act against with impunity.for sloviansky’s business competitors, the objectives were more apparent – access to profitable clients, invested credits, and a way to eliminate an uncompromising competitor.for state officials, our demise represented an opportunity to use sloviansky as the scapegoat for their own sins.
on saturday, feb. 17, mr. marchuk took to the airwaves on national state television [ut-1] and said sloviansky and grado banks were underwriting protest actions in order to avoid prosecution themselves. as for the sta officials, after the liquidation of sloviansky, the goal has become to wash their hands of the matter as quickly as possible.
both tax authorities and employees of the nbu need to endure possible court action and want to escape criminal responsibility for what has been done. they want what happened to sloviansky to be forgotten as quickly as possible. but in order to use the case against sloviansky against tymoshenko, all judges in ukraine would need to be controlled by the authorities.
q. why did the nbu jump on the bandwagon?
a. what motivated the actions of [national bank of ukraine governor volodymr] stelmakh and the nbu vis-a-vis sloviansky can be summed up using one word -fear.
q. what was your bank’s relationship with united energy systems of ukraine and yulia tymoshenko?
a. sloviansky bank was formed in 1989.
i became a shareholder five years later. in 1995, i made the acquaintance of yulia tymoshenko of united energy systems of ukraine (uesu). earlier, in 1992 and 1993, i had met her casually on a few occasions. our relationship was on the level of “hello” and “goodbye.”
i never worked for uesu, although i had an offer to become the company’s financial director at the end of 1996.
they even allocated me an office, but i refused the offer. but by that time, i had grown accustomed to acting independently, so our relationship remained one between bank and client.
q. what exactly are you accused of?
a. the indictment against me was 80 pages.
when asked, do you understand the charges being brought against you? i had to honestly respond, no. prosecutors charged me on five criminal counts. last month, they dropped two of the charges, leaving income tax evasion, misuse of office and misappropriation of collective property.
law enforcement authorities investigating wrongdoing accuse a 'group' led by myself of perpetrating these crimes. understanding the logic behind the investigation or the essence of the charges against me is difficult, even for my lawyers. i still have not received the opportunity to acquaint myself with the particulars of the case against me.
perhaps then i will be able to understand what the authorities are driving at, but for now i’m left only with a general impression about the ineptitude of state prosecutors. we don’t understand one another. at times, i think we speak different languages. for example, three years ago, i borrowed money from a company.
investigators – who apparently do not understand ukraine’s criminal code – still can’t figure out how i paid off the debt, much less accomplished the transaction.
on the one hand, prosecutors accuse me of stealing the sum (although they can’t say from whom, when or how) and, on the other hand, state tax administration agents accuse me of pocketing untaxed profit from the deal.
q. have authorities asked you to provide evidence against tymoshenko or to arrange a plea bargain?
a. there are no grounds for me to come to any accommodation with law-enforcement agencies.
if rule of law existed in ukraine, i could wait for an open legal trial, at which the arbitrariness of the charges against me would be exposed. in the absence of rule of law, there’s little or no reason for them to talk to me at all.
i sought in writing to redress the actions of ukraine’s state tax administration, asking the courts to overturn decisions taken against sloviansky’s account-holders, who have suffered tremendous losses.
to date, i have not received responses to formal applications as stipulated by law.
the counter suits i filed against the state tax administration, general prosecutor’s office and nbu have been ignored.
even though article 55 of the constitution provides citizens the right to seek legal redress for illegal – let alone criminal – acts committed by state officials, it remains almost impossible for ordinary citizens to avail themselves of this right in practice.
take, for example, the case brought by mrs. lesya gongadze against the [deputy general prosecutor oleksy] bahanets.
although the court accepted the case, state prosecutors successfully appealed the decision on grounds that ukrainian courts had no right to “interfere” in an ongoing investigation.
in his ruling, [perchersk district court judge] mykola zamkovenko said his ruling would take immediate effect because of the public significance of the [gongadze] case. [human rights ombudswoman nina] karpachova hailed the decision as historic.
it has taken five years since we adopted the constitution for judges to apply it to a dead person of european significance. it seems ukrainians have a long fight ahead of them before judges will protect their constitutional rights.
(march 29, 2001)